National Insurance Contributions (Secondary Class 1 Contributions) Bill

Munira Wilson Excerpts

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[James Murray]

The way that we are approaching the reimbursement of employer national insurance costs for Departments and public sector employees is similar to what the previous Government did with the health and social care levy. It means that money goes to Departments, local governments, and public sector employees directly to help compensate for the increase in employer national insurance. For other people who are paying employer national insurance, if they have a contract with the public sector they are treated as contractors or private organisations. If they have concerns about their cost base they should talk to their sponsoring Department, the NHS, or whoever they have a contract with, so that those considerations can be taken into account in the round. It was the same for adult social care, and it is the same for other organisations that are funded through the public sector.

[Munira Wilson (Twickenham) (LD)]

Let me pick up on the point about local authorities and public services. I pressed the Minister on that this morning during Treasury questions, and I fear he did not give me a clear answer. Richmond council, my local authority, delivers children’s services through an arm’s length body called Achieving for Children. As a result of these measures, with all the employees who deliver services for vulnerable children in Richmond upon Thames, it faces a bill of £588,000 in employer’s national insurance. Will the Minister assure local authorities up and down the country that operate similar models for delivering services that these arm’s length bodies will be exempt from the national insurance rise? Otherwise he will be damaging the very public services that he claims to be investing in today.

[James Murray]

We are protecting public services by providing relief directly to Departments and other public sector employers. Third parties, private organisations, or those who have a contract with the public sector are dealt with differently and they should approach their local council, or whoever is sponsoring them, to talk about their funding arrangements. I might draw the hon. Lady’s attention to the fact that local government financing is increasing by 3.2% next year as a result of decisions that this Government have taken. I expect she would probably support that increase in funding, but sadly she does not have the guts to support what we need to do to raise the money in the first place.

--- Later in debate ---

[Luke Murphy]

I take it that the hon. Lady must oppose the large investment in public services that the Government are proposing, and that she opposes the Government’s industrial strategy, which is one of the ways we will grow the economy. I remind Opposition Members that workers in small and large businesses depend on the NHS. As others have already said, many workers have continued to be out of work, which has a massive impact on our productivity. We should make no apologies for investing in our public services.

[Munira Wilson]

The hon. Gentleman keeps accusing those of us on the Liberal Democrat Benches of not supporting public sector investment. We have championed it, and we have said that the big multinationals—the big banks and the social media giants—should bear the brunt. Just yesterday, at the Small Business 100 reception here in Parliament, the owners of Shambles, a popular family-run restaurant in Teddington, told me that the impact of the Budget on them next year will cost £50,000 to £60,000. What are they doing? They are freezing all recruitment for the next few months. How will that deliver the growth that the Labour party is apparently desperate to achieve?

[Luke Murphy]

As I have already said, we are protecting small businesses through this Bill and we have an industrial strategy. We are delivering record levels of public investment in the economy, and I doubt very much that the measures that the hon. Lady set out would deliver the kind of funding that this Bill will deliver. We need serious investment to fix the mess left by the previous Government.

We are providing businesses with certainty through a corporate tax road map, as others have said, and upholding our commitment to maintain corporation tax at the lowest rate in the G7. I am proud to support the investment in our country, in our NHS, in education and in rebuilding the infrastructure on which hard-working people across our country rely. We are bringing the funding needed to kick-start a decade of national renewal. While the Conservatives sit back to have their cake and eat it, this Government have acted decisively to invest strategically and build for the future.