National Insurance Contributions (Secondary Class 1 Contributions) Bill

Tom Hayes Excerpts

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[James Murray]

The hon. Member focuses on the national insurance contributions changes, which is rightly the focus of this Bill, but I urge her to look at that in the context of everything else the Government are doing, not least the employment allowance doubling that I have mentioned. There is also our decision to freeze the small business rates multiplier as it applies in England, our decision to introduce permanently lower retail hospitality and leisure rates for businesses on the high street in 2026-27, and the decision in our corporation tax road map to maintain the small profits rate and other allowances from which small businesses can benefit. I urge her to understand that what we are doing on national insurance is taking a tough decision to fix the public finances, while at the same time providing the stability that businesses need to invest and grow, and that is the way to move our country forward.

[Tom Hayes (Bournemouth East) (Lab)]

Does the Minister agree that many people who want to work have struggled to do so because of poor health? They are unable to get access to a doctor, a hospital appointment or a dentist appointment—to a whole range of appointments—and as a consequence they have been forced out of work when they want to be in work, earn a living and get dignity from work. With the changes that the Government are bringing forward, we will see investment in our NHS and our public services that will help people to get the appointments they need to return to work. Does he agree that this investment is much needed and a good thing for our economy?

[James Murray]

I thank my hon. Friend for his intervention, and he is right. He points out why we are taking these difficult decisions, and why it is so important to fund public services and fix the public finances. Healthy businesses need a healthy NHS, healthy businesses need a healthy workforce and healthy businesses need public services to be functioning so that they can maintain their investment and grow the economy. I am sure that my hon. Friend, and other Members, will have seen the Government’s “Get Britain Working” White Paper, which sets out the barriers that ill health puts in the way of people being economically active. We are determined to challenge that and to help people who are able to get back into, and stay in, work. That will be a mission of this Government.

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[Bradley Thomas]

I think the hon. Lady misses the point that I am making. If we are to have a thriving, sustainable set of public services, it is not just a case of funding them; we need structural reform, so that we can deliver the best-quality services at the point of need. Take the NHS as an example. It is fundamentally different from how it was at its inception. People live longer and suffer from different illnesses. It is incumbent on Government, the whole of the public sector and this Parliament to focus on how money is spent to deliver value for money for everyone involved.

A few weeks ago, the Chancellor said that businesses that were concerned about the impact of proposals in this Budget should “cut their cloth accordingly”. Well, the same should apply to Government. Every single one of us should challenge Government to spend our money much more effectively. Once we do that, the tax burden will come down, and when that happens, we can pass on those savings. It is those savings that will ultimately underpin and provide the foundation for an economy that will grow and incentivise businesses across the board.

The Government talk a lot about the climate and the context that they inherited, but they repeatedly fail to acknowledge covid—one of the biggest public finance interventions this country has seen, which took place only a few years ago.

[Tom Hayes]

I agree that there needs to be reform of the NHS alongside this investment, and I welcome the point that the hon. Gentleman is making. In a recent speech, the Secretary of State set out what some of those reforms could be; I would welcome hearing what the hon. Gentleman thinks the reforms to go alongside the investment ought to be. Would he acknowledge, too, that one of the reasons why the NHS was in such a difficult position when dealing with the pandemic was that it was starved of funding and left under-prepared?

[Bradley Thomas]

Absolutely not. I do not agree with the hon. Gentleman. Under the previous Government, the NHS received record levels of funding. The Government have committed additional funds to the NHS, but they have not put forward a productivity improvement plan. The Government are unable to deliver structural reforms because they are in the pocket of their union paymasters. They have zero incentive at all to structurally reform the public services that they claim to care about so dearly. I touched on covid and the financial climate that this Government inherited. Over 14 years, the previous Government delivered 800 jobs per day. The previous Government also delivered a direct cut of £900 in national insurance to the pocket of every “working person”.

Governing is about choices. In this Budget, the Government are borrowing £40 billion of additional spending. In reality, we are seeing the same old tax-and-spend Labour. Let us look at some of those choices. National insurance contributions are up. The Chancellor said that NIC increases for employers would be a jobs tax. The Institute for Fiscal Studies said that would be a straightforward breach of the manifesto. Rate relief is down. A typical pub is paying £6,000 more in business rates per annum. There is the family farm tax, which I desperately hope this Government will do a U-turn on, and the education tax.

