Oral Answers to Questions

Debate between James Murray and Munira Wilson

Tuesday 4th March 2025 Commons Chamber

[Munira Wilson (Twickenham) (LD)]

20. What assessment she has made of the potential impact of the planned increase in employer national insurance contributions on economic growth.

[The Exchequer Secretary to the Treasury (James Murray)]

The Government have taken difficult decisions to repair the public finances, fund public services and restore economic stability. The Office for Budget Responsibility predicts that the employer national insurance contribution changes

“will reduce the level of potential output by 0.1 per cent at the forecast horizon”.

It also predicts that growth will pick up next year and that living standards will rise faster during this Parliament than during the last, and in the long term it expects the autumn Budget policies, if sustained, to increase the size of the economy permanently.

--- Later in debate ---

[James Murray]

The Government’s decision to increase employer national insurance contributions was one of the toughest decisions that we took at the Budget, but it was necessary to restore stability to the public finances. It is only on the basis of having stable public finances and fiscal responsibility that we can boost the investment and growth that will make people across Britain better off.

[Munira Wilson]

As the poor growth figures show, the Chancellor’s jobs tax is really hurting businesses, not least in our hospitality sector. In my constituency, pubs such as the Eel Pie and the King’s Head, as well as the family-run restaurant Shambles, are really struggling with soaring costs and putting off hiring people. If the Chancellor will not reverse her jobs tax, will she at the very least consider extending the current 75% business rates relief for hospitality until the new system that she has announced is in place?

[James Murray]

The hon. Member speaks about business rates relief. We have to remember that the business rates relief for retail, hospitality and leisure was due to end entirely in April 2025 under the plans we inherited from the Conservative party. Despite the toughest of contexts, we decided to extend the 40% relief for another year before the permanently lower rates for retail, hospitality and leisure come in from April 2026.

Finance Bill

Debate between James Murray and Munira Wilson

Committee of the whole House
Wednesday 11th December 2024 Commons Chamber

[James Murray]

The reason why the Liberal Democrats hear this time and again from the Government Benches is that, time and again, they want all the benefits of investment without having to pay for it. That is a pattern that we see again and again in this Chamber.

[Munira Wilson]

rose—

[James Murray]

I am going to make some progress.

I thank my hon. Friends the Members for Falkirk (Euan Stainbank) and for Loughborough (Dr Sandher) for their comments. I feel that I am duty bound to add my congratulations to my hon. Friend for Loughborough on his engagement.

The hon. Member for Hinckley and Bosworth (Dr Evans) is not in his place—sorry, he is at the Bar. Perhaps he could come and take a seat on the Benches. He asked an important question to try to get some clarity about the VAT treatment of combined fees that cover school meals, transport and other services. I hope that my earlier answer gave him some reassurance on that.

I reiterate that I cannot provide advice for individual schools, but it is worth emphasising that the general principle is that if a school supplies a package of education for a single fee, that will normally be a single supply for VAT. That package could include a number of other elements such as transport or meals, alongside the main element of education. If it is a single supply, it is a single VAT liability. However, where a school supplies education and also supplies other elements for a separate fee, that will normally be treated as a separate supply. For example, if a school offers school meals alongside the education for a separate charge, those will normally be two different supplies, and they may have different VAT liabilities. Although the education would be subject to the standard rate of VAT, the school meals may be exempt, if they meet the conditions.

Oral Answers to Questions

Debate between James Murray and Munira Wilson

Tuesday 3rd December 2024 Commons Chamber

[Munira Wilson (Twickenham) (LD)]

Achieving for Children is the arm’s length body of Richmond council that delivers its vital children’s services, yet because of the rise in employer’s national insurance, it now faces a staggering bill of £588,000 because the employees are not directly employed by Richmond council. When the Chancellor looks at her local government settlement, will she build in reimbursement for councils such as Richmond, or indeed exempt arm’s length bodies?

[James Murray]

As the hon. Member will know, we announced in the Budget an increase in local government funding of 3.2% next year, and the Chancellor announced extra funding for early years providers to deliver Government-funded childcare places, meaning that total funding will be over £8 billion in 2025-26. I look forward to the hon. Member’s support for all that extra funding.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between James Murray and Munira Wilson

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[James Murray]

The way that we are approaching the reimbursement of employer national insurance costs for Departments and public sector employees is similar to what the previous Government did with the health and social care levy. It means that money goes to Departments, local governments, and public sector employees directly to help compensate for the increase in employer national insurance. For other people who are paying employer national insurance, if they have a contract with the public sector they are treated as contractors or private organisations. If they have concerns about their cost base they should talk to their sponsoring Department, the NHS, or whoever they have a contract with, so that those considerations can be taken into account in the round. It was the same for adult social care, and it is the same for other organisations that are funded through the public sector.

[Munira Wilson (Twickenham) (LD)]

Let me pick up on the point about local authorities and public services. I pressed the Minister on that this morning during Treasury questions, and I fear he did not give me a clear answer. Richmond council, my local authority, delivers children’s services through an arm’s length body called Achieving for Children. As a result of these measures, with all the employees who deliver services for vulnerable children in Richmond upon Thames, it faces a bill of £588,000 in employer’s national insurance. Will the Minister assure local authorities up and down the country that operate similar models for delivering services that these arm’s length bodies will be exempt from the national insurance rise? Otherwise he will be damaging the very public services that he claims to be investing in today.

[James Murray]

We are protecting public services by providing relief directly to Departments and other public sector employers. Third parties, private organisations, or those who have a contract with the public sector are dealt with differently and they should approach their local council, or whoever is sponsoring them, to talk about their funding arrangements. I might draw the hon. Lady’s attention to the fact that local government financing is increasing by 3.2% next year as a result of decisions that this Government have taken. I expect she would probably support that increase in funding, but sadly she does not have the guts to support what we need to do to raise the money in the first place.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Debate between James Murray and Munira Wilson

2nd reading
Monday 25th November 2024 Commons Chamber

[James Murray]

My hon. Friend is right that we, as a Government, are focused on improving state education for children across the country, because we know that every parent aspires for their child to get the best possible education. That is what our plans seek to achieve, and I would welcome it if the Opposition supported our efforts for the good of children across the country.

Members will have the chance to scrutinise the detail of this Bill in Committee, but I will now spend a few moments outlining how the Bill’s provisions are intended to operate.

[Munira Wilson (Twickenham) (LD)]

Does the Minister recognise that many independent schools, such as Lady Eleanor Holles school and Hampton school in my constituency, are involved in a huge amount of partnership work with schools in disadvantaged areas, like Feltham’s Reach academy, to help disadvantaged children to have opportunities that they would not otherwise get? Does he recognise that both the measures in this Bill and the introduction of VAT on private school fees will lessen that partnership work, which will have a detrimental impact on many state schools?