National Insurance Contributions (Increase of Thresholds) Bill

Debate between Jacob Young and Simon Clarke

2nd reading
Thursday 24th March 2022 Commons Chamber

[Mr Clarke]

My hon. Friend is absolutely right, and we cannot emphasise that enough. We are determined to address the underlying challenges we face not only with the public finances, but crucially with the backlog of care. Let us not forget that 6 million people are on NHS waiting lists as a direct result of the covid pandemic. While we do that, we will always focus on supporting families and, crucially, on making sure that, when we do have to increase taxes, the burden is borne by those with the broadest shoulders. That is what the combination of this measure with the levy will deliver.

The Bill’s first measure will increase the NIC primary threshold and the NIC lower profits limit to £12,570 from 6 July. By way of explanation, these are the thresholds at which the employed and the self-employed, respectively, start to pay NICs. The increases in these thresholds of about £3,000 will equalise the NIC and income tax thresholds, and in so doing create a fairer and simpler tax system, something to which we ought all to aspire. That means that people will be able to earn £12,570 without paying a single penny of income tax or national insurance.

As we heard a moment ago, that is the largest increase in a starting threshold ever, it is the largest single personal tax cut in a decade, and it reduces the tax burden by £6 billion for 30 million people across the United Kingdom. On an individual level, a typical employee will see their tax bill reduced by £330 in the year from July, while the equivalent saving for a self-employed worker will be worth over £250.

[Jacob Young (Redcar) (Con)]

Does my right hon. Friend recognise the calculation by the Institute for Fiscal Studies that it is people who earn £35,000 or less who will benefit from this tax cut, and does that not show that our measures are targeted at those who need our support most?

[Mr Clarke]

Indeed, I absolutely do recognise what my hon. Friend says. The IFS has described raising the NICs threshold as

“the best way to help low and middle earners through the tax system”,

so he is absolutely right in what he says.

Budget: Pre-announcement of Provisions

Debate between Jacob Young and Simon Clarke

Tuesday 26th October 2021 Commons Chamber

[Mr Clarke]

There is absolutely no doubt that we have observed all the proprieties by not talking about tax measures in any of the discussions that have been had. I am in regular contact with the Welsh Government. Indeed, I met the Welsh Finance Minister last week and will be speaking to her again tomorrow morning ahead of the Budget, in the usual way.

[Jacob Young (Redcar) (Con)]

I welcome the announcements that have been trailed ahead of the Budget, in particular the latest announcement on the national living wage. Will my right hon. Friend outline how this national living wage will help my constituents and his in Teesside?

[Mr Clarke]

Ensuring that work always pays is one of the foundational principles of this Government. It is what differentiates us, frankly, from the last Labour Government, who had a series of policies that, I am afraid, did not incentivise work. That led to what the then editor of The Spectator termed,

“the most expensive poverty in the world.”

I am afraid that that was the unfortunate legacy of a series of failed policies. My hon. Friend is absolutely right in saying that the national living wage rise is the right thing to do. I am excited about that policy, and it continues our strong track record of ensuring that our plan for jobs is matched by rising living standards.