Let us look at the impact of all those decisions. The economy is flatlining—there was 0.1% growth in quarter 3. Inflation is up, from 1.7% to 2.3%. There was a 64% increase in business closures the week after the Budget. Asda has said that the Government’s decisions in the Budget risk price rises. John Lewis has said that it is worried about the impact of the national minimum wage increase. Two thirds of businesses claim that they are looking at freezing recruitment or making job cuts. We have already heard hon. Members talk about the impact on the charity sector. In fact, during this debate, I received an email from YMCA, which said that because of the increase in national insurance that it will have to pay in Worcestershire, it will look to freeze all recruitment and probably make redundancies. It will not be able to give a pay award to any of its staff, and it will look at cutting services. That is damning. We see from the Government an ideological pursuit of a policy that is really a false economy. Labour is failing the very working person that it claims to be protecting.

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[Tom Hayes (Bournemouth East) (Lab)]

As a new Member of Parliament, I was looking at the shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller), when he was responding to the Minister, and trying to figure out why he looked so familiar. I realised that it was because he was Liz Truss’s Economic Secretary to the Treasury; the person who had to go out and defend Liz Truss’s mini-Budget. I therefore wonder why this new Conservative party led by a new person is sending out Liz Truss’s Treasury Minister to respond to a Labour Budget that is mopping up some of the mess created by her. When I realised that, it got me thinking about how much we should be listening to the Conservative party. This is a party that, in its contributions today, has shown no desire to learn a lesson from the election or listen to voters who were so damaged in their incomes and their lives by the Government we have replaced, but only a desire to play politics at its worst. The Conservative party has done that rather than actually scrutinise what this Government’s Budget is intended to achieve.

It is worth reflecting on what has happened over recent years. The economy crashed, mortgages were sent through the roof and an early election was called to avoid the Conservative party having to deliver the Budget. There were covid contracts that cost this country millions and a £22 billion black hole; that is what this Government are having to respond to.

[Stuart Anderson]

As this is such an important topic, why are there fewer than half a dozen Back-Bench Government MPs here to discuss it? It is not important enough to get their Benches full?

[Tom Hayes]

I have literally just said that this debate should not be about party politics, but about the scrutiny of this Government’s Budget. Instead of asking questions about the nature and substance of the Budget, the Opposition are resorting to party politics. [Interruption.] As my hon. Friend the Member for Harlow (Chris Vince) says from a sedentary position, we could list debates such as the Grenfell Tower inquiry debate yesterday, during which Conservative Members were deserting their Benches.

The burden of tax has fallen on working people for far too long under the Conservatives. Working people have suffered in many more ways, too: they have been unable to get the NHS appointments they want, the mortgages they want and all the services they should be entitled to. When I have knocked on doors in Bournemouth East and spoken with thousands of people over the last two years, the overwhelming feeling has been of hopelessness. It is the feeling that nothing ever changes in politics because there is a constant back and forth between our Benches about unimportant things rather than a focus on what those people actually want.

People want an NHS that will truly deliver. They want the 40,000 additional appointments a week. They want the billion pounds that is being invested in SEND. They want the £600 million going into social care. They want the £22 billion going into our NHS to start to fix the problems that have been ongoing for 14 years. I say to Opposition Members that if they are dedicated to their constituencies, if they care deeply about putting our public services back on track, and if they care about an economy that grows so that we have private businesses supporting our investment in the public sector, they should be voting with the Government tonight. I am disappointed to see so many of them saying that they will not be doing so.

[Damian Hinds (East Hampshire) (Con)]

We are the Opposition. You are the Government.

[Tom Hayes]

We are the Government taking decisions in the national interest. The Conservatives are the Opposition taking decisions on behalf of their party’s interest. That is why, I am afraid, the Conservatives will not be coming back into power any time soon. They are not prepared to listen to what voters want, they are not prepared to take the tough decisions, and they are not prepared to come to the table, be constructive and try to put right the problems that they have created.

We have a long road ahead to put our NHS our economy and our public finances back on track, but this is a Government with a historic majority and a historic mandate to serve our nation’s interest. I call on those on the Opposition Benches—obviously not the Conservatives—to support this Government in what we are doing, because, together, we can put this country back together.