National Insurance Contributions: Healthcare

Luke Evans Excerpts

Thursday 14th November 2024 Commons Chamber

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

(Urgent Question): To ask the Secretary of State for Health and Social Care if he will make a statement on the impact of changes to employer national insurance contributions on primary care providers, hospices and care homes.

[The Minister for Secondary Care (Karin Smyth)]

I am grateful to the hon. Member for asking this important question. It gives me the opportunity to say to GPs, dentists, hospices and every part of the health and care system that will be affected by changes to employer national insurance contributions that this Government understand the pressures they face and take their representations seriously. The Chancellor took into account the impact of changes to national insurance when she allocated an extra £26 billion to the Department of Health and Social Care. There are well-established processes for agreeing funding allocations across the system, and we are going through those processes now with this issue in mind.

This Government inherited a £22 billion black hole in the public finances, broken public services and a stagnant economy. Upon taking office we were told that the deficit the previous Government recklessly ran up in my Department alone would mean delivering 20,000 fewer appointments a week instead of the 40,000 more we promised. The Chancellor and my right hon. Friend the Secretary of State were not prepared to see further decline in our NHS. That is why we put in an extra £1.8 billion to stop the NHS going into reverse this year.

We built on that at the Budget, delivering the significant investment that the NHS needs to get back on its feet, backing staff with investment in modern technology, new scanners and new surgical hubs, and rebuilding our crumbling primary and secondary care estate. Alongside that, we delivered a real-terms increase in core local government spending power of around 3.2%, which will help to address the range of pressures facing the adult social care sector, including £600 million in new grant funding for social care. We are now working through exactly how that money will be allocated, as per normal processes. As the Secretary of State set out yesterday, we will ensure that every pound is invested wisely to deliver the Government’s priorities and provide value to taxpayers.

The Department will set out further details on the allocation of funding in due course, including through NHS planning guidance and the usual consultations, including on the general practice contract. As part of these processes, we will consider the impact of changes announced to employer national insurance contributions in a fair and open way over the next five months, before the changes come into force in April 2025.

[Dr Evans]

I draw the House’s attention to my declaration of interests.

Many in the health sector will have been pleased to hear the announcement of the extra funding for the NHS, only for their joy to be struck down by the realisation that a manifesto promise not to raise national insurance contributions had been broken. That was compounded further by the discovery that a raft of frontline care providers—care homes, hospices, care charities, pharmacies and GPs, to name but a few—will not be exempt from the NI rise, leaving them with crippling staff bills and the threat of closures and redundancies. The hospice sector expects the cost to be £30 million—closures and redundancies. The initial assessment of the cost to GPs is £260 million—closures and redundancies, at the expense of 2.2 million appointments. For the care sector, the changes will cost £2.4 billion, dwarfing the £600 million in social care support that was announced. Does the Minister accept that it is inevitable that council tax will have to rise to support the increase in NICs?

For the first time, the National Pharmacy Association has announced collective action. Its chair said:

“The sense of anger among pharmacy owners has been intensified exponentially by the Budget, with its hike in national insurance employers’ contributions and the unfunded national living wage increase, which has tipped even more pharmacies to the brink.”

Will the Minister clarify who is exempt from NI? Will the Government admit that they got it wrong and make a change? The Prime Minister, Health Secretary and Chancellor have all said that allocations will be made “in the usual way”. Will the Minister clarify what the usual way is? Will mitigations be put in black and white to the House and the public? Is this part of the £20 billion, or new funding?

More importantly, will the Minister lay out a concrete timetable for hospices, care homes, GPs, pharmacists and all other allied health professionals, who are making decisions now? This seems to be another example of a big headline from the Labour party but no detail.

[Karin Smyth]

Well, really. I am quite dumbfounded by the hon. Gentleman’s response. I respect him for his professional practice, and he knows the state of the NHS that we inherited from the previous Government, as reported in Lord Darzi’s report. He talks about joy, but there was no joy when we inherited the mess they left back in July. He talks about people being tipped to the brink, and they absolutely were, as Lord Darzi made clear.

As I said, we will go through the allocation of additional funding in the normal process, which will be faster than under the previous Government because we are committed to giving the sector much more certainty. The normal process, as the hon. Gentleman should know from his time in government, is to go through the mandate and the planning guidance and to talk to the sector about the allocations due next April, as I said in my opening statement.

--- Later in debate ---

[Karl Turner (Kingston upon Hull East) (Lab)]

It is disappointing to put it mildly that the Opposition spokesperson was unable to mention the record funding committed in the Budget.

[Dr Luke Evans]

It was in my opening line—

[Mr Speaker]

Order! The shadow Minister has been granted an urgent question. He asks the questions; he does not answer them from the Front Bench.