National Insurance Contributions (Secondary Class 1 Contributions) Bill

Sammy Wilson Excerpts

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[James Murray]

I thank my hon. Friend for her question, but eligibility for the employment allowance is not changing. It is the same as it was before, and we are maintaining that provision. On protecting small businesses and charities, the crucial thing for us is the doubling of the employment allowance. In individual cases, I would recommend that organisations get the right advice, but the eligibility criteria for the employment allowance will not change as a result of the Bill.

[Sammy Wilson (East Antrim) (DUP)]

Will the Minister give way?

[James Murray]

I will, one more time, and then I will make progress.

[Sammy Wilson]

Is not the fact of the matter, despite what the Chancellor has said, that businesses have been abandoned? There is no safety net for them. To use the words of the Chancellor,

“What we have done with the increase in employer national insurance is leave it to the business to work out”.

Businesses are bearing the brunt of this, and it is really too bad. As far as the Chancellor is concerned, they will have to grin and bear it.

[James Murray]

I am sorry, but there are tough decisions that we have to take, and there are difficult decisions that businesses will have to take. The only people to have abandoned businesses were the Conservatives when they were in government. They abandoned any pretence of economic stability, fiscal responsibility, and supporting businesses to invest and grow. That is the difference between the Opposition and the Government.

--- Later in debate ---

[Sammy Wilson (East Antrim) (DUP)]

The Bill represents a major breach of the promises made by the Government when they stood for election. The previous speaker, the hon. Member for Chipping Barnet (Dan Tomlinson), was right: people should be cynical, and people are cynical about the way in which politics is sometimes conducted in this country. He talked about his amazement at the anger expressed from the Opposition Benches. I assure the House that, were the situation reversed—with the Conservative party on the Government Benches, introducing measures that the Office for Budget Responsibility, the IFS and everybody else said would hurt ordinary working people—Labour Members would be incandescent with rage.

That is the whole point. A promise was made: “We will not tax working people.” At the end of the day, when people have to pay for their goods, their shopping and so on, it really does not matter to them whether their income has been reduced as a result of direct taxation being taken out of their pay packets in the form of income tax, or whether it has been reduced indirectly by taking the money from their employer. In turn, as the IFS, the OBR and others have said, that will impact on real wages. As the IFS pointed out, it will especially impact the real wages of the lowest paid—that is the whole point. We can play with words, but the truth of the matter is that a tax increase has been imposed on employers, and the OBR says that in 76% of cases, the impact on wages will be felt by ordinary working people. That is a broken promise, no matter how we look at it.

The Government’s excuse has been that they will try to alleviate that impact. People have talked about different sectors so far in the debate, and I am not going to go through all of them, but let us just look at two examples. The first is small businesses. We are told that they can deal with the impact because they are geniuses. What will they do? They will increase productivity. Funnily enough, the public sector is to be protected—the Government are not looking for any increases in productivity there.

We are told that small businesses will find ways of decreasing their expenditure, but funnily enough, the Government are actually looking for ways of spending more money. They are spending £9 billion on a quango, Great British Energy. The Secretary of State for Energy Security and Net Zero came back from COP29 and told us that the Government were now committed to giving £300 billion away to foreign Governments for climate change, but he would not even tell us how much the Government were going to pay out to those Governments. For the nationalisation of the railways, again, there is an open cheque book. We are told that there are no alternatives. Businesses have to find alternatives, but the Government happily spend the revenue that they are taking.

Then, of course, the social care sector and GPs are told, “Go to the NHS and renegotiate your contract.” The NHS does not have to pay the national insurance rise itself—it is exempt. Do we really believe that when the GPs and the social care sector go to the NHS and say, “We want to renegotiate our contracts,” the NHS is going to say, “Oh, you need money for national insurance? There you are—take it.” All the excuses have been given today: we are told that there is no money, but it can be spent on other things. We are told that the social care sector and GPs can renegotiate, and that the private sector will be inventive. Let us see some invention by the Government, rather than broken promises.