Question to the HM Treasury:

To ask Her Majesty's Government what assessment they have made of the impact on jobs of the 1.25 per cent rise in employers' national insurance contributions; and what support beyond the increase in Employment Allowance they will provide to avoid small businesses making staff redundant.

The Government has made several assessments of the impact of the introduction of the Health and Social Care Levy, which were published alongside the announcement. These include the distributional analysis of the impact of the combined tax and spending announcements, a technical annex in our plan for health and social care and a Tax Information and Impact Note.

Further, the Office for Budget Responsibility set out their assessment of the economic effects of the Levy, including the impact on labour supply and wages, in the Economic and Fiscal Outlook published at Autumn Budget 2021.

It is worth noting that the Government is increasing the Employment Allowance (EA) for the third time since its introduction in 2014, demonstrating an enduring commitment to supporting small businesses. Around 495,000 businesses will benefit from the increase to the EA announced at Spring Statement 2022, including around 50,000 businesses which will be taken out of paying National Insurance contributions (NICs) and the Health and Social Care Levy entirely. In total, this means that from April 2022, 670,000 businesses will not pay NICs and the Levy due to the EA.

In addition, the Government has prioritised support for Small and Medium-sized Enterprises (SMEs) by cutting business rates by 50 per cent for retail, hospitality, and leisure businesses, providing a 90 per cent subsidy for world class management training and 90 per cent for apprenticeships, and supporting SMEs to invest and grow by increasing the Annual Investment Allowance to £1 million and subsidising the cost of new software up to £5,000.