National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Jackson of Peterborough Excerpts

Committee stage
Tuesday 4th February 2025 Grand Committee

Moved by

[Lord Jackson of Peterborough]

34: Clause 2, page 1, line 16, leave out “2025-26” and insert “beginning after the tax year in which an impact assessment is published assessing the impact of the provisions in this section on community pharmacies.”
Member's explanatory statement
This amendment would prevent commencement of this section until a full impact assessment is published for community pharmacies.

[Lord Jackson of Peterborough (Con)]

My Lords, it is a pleasure to contribute to this, the third day of Committee on this very important Bill. I say at the outset to the Minister and noble Lords that, again, this is a commencement amendment and does not seek in any meaningful way a permanent exemption to this jobs tax. It is merely an opportunity for the Government to think again, based on up-to-date and more contemporary empirical evidence, so that they can study properly a full impact assessment, as the Bill has an impact on a very important part of the healthcare sector: community pharmacies.

The Minister will know that there is significant concern across the whole NHS and the wider healthcare sector about the implications of these fiscal changes for community pharmacies. The figures produced by Community Pharmacy England suggest that these changes alone will generate an extra burden, an extra encumbrance, on community pharmacies of approximately £50 million, even with the changes in the employment allowance. If you strip out the employment allowance, the figure is approximately £74 million. If you add the two other cumulative factors to these fiscal changes, the encumbrance for community pharmacies is going to be very heavy.

Of course, on its own, we welcome the rise in the national minimum wage—we believe that low-paid people should be paid more and have a decent standard of living—but, remember, these burdens are falling on a particular part of the community. This will mean an extra cost of anything between £115 million and £152 million per annum, according to Community Pharmacy England. If you also add in the reduction in the business rates relief as it impacts on operating costs, the overall, universal impact on community pharmacies will be in the region of £200 million—that is, one-fifth of £1 billion.

Let us remember what community pharmacies are: an adjunct to the NHS, in that they are a neighbourhood health service. I accept that Governments have to make tough decisions; in fact, my own party, when it was in government, was not able to support community pharmacies to the level that we would have liked. There has been a real-terms reduction in pharmacy funding from central government since 2015. The lowest number of pharmacies are now open to the public at any time since 2009, which is 16 years ago: 1,250 pharmacies have closed since 2017. What we are talking about today is a policy decision that has at its heart the very viability of this sector.

As noble Lords will know, doctors and dentists are able to defray the costs of their non-domestic rates by direct reimbursement from the National Health Service. That is not the case with pharmacies; in fact, 90% of pharmacies’ work contracts are for NHS reasons and projects, such as dispensing advice and consultancy—principally dispensing.

Let us think about what community pharmacies do for their local communities. They are a lifeline. Flu immunisation, smoking cessation, sexual health services, alcohol misuse interventions, substance misuse services, healthy lifestyles, diet and nutrition, and generic health education—these are all vital functions that community pharmacies carry out. They take a sizeable burden off NHS acute hospital trusts—clinical commissioning groups as was—and, of course, primary care facilities.

They cannot put their prices up. Because they are locked into contractual arrangements, which are fixed, they cannot pass the costs on to the consumer. Often, they cannot make cuts in staffing or the services offered, or make redundancies, without in effect closing the facility—or at least hugely reducing the service that they deliver. They have, over the past 10 or so years, increased service delivery massively. They will put most public services to shame in terms of delivery of productivity in that period; indeed, they are the safety valve for the NHS.

We on this side of the Room are asking not for special favours or for the policy to be junked but for an opportunity for the Government to think again about the special circumstances of community pharmacies. My noble friend Lady Neville-Rolfe made an important point: the impact note that the Minister prayed in aid is out of date. I do not think that it has the up-to-date, topical data that it should have for the Government to properly consider, with the evidence available, the policy.

Incidentally, I should tell your Lordships that, naturally, I support the other amendments in this group: the employment allowance variation amendments, in respect of dentists and doctors, and, of course, Amendment 46 on pharmacies especially.

To conclude, this is about using an evidence-based analysis to create an impact assessment; to review the policy, at least; to inform the fairest and most sensible policy formulation; and to protect the interests of a vital part of our healthcare sector. If we do not do that, it will have a major impact on very vulnerable people who are NHS patients and who use the important services of community pharmacies. For that reason, I ask your Lordships to support this amendment and beg to move.

[Baroness Lawlor (Con)]

My Lords, I support my noble friend’s amendment on pharmacies. We must think of the impact. I have spoken to those who have been impacted already and worry that there is an impact not just on community pharmacies, which employ more pharmacists, but on small providers. When we look at what happens in towns and villages across the country, we see that, when a pharmacy closes down, elderly people, families and people looking for their prescriptions have to take a bus and go somewhere else. The impact on town centres of this sort of change can be quite significant. We have 3,560 independent pharmacies today.

