National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Londesborough Excerpts

Report stage
Tuesday 25th February 2025 Lords Chamber

Moved by

[Lord Londesborough]

15A: Clause 2, page 1, line 12, after “£96” insert “or,
(b) for businesses and organisations with fewer than 25 full-time employees, £175.”Member’s explanatory statement
This amendment is linked to others in the name of Lord Londesborough. It seeks to maintain the secondary threshold at which employers become liable to pay national insurance contributions on employees’ earnings at £175 for businesses and organisations employing fewer than 25 staff.

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[Lord Londesborough (CB)]

I will not make another speech, but I thank all noble Lords for their thoughtful and supportive contributions when we debated this amendment. I welcomed the challenges, particularly from the noble Lord, Lord Eatwell, who is not in his place, which I listened to with great respect. However, I disagree with his analysis. The cliff edge threshold is there in the Bill for all to see, and Clause 2 has moved it in the wrong direction, to the detriment of small businesses, economic growth and jobs.

I thank the Minister for his patient and construction interactions, but I wish to test the opinion of the House. I beg to move.

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Moved by

[Lord Londesborough]

17: Clause 2, page 1, line 14, after “substitute” insert—
“(i) for businesses and organisations with fewer than 25 full-time employees, £758, and(ii) in all other cases,”Member's explanatory statement
This amendment is linked to others in the name of Lord Londesborough. It seeks to maintain the monthly per-employee threshold at which employers become liable to pay national insurance contributions on employees’ earnings at £758 for businesses and organisations employing fewer than 25 staff.

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Moved by

[Lord Londesborough]

24: Clause 2, page 1, line 15, after “substitute” insert—
“(i) for businesses and organisations with fewer than 25 full-time employees, £9,100, and(ii) in all other cases,”Member's explanatory statement
This amendment is linked to others in the name of Lord Londesborough. It seeks to maintain the annual per-employee threshold at which employers become liable to pay national insurance contributions on employees’ earnings at £9,100 for businesses and organisations employing fewer than 25 staff

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Moved by

[Lord Londesborough]

30A: Clause 2, page 1, line 15, at end insert—
“(c) in sub-paragraph (c), leave out “the figure in sub-paragraph (b)” and insert—“(i) for businesses or organisations with 25 or more full-time employees, £5,000, or(ii) for businesses or organisations with fewer than 25 full-time employees, £9,100,”.”Member's explanatory statement
This amendment is linked to others in the name of Lord Londesborough. It seeks to maintain the existing £9,1000 annual per-employee threshold at which employers become liable to pay national insurance contributions on employees’ earnings for businesses and organisations employing fewer than 25 staff. This amendment applies to earnings periods which are multiples of a week.

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Moved by

[Lord Londesborough]

31A: Clause 2, page 1, line 15, at end insert—
“(c) in sub-paragraph (d), leave out “the figure in sub-paragraph (b)” and insert—“(i) for businesses or organisations with 25 or more full-time employees, £5,000, or(ii) for businesses or organisations with fewer than 25 full-time employees, £9,100,”.”Member's explanatory statement
This amendment is linked to others in the name of Lord Londesborough. It seeks to maintain the existing £9,1000 annual per-employee threshold at which employers become liable to pay national insurance contributions on employees’ earnings for businesses and organisations employing fewer than 25 staff. This amendment applies to earnings periods which are multiples of a month.

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Moved by

[Lord Londesborough]

32A: Clause 2, page 1, line 15, at end insert—
“(c) in sub-paragraph (e), leave out “the figure in sub-paragraph (b)” and insert—“(i) for businesses or organisations with 25 or more full-time employees, £5,000, or(ii) for businesses or organisations with fewer than 25 full-time employees, £9,100,”.”Member's explanatory statement
This amendment is linked to others in the name of Lord Londesborough. It seeks to maintain the existing £9,1000 annual per-employee threshold at which employers become liable to pay national insurance contributions on employees’ earnings for businesses and organisations employing fewer than 25 staff. This amendment applies to earnings periods which are multiples of a day.

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[Lord Hodgson of Astley Abbotts (Con)]

My Lords, the number of times that I have heard debates in this House calling for a greater degree of post-legislative scrutiny—seeing whether we got what we thought we were going to get—is legion. Any effort to try to make sure that our judgment of what the Government of the day were proposing is worth having because it starts to increase the sum of human knowledge.

I am sorry that the noble Lord, Lord Eatwell, took such a dim view of it all, and I rather regret he sullied his comments with an attack on the previous Conservative Government’s economic policy, but so be it. I was not clear whether he was saying that it is a bad thing to do in principle or that the drafting is defective in practice. I am sure that if he felt that, in principle, it was a good idea to do it, our Front Bench would be happy to work with him to make sure that the drafting reached the economic standards that he felt would make it useful and worth while. However, it is a mistake just to discard, without further thought, an attempt to see what happens after the event.

Therefore, which of these amendments is the best? I am not sure, but “there’s gold in them thar hills”, and we should be mining it.

[Lord Londesborough (CB)]

My Lords, I will briefly speak in support of Amendment 38, in the names of the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, to which I have put my name.

Given the enormity of the Bill, with its intention to raise £25 billion in NICs, and given the current broad-brush, macro impact note that came with it, it is surely incumbent on the Government to carry out sector-by-sector reviews and within six months. In particular, the impact on employment levels and hours worked in each of these sectors needs to be looked at, and there will be huge variations—anecdotally, we are getting evidence that variations are already there.

These reviews would also help the Government in shaping their industrial and sector strategies. I do not agree with the noble Lord, Lord Eatwell, that these studies are, in his words, “econometrically impossible”; yes, they are challenging, but not impossible. With the right will, suitable frameworks can be established for each of these sectors, and it is vital that this analysis is carried out.

[Baroness Kramer (LD)]

My Lords, I will be brief. I have some sympathy for the Minister, because, in providing the impact note—which, as the noble Lord, Lord Londesborough, said, had very thin content and was very high-level in general—he is merely following in Treasury tradition, which the previous Government, when in power, also pursued.

The time has come for us to make a stand and to say that we need detailed impact assessments of policy. As the noble Lord, Lord Londesborough, said, in a Bill as complex as this, and which affects many sectors, the impact note has to be far more granular than the kinds of documents we have received in the past. This is also valuable to the Government themselves, because I greatly fear that, within the Treasury, there is very limited understanding of what the consequences are for a wide range of sectors. This is a start in the right direction, making sure that both Parliament and the relevant government departments are informed and can act properly. We will support this.