Employer National Insurance Contributions: Small Businesses in Hampshire Debate
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James Murray
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Employer National Insurance Contributions: Small Businesses in Hampshire
James Murray Excerpts(1Â month ago)
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The Financial Secretary to the Treasury and Paymaster General (James Murray)
It is a pleasure to serve under your chairship, Mrs Barker. I thank the hon. Member for North East Hampshire (Alex Brewer) for raising this issue today and for bringing representatives of businesses in her constituency to Parliament to listen to this debate about such an important issue.
As the hon. Member mentioned, the Government are prioritising growth. In the first half of this year, we were the fastest growing economy in the G7. The Government’s vision is to make sure that growth is felt in every community, high street and postcode. Small and medium-sized businesses are central to that ambition, because they play such an important role in every community across the country, creating jobs, supporting local economies and helping to drive better living standards.
Sustainable economic growth depends on stable public finances. Fiscal discipline has to be the bedrock of economic stability, and that stability is necessary to support investment, confidence and long-term growth. As hon. Members will know, the Government have taken decisions on tax, welfare and spending in order to repair the public finances, protect economic stability and fund the public services on which families and businesses rely and into which the hon. Member for North East Hampshire called for greater investment.
As part of that wider fiscal consolidation, changes have been made to employer national insurance contributions. Those changes were introduced from April 2025 and were accompanied by significant protections for smaller employers, including the more than doubling of the employment allowance to £10,500. That means that around 900,000 employers—around 40%—will have no employer national insurance liability at all. In North East Hampshire alone, around 2,300 employers benefited from the employment allowance in ’25-26. Overall across the country, the employment allowance was estimated to be worth around £7.4 billion in the last tax year.
In addition, businesses can claim employer national insurance contribution reliefs, including for under-21s and under-25 apprentices, which are worth around ÂŁ2.5 billion a year. That means that employers pay no employer national insurance contributions for apprentices under 25 or employees under 21 on earnings up to ÂŁ50,270.
The UK’s 5.7 million small and medium-sized enterprises are central to growth across the country. The Government are backing them to succeed, supporting entrepreneurship and helping people to live well in every part of the country. Again, I thank the hon. Member for securing today’s debate.
Question put and agreed to.