National Insurance Contributions (Secondary Class 1 Contributions) Bill

John Grady Excerpts

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

[Jim Allister (North Antrim) (TUV)]

When we talk about national insurance, it is easy to forget that it is only part of the tax burden placed upon employers. However, within the matrix of tax, the reach of national insurance that has been delivered by the change is truly shocking, particularly because of the reduction of the threshold to £5,000. I suspect that will mean that there is not a single person who does a part-time job whose employer will not now be paying 15% national insurance. Before we even come to the viability of the business they work for, that makes the viability of that job questionable.

To reduce the threshold by that amount is the most punitive part of the measure. It is not even tempered, as it could have been, by a phased reduction, so rather than paying 15%, someone could pay a lower amount, such as 5%, if the threshold was reduced to £5,000. The measure is excessively punitive and will hit many small businesses in everyone’s constituency, including mine.

I think of small businesses throughout North Antrim. They employ six, seven, eight or 10 people, and may stretch to take on an extra worker, but they will not be stretching like that any more. They will be stretching the other way, because the consequence of the measure is putting them over the edge in terms of what is affordable. I am talking not just about small businesses but about a vast swathe of a critical sector that keeps our society in operation. Our community and voluntary sector will be among those most cruelly affected and particularly those who are often doing the job of Government, delivering services in our community. They will bear it unabated, without any assistance such as the assistance that the public sector will have.

I was interested to receive and to read the report from the Northern Ireland Council for Voluntary Action, which is clear that whereas public sector organisations will have their budgets on this aspect reimbursed, voluntary and community sector organisations will not have the same protection. They will have to absorb the budget increase. Yet, as I have said, many of those in the voluntary and community sector deliver services on behalf of Government. The public sector therefore gets matters ameliorated, but those that deliver services for Government in the voluntary and community sector will not. That will have an effect not just on those organisations, but on the services they deliver and, therefore, on all our constituents to whom those services are delivered. When we ally 15% on national insurance with the increase in the living wage, we have a double whammy. The two together are the very thing that will produce a negative outcome.

The hospitality sector in my constituency, as a sector that already runs on relatively small margins and employs a lot of part-time people who will now fall within the ambit of employers’ national insurance, has drawn attention to the fact that the increase, along with the living wage increase, will impose a huge burden. Indeed, the sector’s organisation has suggested that the living wage and national insurance increases will add £2,500 a year for every employee. What business, in current circumstances, can simply shrug that off and carry on unaffected? There will be very few, indeed.

The consequences will be substantial and will affect many small businesses, be it the butcher on our high street, our community services provided by voluntary organisations, our doctors or our dentists. The latter are already under huge pressure and many are giving up national health service provision. Why? It is because they cannot make ends meet. Then, Government come along and put this burden upon them.

I therefore say to the Government that, yes, they have the numbers that mean they can close their ears to all of this. They can impose this if that is their will, but in imposing it they will do irreparable damage to those who they say they care about. This is a wake-up moment. If the Government truly care about ordinary people, whose jobs will be lost and who will be affected by this measure, and about ordinary businesses, which are not rolling in riches but making ends meet, they need to find a way to readdress this issue and to bring back some viability, going forward, for those businesses.

[John Grady (Glasgow East) (Lab)]

Like many on the Government Benches, I have spent many years of my career in business—in my case, as a lawyer. I have worked with some of the largest companies investing in the United Kingdom and some of the smallest companies in the country, such as charities, third sector organisations and others. What they value most of all is economic stability. What they do not value is huge increases in interest rates overnight and rampant inflation.

I understand how important it is to investors to ensure that the public finances are managed in a prudent way, which embraces and faces up to the realities. That is the foundation of the Budget and of our approach to the difficult decisions the Chancellor of the Exchequer has taken on national insurance contributions. A number of the parties on the Opposition Benches, and the Conservatives in particular, criticise, but they broke Britain’s economy and we are left to clean up their mess. There is nothing clever or great about promising that hospital after hospital will be built and not having the funds to cover that. That is the politics of the Santa Claus letter.

The Budget of my right hon. Friend, the Chancellor of the Exchequer, delivers on our commitments to the electorate. It puts an end to non-dom tax status and gets rid of a VAT exemption on private school fees to fund state schools, such as those in Glasgow. The national insurance contributions are an important part of that financial package. The Budget delivers a fairer, more sustainable tax system. Under the previous Government, the tax burden was placed mainly on the shoulders of working people. We heard from the hon. Member for Angus and Perthshire Glens (Dave Doogan), who represents a beautiful constituency, that that is precisely what SNP members are fans of—increasing income tax and national insurance on working people. We have seen that in Scotland time and again. The tax burden that working people face is absolutely enormous. If a person works in Newcastle and wants to move to Edinburgh, they will have to pay more tax to work in the NHS in Edinburgh. If that is supporting Scotland, who knows? We are delivering on our promise not to raise taxes on working people.

[Lincoln Jopp (Spelthorne) (Con)]

Will the hon. Member give way?

