National Insurance Contributions Bill

Jim Shannon Excerpts

3rd reading
Monday 6th September 2021 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

I am sorry that the hon. Member for Ealing North (James Murray) was not able to revisit his greatest hits from Committee or other previous stages of the Bill, but unfortunately he is required to speak to the new clauses and amendments before us, which is what I will do.

The Scottish National party has tabled new clauses that would create a new zero rate of secondary class 1 NICs for employers classed as “green manufacturing companies”, including those that produce wind turbines and electric vehicles. As the House will know, the Government take support for the green economy extremely seriously. For example, since 2013 the Government have provided £150 million per annum to the Aerospace Technology Institute—investment match-funded by industry—including £84.6 million of investment to develop zero-emission flights and further support for other potential zero-emission aircraft concepts.

In addition, the Government are to spend nearly £500 million in the next four years to support the UK’s electric vehicle manufacturing industry as part of our commitment to provide up to £1 billion for the development and mass production of electric vehicle batteries and the associated supply chains. The funding is available UK-wide and will boost investment in the UK’s strong manufacturing base.

Of course, the Government have also stated their ambition to deploy 40 GW of offshore wind capacity by 2030, alongside a commitment to invest £160 million in ports and manufacturing infrastructure. The goal of that investment will be to encourage up to £20 billion of much-needed private investment in coastal areas and to support up to 60,000 green manufacturing jobs by 2030. The Government’s commitment to support green manufacturing is therefore quite clear.

Unfortunately, new clause 1 would introduce a major change to the tax system of a magnitude that would require the careful consideration of costs and benefits and, in fact, goes far beyond what should be included via amendment in a Bill such as this one. The design of a sector-focused tax relief is not straightforward and would add complexity to the tax system. By contrast, there has been no consultation on, costing of or impact assessment made in relation to the measure proposed in new clause 1. For those reasons, I urge the House to reject it.

On new clause 3, covid-19 has proven to be the biggest health and economic threat faced by the UK in decades. Key workers, including NHS staff and social care workers, have done extraordinary things, as the House recognises, to keep the public safe in the continuing fight against the virus. For their part, the Government hugely value and appreciate such important contributions to the covid-19 response. However, as I will explain, the Government do not believe that the new clause is appropriate or necessary. Under long-standing rules, any payments made in connection with an employment incur income tax and national insurance contributions. Such payments also count as income for the purposes of calculating entitlement to certain benefits.

[Jim Shannon (Strangford) (DUP)]

In Northern Ireland, we have done something just a wee bit different. It is a £500 bonus, and if the 20% of tax and the national insurance at 12% are added in, that means that the Northern Ireland Executive is paying £735 per individual. Is the Minister aware of that, and would he replicate it in the rest of the UK?

[Jesse Norman]

I think the hon. Gentleman knows that the £500 payment has been offered across devolved Administrations. It is important that he has made that point, and I recognise it, but that does not really affect the point at issue in relation to the new clause, which is about the £500 payments that the Scottish Government are making to health and social care workers, which they are using to function as a top-up to wages. We therefore consider that these payments are taxable as earnings under the normal rules.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

First, I put on record my thanks to the Minister and the Government for bringing forward the Bill. It is good to see the finished article. On behalf of my party, and given where we stand and what we want to put forward, may I say that we were very happy to support the Government tonight.

I will make a couple of very quick comments. The Minister and I had an exchange earlier about new clause 3, but I was dismayed and shocked to hear from a Marie Curie nurse that her covid thanks package was subject to tax and national insurance. The central office was administering that in Scotland. In Northern Ireland, we understood that the bonus was an income, yet the Northern Ireland Executive made the decision to make payments of up to £735 an individual. That meant that those who qualify for the full award, which many do, pay tax at 20% and national insurance at 12% and still receive approximately £500 in their pay packet at the end of the month. We very clearly made that decision, and I think the Government have recognised that, because it is a recognition that these public service staff deserve a substantial boost and need it.

I very much welcome the Minister’s comments about freeports. I know that the final decision lies with the Northern Ireland Assembly, and he has referred to that already. I very much look forward to us in Northern Ireland playing our part and taking advantage of what the Government have brought forward here tonight.

The right hon. Member for Hemel Hempstead (Sir Mike Penning) was right in his intervention that the first 12 months for any veteran are really important, because that is the time they need support most. I am therefore very pleased to see that measure. I also welcome the Minister’s decision to ensure that there is no ambiguity with regard to the Northern Ireland aspect of the Bill, as amendment 3 replaces a reference to the Social Security Contributions and Benefits Act 1992 with a reference to that Act and the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

As I highlighted in my previous contribution on the Bill, it seems that we have to remind Europe almost daily in this House that Northern Ireland is an integral part of the UK. It is determined to treat us as a third nation when it suits for duty free and taxation, but not when it does not suit for representation and European healthcare. If I may, Mr Deputy Speaker, I put on record that this week, my party leader, my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson) will be making a major statement on this issue. I hope that the Government will take note of what we are doing and what we are saying, because it has some effect on the future and where we are in relation to the Northern Ireland protocol.

I believe that the capacity is here to work together for all of the United Kingdom of Great Britain and Northern Ireland. It is always my hope that we do that, and I hope that that is what the Minister has put forward today will do. I look forward to working with the Minister through the Northern Ireland Assembly if that is possible and if it is still in place. We will wait to see what happens.

Question put and agreed to.

Bill accordingly read the Third time and passed.