National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between Joe Morris and Gareth Davies

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

[Joe Morris]

My hon. Friend eloquently makes the point that I have been trying to make when I have tripped over my words.

I am extremely proud that the Government are committed to achieving economic stability, being frank with the public about the choices that we face and not simply taking the easy options. We need to implement these tough measures in order to resolve the previous Government’s disastrous economic mismanagement and to restore our foundations. I will finish by saying that traditionally, as far as I am aware, it is poor form for the arsonist to criticise the actions of the fire brigade.

[Gareth Davies (Grantham and Bourne) (Con)]

I rise to speak, on behalf of the official Opposition, to amendments 13 to 18 and new clause 1, which stand in my name.

First, it is important to remember the context of the situation we find ourselves in today. Throughout the election, the Chancellor and the Prime Minister promised the British people that they would not raise taxes on working people. They committed specifically to not raising national insurance, but here we are in Committee debating a national insurance tax on working people worth some £25 billion. Each and every Government Member made specific promises to their constituents on national insurance, which they have now broken. We have it here in black and white.

Clause 1 raises the rate of secondary class national insurance from 13.8% to 15%. To compound the impact, clause 2 drastically cuts the secondary threshold from £9,100 to £5,000. This two-pronged attack on business means that while clause 1 squeezes more from businesses, clause 2 simultaneously pushes more businesses into the taxman’s grasp. Taken together, based on data from His Majesty’s Revenue and Customs, a staggering 940,000 employers are set to lose out in net terms from the Bill. The Office for Budget Responsibility has made it clear that each one will be hit by an average of £26,000 in additional tax.

On Second Reading we heard the same old script from the Government and their Back Benchers. Time and again we hear that the Bill will hurt only the largest businesses, but that is not correct. Most high street hair salons would not say that they are a big business with mounds of profit to give away to the Exchequer, no matter how much hair mousse this Prime Minister buys from them. A village family butcher surely would not regard themselves as profiteering fat cats. Community pharmacies providing vital services to residents young and old surely cannot be put in the same category as a large multinational pharmaceuticals company. Yet they are.