National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Hope of Craighead Excerpts

Committee stage
Tuesday 21st January 2025 Grand Committee

[Lord Hope of Craighead (CB)]

My Lords, I would like to give one example from the social care sector which concerns this group of amendments. Cyrenians is a charity in the south-east of Scotland that supports people suffering from homelessness. It is a very active charity, with over 60 services, employing more than 200 staff and providing vital support to people who are at risk of homelessness or are suffering from it. It calculates that the effect of these changes will cost it approximately £170,000 a year, which is a very substantial amount, considering that it depends on charity to support the services it runs. As a result of this, it will have to diminish the training and development of the staff it employs, which in turn will have an adverse impact on the quality of the service that it provides to the people in need of it.

This unintended consequence is an example of the severe effect on an individual charity of this kind in the third sector in Scotland that is providing vital help to people facing homelessness. I need not add that homelessness is an emergency in Scotland and is recognised as such by the Scottish Government, so anything that diminishes the support that is given to people facing homelessness is a matter of grave concern. I do not expect that the Government will accept these amendments, but I ask them to consider carefully whether it is necessary for charities of this kind to suffer that kind of consequence. It is not so much the charity that will suffer but people who are homeless or at risk of homelessness.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Hope of Craighead Excerpts

Report stage
Tuesday 25th February 2025 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I take this opportunity to support the sentiments of the noble Baronesses, Lady Barker and Lady Kramer, in tabling these amendments, in particular Amendment 9A. I declare my interest as advising the board of the Dispensing Doctors’ Association. I wonder whether, when the Minister comes to respond to this group, he could clarify the position. I noticed that dispensing doctors are not referred to in Amendment 9A, but in effect they probably employ more staff than other GPs, pharmacies or organisations itemised in the amendment.

The reason for that is that, in addition to dispensing to regular patients, dispensing doctors also perform a profoundly important role in rural areas where there is no community pharmacy, because their patients have nowhere else to go. A dispensing doctor normally intervenes to dispense in those rare circumstances. I have to say that the reason I am so familiar with dispensing doctors is that my late father and my now retired brother were both dispensing doctors.

As dispensing doctors are quite large employers in this regard, is the Minister minded to look favourably on reimbursing them for the additional costs that they will incur through the increase in national insurance contributions, either through the very helpful amendment moved by the noble Baroness, Lady Barker, by adding dispensing doctors to it, or will he look at some other avenue to ensure that the costs incurred by dispensing doctors will be met? I am sure the Minister is aware that pharmacies and dispensing doctors are currently not being fully reimbursed for the costs of medicines that they are dispensing or prescribing, so they are in an acutely difficult position caused by the Government’s announcements on national insurance contributions in the last Budget. I ask him to answer those points in addition to those raised by the noble Baroness, Lady Barker.

[Lord Hope of Craighead (CB)]

My Lords, I support the amendments in this group, which seek to mitigate the effect that the measures in this Bill will have on charities that provide social care. Particular attention needs to be paid to those that provide services in areas where the primary responsibility lies on the public sector. I understand that about one-third of social care staff in Scotland are employed by the voluntary sector. The support that they provide is an essential part of the system of social care in Scotland as a whole, and without their support the public services as currently funded would be quite unable to meet what the public need demands of them.

To put a little colour on what I have just been saying, I will return very briefly to an example I gave to the Grand Committee—that of the Cyrenians, a charity that addresses the causes and consequences of homelessness in the south-east of Scotland. It sees homelessness as something which is always about much more than a lack of housing; it cannot be solved simply by building more houses, nor can it be solved by the public sector alone. What the Cyrenians do is help people to avoid becoming homeless in the first place. It provides a range of services, such as mediation and support to families that are at risk of breakdown—which leads in due course to homelessness of one partner or the other.

The Cyrenians charity also provides services to ensure that people coming out of hospital are not discharged into homelessness. It runs a residential community which provides accommodation for people with acute psychiatric and mental health problems who have been discharged from a hospital where they have been receiving treatment. These are people who can be discharged only because that support is available.

All in all, the Cyrenians run over 60 services with a staff of over 200. It estimates that the increase to national insurance contributions provided for in the Bill will cost it about £170,000 a year. This is a significant burden on its finances which, for various reasons, are already being stretched very thin. I am told that it cannot benefit from any increase in the employment allowance. The Minister will correct me if I am wrong, but the charity believes that it is not eligible, as its class 1 national insurance liabilities were more than £100,000 in the last year. The public sector exemption is not available either.

The result is that the charity will no longer be able to provide the training and development that its staff need. That will lead, inevitably, to an erosion in the extent and quality of the service that it offers. Those who will suffer will be those most in need of protection: those who are at risk of, or who are already suffering from, homelessness, for whom the public services cannot provide.

