National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill (First sitting)

Laura Smith Excerpts

Tuesday 14th May 2019 Public Bill Committees

[Grahame Morris]

Q I am with you. Do we have an estimate of how much the Treasury has lost as a result of using this method to avoid paying NICs?

Simon Smith: We do not have a breakdown of that.

[Laura Smith (Crewe and Nantwich) (Lab)]

Q It is a pleasure to serve under your chairmanship, Ms McDonagh. A quick question for the Minister: how much consultation has there been with the trade unions over this?

Robert Jenrick: We consulted twice and the trade unions took part in the consultations.

Simon Smith: The Trades Union Congress definitely responded. I have a full list of responses, and would have to look at who else responded. The Trades Union Congress definitely sent a response.

Robert Jenrick: We will confirm which other trade unions responded to the consultation. From memory, the Trades Union Congress certainly did.

[Laura Smith]

Q So we can get some of that information from you. Brilliant, thank you.

Simon Smith: Yes. I think it is publicly available. There is a full list of the respondents to the consultation on termination payments at the back of the consultation document.

[Thelma Walker (Colne Valley) (Lab)]

Q It is a pleasure to serve with you in the Chair, Ms McDonagh. There is concern among trade unions that this means downward pressure on the amount received by people losing their jobs, who are, by definition, in a time of need. What are your comments on that?

Robert Jenrick: I tried to answer that earlier. We all understand that, regardless of income, losing your job is a very difficult period in your life. People of all income levels can live to their income and have commitments and so on. I do not for one moment underestimate the difficulty that that situation presents to individuals and their families. However, this measure is targeted at higher earners. We have the £30,000 threshold, which takes out the majority of termination payments. Around 20% of those individuals receiving a termination payment will be affected by this, so 80% will not be affected.

Those who are affected will be individuals in the higher income brackets, as we said earlier—those in the top two or three income deciles. They will be higher rate or additional rate taxpayers. I do not diminish the fact that for higher rate taxpayers, losing your job is a very difficult period in your life which puts all manner of pressures on you and your family. It is worth noting, at least, that this is a measure that is unlikely to impact those on lower incomes.