Employer National Insurance Contributions

Torsten Bell Excerpts

Wednesday 4th December 2024 Commons Chamber

[Mel Stride]

I am surprised that the hon. Gentleman raises the inheritance that his party has received from the Conservatives. We had the highest rate of growth in the G7. We had brought inflation right down from 11.1% in October 2022 to 2%—bang on target—at the time of the general election. We had a near-record level of employment. We had a near-record low level of unemployment. We had real wages that had been increasing month after month for 13 or 14 months prior to the general election. That was not a bad inheritance.

[Torsten Bell (Swansea West) (Lab)]

I am grateful to the shadow Chancellor for giving way, even if I cannot quite believe what I am hearing. Anyone boasting about the economic record of the previous Government, particularly in the immediate run-up to the last election, should read this week’s release from the Office for National Statistics on the reweighted labour force survey. It shows that productivity in the year running up to the election fell by 0.9%. That was in just one year. That is what economic failure looks like.

[Mel Stride]

No matter what points the hon. Gentleman may make, I am afraid he cannot get away from the fact that this Government are bearing down on growth, pressing up on unemployment, bearing down on employment and bearing down on living standards.

The OBR also says that real household disposable income by 2029 will be 1.25% lower than it was back in the spring, at the time of that forecast. We know the impact that national insurance is going to have on wages. It will press them down and it will further diminish living standards.

--- Later in debate ---

[Paul Holmes]

I simply say—and the Chief Secretary should know this because he supposedly wrote the Budget that we voted on a couple of weeks ago—that growth forecasts were higher under the last Government than those of the Government for whom he is now leading in the Treasury. I say to the Government that business confidence is at the lowest it has been for years.

[Torsten Bell]

The hon. Member has raised the issue of business confidence, which I have heard a few times from Opposition Members. That leaves me pondering why, if businesses were so confident under the previous Government, we had the lowest private sector business investment in the entire G7, and the only country in the OECD that saw lower levels of private investment was Greece.

[Paul Holmes]

I know the hon. Gentleman liked to pride himself on being the oracle of economics when he led a think-tank, but if he looks at the bare facts of business confidence out there, he will see that it has been lower under the five months of the Labour Government than it ever was under the 14 years of the Conservative Government.

I want to mention some of the impacts that this measure will have on my constituency of Hamble Valley. There are 4,000 people employed in the hospitality sector in my constituency. Just last night, a business leader—a small business leader who owns three local venues—outlined to me that, because of the measures this Government have brought forward, he now has to find 5% extra of his total turnover to pay his taxes. That leads to a number of options: he can reduce staff count, meaning higher unemployment in my constituency and nationally; he can close venues, which again means lower employment and the death of our town centres—in every constituency, I remind Members—or he has to choose between not hiring local staff and stopping expansion, as every extra person he wants to take on will cost the business an extra £800 because of this national insurance contributions rise. That choice is facing businesses up and down the country, with lower growth, higher bureaucracy and higher taxes on the people who create jobs and wealth in every constituency in this country and drive the economy that we need to fund public services.

What is most damaging about the Government’s proposal is the catastrophic impact it will have on charities across this country. I defy any Labour MP to stand up in this Chamber and say that they are willing to bring in and happy to vote for a measure that will mean frontline services delivered through our charitable sector are cut. There are other options the Government can take, and they have chosen not to.