National Insurance Contributions

Jonathan Brash Excerpts

Tuesday 4th February 2025 Commons Chamber

[James Murray]

Regulations are made each year to set various national insurance thresholds, and to uprate child benefit and the guardian’s allowance. In opening the debate, I will give the House details of what the regulations set out to do. First, the Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran’s Relief) Regulations 2025 set the rates of certain national insurance contribution classes and the level of certain thresholds for the 2025-26 tax year. The lower earnings limit, the small profits threshold and the rates of class 2 and class 3 contributions will all be uprated by the September consumer prices index figure of 1.7%, while the other limits and thresholds covered by the regulations will remain fixed at their existing levels.

The regulations also make provision for a Treasury grant—a transfer of wider Government funds—to be paid into the national insurance fund, if required, for the 2025-26 tax year. The regulations also, importantly, extend the veterans’ employer national insurance contributions relief until April 2026. The scope of the regulations under discussion is limited to the 2025-26 tax year.

As hon. Members will know, national insurance contributions are social security contributions; people make contributions when they are in work to receive contributory benefits when they are not working—for example, after they have retired, or if they become unemployed. National insurance contribution receipts fund those contributory benefits, as well as helping to fund the NHS.

The primary threshold and the lower profits limit are the points at which employees and the self-employed start to pay employee class 1 and self-employed class 4 national insurance contributions respectively. The primary threshold and lower profits limit were frozen by the previous Government at £12,570 until April 2028. However, the level of those thresholds does not affect people’s ability to build up entitlement to contributory benefits such as the state pension. For employees, entitlement is determined by their earnings being above the lower earnings limit, which the regulations will uprate from £123 a week in 2024-25 to £125 a week in 2025-26. That is the equivalent of an uprating from £6,396 to £6,500 a year.

Entitlement for self-employed people is determined by their earnings being above the small profits threshold, which the regulations will uprate from £6,725 in 2024-25 to £6,845 for 2025-26. Uprating the lower earnings limit and the small profits threshold is the usual process, and it maintains the real level of income at which people gain entitlement to contributory benefits. Wage growth is currently higher than inflation, which means that following the uprating by CPI, there will be a reduction in the number of hours that someone who has received a typical wage increase needs to work to gain entitlement compared with last year.

The upper earnings limit, which is the point at which the main rate of employee national insurance contributions drops to 2%, and the upper profits limit, which is the point at which the main rate of self-employed national insurance contributions drops to 2%, are aligned with the higher rate threshold for income tax at £50,270 a year. The previous Government also froze those thresholds until April 2028.

I now turn to the thresholds for employer national insurance contribution reliefs. As hon. Members are aware, the Government have had to make difficult decisions to fix the public finances. One of the toughest decisions that we faced was the decision to increase the rate of employer national insurance contributions and reduce the secondary threshold. Although those changes are the subject of a separate Bill, not these regulations, they are the context for why our decision to maintain other targeted national insurance contributions reliefs is so important. Those employer reliefs include those for under-21-year-olds, under-25 apprentices, veterans, and new employees in freeports and investment zones. The regulations that we are debating set these thresholds in line with other personal tax thresholds.

The regulations also provide for the national insurance contributions relief for employers of veterans to be extended for a year until April 2026. This measure means that next year, businesses will continue to pay no employer national insurance contributions on salaries up to the veterans upper secondary threshold of £50,270 for the first year of a qualifying veteran’s employment in a civilian role.

[Mr Jonathan Brash (Hartlepool) (Lab)]

I welcome the extension of national insurance contributions relief for veterans, but does the Minister agree that we need to do more to ensure that employers across the country know that the relief exists, to incentivise employing veterans?

[James Murray]

My hon. Friend is absolutely right that we want employers to be aware of this important relief, and to encourage them to make use of it to employ veterans. This relief helps to support those who have already given so much to our country, and it also means that the skills and the huge potential of those people who have already given such service to our country can be used to make a further contribution to our country and our economy. We want all employers to know that this relief exists. We can all play a role as local MPs in making sure that all employers in our constituencies are aware of this important relief. I thank my hon. Friend for letting me make that point.

