Social Security

Mark Garnier Excerpts

Tuesday 10th February 2026 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

It is a great pleasure to debate these two statutory instruments with the Exchequer Secretary. As he stated, they are made each year, and the precedent is for them to be debated on the Floor of the House. I am glad to see that that practice continues, and I hope that the Government will keep this going for the remainder of the current premiership, however long that may last. I want to make it clear that we will not be voting against the measures before us when the debate concludes. However, I would like to comment on each SI and the wider political discourse around them.

First, the social security regulations set the rates of certain national insurance contribution classes and the level of certain thresholds for the 2026-27 tax year. Specifically, they uprate the lower earnings limit, the small profit threshold and the rates of class 2 and class 3 national insurance contributions. The increase will be 3.8%, which is the consumer prices index figure from September 2025. All other limits and thresholds that these regulations cover will remain frozen at their current level.

This highlights that the increase last year was 1.7% compared with 3.8% this year. Both these percentages represent the rate of inflation that our constituents are suffering, but the 1.7% is of course what we left the Government when they came to power, and 3.8% is the level of inflation they are now delivering for consumers. When we left office, inflation was at 2%. We had managed to get it down following a once-in-a-generation pandemic and Russia’s illegal invasion of Ukraine and the subsequent energy crisis.

Since Labour has come in, inflation has risen almost every month and is now stuck at about 3.6%. Why is that? It is because the Government are relentlessly pursuing policies instead of making practical solutions—for example, the drive towards net zero. We of course want net zero and to get to the point where we clean up our carbon footprints, but by going too far they have managed to put up energy bills by £300 since they were elected. Is it any wonder that inflation is so high and shows little sign of coming down any time soon? I do not want to press the Minister on too many questions, but could he in due course let us know when the Government expect inflation to return to the target rate of 2%, which everybody agrees is where it should be?

The other point that I want to make about the statutory instrument is that it extends the employer national insurance contributions relief for veterans to 2028, which means businesses will continue to pay no employer NICs on salaries up to the veterans upper secondary threshold of £50,000 or £270 for the first year of their employment, which is a very good thing, as I think the Minister will agree. We introduced this relief in 2022, as we wanted to encourage as many employers as possible to help our veterans. These people have done a huge amount to protect our country, and it is important that we show our gratitude to them.

[Dan Tomlinson]

indicated assent.

[Mark Garnier]

The Minister is nodding, and I am sure he agrees with us on this point. Therefore, we welcome the fact that the Government have committed to extending this relief for the next two years.

However, I point out that the Government said in the Budget document:

“The government will extend the employer NICs relief for employers hiring veterans in their first civilian role to April 2028, from which point support for veterans into employment will be covered through spending review settlements rather than through this tax relief.”

The Government have committed to consult on which way would be best to do that, which is positive, and I hope the Minister is open to considering continuing this relief as an option if a suitable alternative cannot be found. In due course, it would be great if he or the Government could let us know what is being planned and on what timeframe, so we may understand what will be happening for veterans.

The child benefit and guardian’s order will uprate the allowances in line with CPI for the 2026-27 tax year. Again, we welcome the increases as these benefits are an important part of our welfare system. Guardian’s allowance is designed to provide further support to people who care for someone else’s child—for example, if the child’s parents have died. When these people step as guardians, they are incredibly important in the upbringing of young children, and we have a duty to support them so that they can ensure that the children they care for have the best start in life.

Although these state benefits are important, the Government are abandoning their responsibilities to tackle the wider benefits bill. In this debate last year, the former Exchequer Secretary, who is now the Chief Secretary to the Treasury, said:

“the Government are committed to delivering a welfare system that is fair for taxpayers while providing support to those who need it.”—[Official Report, 4 February 2025; Vol. 761, c. 716.]

When it came down to it, however, this Government did not take the opportunity to make those savings. Instead, it appears that they caved in to their Back Benchers, and we are now in a position where the benefits bill continues to balloon. According to The Times, even the Prime Minister has vetoed plans to reform the welfare system, simply to avoid the embarrassment of yet another U-turn. That is not fair to taxpayers, or to those who need support the most. In due course, I hope the Minister will set out when the needed benefit reforms will be brought forward and what steps he is taking to ensure that taxpayers’ money goes to those who need it most.

The Conservatives will not stand in the way of any of the statutory instruments before us today, but we look forward to hearing what the Minister has to say—not necessarily this afternoon, I stress—on the points I have raised.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.