National Insurance Contributions: Hospitality Sector

Lord Popat Excerpts

Thursday 13th February 2025 Lords Chamber

[Lord Livermore (Lab)]

We know it is particularly important to protect the smallest companies, and that is exactly why we doubled the employment allowance, meaning that 865,000 employers will now not pay any national insurance at all and more than 1 million businesses will pay the same or less than they did previously.

[Lord Popat (Con)]

My Lords, we are a highly regulated and highly taxed country; that has a big impact on SMEs. On regulation, to appoint a lawyer can take as much as two months, to open a bank account takes three months and even to register for VAT can take weeks. This NIC increase is very much an employment tax: on every person employed, you have to pay 15% NIC. Could the Minister please tell us what they can do to support SMEs, which are the backbone of our economy, in terms of regulations?

[Lord Livermore (Lab)]

I completely agree with the noble Lord that small businesses are the backbone of the economy. Many of the regulations he speaks about were introduced by his Government over the past 14 years. We have committed not to raise corporation tax for the lifetime of this Parliament, giving certainty to business and keeping the rate at the lowest in the G7. We will introduce legislation to tackle late payments, which is a key issue that disproportionately affects small businesses. The upcoming small business strategy will set out a comprehensive plan to ensure that small businesses have access to the right skills, finance and markets to reach their full potential.