National Insurance Contributions (Secondary Class 1 Contributions) Bill

Viscount Chandos Excerpts

Committee stage
Tuesday 21st January 2025 Grand Committee

[Lord Randall of Uxbridge (Con)]

My Lords, I support Amendments 4 and 5, to both of which I have added my name. I echo the excellent words of the noble Lord, Lord Storey, who introduced the issue of the childcare sector. I do not particularly need to add to those words, or indeed to what the noble Lord, Lord Sharkey, said about universities, except to say that I have a university that I can remember being built in my back garden, effectively—it is not really my back garden but I could see it rise. That is Brunel University, which is excellent and, like every other such institution, it has its problems. A few years ago, I suggested that it changed the name to “Uxbridge University”, hoping that some benefactors from across the United States might get confused with Uxbridge and Oxbridge and send lots of money across. Like so many of my cunning plans, that was rejected out of hand.

I also want to speak particularly to Amendment 5 about charities, although housing associations are an important issue, too. But the issue of charities is the one we should probably be most aware of. I have to declare that I am a trustee of several charities. I have stood down from a few more in the past year or so but a lot of these charities have approached me and told me of the huge costs. Although for some of the smaller ones the costs may not be the same, in relative terms they are just as difficult.

Earlier today, I wanted to get in on a Question about the National Trust, and there were many people on both sides, but particularly on the government and Liberal Democrat sides, saying that the National Trust is a great organisation, and I would echo that. But I wonder how many people who pay their subscriptions want to see them going not towards the landscape or the historic houses, or whatever, but being swallowed up by these increases.

One charity where I was a member of the council—a trustee—until earlier this year was the RSPB and it was the same thing. It was a huge amount; we are talking about it having to pay out a couple of million. The thing with charities—I think this was mentioned by the noble Earl, Lord Kinnoull, but I would like to reiterate it—is that it is not a matter of putting any prices up because they are supplying stuff. Their funding comes from either organisations, such as foundations or whatever, or individual donations. Charities are not charging for their services. They are performing lots of things which the state would otherwise have to pick up.

One thing which struck me when these organisations approached me, having seen that I put my name down to amendments, is when they told me how much they were going to have to pay they were reticent about me disclosing that, which I will stick to. I thought first, “Why are they so reticent? Is it that they do not want to upset the Government because they want to keep on-side?”. That is a perfectly logical position at this early stage of a Government. After a while, most organisations start to hate the Government rather than the political party who form that Government. Then I thought, “Maybe they do not want to because they have to rely on donations”. Whether it is somebody giving just a few pounds to the Dogs Trust or in a charity shop, if they think that that money is effectively going to the Treasury and not to the good cause that they want to support, they might be less keen. People sometimes do not need much of an excuse.

I am sure many noble Lords here today will have heard the excuse when people do not want to give to charities. They say, “Oh, it is not going to go directly to what I want it to go to”. This is something that charities will be nervous about saying publicly. I am sure that the Minister will have had representations from many charities, because they are extremely worried. This has really upset the whole sector, and it should be reconsidered.

As the noble Earl, Lord Kinnoull, said, there is another possibility. I do not want to give the Minister too many let-outs, but one possibility would be to delay it. Most of these organisations, particularly by this time of the year, have made their budgets. They have put in applications for funding from other organisations and put various amounts in. To suddenly find an increased cost that they were not expecting makes it very difficult for those budgets to be met. Although I have raised the point on other sectors, to me it is the charitable sector which is the most vulnerable. We should really be considering whether we want to impose this on it.

[Viscount Chandos (Lab)]

My Lords, I shall speak briefly on this group, particularly Amendments 4 and 5, but the arguments that I make really apply to many of these early groups because each one is a special plea. My noble friend Lord Davies of Brixton asked, “How can you speak out against an exemption in favour of veterans?”. The same could be said for small animals or whatever tugs at our heartstrings, but it comes back to the argument that my noble friend Lord Eatwell made so powerfully, which is that in an already complicated tax and national insurance system, we should avoid any further complexity if we can, and I think that the price which that may impose on different organisations is a price worth paying.

The noble Baroness, Lady Neville-Rolfe, talked about her involvement in attempts to achieve tax simplification when she was in government. It was the Conservative Government who introduced the Office of Tax Simplification and then abolished it, perhaps because it came up with the inconvenient truth that the agricultural and business relief regime should be reviewed and, implicitly, abolished.

At Second Reading, I made a declaration of interests which include being a trustee of two charities. One of them is a higher education institution, so it is covered doubly by Amendment 4 and Amendment 5. Many noble Lords who have spoken have referred to their personal experience of charities or different organisations. I have to say that I am struck by the fact that the organisations of which I am a trustee have, without any input from me, taken this philosophically as a cost that they must cope with. No increase in cost is welcome. Energy-led inflation was not. The insurance inflation that we are all suffering from, the wage inflation that we have seen and the overall increase in the cost of living are unwelcome costs for any organisation, large or small, to bear.

As I suggested at Second Reading, there is an understanding in many organisations, including commercial ones—I cited the comments of Mr James Daunt, as chief executive of Waterstones and his eponymous chain of bookshops—that the purpose of this revenue-raising from the changes to NI feeds into supporting the community from which organisations draw their employees, customers and donors. For this reason, although I do not welcome the increase in the cases of the organisations with which I am associated and of the many others that are similarly affected, I believe in the simplicity of applying the same rate to pretty much all organisations in the private and voluntary sectors. The arguments for simplicity outweigh those of the individual challenges that this measure will give organisations.

[Lord Forsyth of Drumlean (Con)]

My Lords, it is a great pleasure to follow the noble Viscount, Lord Chandos, who is very wise and diligent. For many years, we were together on the Economic Affairs Committee. I agree with him about the simplification of the tax system. Indeed, the Office of Tax Simplification was a recommendation from the tax commission that I chaired back in 2006 to George Osborne and David Cameron. It was implemented and, somehow, the Treasury managed to bog it down in a way that prevented it doing an effective job.

I agree entirely with the noble Lord, Lord Eatwell, that we need a simpler, fairer tax system. The simplest way of dealing with that would be not to have this increase at all because then there would not be the need to have these exemptions. This is a problem that has been created by the Chancellor and the Government. I must say, in speaking to these amendments, that Amendments 4, 5 and 8—