Employer National Insurance Contributions

Lisa Smart Excerpts

Wednesday 4th December 2024 Commons Chamber

[Lisa Smart (Hazel Grove) (LD)]

I will talk in particular about two organisations in my constituency that have contacted me about the subject we are debating. For context, we know that small businesses have had a tough time for a number of years. They have been struggling with rising prices, interest rates and input costs going up. They were absolutely hammered by the previous Conservative Government, who broke their promise to reform business rates, trapped them under a mountain of red tape and made it much harder and more expensive to trade internationally. Making things harder for small businesses and their workers just is not right. They are the lifeblood of our economy and are exactly where we should be looking for the growth we all need. When we are talking about small businesses, we are also talking about community pharmacies, hospices and GP practices, all of which will be impacted by this tax rise.

We on the Liberal Democrat Benches are particularly worried, as the House would imagine, about the impact of these tax rises on our health and social care sector. We are worried about what it means for social care providers, for the families who depend on them and for the local councils that have to find the funding for many of them. Raising the employment allowance will shield only the very smallest, leaving thousands of small organisations still negatively affected.

In the Chief Secretary’s opening remarks, he asked for ideas about where else he might find some tax revenue. I really encourage him, and indeed all Government Members, to reread the 2024 Lib Dem manifesto—I am sure they have read it at least once. As my hon. Friend the Member for St Albans (Daisy Cooper) laid out from our Front Bench, the Government could reverse the tax cuts that the previous Government gave to the big banks, reform capital gains tax so that it is applied in a much fairer way, and charge the gambling giants more so that they pay their fair share.

I turn to the two organisations in my constituency. A childcare company got in touch because, like many early years settings, it allocates 70% of its revenue to staff wages, and annual increases to the national living wage combined with the increase in NICs will make it impossible to pay for rent, staff improvement and training. That will just make the staffing crisis worse, which is the exact opposite of what the Government say they want.

[Gideon Amos (Taunton and Wellington) (LD)]

Does my hon. Friend agree that businesses such as Sheppy’s cider farm in my constituency, to which I invite all Members to come to enjoy a pint of cider, will be affected not just by the national insurance rises but by the change in business rates and the family farm tax?

[Lisa Smart]

I thank my hon. Friend for his intervention. Sadly, I have not yet tried the wares of Sheppy’s cider farm, but I would welcome the opportunity to visit, try those wares and support it as we all need to do in the face of these changes, which affect everyone.

The second organisation is one of my GP practices, which emailed me. It operates as a legal partnership, as it has done since the inception of the NHS, but as it is a GP practice it lacks flexibility to absorb the increased costs. It cannot raise prices and it cannot do more than it is already doing and drive up activity levels. As it is designated as a public authority but does not get an employment allowance exemption, it will bear the full cost of the impact. It tells me that the rise in national insurance and the lowering of the thresholds will force it into reductions in clinical staffing, adversely impact patient care and increase waiting times. That is exactly the opposite of what the Government say they want.

[Gregory Stafford (Farnham and Bordon) (Con)]

The hon. Lady made that point powerfully. I have spoken to a GP surgery in my constituency that will have to cut seven members of staff, including a GP, a nurse, a social prescriber, a pharmacist and others providing ancillary services. These changes will affect not just her constituents and my constituents but every single constituency in the country, because every single GP practice will have the same problem.

[Lisa Smart]

I completely agree with the hon. Member’s point. All Members across the House want to see our NHS thrive and to see the healthcare and social care that our constituents deserve. I urge the Government to think again about their plans.

[Victoria Collins (Harpenden and Berkhamsted) (LD)]

In Harpenden and Berkhamsted we have the Elms medical practice, which has said it is dedicated to the NHS and wants to serve people but is facing these difficulties. It is asking the Government to rethink their choice on national insurance. This is about those who want to serve and our constituents who need them.

[Lisa Smart]

I very much agree with my hon. Friend. We will all have had constituents and organisations contact us because they are really worried about the impact that these changes will have.

I do not think that the Government intentionally set out to make life more difficult for GPs, and I do not think that they intentionally set out with their Budget to make life more difficult for pharmacies, for hospices or for dental practices, but we need to speak up for constituents who contact us to say that if the Government want to keep the cost of childcare from rising and constituents to be able to access a GP appointment in a timely manner, they need to think again about this rise. I urge them to do so.