National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Ahmad of Wimbledon Excerpts

Report stage
Tuesday 25th February 2025 Lords Chamber

[Baroness Fraser of Craigmaddie (Con)]

My Lords, I am not an economist, but I run a small Scottish charity that provides health services. I want to come back on some of the points raised.

I wish the noble Lord, Lord Eatwell, the noble Viscount, Lord Chandos, and even the noble Lord, Lord Macpherson, had had the recess that I have just had—looking at our employees, some of whom have been with us for over 20 years and are highly trained clinical specialists, and telling them that their roles are under threat of redundancy. As I said at an earlier stage of this Bill, I have not been able to participate in it as much as I would have wished because of its effects on my organisation, which are that people will lose their jobs and organisations will lose skill. Those are very difficult things to build up again.

Like the noble and learned Lord, Lord Wallace, I have been in touch with the Coalition of Care and Support Providers in Scotland. I am slightly concerned that these amendments do not cover health and social care services in Scotland. If he is to bring back an amendment at Third Reading, I will happily work with him on it.

I would love a simpler tax regime and would absolutely support it. The way to have one is not to have this national insurance increase—that would be very simple. The lists covered by these amendments are all of organisations that support public services and the public sector. These are services that many government agencies are required to provide by law, yet they are farmed out to organisations such as ours, as well as to CrossReach, Ark and others.

Frustratingly, this demonstrates a huge lack of understanding by this Government of how these measures will affect vulnerable people—the people who these organisations support. My organisation, Cerebral Palsy Scotland, is a regulated, registered charity, so we cannot put up prices. Our raison d’être is to make our services available to the most vulnerable who cannot pay for them, and so we cannot put up our prices. Yes, we may have benefitted last year from paying slightly less employers’ or employee national insurance, but all our providers—the people who clean our centres, help us with IT, empty our sanitary bins, and things like that—employ people and they are all putting up their costs. Our costs are rising, our national insurance is rising, and because of the minimum wage increases at the same time, it is becoming more and more expensive for us to employ people. The only thing we can therefore do is to cut our cloth and employ fewer people.

I do not understand these measures. I support having lists of different sectors, because these are the sectors that are delivering support that gives people choice, quality of life and control over their lives, and that support the NHS and the social care sector, which would otherwise be stuck. This is a measure that will not save public services, as the Minister has told us it has been put in place to do, but that will, I am afraid, crush them.

[Lord Ahmad of Wimbledon (Con)]

My Lords, briefly, I support the amendment so ably tabled by the noble Baroness, Lady Barker. I pay tribute to her for her attentive nature during Committee. I say to the noble Lord, Lord Eatwell, that the fact there is this extensive list demonstrates once again the lack of an impact assessment, on which I implored the Minister in Committee.

I was a Minister for over 12 years. One thing you learn as a Minister is that, when taking a Bill through, you must consult with and speak to the sectors—you must talk to them and understand their challenges and then address those issues. Unfortunately, that had not been done. Take adult social care, where the impact is close to £1 billion. We may hear from the Minister that this has been addressed in the Budget, but it has not. The Nuffield Trust has said as much: the actual measures put forward in the Budget will be dwarfed by these contributions, and that is just in adult social care. Talk to community pharmacies and they will make a desperate plea, akin to what we have just heard from my noble friend, and say that they will have to shut. Why? Because they cannot afford to keep their employees.

Even at this late stage, I implore the Minister to listen, connect and communicate, and, I hope, to take on board some of the challenges and important concerns being put across in this House on behalf of the many different community services that will so desperately be impacted by these national insurance increases.

[Lord Leigh of Hurley (Con)]

My Lords, I am somewhat amazed by some of the arguments I have heard in this debate. The Bill is before us and we are a revising House. Our purpose is to debate the Bill, put forward amendments, debate the amendments and vote on them. The idea that we should not be changing this because we should not change the Budget is absurd; it defeats the whole purpose of having the House of Lords. We are a revising Chamber; we bring with us expertise and experience, which many of us would like to think assist the Government in their decisions, particularly when they make bad decisions—of which this is one.

The noble Lord, Lord Eatwell, talked about Adam Smith’s desire for simplicity, but he also wanted fairness. What has happened here is not fair. If the noble Lord consults the organisations with which I know he has been connected in the charitable and university sector, they will all say that this is a very unfair imposition on their modus operandi.

There is a reason why there are so many amendments. The first amendment is excellent, and passing it will deal with all the issues in one go. If it is not successful, other amendments will follow that will detail the sectors on which laws can focus their attention.

The noble Lords, Lord Eatwell and Lord Macpherson of Earl’s Court, and others may not have heard me in Committee, where I attempted to cost the various types of amendments, as well as the whole effect of the Bill, on the charitable sector. We have made attempts to detail them, and in other groups of amendments I will discuss those numbers and invite the Government to comment on them. The absolute total that the charitable sector itself has said that this would impact will be £1.4 billion, out of the alleged £22 billion black hole that the Government claim. We have made suggestions about how this may be recouped in other areas.

In Committee, I talked about the enormous damage that the Government are about to impact on the adult social care sector. It is utterly demotivating for the very many people, including me and others in this Chamber, who go out fundraising for such charities, doing our best to help those in need, only now to see the Government snatch it away in such a heartless manner.

In Committee, we discussed some of the big numbers. At that stage, I focused on social care and, as an example, the cost that Jewish Care faces—£1.1 million, which it does not have—to pay for this increase in national insurance. This time, I will discuss hospices, because I do not want to repeat what was said in Committee—albeit it was in Grand Committee and so did not allow us the opportunity to vote, which was extremely disappointing.

I will look at one hospice: Thames Hospice, which is close to Hurley. I was introduced to it by my then local MP, who is now my noble friend Lady May of your Lordships’ House. Its excellent CEO, Dr Rachael de Caux, is reported as explaining that it will now have to post a £1 million deficit and that the NI increases, together with the national minimum wage increases, will cost it £650,000. This is a charity that raises some £4 million from its fundraising, so that is a very material sum. As she herself memorably put it:

“The NHS is supposed to be from cradle to grave and what we have is from cradle to a few months before”


the grave.

Yes, a £100 million for the sector was announced before Christmas, but, as my noble friend Lord Howard of Lympne explained, it is a one-off spend over two years—actually, it is largely back-ended, with most of it in the second year—and restricted to capital sums. In fact, it is spread over 170 hospices, so it is a bit of an insult to claim that that is proper compensation.

Thames Hospice is looking to try to serve 400 people, mainly in their homes. I was very pleased to see that, in the amendment, proposed new paragraph (f) specifically covers those who are being cared for at home. As a charity, it is dependent on the local community for its generosity and financial support. The Government cover only about 30% of its costs, and the hospice has to raise £34,000 a day to provide all its services. The Government know that the demand for these sorts of services will grow. It is estimated that, in Thames Hospice’s catchment area alone, the overall demand for palliative and end-of-life care is expected to grow by at least 9% by 2030, with the number of deaths rising to 4,150 in 2030.

Perhaps the Minister can explain to Thames Hospice what it is expected to do, following this attack on hospices by the Government. Is it supposed to turn away people? Will it have to offer less care? It will see more people die in pain and agony, as it cannot offer the palliative care that it wishes to provide. I am sorry to be so graphic, but that is the choice for your Lordships’ House today. How can anyone hold their head up high if they walk through the Division Lobby seeking to cause such damage to the hospice sector?