National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Bishop of Southwark Excerpts

2nd reading
Monday 6th January 2025 Lords Chamber

[The Lord Bishop of Southwark]

My Lords, I wish to make three quick points on this, the largest and probably most consequential, measure announced by the Chancellor in the Budget. My first point is very tentative, as it relates to the promises on taxation made by major parties prior to general elections. We are an unelected House, and I am deeply conscious of the peculiar pressures that political parties navigate to put across a message and compete with their opponents, but I think, wishfully perhaps, that greater restraint by parties on what they promise in the area of taxation would be appropriate since the House of Commons should have maximum freedom to pass a Finance Bill in our overall interests. I cannot be alone in thinking that placing such a burden on employer national insurance because of prior commitments ruling out other possible options is less than optimal and is already seemingly restraining economic growth.

My second point is that the Church of England agreed in 1976 to forgo the pre-existing arrangements whereby ministers of religion were treated as self-employed and embrace employer national insurance. The increases mandated by this Bill affect us as they affect others. The impact nationally for a full year, including clergy, is around £10 million, excluding large numbers of staff directly employed by parishes. For my diocese, the amount is around £390,000. Our principal income source for paying all stipend-related costs comes from voluntary parish giving, which is restricted, and we have still not heard from the Treasury whether it will extend the listed places of worship grant scheme which gives VAT refunds for listed church repairs.

Our parishes and dioceses sustain extensive social outreach as well as support for other charities. Do His Majesty’s Government appreciate the risk of staff and clergy reductions and the closure of buildings as a consequence of these measures in the worst-case scenario? This is mirrored, as I am sure the Minister has been advised and as we have already heard from other Members, by the impact on hospice care—much of which originated in Christian foundations—where the additional government help will not address the shortfall, despite the urgent need highlighted in the debate in another place on the assisted dying Bill.

However, my principal point has been raised in the briefing sent to a number of your Lordships. It is the impact of the proposed increases on the transport sector that is devoted specifically to serving children with special educational needs. As I understand it, local councils will be covered by proposed grants and compensation for the increases in this Bill where they directly employ staff in school transport. However, this does not extend to private industry, which employs some 100,000 people in this sector as drivers and passenger assistants. Many are part-time, whose employment will be caught by the provisions of this Bill for the first time. All are trained in serving special needs children and many are over 50 years of age. If contracts become unviable as a result of these measures and companies return them to local authorities, it will introduce a degree of turmoil into the lives of children, many of whom are on the autistic spectrum and for whom consistency is vital. Failure to maintain their education because of gaps in SEND transport will have serious consequences. I hope that the Minister will note this. It will further increase unemployment among the over-50s, whom we want to keep from the ranks of the economically inactive. Therefore, will the Minister consider two measures to ameliorate this situation? First, will he consider an emergency grant to local authorities for the fiscal year 2025-26 to address immediate and unplanned shortfalls arising from the increased costs to the SEND transport sector? Secondly, will he submit long-term funding provision for SEND transport services to phase 2 of the comprehensive spending review in order to extend support through to at least March 2028?

I do not intend to vote for the amendment in the name of the noble Baroness, Lady Kramer, but I am grateful for the opportunity afforded at this Second Reading to express my concerns to the House about the impact of the Bill.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Bishop of Southwark Excerpts

Committee stage
Wednesday 29th January 2025 Grand Committee

[The Lord Bishop of Southwark]

My Lords, I will speak to Amendment 67, which stands in my name. It is supported by the noble Lords, Lord Alton and Lord Forsyth of Drumlean, whose names were not entered in time for the Marshalled List.

I agree with much of what the noble Baroness, Lady Monckton of Dallington Forest, said in support of Amendments 14 and 27, in her name, and others concerning the provision of transport for children with special educational needs and disabilities—many years ago, my identical twin brother was one of them. My amendment has the same intention, albeit a slightly different effect.

When I raised my concern at Second Reading, the Minister, in response, referred to both the increased settlement overall for local government in the coming financial year and to the extra £515 million to cushion local authorities against the impact of national insurance changes. I wrote to the Minister on 10 January about my concern that such funding did not cover contracted-out services, and I have yet to receive a reply—hence my amendment, which is now before the Grand Committee.

The Local Government Association on 28 November stated that the measures that the Government seeks

“will lead to a £637 million increase in councils’ wage bills for directly employed staff, and up to £1.13 billion through indirect costs via external providers including up to £628 million for commissioned adult social care services”.

It is therefore clear that the concerns that I laid before your Lordships’ House on 6 January are well founded and remain current.

The transport provision for children with special educational needs and disabilities is, of necessity, a very labour-intensive one. It also requires dedicated recruitment, since not any driver will do, and in some cases a passenger assistant is also required. As we have heard, the children involved place enormous value on continuity and trust. Hence, it is key that they trust the staff who serve them in this way and, once that trust is established, that these are the people with whom they routinely deal. It is hard to describe the anguish that will result if contracts become unviable, or the additional pressures this will place on parents. There will be inevitable breaks in education, which can easily affect the rest of an individual’s life.

Noble Lords resident in North Yorkshire, the West Riding, north Lincolnshire or South Yorkshire may have seen the regional news bulletin, “ITV Calendar (North)”, on 22 January, just a few days ago. Its first and main news item was this very issue, setting out, with some of the people affected, what the impact would be. It is hard not to sympathise with, for example, the bewilderment of the mother of a mute child at the very real likelihood of the loss of her son’s provision.

I accept that Governments take tough decisions and that there is a burden to public service borne by those who serve us in this way. However, in this instance, the chief burden and distress—the overwhelming hardship—will be borne by SEND children and their parents. As this is a situation brought into being by the Government, it is appropriate to look to His Majesty’s Government for a solution, and I would be happy not to press the amendment if they were to proffer a remedy such as ring-fenced funding.

Unlike Amendments 14 and 27, my amendment, which requires the Government to review and estimate the impact on the SEND transport sector in each of three tax years, and to state what remedy might be applied, includes the ameliorating provisions of Clause 3. However, as your Lordships will have established and the Minister knows, that clause will not be the remedy here. I beg to move.

[Baroness Bennett of Manor Castle (GP)]

I rise briefly to offer the Green group’s support for all these amendments. Perhaps the right reverend Prelate’s amendment gives the Government a way forward that does not interfere with the general progress of the Bill but any of these would do.

I am going to make two quick points. First, I note the briefing I received from the chair of the Licensed Private Hire Car Association’s SEND group, setting out the points that have been made on how it is desperately concerned and the chaos that this national insurance rise has the potential to cause it.

Secondly, I point out that the Children’s Wellbeing and Schools Bill is in the other place. There, the Government are trying to deal with, help and support children with special educational needs and disabilities, and their parents, through that Bill. Then we have this Bill, which is undoing, and creating further risks and damage. It is useful to set those two against each other. In your Lordships’ House, we often hear expert testimony about how difficult life is for children with special educational needs and disabilities and, of course, their families and parents. This is—I am going to use an informal term—such a no-brainer to sort out.