National Insurance Contributions (Secondary Class 1 Contributions) Bill

James MacCleary Excerpts

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[Wendy Morton]

That is exactly the point. What we see instead is Labour Members continuing to blame their economic inheritance. That is simply not correct. The chair of the Office for Budget Responsibility said:

“Nothing in our review was a legitimisation of that £22 billion”.

I wonder what the former Governor of the Bank of England, Mark Carney, makes of all this. In the run-up to the 2024 general election, he endorsed Labour.

What many people now see is a Government who do not really understand the role that so many charities play in supporting the NHS, communities, older people, young people, families, and patients—people who are sick and sometimes terminally ill. For example, why would they protect the public sector and the rest of the NHS from the national insurance tax, but not general practice? Analysis from the Institute of General Practice Management estimates that it will cost each practice an average of £20,000 a year. How many staff hours is that equivalent to? How many hours of a GP’s time or a practice nurse’s time is that?

I have spoken to a number of local charities, and we have heard from others today. Every pound that the Labour Government squeeze out of them through the jobs tax is an extra pound that cannot be spent on frontline services—an extra pound that they have to find just to stand still. I find it so hard to believe that this Labour Government are also taxing those who provide vital hospice care. How can they talk of helping palliative care with one hand, while clobbering hospices and care providers with extra taxes with the other?

I can be cynical at times but I see a complete lack of business expertise, knowledge or experience among those on the Labour Benches. Just visiting businesses is not enough to understand how a business operates. I speak to them in my constituency on a weekly basis. The chair of the CBI has stated that

“business has been milked as the cash cow”.

We simply cannot expect small businesses, or indeed any business, to just be squeezed and squeezed, thinking, “Well, they’ll just increase their costs and pass them on to the end user.” The end user cannot afford them, as we have heard this afternoon. Ultimately, something will have to give: hours, training, development and jobs.

Just yesterday, we were in this Chamber debating the Government’s welfare reform. At the heart of the issue, I really believe people want to get back into work. They need support to do that, but they also need employers and businesses to have vacancies so that they can support them back into work. What I, like others, see in this legislation is the Government taxing businesses out of creating the vital jobs that this country so needs to get the growth that we do not have at the moment.

As I mentioned, attendance on the Government Benches is somewhat threadbare, giving the appearance that the Government do not care. We have heard from Labour Members who do care, just like we on the Opposition Benches care. I draw my remarks to a conclusion by urging Members on the Government Benches and those listening outside to reflect very carefully. We all have the opportunity today to do the right thing—to protect and help charities and hospices and, by virtue of that, to protect and help some of the most vulnerable in our country and society. We have the opportunity to protect jobs and help businesses to create opportunities and, by virtue of that, to help working people who aspire to a better life. I end quite simply by urging those on the Government Benches to think again and to do the right thing.

[James MacCleary (Lewes) (LD)]

I wish to express my deep concerns about the Government’s national insurance changes and the devastating impact they are having on essential services in my constituency. The amendments put forward by the Liberal Democrats in the Lords are crucial to preventing this policy from inflicting serious harm on GP practices, care providers and the wider health system.

Take our GP surgeries, which are vital to healthcare in Lewes and beyond. I have been speaking to local healthcare providers in my community over the past week. Unlike private businesses, GP surgeries cannot pass their costs on to their patients. Every extra pound spent on national insurance is a pound less spent on patient care, staffing and appointments. The Government’s failure to exempt them will mean fewer face-to-face consultations and longer waiting times, contrary to the Government’s claimed objectives. The Liberal Democrats’ Lords amendments 1, 4, 5, 9 and 13 would protect GP surgeries, NHS-commissioned dentists and pharmacists by keeping their national insurance costs at a sustainable level.

Social care providers are facing the same predicament. A domiciliary care provider in my constituency is already struggling to recruit and retain staff due to rising costs.

[Helen Maguire (Epsom and Ewell) (LD)]

I have a similar situation in my constituency with Strada Care, which is under immense strain, having already closed four care homes over the past seven years due to chronic underfunding. Thousands of care providers are on the brink of collapse, and many more may follow if these Lords amendments are disagreed to. With social care services already struggling, more vulnerable individuals will be forced into hospitals and be bed blocking. Does my hon. Friend agree that increasing costs for social care providers will have a devastating knock-on effect for the NHS?

