National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between James Murray and Wendy Morton

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[Wendy Morton (Aldridge-Brownhills) (Con)]

Does the hon. Gentleman not accept that in the UK, the definition of a small business is one that employs fewer than 50 employees and has an annual turnover of less than £10 million? Thanks to his changes and political choices, thousands of small businesses across the country will face the decision of whether to keep staff on or lay them off.

[James Murray]

We know that the tough decision that we have had to take will have impacts—we have been up front with people about that—but we also know that over half of all employers will pay no more or less national insurance than they did before. We acknowledge that this decision will have an impact, but we believe that it is the right decision. I will explain why that is.

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[Clive Lewis (Norwich South) (Lab)]

rose—

[Wendy Morton]

rose—

[James Murray]

Members will have to wait a second so that I can answer this question.

We will maintain the charitable reliefs in the system, such as business tax relief and gift aid relief. However, it is important to recognise that the decisions we have taken overall mean that over half of all employers will not pay any more or will pay the same national insurance as they did before. Their national insurance bill will be the same or less than it would have been otherwise.

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[Wendy Morton]

The hon. Gentleman refers to the NHS, and I believe the NHS and hospital trusts will receive an exemption to the increase in national insurance contributions. Given his clear passion for the NHS, will he look again at the impact that his rise in national insurance contributions will have on air ambulances? Under the current proposals air ambulances, like hospices, will face a huge increase in their costs.

[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.