National Insurance Contributions (Secondary Class 1 Contributions) Bill

Wendy Morton Excerpts

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[James Murray]

I thank the right hon. Gentleman for mentioning hospices, and perhaps I may set out the Government’s position on hospices and some of today’s amendments. The Government recognise the vital role that hospices play in supporting people at the end of life, and their families, and they also recognise the range of cost pressures that the hospice sector has been facing over a number of years. We are supporting the hospice sector with a £100 million increase for adult and children’s hospices, to ensure that they have the best physical environment for care, and £26 million of revenue to support hospices for children and young people. The £100 million will go towards helping hospices to improve their buildings, equipment and accommodation, to ensure that patients continue to receive the best possible care.

[Wendy Morton (Aldridge-Brownhills) (Con)]

The point that Opposition Members are trying to emphasise is that the Government appear to be giving with one hand, but taking away with the other. The hospice sector is just one example of many sectors that have been adversely affected by the Government’s cruel tax.

[James Murray]

As I said a few moments ago, the way that the Government support central Government, local government and public corporations—that is Departments and other public sector employers—is the same way that the previous Government responded to the health and social care levy. That is a standard way in which the Government offer support for employer national insurance costs.

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[Dame Caroline Dinenage]

I rise to speak in support of the Lords amendments, and I direct the House to my entry in the Register of Members’ Financial Interests.

I want to talk about the services that are so integral to our communities, because they are the ones on which our constituents rely. I am talking about GP surgeries, dental practices and pharmacies. I am also talking about our community hospices; the charity hospices that care for our loved ones through the most difficult and heartbreaking of times; the hospices that our constituents work so hard to raise funds to keep going. including our children’s hospices.

I listened very hard to what the Minister said, and he talked really dispassionately about difficult decisions. Has he no shame? This is a choice, and the Government have chosen to impose this jobs tax on children’s hospices and the services that support families going through the most unimaginably difficult and painful of times.

[Wendy Morton]

My hon. Friend speaks with so much knowledge and passion, and she is a real advocate for her constituents. When we look across the Chamber, we see that the Labour Benches are threadbare. Is that not testament to the fact that Labour is actually trying to defend the indefensible?

[Dame Caroline Dinenage]

That is absolutely right. There are over 400 Labour MPs, but just four of them are sitting there to try to defend this indefensible jobs tax on our most vulnerable. They should be utterly ashamed of themselves. Do they not have children’s hospices in their constituencies? Do they not have hospices and other settings that their constituents work so hard to raise funds for? They should be absolutely ashamed of themselves.

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[Dave Doogan]

It is almost three months to the day since we were here in this Chamber on Third Reading. The SNP and other parties warned at that stage of the very real, dire consequences for organisations, businesses, charities, hospices and so on. It certainly does not give me, or anybody else on the Opposition side of the House, any pleasure that those threats have come to pass. There is no pleasure in that whatsoever.

The British Chambers of Commerce spoke last month of a “powder keg of costs” for businesses, with 82% of firms surveyed saying that they faced the potential of staff lay-offs, wage freezes or cancelled promotions in the workforce, which will be a terrible drag on the economy. Last month saw vacancies in the UK contract at the second-fastest rate in nearly five years, while wage growth has slumped to an almost four-year low. If we want the evidence of what business thinks of this change, it is there in the figures: 300,000 small business owners surveyed last month said they intend to lay off employees in order to cope with Labour’s national insurance increase.

The economic impact is now becoming absolutely clear. Last week’s GDP figures show the UK economy shrinking in January. On Monday this week, the OECD downgraded the UK growth forecast for both this year and the next. The reality under Labour is that economic growth has fallen in four of the past seven months. The national insurance grab represents an extraordinary and unforced error in fiscal policy. If Labour genuinely has confidence in this move, then it should have no issue whatsoever in agreeing to Lords amendment 21 and publishing an impact assessment of its national insurance increase. What the Minister detailed as an impact assessment was in fact an analysis. An impact assessment deals not with the numbers, but with output in the real economy—the effect on business. The Minister knows fine that that is not what he is talking about.

On GPs and Lords amendments 1, 4, 5, 9 and 13, the Scottish Government will be investing—or compensating, rather—£13.6 million in general practice this financial year to support GPs in Scotland alone, obviously, to retain and recruit staff in the face of the change. But Scotland’s GPs, any more than England’s, Wales’s or Northern Ireland’s, should not be paying the price for UK Government decisions. Labour’s decision to increase national insurance contributions is a catastrophe for GP practices and for charities across Scotland—the relevant Lords amendments are 2, 7, 12 and 16.

There are 7,000 charities in Scotland at risk from this Labour Government. Marie Curie faces a £2.9 million inflation to its costs, with £75 million across the charitable sector in Scotland. The Scottish Society for the Prevention of Cruelty to Animals alone is exposed to a £400,000 recurring pressure from this Labour Government. Scotland’s public sector faces a £700 million recurring pressure, which, with the Government’s compensation, still leaves a £200 million shortfall. Scotland is again being punished for choosing to invest more in its public services and paying people who deliver those services better.

The Government regularly attack us by saying, “What would you do?” I will tell them what I would do: £30 billion by rejoining the single market; £16 billion by introducing Scottish income tax rates; and £43 billion from a wealth tax of 1% on assets over £10 million. But this Labour Government will not go after multimillionaires. They would far rather go after the disabled, hospices, family businesses, GPs, farmers, councils and charities. That is what these so-called socialists are intent on doing.