The continuation of the veterans relief is evidence of the Government’s commitment to supporting our veterans. As I explained in response to my hon. Friend’s intervention, it is intended to incentivise employers to take advantage of the wide range of skills and experience that ex-military personnel offer. As I said, it is important that we support those who have given so much to our country by helping to make sure that our country benefits further from the skills and potential of our service leavers.

Let me move on to the national insurance fund, into which the majority of national insurance contributions are paid, and which is used to pay the state pension and other contributory benefits. The Treasury has the ability to transfer funds from wider Government revenues into the national insurance fund. The regulations make provision for a transfer of this kind, known as a Treasury grant, of up to 5% of forecasted annual benefit expenditure to be paid into the national insurance fund, if needed, in 2025-26. A similar provision will be made in respect of the Northern Ireland national insurance fund.

The Government Actuary’s Department report laid alongside these regulations forecasts that a Treasury grant will not be required in 2025-26, but as a precautionary measure, the Government consider it prudent to make provision at this stage for a Treasury grant. That is consistent with what has been done in previous years.

I turn to the draft Child Benefit and Guardian’s Allowance Up-rating Order 2025. As hon. Members will know, the Government are committed to delivering a welfare system that is fair for taxpayers while providing support to those who need it. The order will ensure that the benefits for which Treasury Ministers are responsible, and which His Majesty’s Revenue and Customs delivers, are uprated by inflation in April 2025. Child benefit and the guardian’s allowance will increase in line with the consumer prices index, which had inflation at 1.7% in the year to September 2024. Uprating by the preceding September’s CPI is the Government’s typical approach. Tax credit awards will end on 5 April 2025, so no changes to rates will be required from 2025-26 onwards.

I hope all Members will support the regulations. Rejecting them would mean that HMRC-administered benefits would not rise at all next year, and so would lose value in real terms. The regulations fix most of the rates and thresholds for the national insurance contributions that they cover at the 2024-25 levels for the 2025-26 tax year, except for the lower earnings limit, the small profits threshold, and the rates of class 2 and class 3 contributions, which will all be updated by the September 2024 CPI rate of 1.7%. The regulations also make provision for a Treasury grant. They extend the veterans employer national insurance contributions relief, and increase the rates of child benefit and the guardian’s allowance in line with prices.

Finance Bill

Jonathan Brash Excerpts

Committee of the whole House
Wednesday 11th December 2024 Commons Chamber

[Damian Hinds]

The hon. Gentleman raises an important point. I will come to exactly where the money to meet the costs will come from. We have talked about revenue costs, and the policy paper from His Majesty’s Revenue and Customs covers that, but what about capital costs? What if whole new places need to be created? What if entire new year groups need to be created—or even entire new schools in some cities or local authority areas? Where is the allowance for the capital costs? Then there is, as the hon. Gentleman rightly says, the question of how the costs will be met. The money follows the pupil, so a school will be reimbursed for any pupil who presents there—but after the census date, so it depends on exactly when the pupil turns up—but the question is: from where does the money come? Does it come out of central Treasury coffers, or will the Department for Education be told, “No, we have given you your annual budget, so if more children come into the state sector, you must fund them”?

Will councils be reimbursed additionally if more children come out of independent schools and get EHCPs, or will they also be told that they have to absorb the cost of that, and meet it from their already stretched budgets? Then there are the indirect costs, as trade unions have pointed out, such as teachers being made redundant and, because it is not the turn of the academic year, potentially dropping out of the profession altogether.

[Mr Jonathan Brash (Hartlepool) (Lab)]

The right hon. Gentleman has spoken eloquently and at great length about the needs of children with special educational needs. Does he regret the state of special educational needs provision in this country, and that some people feel that they have to pay because they cannot otherwise get the service that they would like for their children? Does he regret that legacy of the previous Government?

