Employer National Insurance Contributions: Charities

John Milne Excerpts

Tuesday 7th January 2025 Westminster Hall

[Joe Robertson]

I agree: of course it is ludicrous. This is charitable money—most of it is charitable donations—that is given to charities to provide valuable work, and the Treasury is taking it and putting it into the Government’s coffers. Some of these charities, such as those in my right hon. Friend’s constituency, are small charities doing valuable work and are the least able to afford to give money over to the national Government. It is therefore unsurprising that 7,000 charities have signed an open letter to the Chancellor. This is about not just the increase in national insurance contributions but the timing of it and the combination of factors.

[John Milne (Horsham) (LD)]

rose—

[Joe Robertson]

I will make a little progress and then come back to the hon. Gentleman.

Most charities are suffering as they try to raise charitable funds, yet the Government have decided to take some of those charitable funds for themselves. For charities that support older people, such as Age UK, the simultaneous impact of the withdrawal of winter fuel payments has meant that more people are using their services, and at the same time the Government are taking money off them.

--- Later in debate ---

[Joe Robertson]

I agree that the Minister needs to go back and do that. That is why I secured the debate.

The chief executive of Crisis said:

“Increasing employers’ National Insurance contributions will have a dreadful impact on charities at a time when we are seeing unprecedented demand for our services.”

Some 75% of charities are reducing or considering withdrawing from public service delivery. Who will pick up that shortfall? In the worst case, no one will pick up where charities withdraw, or the Government and the public sector will have to, and I am fairly sure it will cost them more than £1.4 billion to do so. I prefer to put my trust in charities with experience in what they do, rather than the Government having to put emergency measures in place because charities are forced to withdraw. Some 61% of them are likely to cut staff.

The Government’s stated aim is not backed by their tax policy in three areas in particular: in health and social care, which we have already spoken much about; in poverty and homelessness; and for vulnerable groups.

[John Milne]

On the hon. Member’s earlier point about Age UK, it estimates that just in my Horsham constituency it will cost £150,000 per year to cope with the changes and the extra charge. Age UK is not a business and cannot raise its prices; it can only cut its service. Does the hon. Member agree that when one in five pensioners are adjudged to be living in poverty, this is the wrong time for such a measure?

[Joe Robertson]

I agree with the hon. Member. Broadly speaking, Age UK operates as small charities in individual communities. Age UK in the Isle of Wight, where my constituency is, also faces paying tens of thousands of pounds. On a national scale, that might not seem like much money, but it makes a huge difference at the local level and leads inevitably either to service cuts or to staff cuts. I agree with the hon. Member that no good can come of it.