Employer National Insurance Contributions: Charities

Seamus Logan Excerpts

Tuesday 7th January 2025 Westminster Hall

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

It is a pleasure to serve under your chairmanship again, Ms Vaz. I thank the hon. Member for Isle of Wight East (Joe Robertson) for securing this important debate and for his excellent contribution.

If the Labour Government thought that the national insurance controversy would die away as we moved into 2025, I am afraid they will be very disappointed. They have offered Scotland an additional £300 million to meet the additional costs, but the Scottish Government estimate that the actual cost is in the region of £750 million. This past week, 48 organisations from across civic Scotland have joined with First Minister John Swinney and president of the Convention of Scottish Local Authorities Shona Morrison to call on the Chancellor to cover the additional costs and to ensure that that is extended to the full range of organisations delivering public services. They are all facing a huge rise in their costs. According to the Scottish Government, the UK Government did not even bother to consult with them on this change. How is this change contributing to growth? It is reducing services for vital support at a dark time in people’s lives.

--- Later in debate ---

[Stephanie Peacock]

As the right hon. Gentleman makes clear, I am not personally responsible for the specific policy, but I will reflect his point to the Treasury.

Employers, including charities, will still continue to benefit from employer NI reliefs, including for hiring those under 21 and apprentices under 25 where eligible. I am aware, however, of the concerns of the voluntary, community and social enterprise sector about the impact that the changes will have on their organisations. I acknowledge that the last few years have been difficult for voluntary and community sector organisations, many of which have seen a rise in demand for their services while dealing with increased financial pressures. After the last 14 years, where the state at every level has been cut back, more demand has been placed on charities. Indeed, my local authority saw some of the worst cuts in the country, despite being one of the areas of greatest need, so I completely appreciate the role that charities have played during that time.

The simple reality is that the situation cannot be reversed overnight. To grow our economy and our country, tough decisions have to be taken, and I appreciate that that is difficult.

[Seamus Logan]

The Minister mentioned a number of mitigations for charities, and she said that she thinks that virtually all charities will benefit from those, so where are the Government actually obtaining the resources to fill the hole in the public finances?

[Stephanie Peacock]

I did not catch all of that intervention, but I said that half of charities would either stay the same or gain from the changes. I am happy to discuss that with the hon. Member after the debate, or write to him if I have misunderstood his point.

I have met representatives from the sector to specifically discuss the NI changes on more than one occasion. They have put forward many of the same arguments and questions that hon. Members have today, and I have shared those in turn with the Treasury.

A number of specific causes and sectors have been raised during the debate, and I would like to address some of those in the time available. Individual Departments will continue to provide direct funding and support for specific causes and areas. As has been mentioned a number of times, most hospices are charitable, independent organisations. As announced by the Department of Health and Social Care, the sector is set to receive a £100 million boost, alongside a further £26 million for children and young people’s hospices. Clearly, that will help with financial pressures. That sits alongside some of the other actions taken by the Government, including an £880 million increase in the social care grant and an additional £233 million of funding on homelessness, to help prevent rises in the number of families in temporary accommodation and to prevent rough sleeping.

The Home Office is working to agree decisions on its wider budget in support of the ambition to halve violence against women and girls, and it will communicate that as soon as possible. To answer the point made by the Opposition spokesperson, the hon. Member for Meriden and Solihull East (Saqib Bhatti), I have a cross-Government meeting on violence against women tomorrow morning.