Commons Sense

House of Commons · Bill Debate

Finance Bill (No. 2) - Clause 1: Reduction in National Insurance Contributions

30 November 2023 · 14 other contributors

Opened by Laura Trott Con Sevenoaks

Taxation

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Laura Trott raised concerns about finance bill (no. 2) - clause 1: reduction in national insurance contributions in the House of Commons. Other MPs contributed to the debate.

Key points

  • This is a landmark moment as we focus on growing our economy and cutting taxes after supporting people through the pandemic with significant spending.
  • The Bill will cut national insurance contributions for 29 million working people by reducing employee class 1 NICs main rate from 12% to 10%, saving the average worker more than 450 a year, starting from January 6th.
  • It also reduces self-employed class 4 NICs rate from 9% to 8%.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Laura Trott Con Sevenoaks

I beg to move, That the Bill be now read a Second time. This is a landmark moment as we focus on growing our economy and cutting taxes after supporting people through the pandemic with significant spending. The Bill will cut national insurance contributions for 29 million working people by reducing employee class 1 NICs main rate from 12% to 10%, saving the average worker more than £450 a year, starting from January 6th. It also reduces self-employed class 4 NICs rate from 9% to 8%. These measures will simplify the system for self-employed taxpayers and reduce administrative burdens while incentivising work.

Other contributors (14)
  • Laura Trott Con Sevenoaks

    The reduction in national insurance contributions benefits more than 27 million employees, saving them an average of £450 per year. For the self-employed, it reduces class 4 NICs by one percentage point and removes the requirement to pay class 2 NICs for those with annual profits above £12,570, resulting in a total savings of £350 in 2024-25. The Bill's measures are estimated to be worth more than £9 billion per year, according to the Office for Budget Responsibility (OBR).

  • Harriett Baldwin Con West Worcestershire

    Intervened asking the Chief Secretary to confirm how many Labour Back Benchers are present for this milestone debate.

  • Jim Shannon DUP Strangford

    Welcomed the cut in national insurance but expressed concern that it does not sufficiently address the high tax burden on average working-class families. Sought reassurance from the Minister that there are more benefits forthcoming for these individuals.

  • James Murray Lab Co-op Ealing North

    Murray supports the cut in national insurance but criticises the overall tax burden under Conservative rule. He cites statistics showing that taxes on the median earner will rise from £6,112 to £7,364 over the period. Murray also discusses the impact of previous national insurance rises and their subsequent reversal, highlighting how these have made working people worse off.

  • Alun Cairns

    Cairns questions whether Murray recognises the context in which the autumn statement was made and challenges him about his support for financial measures during the pandemic.

  • Richard Graham

    Graham responds to Murray's confusion over tax changes by pointing out that the income tax starting point has doubled, providing extra take-home pay for workers. He defends the Government’s measures as beneficial.

  • Drew Hendry SNP Scotland

    The Chancellor’s proposed reduction in national insurance contributions is superficial and does not address the cost of living crisis adequately. The reduction will offer minimal benefits to average earners, with a net saving of only £36 per year, while the real-terms cuts to public services exacerbate the situation for families already struggling with high costs.

  • David Simmonds Con Ruislip, Northwood and Pinner

    Welcomes measures to reduce national insurance contributions as significant financial support for constituents. Emphasises that these reductions will help many households, particularly those with unstable employment or starting careers. Raises concern about recruitment of foreign workers and suggests differential rates of national insurance contributions for short-term visa holders compared to lifelong citizens.

  • Richard Graham Con Gloucester

    Supports the amendment for its positive impact on constituents' take-home pay and overall economic well-being. Highlights that Gloucester's employment rate has risen from 76% to 84%, indicating a strong job market despite inflationary pressures. Emphasises the success of measures like the furlough scheme during the pandemic, preserving jobs and businesses. Cites data on apprenticeships, noting nearly 15,000 new starts in Gloucester since 2010, which are at risk under Labour's proposed cuts to apprenticeship spending.

  • Priti Patel Con Witham

    Welcomes the reduction of the class 1 primary rate from 12% to 10%, arguing it will put money into people's pockets and help the self-employed. Points out that reducing national insurance contributions has been supported by previous debates with full scrutiny, despite today’s low attendance in Parliament.

  • Dominic Raab

    Intervened to support Priti Patel's argument, noting the tax cut of £589 a year for employees in Esher and Walton benefiting 50,000 people. Criticised Opposition for not supporting measures that benefit constituents.

  • Tulip Siddiq Lab Hampstead and Highgate

    Critiques the reduction as a cynical attempt to draw voters' attention away from rising taxes and falling living standards. Argues that despite tax cuts, households are still paying £4,000 more annually than under Labour's previous government.

  • Nigel Huddleston Con Droitwich and Evesham

    The Minister supports the Bill, arguing that it delivers tax cuts, rewards work, and grows the economy in a sustainable way. He acknowledges the context of global crises but defends the Government's approach to economic challenges.

  • Rehman Chishti Con Gillingham and Rainham

    Intervenes to support the Bill, highlighting apprenticeships in his constituency and arguing that the Bill ensures people who work hard keep more of their earnings. He emphasises the pension triple lock as providing dignity for retirees.

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