National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Clarke of Nottingham Excerpts

Report stage
Tuesday 25th February 2025 Lords Chamber

[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?

[Lord Clarke of Nottingham (Con)]

My Lords, I agree with the noble Viscount, Lord Chandos, and others that, in principle, it is not a very good idea to have a system of taxation in which you suddenly start providing dozens of exemptions for particularly chosen groups when it is introduced. Taxation should be simple and collected in the most straightforward fashion across the whole economy, although there will always be bits that are subject to different effects of such taxes.

I will be supporting these amendments, mainly as a symbolic sign that I disapprove extremely strongly of the choice of tax rise that the Government made in the Budget. In fact, this increase in employers’ national insurance has had a serious, damaging effect on very important sections of the economy as a whole. Many small and medium-sized businesses—and many giant ones in labour-intensive parts of the economy—are being badly affected at a time when many other features of our financial crisis are affecting them as well. We had some exchanges in the House a few moments ago about the withdrawal of the investment proposals by BMW in Oxford. This country is not an attractive place for investment at the moment, yet we desperately need investment if we are to begin to recover from the appalling stagflation in which the economy is now stuck.