[John Grady]

I wish to make some progress if I may; I have been waiting a long time to speak.

Our plans will not see additional taxes coming out of a worker’s payslip. We are supporting small businesses by doubling the employment allowance before companies and charities have to pay national insurance, which will protect hundreds of thousands of employers from paying any national insurance at all.

According to the OBR, changes to the employment allowance will see 250,000 employers across the UK gaining from these changes, while an additional 820,000 or so will see no change. This means that around half of all businesses that are liable for national insurance will pay the same or less than they were previously, while, set against that, many businesses and charities in Scotland and Glasgow will be protected against the increase. This strikes a fair balance.

As a Scottish MP, I must turn to Scotland. The context of this national insurance rise is that around one in six Scots is on an NHS waiting list. On a Friday evening a few weeks ago, I was contacted by a constituent whose wife of 40 years was in hospital. He was petrified and devastated because there was no bed available for his wife after she had suffered a stroke. That is the context of this national insurance rise. It is correct to raise taxes to invest in our health service, and that is the beginning and the end of it. In Glasgow, this year, 172 teaching posts have been removed. That is the context of this national insurance rise.

Our Budget delivered the largest settlement for the Scottish Government in the history of devolution—£4.9 billion of additional funding and further funding to cover the national insurance rise over the next two years. This is a UK Government delivering for Scotland and giving the SNP the tools to clean up its mess. The changes to national insurance are critical to this additional funding, which will benefit the people, charities and businesses of Glasgow and Scotland.

Despite this extra funding, the SNP repeatedly criticises our Budget and our management of the public finances. This is—as some say of Christmas dinner—somewhat rich coming from the Scottish National party. After almost 18 years of the SNP Government in Holyrood, public finances are in a catastrophic mess. Let me provide a simple example: the replacement Arran ferries are hundreds of millions of pounds over budget and years late, making lives miserable for people trying to get from Arran and damaging the tourist industry. It would be unwise to choose Rod Stewart’s song “We are Sailing” for the SNP Christmas karaoke, because no one is sailing under the Scottish Government’s appalling management of the economy.

The SNP has criticised our choices. This Government have not been in power for even six months. The Tories were in power for 14 years and the SNP have been in power for 17 and a half years. On any view, the criticism of our Budget after nearly six months defies logic, but that defiance of logic does not end there. The Conservatives criticise our choices, but they do not say what they would do instead. They may have a shopping list of additional spending commitments, but they simply do not explain how they will tax or fundraise those spending commitments. This is not serious.

We are having to make difficult decisions. The Government are asking employers to contribute more. That will enable investment in public services, which is good for employers. We are being straightforward about the choices regarding the public finances, spending, tax and national insurance. I say to Opposition Members that cakeism is for Christmas. It is not an approach for serious Government or serious Opposition. The job of a serious Government is to make serious choices to progress the country—choices that will allow us to invest in our public services.

Oral Answers to Questions

John Grady Excerpts

Tuesday 29th October 2024 Commons Chamber

[James Murray]

My hon. Friend is absolutely right to say that while it is essential that we tackle high energy bills now, it is also essential that we invest for the future to bring energy bills down for good. Critical to that is investing in our housing stock, as I have mentioned, but also, through GB Energy, in sustainable energy sources to make sure we improve our energy security and bring bills down for families across the country.

[John Grady (Glasgow East) (Lab)]

8. What steps she is taking to help ensure sustainable public finances.

[The Chancellor of the Exchequer (Rachel Reeves)]

In July, a Treasury assessment of public spending showed that this Government inherited a £22 billion black hole in the public finances. I took immediate action—[Interruption.] Those on the Opposition Benches may not like it, but it is true. [Interruption.]

[Rachel Reeves]

There are not many Conservative Members, but they still make quite a lot of noise.

I took immediate action by identifying savings and making reforms to the spending and fiscal framework to ensure that never again can a Government be allowed to make unfunded commitments, and to leave their successors with a massive black hole, as the Leader of the Opposition and the previous Chancellor did. As my right hon. Friend the Chief Secretary to the Treasury said to the House yesterday, the Budget will confirm the detail of the robust fiscal rules—this was set out in our manifesto—and will set out tax and spending plans, alongside an updated forecast from the independent Office for Budget Responsibility.

[John Grady]

Does my right hon. Friend agree that being honest and transparent about the state of public finances is the right thing to do, and that having a long-term plan to fix the foundations of our economy and the public finances is preferable to the short-term, chaotic approach taken by the SNP in Scotland, which has led to three consecutive years of emergency in-year budget cuts?

[Rachel Reeves]

This Government are committed to sustainable public finances, unlike two of the Opposition parties. A stable economy built on stable public finances is a key foundation for growth, which is why Labour is on the Government Benches, and the SNP and the Tories are on the Opposition Benches. The robust fiscal rules set out in our manifesto will put the public finances on a sustainable path, so that we can move the budget into balance, with day-to-day costs being met by revenues, and get debt falling as a share of our economy. Given our challenging inheritance, that will require difficult choices, but this Government will make them to fix the foundations of our economy.

