Oral Answers to Questions

Peter Luff Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Andrea Leadsom]

The hon. Gentleman is quite right: more needs to be done. The problem is not solved. This Government are doing a great number of things to try to help facilitate not only bank lending, but crowdfunding and peer-to-peer lending. We are putting crowdfunding possibilities into individual savings accounts, as the Chancellor announced at Budget time. We are also taking great steps to improve the availability of new challenger banks, to ensure that banks provide postcode-level lending data so that new challengers can look for new opportunities and to ensure that banks share credit histories via credit reference agencies. All those measures are being taken to try to improve the availability of funding to small businesses. There is certainly more to be done and I would be happy to hear any ideas the hon. Gentleman has.

[Sir Peter Luff (Mid Worcestershire) (Con)]

15. What estimate he has made of the potential effect of a rise in national insurance on employment rates and take-home pay.

[The Financial Secretary to the Treasury (Mr David Gauke)]

This Government inherited plans to increase the employer’s national insurance contributions rate by 1%. We largely reversed the negative effect of that by raising the employer threshold by £21 a week above indexation. We have also introduced the employment allowance. From April 2015, we will abolish employer’s national insurance contributions for under 21-year-olds, helping to support jobs for almost 1.5 million young people currently in employment.

[Sir Peter Luff]

It cannot be said too often: higher national insurance is a tax on pay and a tax on jobs. My hon. Friend will therefore understand my delight when the Government introduced the £2,000 employment allowance—he referred to it in his answer—which will help new businesses in particular to create new jobs. May I tempt my hon. Friend to say what further measures the Government plan to take to reduce the tax burdens on businesses and so increase employment in this country?

[Mr Gauke]

As I mentioned earlier, we have the removal of national insurance contributions for under-21s next year. I entirely agree with my hon. Friend about the impact of higher employer’s national insurance contributions, and I have to say that one of the risks that the economy faces is a future Labour Government putting up employer’s national insurance contributions.