Another Scottish charity that works in the area of social care is Ark Housing Association. It is a larger organisation which is in a similar position to that of the Cyrenians in that it seeks to provide services across a large area of Scotland. In its case, these services are offered to vulnerable adults, such as those with a learning disability and other complex needs. As matters stand, that charity too is not eligible for any support from the Government, as it has a turnover of about £24 million per year and employs over 700 people. It estimates that the effect of the Bill on its operations will be, in its own words, “devastating”.

As matters stand, the charges that it faces to do its work barely break even, year after year. It estimates that its national insurance increases will amount to a further £600,000 per year. This means that it will not be able to survive without damaging cuts to its services to reduce costs, and even these may not be enough for it to survive. As in the case of the Cyrenians, the people most affected are the thousands of vulnerable people for whom the social care that Ark provides is a vital lifeline, and who have nowhere else to go.

It is not an exaggeration to say that, as the Bill stands, social care and support providers in the third sector in Scotland will face a situation of crisis that the public services simply cannot cope with. Something has to give, and the responsibility for this lies with the Government. I hope that the Minister will feel able to assure the House that he recognises that something needs to be done to minimise the impact of these increases on this sector. For the time being, however, I will support the noble Baroness, Lady Barker, if she decides to press her amendment.

[Lord Howard of Lympne (Con)]

My Lords, I am afraid that I too was unable to be present at the earlier stages of the Bill, but I rise to support this amendment—in particular, the provisions relating to hospices. These would have the same effect as later amendments in the name of my noble friend Lady Neville-Rolfe, to which I have also put my name. I draw attention to my entry in the register as vice-president and past chairman of Hospice UK.

The added burden that the increased contributions will place on the hospice sector are considerable. The extra cost has been estimated at no less than £34 million a year. St Christopher’s Hospice in south London has said that it will face increased costs of around £450,000 a year—equivalent to the cost of nine specialist nurses. Dorothy House hospice in Wiltshire estimates additional costs of £422,000 a year. The Kirkwood Hospice has had to put 33 roles at risk of redundancy, citing the increased national insurance costs as one of the drivers. Nottinghamshire Hospice is also proposing redundancies, again citing these extra costs as one of the factors.

These are just some of the examples of the devastating effect that these measures will have on hospice care. This is all so short-sighted. We all know that one of the major challenges facing the NHS is bed-blocking. As I have told your Lordships before, hospices can make a huge contribution to overcoming this challenge by looking after patients in the community, either in hospices or looked after by hospices at home. To make that contribution, hospices need more resources, not fewer, so this change will add to the challenges facing the NHS, not only directly in respect of its own employees but indirectly by diminishing the capacity of hospices to help.

The Minister will no doubt refer to the Government’s recent announcement that £100 million would be made available to hospices, and that is indeed welcome. But that money is for capital projects. Not a penny of it is available to defray the extra costs of the increase in national insurance contributions, which we are debating today, so it will have little or no effect on the crisis in hospice care that I have described.

I urge the Government to think long and hard about this amendment and to come up with a constructive solution.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Hope of Craighead Excerpts

3rd reading
Tuesday 4th March 2025 Lords Chamber

[Lord Hope of Craighead (CB)]

My Lords, I added my name to this amendment for the reasons the noble and learned Lord, Lord Wallace, has given. It is, obviously, quite important to bring the Scottish position into line with the rest of the United Kingdom.

It also gives me an opportunity to make two points that I ask the Minister to bear in mind. The first is the extent to which the public services in Scotland are dependent on the third sector. They depend to a major extent on the work done by charities and other third sector organisations. There is, of course, an imbalance between the way in which public sectors react to the changes in the Bill and the third sector is left with very little support at the moment to enable it to do that. Perhaps the Minister might bear in mind, as time goes on, that it is necessary to keep an eye on the extent to which the Bill has that deleterious effect.

There are other ways—I know the Minister understands this—in which these bodies can be assisted. It may be, if the position is as people are saying and they will be so disadvantaged, that the Government might be able to support them in some way to enable them to continue to provide their vital support. In the end, the people who suffer are not those who provide the services but those for whom the services are provided, for which the public services in Scotland are not fully equipped.

[Baroness Kramer (LD)]

My Lords, let me say to the noble Lord, Lord Eatwell, that I take full responsibility for the misdrafting of the original amendment, and for not being sensitive to the legal differences between Scotland and other parts of the United Kingdom. I thank my noble and learned friend Lord Wallace of Tankerness and the others who have supported him, and those in Scotland who were so concerned about what might happen to the care services there that they wanted to make sure that the language was reasonably perfected.

I am delighted to accept that amendment, but I am also very grateful that people came forward. It is good to know that we are sending something to the other place that is not holed beneath the waterline; I appreciate that. I also appreciate the vote that came in this House, which is not disrupted at all by this amendment, as people were very clear that they intended it to apply to Scotland as well as to the rest of the United Kingdom.

I hope that I will be in a position to thank the Government for accepting this tidying-up amendment, understanding the spirit both in which it was offered and in which the previous debate took place.