[Damian Hinds]

Look, I want every child to have the best education available to them. When I was working at the Department for Education, I regarded it as part of my job to ensure that nobody thought, “I have to send my children to a private school”—but I would not have denied them the choice. State school improvement over that time will be one of the things that drove the figure I mentioned from 7% to 6%. A huge amount of additional money is going into high needs. The hon. Member for Dartford (Jim Dickson) shakes his head, but it is true; that is in the Treasury’s own figures. It is also true that demand has greatly increased. There is much more to do to ensure that we have the high-needs system and resourcing that we all want.

On the equalities impacts, it may surprise some people to learn that Independent Schools Council census figures show that the proportion of children from ethnic minorities, and, as we have been discussing, the proportion of children with special educational needs, is higher at independent schools than in the state sector. However, the really big equalities issue relates to faith. I am pleased that the Treasury seems to have dropped its earlier assertion that people of faith will not be disproportionately affected by the measures. That assertion can only have been based on the notion that most children of a religious faith are in state education anyway, and are mostly Catholic or Church of England and in denominational or non-denominational schools. However, we cannot pretend for a moment that families of the Haredi Jewish community, or who have children in Muslim independent schools, or who are of certain Christian traditions, will not be affected more than others.

To come to a close, this is a bad policy overall. Education is a public good that simply should not be taxed. That principle is observed by Governments of the left and right all but universally, right across the world. In this country, in education, there is no tax break; in fact, families whose children go to independent school save the state money. Independent schools cater for some needs, such as those met through the music and dance scheme and the needs of small faith groups, that the state sector simply does not. In any case, parents are entitled to choose what they think will be right for their child, whatever the reason.

This measure does not even do what we think gets Labour MPs excited about it. It does not hit its target, because not every parent with a child at a private school is rich, and believe it or not, in some of those schools, including some of the fee-paying Muslim or Jewish Haredi schools I mentioned, the cost of a place is less than the average cost at a state school. Here is the bigger point: there are plenty of parents with children at state schools who are wealthy. If Labour Members really wanted to soak the rich, to tax the wealthy, there are more efficient ways of doing so—and more honest ways of doing so.

Most importantly of all, this policy will have an adverse effect on state education, especially in places where secondary schools are already or almost full. Labour challenges us to say whose side we are on—do we stand with the 94%, or with the 6%? We refuse to choose, because they are all children. There is no need to set one part of our education system against the other, and this tax will be bad for both.

VAT: Independent Schools

Jonathan Brash Excerpts

Tuesday 8th October 2024 Commons Chamber

[Mr Jonathan Brash (Hartlepool) (Lab)]

I am new to this place. Indeed, until 4 July, I was teaching at an independent school. [Hon. Members: “Oh!”] Indeed. To all those Opposition Members who repeatedly say that this is a policy of spite, that this is an ideological attack, that this is envy and that this is cruel and vindictive, I say that it is nothing of the sort. This is about fairness. I have friends and former colleagues who are right now teaching in the independent sector—in fact, they are 10 minutes into period six as I speak. When someone runs a private business, they pay VAT. We believe in paying our taxes. [Interruption.] The hon. Member for Boston and Skegness (Richard Tice) makes the point about charities. I will say the same thing to him that I said to my former boss: charging somebody £15,000 a year for an education is not a charitable act.

[Richard Tice (Boston and Skegness) (Reform)]

Education is a charitable endeavour.

[Mr Brash]

The hon. Gentleman was briefly the candidate in my constituency. Given the result, it is rather a shame that he did not continue to be so.

As I understand it, the Opposition could have tabled a motion about anything for today. They could have tabled a motion about the crisis facing children in social care, slowly bankrupting local authorities such as mine. They could have tabled a motion about child poverty which results in 1,500 Hartlepool children not having a bed to sleep in tonight. They could have talked about the scandal of children arriving at school hungry, the 10% cut to our further education sector, the drop of a third in our apprenticeships, and the school cuts that have cost Hartlepool schools £1.7 million in real terms since 2010. But no, they chose to talk about this—the removal of a subsidy that the 93% pay for the 7% who want to send their children to private school. It is wrong and the myths attached to it are ridiculous.

