National Insurance (Contributions) Bill

Julian Smith Excerpts

Tuesday 10th December 2013 Commons Chamber

[Shabana Mahmood]

First, may I join the Minister in paying tribute to all the members of our Bill Committee, who helped to scrutinise the Bill and provided valuable insight into its measures? If there was the occasional predictable question, it was always asked with good humour and good grace.

We have supported the employment allowance from the moment it was announced in the Chancellor’s last Budget. Our bone of contention with the Government has not been about the detail of the EA or who it applies to; rather, it has been about the time scales for its introduction. We believe that the Government should have changed course much earlier, particularly given what happened with the previous regional national insurance holiday scheme. Although that helped a lot of businesses, the number certainly fell far short of the 400,000 it was supposed to assist.

The Government say this Bill is about helping our country compete in the global race, but if we are going to compete in the global race, we will have to start getting out of the starting-blocks more quickly. I therefore say to the Minister that the Government should have acted more swiftly on national insurance. If the Government had changed course sooner, we may have been well into the take-up of the EA by now instead of having to wait for it finally to be introduced in April next year, and the country might already be enjoying all the good effects that all of us across the House hope will flow from it.

In last week’s autumn statement the Government introduced a new measure that we have also supported today: the abolition of employers’ NICs for all employees under 21 years of age. I repeat what I said to the Minister in our earlier debate, however: we would have liked bolder action from the Government in their autumn statement to help deal with the problems of youth unemployment. We do not think this measure, which will come into force only in 2015, goes far enough, nor will it stimulate higher levels of youth employment as quickly as we would like. The real bone of contention, which I fear we will continue to debate until this measure finally comes into force in 2015, is the delay. None of the reasons the Minister gave in his winding-up of the debate on new clause 3 for waiting until 2015 sounded sensible to me. He said that if the Government could have done so, they would, of course, have wanted to bring the measure forward in 2014. But the Government could also have got rid of the regional national insurance employers’ holiday scheme earlier when it was clearly failing, but they did not do so. I do not understand why it is impossible to introduce this measure earlier. I am sure we will examine that issue further when the Bill is debated in the other place and through oral and written parliamentary questions. The Minister and I will continue to debate the merits of the introduction of that measure in 2015, as opposed to the introduction of the new clause, which is what we would have liked.

We have supported the EA in the Bill and we consider that the extension of the GAAR to apply to national insurance contributions is sensible, although we continue to have very real concerns about the extent of the GAAR.

[Julian Smith (Skipton and Ripon) (Con)]

Does the hon. Lady wish to put on record in this Chamber that she regrets that Labour did not bring an anti-avoidance rule into law during its 13 years in government?

[Shabana Mahmood]

As the hon. Gentleman knows, we had exactly the same line of questioning in the Bill Committee and I remind him that the Labour Government brought in the disclosure of tax avoidance schemes, which has raised a hell of a lot more money than the Government believe the GAAR will. We have a proud and strong record on tax avoidance. Also, that does not get the Government off the hook in respect of their GAAR, which will not make quite the impact on the tax gap that everybody would like.

The measures relating to oil and gas workers and to limited liability partnerships have changed in order to clarify the Government’s intentions in the new clauses and the removal of old clauses 12 and 13, but they are both sensible measures that we are happy to support. So, although we have real concerns about the pace at which the Government are moving to deal with the challenges that this country faces—especially youth unemployment, which we are debating today as a result of the measure in the autumn statement—we support the measures themselves and will support the Bill’s Third Reading.

--- Later in debate ---

[Julian Smith (Skipton and Ripon) (Con)]

New clause 3 was a fantastic Christmas present to members of the Bill Committee and a big boost for youth employment across the UK, particularly in North Yorkshire, where I represent a very rural set of communities and where, although we have very low unemployment figures, young people still want jobs. This will be a big boost for them.

During small business Saturday, Government Members and, I hope, Members across the House, were out seeing small businesses across the areas we represent. In the town of Settle in the Yorkshire dales, people were clamouring for more information on the Government’s policy on the employment allowance and their new policy on employing under-21s without paying tax. That makes a huge difference, as other hon. Members have said, to businesses with a small profit margin that have just been set up.

Such businesses include JW Garnett, which managed to sell me a toaster on small business Saturday; 3 Peaks Cycles, which is revving up for the Tour de France in Yorkshire, which the Government have backed with £10 million; the Talbot Arms, which is being funded by a parent of the publican who is anxious to get moving and employ more people; and the Three Peaks Gallery, which is run by Hazel, who lost her husband at the end of last year, has this year been trying to keep the business moving and is now planning to use the Government’s measures to expand and employ people.

The employment allowance and the removal of employers’ NICs for under-21s, along with the business rate announcement in the autumn statement, mean that this Government now have a bumper range of policies to ensure that we are the party of business. The policies also include start-up loans, apprenticeships, the boost to the funding for lending scheme and a tax reduction whereby we will have one of the lowest rates of corporation tax in the world and thereby one of the best places in the world in which to do business and invest. My hon. Friend the Member for Macclesfield (David Rutley) has mentioned how difficult it is to employ people, but our moderate measures on employment—which faced stiff opposition from the Labour party—will make it easier for businesses to take on people.

All those measures mean that the Conservative party is the party of business. We will ram that message home as we approach the next election, because anyone who wants to start a business, who is an entrepreneur, who is thinking about being self-employed, who wants to take a risk or who thinks it might be worth investing in an initiative, market or product has only one choice in 2015, and that is this party.

Question put and agreed to.

Bill accordingly read the Third time and passed.