National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Porter of Spalding Excerpts

Committee stage
Thursday 6th February 2025 Grand Committee

This amendment is a probing amendment, but it is no less serious for that. On this side, we are laying down a marker which demands a response to yet another broken promise. The Minister should know that this tax is not just a free hit on the man from the council. Will he just admit that the effect is actively targeting the most vulnerable in our society and the people I thought the Labour Party came into existence to protect? I beg to move.

[Lord Porter of Spalding (Con)]

My Lords, I apologise if it is inappropriate to speak now, when I have not paid any attention to this debate previously—there is a good reason for that, which I will explain in a minute. I declare my interests as they pertain to this: there are a number, but the two main ones are that I am a vice-president of the LGA, so clearly I agree with some of what my noble friend Lord Fuller said, and I am also a non-executive director of a care company owned by another council. I could have spoken in a number of these debates, but I have chosen to speak now only because my noble friend Lord Fuller was speaking, and somebody has to put what he said in loads of words into a few short words. That is no disrespect to my noble friend, who is obviously much more eloquent than I will ever be.

I have not spoken before because I do not agree with my side on everything. I do not think it is the Ministers’ fault, or my colleagues’ fault when they were Ministers, or the coalition’s fault when they were Ministers. All the pressures facing public services have been in the system for at least 20 years. In 2006, before the 2008 crash, we had a declining budget for public services; all the political parties have fingerprints on that. I do not want to get involved in the debate about whose fault it is, why we are here and how we got this far. I really love civil servants—I was a NED in a department for a while—but it is their fault that the Government are now doing the wrong thing. The Government have created a jobs tax that will increase unemployment because it was an easy model that has been sitting on the shelf for the best part of 15 or 16 years. Other Governments resisted going down this route; the current Government have been caught on the hop and are acting against their own stated aims.

I really do not want to criticise the Government or the Civil Service, but if we are to have more money to spend on public services, which everybody agrees are underfunded, we have to get it from somewhere, so somebody is going to pay more. Hopefully, we will all make more, so we can all afford to pay more, but this will not give us more. It will end up giving us less, because people will be laid off and we will have to pay their benefits. We will get worse public services and more expensive benefits—nobody wins, but it is an easy solution to a big problem. So, while I agree that we are going to play Committee games and not move any of these amendments, at some point we will end up going through a Division Lobby and we will vote against the Government—not because we do not like them, but because we think they are being sucker-punched by people who have an easy solution that will not fix the problem.

This is a hard problem; we have to find the proper solution to it, and NI is not the way to get better public services. For those reasons, I have to agree with my friend John—my noble friend Lord Fuller—but I cannot speak as eloquently as he can.

[Lord Jackson of Peterborough (Con)]

My Lords, I will speak briefly on this issue. I find myself in agreement with both my noble friends Lord Porter of Spalding and Lord Fuller, because they are both right. My noble friend Lord Fuller puts his case with great elegance and eloquence, and has experience of having led a district council and being involved with the District Councils Network. We have something in common because I was also once vice-president of the Local Government Association and had the great honour of being a Front-Bencher for Communities and Local Government in the other place.

I want to focus on a particular aspect that concerns me about the unintended consequences of these fiscal changes and their effect on local government. There are huge demographic pressures that no government can get absolutely right, because no government can deal with, for instance, the problem of unaccompanied children that faces councils such as Kent County Council; social care for the over-85s, the number of whom is going to double in the next 20 to 25 years; children’s transport services, with the number of children who are given statements for special educational needs; and, of course, pensions in local government. These are all issues that any party in government is going to have to deal with, irrespective of how well-meaning Ministers are and how hard civil servants work.

My concern stems from what has happened recently in Peterborough, where the gap between the available budget and spending is around £20 million, which, for a small unitary, is a significant amount of money. The reserve has been reduced, over just one year, from £45 million to £14 million. My worry is about what Lord Macmillan, Harold Macmillan, described in 1985 as “selling off the family silver”. The problem with such a broad-brush fiscal change as this is not that it will necessarily force many authorities into a Section 114 situation where they are, de facto, bankrupt, but that it will force them to dispose of very important long-term assets, which they will never get back.