In conclusion, Labour’s fiscal bonfire is what my colleagues in the Scottish Government have had to deal with to try to ameliorate and protect communities from Labour’s economic ineptitude. But even fiscally incompetent Unionists—a cadre in whose number I include the Minister—must realise that the Scottish Parliament cannot exist simply to ameliorate and protect Scottish public services from the United Kingdom’s decisions. Devolution can only ever be a temporary face-lift for the crumbling foundations of Unionism. As the Union crumbles, I shed no tears, but I wish it was not ripping the economic heart out of Scotland on its way down.

[Wendy Morton]

I would like to start with a gentle reminder, if it is needed, that Labour promised in its manifesto not to raise national insurance. Yet we are here today because Labour broke that promise. We are here today because right hon. and hon. Members in the other place tabled some very important amendments to the Bill, which are, rightly, now here for us to consider. Let us also not forget that Labour colleagues voted against protecting small family businesses; against protecting hospices; against protecting GPs; against protecting care providers; against protecting small charities, including air ambulances; against protecting providers of school transport for children with SEND; and against protecting nurseries. Now they all face the jobs tax.

[Sir Roger Gale]

My right hon. Friend will recall that the hon. Member for Loughborough (Dr Sandher) referred in his speech to perverse incentives. Is it not perverse that the Government should, while exempting the health service, be taxing doctors, dentists, hospices and children’s hospices, which are, effectively, all part of that same health service?

[Wendy Morton]

My right hon. Friend is absolutely spot on. I find it hard to believe that we are listening to those arguments being made by Labour Members. The unintended consequences of the Labour Government’s choices are not just disappointing but callous. They are so harsh on some of the most vulnerable communities and vulnerable people in society.

[Dame Caroline Dinenage]

My right hon. Friend is making some excellent points. Does she agree that it also shows a deep lack of understanding by the Labour party of the way our communities are constructed and the organisations we rely on so much to keep them going?

[Wendy Morton]

That is exactly the point. What we see instead is Labour Members continuing to blame their economic inheritance. That is simply not correct. The chair of the Office for Budget Responsibility said:

“Nothing in our review was a legitimisation of that £22 billion”.

I wonder what the former Governor of the Bank of England, Mark Carney, makes of all this. In the run-up to the 2024 general election, he endorsed Labour.

What many people now see is a Government who do not really understand the role that so many charities play in supporting the NHS, communities, older people, young people, families, and patients—people who are sick and sometimes terminally ill. For example, why would they protect the public sector and the rest of the NHS from the national insurance tax, but not general practice? Analysis from the Institute of General Practice Management estimates that it will cost each practice an average of £20,000 a year. How many staff hours is that equivalent to? How many hours of a GP’s time or a practice nurse’s time is that?

I have spoken to a number of local charities, and we have heard from others today. Every pound that the Labour Government squeeze out of them through the jobs tax is an extra pound that cannot be spent on frontline services—an extra pound that they have to find just to stand still. I find it so hard to believe that this Labour Government are also taxing those who provide vital hospice care. How can they talk of helping palliative care with one hand, while clobbering hospices and care providers with extra taxes with the other?

I can be cynical at times but I see a complete lack of business expertise, knowledge or experience among those on the Labour Benches. Just visiting businesses is not enough to understand how a business operates. I speak to them in my constituency on a weekly basis. The chair of the CBI has stated that

“business has been milked as the cash cow”.

We simply cannot expect small businesses, or indeed any business, to just be squeezed and squeezed, thinking, “Well, they’ll just increase their costs and pass them on to the end user.” The end user cannot afford them, as we have heard this afternoon. Ultimately, something will have to give: hours, training, development and jobs.

Just yesterday, we were in this Chamber debating the Government’s welfare reform. At the heart of the issue, I really believe people want to get back into work. They need support to do that, but they also need employers and businesses to have vacancies so that they can support them back into work. What I, like others, see in this legislation is the Government taxing businesses out of creating the vital jobs that this country so needs to get the growth that we do not have at the moment.

As I mentioned, attendance on the Government Benches is somewhat threadbare, giving the appearance that the Government do not care. We have heard from Labour Members who do care, just like we on the Opposition Benches care. I draw my remarks to a conclusion by urging Members on the Government Benches and those listening outside to reflect very carefully. We all have the opportunity today to do the right thing—to protect and help charities and hospices and, by virtue of that, to protect and help some of the most vulnerable in our country and society. We have the opportunity to protect jobs and help businesses to create opportunities and, by virtue of that, to help working people who aspire to a better life. I end quite simply by urging those on the Government Benches to think again and to do the right thing.

[James MacCleary (Lewes) (LD)]

I wish to express my deep concerns about the Government’s national insurance changes and the devastating impact they are having on essential services in my constituency. The amendments put forward by the Liberal Democrats in the Lords are crucial to preventing this policy from inflicting serious harm on GP practices, care providers and the wider health system.

Take our GP surgeries, which are vital to healthcare in Lewes and beyond. I have been speaking to local healthcare providers in my community over the past week. Unlike private businesses, GP surgeries cannot pass their costs on to their patients. Every extra pound spent on national insurance is a pound less spent on patient care, staffing and appointments. The Government’s failure to exempt them will mean fewer face-to-face consultations and longer waiting times, contrary to the Government’s claimed objectives. The Liberal Democrats’ Lords amendments 1, 4, 5, 9 and 13 would protect GP surgeries, NHS-commissioned dentists and pharmacists by keeping their national insurance costs at a sustainable level.

Social care providers are facing the same predicament. A domiciliary care provider in my constituency is already struggling to recruit and retain staff due to rising costs.