I do not have the time to go into the many things that I would like to say, but I want to finish on one simple point: I am sick and tired of hearing people talk as if the parents of aspiration and the parents who work hard are only those who want to send their children to private school. All parents aspire for their children, all parents work hard for their children, and we stand up for all parents and all children in this country.

Public Spending: Inheritance

Jonathan Brash Excerpts

Monday 29th July 2024 Commons Chamber

[Rachel Reeves]

I understand the hon. Lady’s frustration and anger on behalf of her constituents that today we had to be honest about the scale of the inheritance we face. There was no money allocated for the A303 by the previous Government, despite their saying that it was going ahead. That is the state of affairs that we inherited. I am sure that my right hon. Friend the Transport Secretary would be happy to meet the hon. Lady and colleagues to discuss the matter.

[Mr Jonathan Brash (Hartlepool) (Lab)]

I thank my right hon. Friend for outlining the Conservative cover-up, for which they should apologise. One of the more shocking things to hear this afternoon is the repeated constant criticism of the idea of paying public sector workers properly. With the election of a Labour Government, are the days of scapegoating public sector workers when it comes to the public finances over?

[Rachel Reeves]

I know how hard our teachers, doctors, nurses, armed forces, police officers and prison guards work to keep us all safe, healthy and educated. They deserve the pay awards that we have announced today. It was the independent pay review bodies that recommended those pay increases. It would be extraordinary not to honour them, and we have done so today.

Economy, Welfare and Public Services

Jonathan Brash Excerpts

Monday 22nd July 2024 Commons Chamber

[Mr Jonathan Brash (Hartlepool) (Lab)]

I congratulate all Members who have made their maiden speeches today, including the hon. Member for Mid Leicestershire (Mr Bedford), who paid a moving tribute at the end of his speech.

I thank staff across the parliamentary estate for diligently and patiently looking after new Members in these first few days.

It is an honour to be called to make my maiden speech, which I do proudly as the Member of Parliament for my hometown of Hartlepool. To represent the place where I grew up, where I met my wife Pamela and where we are raising our young family holds a special kind of responsibility for me. The challenges that Hartlepool people face are personal, because they are challenges that I share. When one of our local businesses closes due to spiralling costs, there is a good chance that I have visited it in better times. When a local play area is the victim of arson, my children are among those devastated at the loss of a place they enjoyed, and when someone tells me that they are living in pain because they cannot see an NHS dentist in a town that has been described as a dental desert, I know how they feel, because I cannot get one either.

It is these experiences that drove me to serve my home-town, and it is Hartlepool people who have given me that opportunity. It is now my duty to respond in kind by delivering for them the opportunities that they have been denied for far too long. That is why I welcome this King’s Speech, which prioritises growth in every part of the country, not just those already blessed with affluence.

Hartlepool’s history is one of innovation and industry. Once the bedrock of the British economy as the country’s third-largest port, we built ships that shipped the Durham coal that powered the world. At one point in our history, Hartlepool’s shipyards, such as William Gray and Company, launched more ships than anywhere else in the world. As a major exporter of steel, we built the bridges, the ships, the railways and the infrastructure that transformed not just our economy but economies across the globe. Such was Hartlepool’s strategic importance that, along with only two other places on the north-east coast, it was targeted for bombardment by the German navy during the first world war. In true Hartlepool style, we were the only place to fire back, making the Heugh gun battery the UK’s only first world war battlefield.

Our industrial heritage has not left us. The Expanded Metal Company, which I have had the pleasure of visiting, provided metal mesh for buildings such as the Stephen Lawrence centre in Lewisham, the Young Vic theatre and New York’s New Museum, among many others. Our world famous, and award-winning, Camerons brewery was built during Hartlepool’s industrial heyday, but it has survived, grown and adapted to a changing economy, and a pint of Strongarm is as good today as it was back then.