[James MacCleary]

I absolutely agree. The care provider in my constituency faces a 9.4% increase in employer’s costs, which it simply cannot absorb. These are the very people keeping elderly and disabled residents safe in their homes, preventing hospital admissions and easing NHS pressures, yet the Government have chosen to burden them rather than support them. The Lords amendments I mentioned would ensure that care providers can continue to deliver essential services without being driven into financial crisis.

[Gideon Amos (Taunton and Wellington) (LD)]

The £615 cost per person reported to me by care providers in my constituency will mean that one constituent, who is paying £1,500 a week for care for her 94-year-old mother, will no longer have the money to pay for the care of her disabled brother as well, after the fees go up as a result of this jobs tax. Does my hon. Friend agree that that is a shockingly unacceptable result of these changes, and that the Lords amendments introduced by the Liberal Democrats should be accepted?

[James MacCleary]

I thank my hon. Friend for providing such a concrete example of the real suffering these changes will cause. This is not an abstract thing; it is about real people’s lives, and there are people who will suffer as a result, as in the example given by my hon. Friend.

I will move on to nurseries and early years providers, an issue very close to my heart. In my constituency, they are facing the same impossible squeeze. The rise in national insurance contributions, combined with the increased statutory wage costs, is pushing many to the very brink. The National Day Nurseries Association has warned that the average nursery will see an additional £47,000 in costs, which the Government’s funding increase does not come even close to covering. If nurseries are forced to close, it will leave working parents, who are already struggling with the cost of living, without the childcare they need. If schools are exempt from this tax hike, as they should be, the nurseries that provide the very foundation of a child’s education should be, too.

What makes this even worse is that the Government are not just undermining essential services, but forcing more people towards them by stripping away other forms of support. At the same time as these tax hikes, Ministers are cutting vital benefits such as personal independence payment, leaving thousands of vulnerable people struggling to afford the basics, meaning that more people will have no choice but to turn to the very care providers and community health services that are now being hit financially by these national insurance changes. The Government cannot claim to support essential services while actively driving them towards collapse. They are giving with one hand, while taking much more with the other.

I find that a gauge of the level of enthusiasm and pride that a Government have in a policy they have put forward is often the number of their representatives who turn up to support it and be associated with it. Notwithstanding the heroic contribution of the hon. Member for Loughborough (Dr Sandher), the emptiness of the Government Benches speaks volumes.

The Liberal Democrat Lords amendments before us today would help to prevent irreparable damage to GP practices, care providers and the wider healthcare system. I urge the Minister to back them, because failing to do so will cost not just money, but lives.

[Aphra Brandreth (Chester South and Eddisbury) (Con)]

I draw attention to my entry in the Register of Members’ Financial Interests.

The Bill is yet another example of legislation from this Government that breaks their manifesto promises, harms local business, negatively impacts our constituents and limits the prospects of growth in my local economy of Chester South and Eddisbury and, indeed, the country.

Fundamentally, these changes will hit working people the hardest—the very people the Chancellor said would be shielded from the impacts of the Bill will be the most affected. It will mean lower wages, higher unemployment and increased costs for businesses, resulting in higher prices in the shops. Do not just take my word for it: the Office for Budget Responsibility has stated that

“additional payroll costs for employers are passed through into lower wages.”

When I speak with business owners in my constituency, they say they feel like they are swimming against the tide, from the NIC increases to the reduction in business rates relief. The recurring message from every company I speak to is that confidence in the economy is down. I must ask the Minister: how is that conducive to growth?

I will speak to two of the amendments. Exempting hospices from this damaging increase in employer national insurance contributions is the right thing to do. I have had the pleasure of visiting both the hospice of the Good Shepherd in Backford and St Luke’s hospice in Winsford, which provide a vital service to the most vulnerable of my constituents at the most difficult time in their lives. They provide the very best care and support, and I encourage the Minister to visit and see for himself the warm, compassionate and welcoming environment that they offer, which reflects the attitude of the doctors, nurses and, indeed, all the staff who go above and beyond in their work.

The financial implications of an increase in national insurance contributions and the resulting consequences for services and staff will be hugely damaging. Those hospices have shared with me their challenges with recruitment and their deep concern that these tax rises will make paying their staff in line with what their colleagues receive in the NHS even harder than it already is.