National Insurance Contributions (Secondary Class 1 Contributions) Bill

Jim Shannon Excerpts

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[Damian Hinds (East Hampshire) (Con)]

We have a mission-led Government. I am not sure whether anybody knows exactly what that means, but we do know what the mission is meant to be: delivering for working people. But I am afraid that the Government have forgotten how working people become working people. It is the people—the other people—who employ them. All of us in this House want excellent public services, but it is only the Conservatives who understand that to get excellent public services, business needs to generate the wealth. The Government have a bit of a “four legs good, two legs bad” mantra that sees business as a cash cow to be milked to pay for the public sector. They have forgotten that fundamental dependency. They have even messed up the “four legs good, two legs bad” theory, because they seem to have forgotten that a very large part of what delivers our public services is people—people who are not directly employed by the public sector.

Let us take nurseries as an example. We have had another mission this week on early years education, which I welcome, but it will be hampered in its delivery by this national insurance contributions rise. Then there are the universities. They received a bonus of £390 million from a fee increase a couple of weeks ago, but they will be paying £400 million in extra national insurance contributions.

I have also heard from many GPs across my constituency in East Hampshire, who see the Government giving with one hand and taking away with the other. The Minister says that the Government will take care of this in the settlement for GPs, which is fine, but it should have come on top of what they should have been doing for GPs anyway. Lord Darzi and the Secretary of State have been talking about increasing the focus on primary care. We know how the Treasury works when it is making its spending allocations to Departments; things will be tucked in under that settlement, so we need to see it rise. How do the Government think GP practices plan? Here we are in December, and the new financial year starts at the beginning of April. Do Ministers not think that, in the national health service, general practitioners need certainty now about what is going to happen?

The wider point is this: the Treasury can reimburse GPs, but it cannot reimburse the private sector. Ultimately, there is no such thing as a tax on business. Taxes can only ever ultimately fall on people. They fall on the owners of that business, the customers of that business, or the employees of that business. The analogy for the Treasury reimbursing GP practices for their increased costs is the employees of a private company reimbursing their employer for that cost. It is they who will ultimately pay. Economists are united in saying that employer national insurance contributions are only ever, in the end, seen in lower wages or lower employment figures. The Government talk about difficult decisions, but difficult decisions are the ones that employers will be faced with: do I cut down my wage settlements or do I let people go?

[Jim Shannon (Strangford) (DUP)]

Not more than half an hour ago, I met a businessman from Northern Ireland whose firm employs 1,200 people. He said national insurance contributions will cost the firm almost £1 million a year. The cost will ultimately be passed on in its food prices, which will rise by between 15% and 20%, and the ordinary man or woman on the street will pay for it. Does the right hon. Gentleman agree that that is where the Labour party has got this wrong?

[Damian Hinds]

The hon. Gentleman is quite right. This is not some trivial increase that is easy for an organisation to absorb. While 1.2 percentage points may not sound like much, with the serious decrease in the threshold at which it starts being paid, it is a lot of money. The cost of employing the average worker on medium earnings goes up by £900. For a 21-year-old on the legal minimum wage working full time, the cost goes up by £770. Moreover, it is regressive because it will fall more harshly on people at the lower end of the wage spectrum and on people who are part time. It cannot be seen in isolation; it must be seen alongside all the other things the Government are doing. Of course, the national living wage has risen. That increase is a good thing in itself, but the effect compounds with the other measures being taken.

Two of the three volume employer sectors in this country—retail and hospitality—are also seeing a massive reduction in the business rates relief they are getting next year. When unemployment hits, young people are always hit first and most, and that will be true again. It will hit those furthest from the labour market, those who need most help, those coming back to work after a long period and those who were ex-offenders. I sometimes wonder if Ministers talk to each other about the contradiction and irony of one of them producing a document called, “Get Britain Working” while their colleague is hellbent on doing the opposite.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Jim Shannon Excerpts

Committee of the whole House & 3rd reading
Tuesday 17th December 2024 Commons Chamber

[Sammy Wilson]

We have seen over the last five months that growth has already been impacted. Of course, the OBR has indicated that in two and three years’ time, growth will be impacted negatively as well. I do not think that one can hide behind those arguments. As I said, I hope that I am wrong, but I suspect that all the economic logic on the impact of this measure and what we are already hearing from employers indicate that that is not the case.

[Jim Shannon (Strangford) (DUP)]

The reality is that those who own businesses in my constituency tell me that they will have to look at reducing wages and reducing numbers. Because of the Government’s policy, those working in doctors’ surgeries will have to look at a reduction in numbers as well. Whether Government Members like it or not, this measure will impact on small and medium-sized businesses and on GP surgeries. That is the reality. The Government are to blame for a recession—there really is talk about it. If a recession comes, the Labour party will be responsible.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Jim Shannon Excerpts

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[James Murray]

I will not, as I have already given way several times and must make progress.

We had to take those decisions to put the fiscal responsibility back at the heart of government, to return economic stability to the public finances, and to have the basis for the investment on which we can grow the economy and put more money in people’s pockets.

Lords amendments 1, 4, 5, 9 and 13 relate to the NHS and social care providers. The amendments seek to maintain the employer national insurance contribution rates and thresholds at their current level for NHS-commissioned services, including GPs, dentists, social care providers and pharmacists, as well as those providing hospice care. As Members of both Houses will know, as a result of the measures in this Bill and wider Budget measures, the NHS will receive an extra £22.6 billion over two years, helping to deliver an additional 40,000 elective appointments every week.

Primary care providers—general practice, dentistry, pharmacy and eye care—are important independent contractors that provide nearly £20 billion-worth of NHS services. Every year, the Government consult the general practice and pharmacy sectors.

[Jim Shannon (Strangford) (DUP)]

One question raised regularly in my constituency relates to GP surgeries. The national insurance contributions will hit them immensely hard. GPs tell me that their only choice is to reduce staff and cut back appointments. The Minister mentions £22 billion extra for the NHS, but if GP surgeries and health clinics are reducing staff and reducing their capacity to deliver services, is that not a step down in what is delivered in my constituency and beyond? Will he reconsider the measures given the impact on GP surgeries?

[James Murray]

I thank the hon. Gentleman for raising the question of GPs and the funding and support that the Government are providing them. We are investing an additional £889 million in general practice, which brings the total spend on the GP contract to £13.2 billion in 2025-26. That is the biggest increase in over a decade. The changes to the contract will improve services for patients and help to make progress towards the Government’s health mission—shifting from analogue to digital, from sickness to prevention, and from hospital to community care—as set out in the Prime Minister’s plan for change. That support for GPs is an essential part of what the Budget, including the national insurance measures we are debating, delivers.