VAT: Independent Schools

John Grady Excerpts

Tuesday 8th October 2024 Commons Chamber

[John Grady (Glasgow East) (Lab)]

Thank you, Madam Deputy Speaker. It is an honour to have the opportunity to give my maiden speech today. I start by paying tribute to my two immediate predecessors, David Linden and Alison Thewliss. They were thoughtful and conscientious Members of Parliament. David’s diligent work included chairing the all-party parliamentary group on premature and sick babies, a topic that is close to my family’s heart. I greatly respect Alison and David, and thank them for their service to Glasgow. I should mention two other predecessors, Margaret Curran and Anas Sarwar, who, after leaving this House, have continued their public service in Africa and Scotland with great effectiveness.

It is a tough act to follow two great maiden speeches. The hon. Member for Isle of Wight East (Joe Robertson) mentioned bears, and I believe that Bear Grylls lived on the Isle of Wight for some time. A good friend of mine used to suggest that I name my son, and then my daughter, after Bear Grylls, but no good comes of naming a child “Bear” in Glasgow.

The constituency of my hon. Friend the Member for North East Derbyshire (Louise Jones) covers Clay Cross, I believe. The former Labour leader, Arthur Henderson, served as an MP there and Dennis Skinner served as a councillor—quite a combination.

This debate is about schools. State education has been a huge part of my family’s life. My mum and my two aunts were state school teachers. Dad was a rebel, who trained teachers and taught English in a prison to immigrants. They all had a great passion for state education, and I see that passion every day in the teachers who teach my children and who teach in the state schools across Glasgow East. Many parents in Glasgow East struggle to pay for the bare essentials—the cost of the school day. Without being controversial—this is a maiden speech—those parents have great aspirations for their children. The duty of any Government is to focus their finite and limited resources on those families across our nation.

I must say something of Glasgow East, the greatest of the Glasgow constituencies. Next year, Glasgow will celebrate its 850th birthday. My seat is at the heart of it, with some of the greatest medieval architecture. Glasgow green hosts the Templeton building, which is better than anything in Venice. George Square is the heart of Glasgow. My seat has an incredible cultural and artistic life. The young children I have listened to at the Big Noise project in Govanhill, the Glasgow schools CREATE project and the East Glasgow Music School give me great comfort that the next 850 years have a bright artistic future.

We also have some of Scotland’s finest venues, including the Barrowlands ballroom where David Bowie, among others, has played. Gil Scott-Heron was one of the most significant North American musicians of the last century. I have no idea if he played in Glasgow East, but his dad did: he was the first black player for Glasgow Celtic. The world’s first black international footballer also played in Glasgow East. Andrew Watson captained Scotland against England in 1881, and I am delighted to say that Scotland beat England 6-1. Both, as black players, were pioneers. Another football pioneer was Baron Ouseley, who passed away earlier this month. He was the founder of Kick It Out. I think everyone in this House would pay tribute to Baron Ouseley’s immense contribution to our public life. [Hon. Members: “Hear, hear.”] Like the footballer Andrew Watson, Baron Ouseley came to Britain from Guyana. One of Glasgow East’s greatest strengths comes from centuries of immigration. We have one of the oldest Muslim communities in Scotland, of which I am incredibly proud. People from across the world—Roma people, Nigerians, Irish people and Italians—contribute greatly to our city. Immigration has been a source of joy, strength and energy in Glasgow over its 850 years.

Returning to football, I must emphasise that I am entirely neutral about Glasgow football—no good comes of taking a view—but I congratulate Vale of Clyde, the third-oldest Scottish junior club, which has just celebrated its 150th birthday, and Garrowhill Thistle, who made it to the Scottish junior cup final at Hampden this year. I leave football by noting that Kenny Dalglish was born in my seat. King Kenny was one of the best players of the beautiful game, but that is not the profoundest beauty of Kenny Dalglish’s life. It is his devotion to the victims of the Hillsborough disaster and their families. He has lived the famous Liverpool saying, “You’ll never walk alone”. It is that saying that encapsulates the people of Glasgow East.

Many people in Glasgow East face profound challenges with poverty and poor housing, but Glaswegians are determined, hard-working and tenacious, and no more so than when it comes to looking after each other. If I may, I would like to give some examples. John Ferguson MBE, a Parkhead man, was the driving force behind the Parkhead Housing Association. Jimmy Mutter fought hard to transform the Gorbals. He succeeded. The volunteers at the Glasgow south-east food bank, founded by Audrey Flannagan, have provided help to families in Govanhill for many years. Audrey, John and Jimmy made sure that their constituents did not walk alone.

The same can be said about many others in Glasgow. Their values are shared across our family of nations, from the Isle of Wight to the north of Scotland, where my mother came from. The work of these great constituents I have mentioned points to our most urgent task: to fight against poverty. In Glasgow’s 850th year, my duty is simply to play my part in ensuring that no one in Glasgow East, or anywhere in this family of nations, walks alone.