National Insurance Contributions (Secondary Class 1 Contributions) Bill

Jerome Mayhew Excerpts

Consideration of Lords message
Tuesday 25th March 2025 Commons Chamber

The Government persist in their tendentious references to additional funding, all of which is capital and none of which can soften the blow of the measures contained in the Bill. They do not want to support, in particular, Lords amendment 21B, because they would rather continue to cloak the effect that the Bill will have on care services and contractor elements of the national health service up and down these islands, and the effect that it will have on the real economy, which Labour is a stranger to.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I am just flummoxed by the Government’s approach to the Bill. Clause 1 raises employer national insurance from 13.8% to 15%. Almost more damagingly, clause 2 reduces the threshold at which they start paying it from £9,100 to just £5,000. The Government know how damaging this measure is for healthcare. We can see that because they have taken action to exempt the NHS from it. That will cost billions of pounds, because healthcare providers cannot just diversify as other sections of the economy might be able to. They cannot raise prices. A general practitioner’s customer is the state, and prices are fixed by the Treasury. As a result, the Government know exactly what the impact of this proposal will be on hospices. We have already heard that without an exemption, they will face an additional £30 million of costs every year as a result of these changes.

When the Bill was first announced, I assumed that there had been an oversight by the Treasury and that it would be addressed as the Bill progressed. But both last week and this week, the Lords have moved to fix what was originally considered to be perhaps an oversight. Today’s decision to seek to reverse Lords amendments 1B and 5B in particular demonstrates beyond doubt that it is not an oversight but a deliberate decision taken by Labour to penalise hospices for the care of the dying, and to do what with that money? We may be in the obscene position in a few weeks’ time of funding for state-assisted dying being raised by taxing palliative care. This is absolute madness. If Members wanted any other reason why they should not support the Government, that is an overwhelming one.

I make one last reference to the emptiness of the Government Benches. There are now two Labour Members sitting there who are not required to be—[Interruption.] I take it back, there is only one. That indicates to me that Labour Members do not want to be associated with the Bill. They will scurry through the Lobby later, but they are not brave enough to stand up and defend the decision of their Government.

[Gregory Stafford]

You do not need any convincing of this, Madam Deputy Speaker, but were you to, the Lords amendments demonstrate why we need a House of Lords. They are the ones standing up and delivering the amendments that this Government are trying to wriggle out of this afternoon. Amendments 1B and 5B, which the Government are trying to derogate from, are essential for our care services. The financial strain that the Government’s national insurance contributions will put on the care sector is astronomical—some predictions are of around £2.4 billion on social care alone. Ultimately, that will lead to reductions in services and, unfortunately, closures, especially in the hospice sector.

The Minister has repeated what he and other Ministers have said on many occasions: they are giving a certain amount of money to the hospice sector, but as Opposition colleagues have stated, that is capital spending. What they desperately need is revenue spending to cover the cost of the rise in national insurance contributions.