National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between Richard Fuller and Clive Lewis

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[Richard Fuller]

That is a very odd question when the Minister himself has said that the objective today is to provide more money for the health service. I guess I will think about what the hon. Gentleman has asked.

[Clive Lewis]

Will the hon. Gentleman give way?

[Richard Fuller]

I will be very happy to give way, but I will make some progress first.

If we take the Government at their word that their intention is to raise funds for public services, this measure is an inefficient way to do so. Under the provisions of the 1992 Acts on social security provision, only a proportion of the moneys raised by this form of taxation will be allocated to public services; the vast majority is essentially hypothecated to the national insurance fund. Will the Minister tell us what proportion of the moneys raised by the Bill will actually be allocated to the national health service? Will he also advise us of why the Chancellor chose this particular tax, which, uniquely, will burden the economy with far more in taxes levied than will actually end up going to support public services?

Employers large and small across the United Kingdom have been pleading with the Government to reverse this measure, letting them know about the impact it will have on jobs and on wages; the particularly harsh impact it will have on female workers and on young people starting out in their careers; the vulnerability of our hard-pressed hospitality businesses and high street retailers; or the pre-Christmas pleas of our charities, hospices and GPs about the way their contribution to public services has been completely ignored. Has the Minister been listening to the voices of people who actually have experience of running a business, creating jobs or delivering public services, who are telling him about the negative impact the Bill will have on jobs and pay, and even on their own viability, or has he been turning a deaf ear?

[Richard Fuller]

I have been listening to questions from Members who believe that this is “not a tax on working people” asking for exemptions from it. When we hear that these taxes are being levied on hospices, charities, GPs and small businesses, we cannot help but believe that Labour thinks that people work only when they work for the Government. The truth of the matter is that working people work in many institutions across the country—in small businesses, large businesses and in the third sector—as well as for the Government. This Government are taxing working people.

[Clive Lewis]

I think sometimes, listening to the Opposition, it is as if that money goes into a complete black hole. Those billions are not just going to go into public services like health, education and social housing; we are also putting that money into people’s pockets—into the pockets of nurses, doctors, engineers and builders—who will then spend their money in those businesses. It is called the multiplier effect. That money will go back into our economy, rebuild our public services, which the Conservatives destroyed, and go into the pockets of people through the economy. What’s not to like?

[Richard Fuller]

The hon. Gentleman asks, “What’s not to like?”, but just a few minutes ago he was saying what he did not like in the Bill. He said he wanted exemptions that the Minister was not prepared to give him; I think his dispute is not with me, but with his hon. Friends on the Front Bench.

The British Retail Consortium—another section of the economy—wrote to the Chancellor detailing the costs of the measures to retailers: £0.57 billion from the rate increase and £1.76 billion for the reduction in the national insurance contributions threshold. It spelled out the consequences:

“For any retailer, large or small, it will not be possible to absorb such significant cost increases over such a short timetable. The effect will be to increase inflation, slow pay growth, cause shop closures, and reduce jobs, especially at the entry level. This will impact high streets and customers right across the country.