National Insurance Contributions
Steve Darling Excerpts(5 days, 8 hours ago)
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Steve Darling (Torbay) (LD)
The Liberal Democrats welcome the Minister’s suggestion that today’s proposals are yoked to the national insurance increases going through the other place. Since the general election, we have had doom and gloom from the Labour party until very recently. The uncertainty around the Budget and the national insurance increases that are yet to hit has only put the cold hand around the economic growth that we need to see pumping harder in our economy.
In my own part of the world in the west country, it is having a massive impact on the tourism industry. The fact that the thresholds at which people start to pay national insurance are going down from £9,200 to £5,000 means that businesses in my constituency, such as Paignton pier, Paignton zoo and Splashdown, all have massive increases in seasonal worker costs, through both the threshold hitting harder and the increases in national insurance costs. When I speak to businesses such as Splashdown in Paignton, they tell me that it means they will probably operate for a shorter time and that they may look at reducing the number of staff they take on. Sadly, the national insurance increase is a jobs tax on our tourism industry, as well as on the rest of our economy.
I am only too well aware that the cost to hospitality is £1 billion. That is extremely disturbing. Again, people will not be taken on due to those cost pressures. Therefore, this really is a jobs tax.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I am very interested in what my hon. Friend is saying about the threat to jobs. At the other end of the country, the north of Scotland, we have the same issue. The loss of any jobs in the hospitality industry is disastrous, when we do not have much employment anyway. We would like much more—let us put it that way.
Steve Darling
I am delighted with my hon. Friend’s intervention, because the Liberal Democrats represent the full length of the United Kingdom from Shetland to the Isles of Scilly, and it is important that we hear about that impact from a breadth of colleagues. The Liberal Democrats represent some of the best places to go on holiday across the UK.
There is a significant high-tech industry in Torbay. Again, businesses in that manufacturing industry tells me that their owners abroad may ask them to offshore some of their manufacturing to places such as Taiwan, where taxes on employment are significantly lower. That is another significant impact of the rise in national insurance contributions.
Bay Care is an outstanding social care business, but Kat Hall, one of its senior managers, tells me that this measure will have a significant impact. The business operates within very tight margins, and it will have to reduce services or limit its offer to our communities in South Devon and Torbay. Those reductions will inevitably have an impact on the social care offer.
Finally, let me say something about the voluntary sector. Torbay Communities gives outstanding service to the people of South Devon and Torbay, but the national insurance increases will confront it with considerable challenges. It will have to think about whether to reduce its staff and stop supporting some of the most vulnerable people in the area—people who are in need. With due respect to the Minister, I ask the Government to reflect on these increases and to see how they can alleviate them, particularly in the hospitality, social care and voluntary sectors.
Agricultural and Business Property Reliefs: OBR Costing
Steve Darling Excerpts(2 weeks, 3 days ago)
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Steve Darling (Torbay) (LD)
After years of the Tories failing our rural communities, including with a dodgy and utterly shameful Australian trade deal, it is a great pity that the new Government have picked up the baton. From Orkney to the Isles of Scilly, Liberal Democrat colleagues are extremely concerned about the impact of these proposals.
The report published yesterday clearly demonstrates the uncertainty about the income from the misguided family farm tax over the next two decades. In the light of this, and given that it will hit older farmers in particular and those who put food on the tables of the United Kingdom, will the Minister do the right thing and scrap this tax?
James Murray
The OBR document published yesterday refers to the level of uncertainty associated with this policy, which is exactly what was set out at the time of the Budget, and it is a typical way in which the OBR responds to new measures. What was published yesterday simply reiterates the OBR’s conclusions from the end of October.
Oral Answers to Questions
Steve Darling Excerpts(2 weeks, 5 days ago)
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Michael Wheeler (Worsley and Eccles) (Lab)
Steve Darling (Torbay) (LD)
The Exchequer Secretary to the Treasury (James Murray)
The Government announced a range of measures at the autumn Budget to support SMEs, including in the retail, hospitality and leisure sectors. They include more than doubling the employment allowance, freezing the small business rates multiplier, extending RHL relief to 40%, maintaining the small profits rate and reducing the duty on qualifying draught products, which represent 60% of alcoholic drinks sold in pubs.
James Murray
I thank my hon. Friend for his question and for referencing Wonderful Palate, the business in his constituency. I do not know the details of the rateable value of that property, but I point the owner to the fact that we are retaining small business rate relief, freezing the small business multiplier next year and extending the retail, hospitality and leisure relief in 2025-26. I also point the owner of that business and other businesses to our future plan, as I mentioned, to have permanently lower tax rates for retail, hospitality and leisure businesses with values of below £500,000, as well as to consider reforms to small business rate relief to better support businesses that want to expand into a second premises.
Steve Darling
What consideration have Ministers given to exempting the seasonal tourism industry from the national insurance hikes set to kick in this summer? That would benefit Paignton zoo and Splashdown in the Torbay constituency.
James Murray
We set out the details of our decision to increase the rate of national insurance contributions from employers and to reduce the threshold, and we have added the different benefit we will give, particularly to small businesses and charities, by more than doubling the employment allowance. The employer national insurance contribution changes were among the toughest we took in the Budget, but they were necessary to repair the public finances and deliver the economic stability that is so crucial for investment and growth.
Oral Answers to Questions
Steve Darling Excerpts(5 months ago)
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Steve Darling (Torbay) (LD)
Caroline Voaden (South Devon) (LD)
Rachel Reeves
I understand the concerns that the hon. Lady sets out. The state pension is worth £900 more than it was a year ago and energy bills are lower this winter than they were last winter. As she points out, we inherited a £22 billion black hole from the previous Government, who had made unfunded spending commitments with no idea how to pay for them. When I became Chancellor, I undertook an immediate audit of the spending situation to understand the scale of the challenge, and I made difficult decisions—some very difficult decisions—to put the public finances on a sustainable footing. They were tough decisions, but they were the right decisions in the circumstances we faced. They included the decision to make the winter fuel payment better targeted, so pensioners who need it most will still get it alongside pension credit. Targeting the winter fuel payment will save around £1.5 billion a year to support public finances.
Steve Darling
Some 21,000 pensioners in my constituency of Torbay will be impacted by the cut. In Devon and Cornwall, almost 90% of pensioners will be impacted by it. While many of us acknowledge that the Chancellor was left with a massive financial challenge when she came into the post, I remain extremely concerned about the residents who have reached out to me and colleagues with their major concerns about making ends meet as we enter the winter period. They have had no time to save and it is a complete shock to them. What assurances can the Chancellor give that the Government will support those who are most vulnerable? If those measures fail, what assurances can she give that she will scrap the proposal?