National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between Joe Robertson and Caroline Dinenage

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[Dame Caroline Dinenage]

That is absolutely right. There are over 400 Labour MPs, but just four of them are sitting there to try to defend this indefensible jobs tax on our most vulnerable. They should be utterly ashamed of themselves. Do they not have children’s hospices in their constituencies? Do they not have hospices and other settings that their constituents work so hard to raise funds for? They should be absolutely ashamed of themselves.

[Joe Robertson]

Perhaps I may suggest an easy decision, rather than a difficult one? The Government, instead of giving £9 billion away to Mauritius, should use some of that to support social care and charities.

[Dame Caroline Dinenage]

That would be an excellent decision, and I am sure the Naomi House children’s hospice and Jacksplace, which do so much invaluable work to support families going through the most unspeakable difficulties in my area, would advocate for that.

I want to talk about childcare settings, which ensure that our smallest but most cherished family members are cared for and given the very best possible start in life. It is incomprehensible that the Government have taken this decision to imperil some of the businesses and services that our constituents most rely on—nursing homes, for example. The owner of one nursing home, with 35 years of service in the Gosport constituency, told me that the tax rises in the Budget will add £90,000 on top of its annual costs. This business is particularly vulnerable because a very large proportion of its bed spaces are occupied by local authority patients. Its costs are going to go up by 12% this year, driven mostly by changes to the minimum wage and this jobs tax—the national insurance contributions change—on his 75 members of staff. The council, which is having difficulties of its own, can provide only a 4% uplift to cover it. Quite simply, this an existential threat to his business, and he is not alone.

It is the elderly, the vulnerable, disabled people and their families who are going to pay the price, and we know that these costs will go to those having to foot the bill. If people are not privately funded, some nursing homes will be forced to hand back their local authority contracts and increase the proportion of beds commissioned privately. Since the Budget, I have received messages from individuals who have already seen the cost of care going through the roof. One wrote to me:

“Directly due to the increases in Employers National Insurance contributions the Chancellor has managed to cause an increase of 7.8% in my brother’s care home fees that are already north of £8000 a month… I shudder to think of the overall cost nationally of this increase across all those with relatives and loved ones in care.”

I also want to talk about early years settings. Early years providers are facing a squeeze that many just will not be able to stomach. Just as care settings have their revenue dictated by local government, nurseries are limited by childcare ratios and the fees they get from their local authority for their 30 hours’ free childcare. Hopscotch nursery, which looks after 1,900 children across my region, has told me that these changes will add £1 million to its overheads. It says that, in order to make up the shortfall, it is going to have to put its fees up by 10%, and that 10% will be passed on to my Gosport constituents. How can parents in Gosport face such an uptick in fees? What assessment have the Government made of the impact that will have on parents, on people dropping out of the jobs market or out of the workforce, and, most especially, on women? At the end of the day, we all know that when it comes to childcare, rightly or wrongly, the buck always stops with us. What will be the disproportionate impact of this on women?

I could mention so many other organisations that are facing the prospect of scaling back their activities. They include hair and beauty salons, which are warning that this will result in billions of pounds lost, and many will shut up shop or encourage staff to go freelance. They have previously taken on so many apprentices, but they warn that by 2027 there will be no apprenticeships left in this sector because they will be too expensive.

The common thread is that this national insurance change will hit businesses for which labour is the highest cost and there is no digital solution, and businesses that are unable to find efficiencies because of the nature of their overheads. The amendments passed in the Lords would go some way towards alleviating those cost pressures. In many cases, they would be a lifeline for the businesses and services that our constituents so desperately rely on, and those that by their very nature are reliant on the public sector for revenue. I urge the Minister to change his mind, to show some compassion, to show he cares, to listen to his constituents and to support these amendments.