In all of our debates today, we have spoken about the impact on each sector and how it might be alleviated, with amendment after amendment proposed from these Benches and from the Liberal Democrats, who spoke earlier in Committee. Barring retail and hospitality, today’s groups of amendments cover what are usually called public services. They are provided by independent providers. Some, such as the early years and hospice sectors, are charitable as well as independent. If they do not provide these services, there will be greater costs to the taxpayer, and they will do so in a much more bureaucratic and less person-sensitive way. The quality will go down and the cover will be broader; in fact, it will not meet the kind of person-to-person approach that we see offered by many independent providers.

I support my noble friend Lord Jackson because we are talking about people and their jobs: 80,000 pharmacists were employed in 2023-24. As well as them, we are thinking of pharmaceutical technicians, of which there are 34,300. These are real people and real jobs, and they are on top of the jobs that we have spoken about day in and day out in this Committee. I implore the Government and the Minister to think about what happens when people’s jobs go: not only do we as communities lose the services that are vital and which we have spoken about; we see an impact on our streets and our communities, and we increase the cost to the taxpayer—that will go further, in addition to the high hike in borrowing and the tax rises that the Government intend. We will see the further damage that will be caused to the economy. I implore the Government to think again.

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

It would be helpful if the Minister clarified that. I am concerned about this backward-lookingness that tends to be a feature of our discussions, because we are trying to look forward and make sure that growth stops flatlining, so that this economy grows in the coming months and years. Saying that a particular rule on employment was laid down in the past and therefore that the Government are not going to change it is a mistake.

In this area, there is a lot of evidence of a problem. The NHS has been compensated for these steep increases. The private sector part of the health services sector, which I know the Minister’s Secretary of State and his advisers think can play an important part in the future, is being sold down the river. That seems to be a pity; we should take this opportunity to try and do something to improve things.

I withdraw my amendment—no, I have not moved it. Forgive me.

[Lord Jackson of Peterborough (Con)]

People are withdrawing their amendments before even moving them.

If I could beg the indulgence of the Committee briefly, I wonder what the Liberal Democrats’ view on this policy is because I have a Liberal Democrat press release dated 16 December, entitled, “Liberal Democrats table amendment to exempt health and care providers from NICs hike”. Many Liberal Democrat MPs in the other place are quoted. I was not able to discern it in his remarks but is the noble Lord, Lord Scriven, against the whole policy with regard to community pharmacies and NICs, or just against the concept of doing a proper, thorough and robust empirical analysis and impact assessment?

--- Later in debate ---

[Lord Livermore (Lab)]

I thank the noble Lord for that point. I am of course still happy to write, so that we have absolutely clarified the point.

[Lord Jackson of Peterborough (Con)]

We have established that an epistle will be oncoming from the Minister to the noble Lord, Lord Scriven. I am glad he has clarified that. I just think—

[Baroness Kramer (LD)]

Perhaps I may interrupt. I really think it was appropriate that we did not remake the speeches that we made extensively on days one and two. I am sorry if people were unable to attend or contribute on those days, but it is not sensible for us to continuously repeat the same statements that we have made over and over again. We have tried to observe that, out of respect for the Committee, and an assumption that those who are interested in what we had to say would have looked at Hansard.

[Lord Jackson of Peterborough (Con)]

I think the noble Baroness, Lady Kramer, is rather tetchy about that. I am seeking clarification of the Liberal Democrat policy, and the noble Lord, Lord Scriven, has given me a very clear explanation, for which I am inordinately grateful. Perhaps I can now move on to speak to my Amendment 34.

I heard the Minister and, notwithstanding what colleagues on the Liberal Democrat Benches have said, I still think that he did not adequately address the issue of the data and the response since the Budget on this particular policy with this particular healthcare sector. My noble friend Lady Neville-Rolfe made a very cogent and valid point that it is not good enough to just keep saying, “We have no intention of publishing an impact assessment; that is the end of the debate”. That is not discharging the proper fiduciary duty of Ministers to make sure that they are pursuing the correct financial policies and know the impact they will have on individuals in the NHS and wider healthcare sector. That needs to be looked at again; perhaps it will be.

While I am on my feet, for the avoidance of doubt, I did attend on previous days in Committee. I was there, and I moved an amendment on day one, I think, should noble Lords want to read Hansard. With that caveat made, I feel duty bound to beg leave to withdraw my amendment, subject to further discussion on Report.

Amendment 34 withdrawn.