In moving the Humble Address, my hon. Friend the Member for Bootle (Peter Dowd) mentioned the famous Antony Gormley statues in his constituency. Although there are no Antony Gormley statues in Hartlepool, we are proud to have built the most famous one. Whenever I travel up the A1 through the constituency of my hon. Friend the Member for Washington and Gateshead South (Mrs Hodgson) and see the magnificent Angel of the North, I remember three simple words: “Made in Hartlepool.”

If our history is one of industry, innovation and growth, I must tell the House in all candour that it must also be our future. Too often, towns such as Hartlepool have been left behind, an afterthought in our national conversation, able only to reminisce about what we once were, not plan for what we can be. This must change, and I believe it will change under this Labour Government.

Right now, we are witnessing a new industrial revolution sweep the world as we shift to a net zero future. Whereas our past was in coal and ships, our future is in new nuclear, wave and tidal. The election of this Labour Government means that revolution is finally coming to our shores, with a national wealth fund investing in jobs in every part of the country, a proper industrial strategy that forges a real partnership with business, and Great British Energy, which will make the UK a clean energy superpower.

I am determined that Hartlepool will play its part in this transformative agenda, once again at the metaphorical coalface of our country’s prosperity and economic growth. That is nothing less than Hartlepool people deserve. They are my inspiration, with their defiance, grit and determination to succeed in the face of challenge. Even in the toughest of times, we come together, stronger, more united and standing up for each other.

Everywhere in our town, we see courage, community and compassion. I have been privileged to work with brilliant Hartlepool people every day to improve our town, from those in our voluntary sector organisations and community groups, our faith leaders, and those in our schools, colleges and clubs, including Hartlepool United; my children and I are proud season ticket holders. All of them are working together in the service of our town.

Hartlepool has produced many leading lights across a variety of professions, from Iron Maiden guitarist Janick Gers, world boxing champion Savannah Marshall, fashion designer Scott Henshall and television presenter Jeff Stelling, whose repeated and impassioned outbursts defending the north-east, its culture, heritage and people from those who would seek to criticise it display all the formidable characteristics of a person raised in Hartlepool.

The Prime Minister has rightly talked about putting his Government back into the service of working people. My unfaltering belief in public service was instilled in me from a young age. I want to take a moment to pay tribute to my father, Charles Brash, a doctor in Hartlepool for over 30 years. One of my earliest memories is of him coming home from a night on call—GPs did that in those days—having a quick bite to eat, and then heading straight back out for his morning surgery. Some people still call me “the doctor’s son”, and I wear it like a badge of honour. His career, spent in the service of others, shaped my values, and my belief that only by putting people first can we achieve the change we need.

I pay tribute to my predecessor, Jill Mortimer. Since her election in 2021, Jill has forged strong relationships in Hartlepool, particularly with veterans’ groups, which I hope to emulate. Public service is never easy, and I thank Jill Mortimer for her service to Hartlepool.

I close by returning to the idea of opportunity. Right now, in 2024, in one of the richest countries in the world, nearly 20% of Hartlepool’s children live in absolute poverty. Nothing could better symbolise the spectre of opportunity denied—the opportunity for a safe and secure upbringing, to fulfil their boundless potential, to get a good job and raise their own family in security and prosperity. So I welcome the announcement by my right hon. Friends the Secretaries of State for Education, and for Work and Pensions, on developing an ambitious child poverty strategy, because as Members know, the record is clear: when Labour is in government, child poverty falls.

I am privileged to stand in this place, but I will never lose sight of the fact that it is a privilege gifted to me by Hartlepool people, far too many of whom have been denied opportunity for far too long. Hartlepool people have a reputation for, on occasion, electing fighters as opposed to quitters, and I am pleased to tell the House that they have done so again. My duty, my service, is to fight for them every day to secure the brighter future that our town deserves.

[Mr Deputy Speaker (Sir Christopher Chope)]

I call Nick Timothy to make his maiden speech.