Commons Sense

House of Commons · General Debate

National Insurance Contributions (Secondary Class 1 Contributions) Bill 2025-03-25

25 March 2025 · 14 other contributors

Opened by James Murray Labour (Co-op) Exchequer Secretary to the Treasury

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

At a glance

James Murray raised concerns about national insurance contributions (secondary class 1 contributions) bill 2025-03-25 in the House of Commons. A government minister responded. Other MPs also contributed.

Key points

  • The Minister of State for the Treasury welcomed the opportunity to discuss the Lords amendments to the National Insurance Contributions (Secondary Class 1 Contributions) Bill.
  • The Minister stated that the measures in the Bill are necessary to repair public finances and rebuild public services after inheriting an unsustainable fiscal situation.
  • The Minister emphasised that the Bill will play a crucial role in fixing public finances and that any exemptions would necessitate higher borrowing, lower spending or alternative revenue-raising measures.

How the debate unfolded

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

Opened the debate

James Murray Labour (Co-op) Exchequer Secretary to the Treasury

The Minister of State for the Treasury, James Murray, welcomed the opportunity to consider the new Lords amendments to the National Insurance Contributions (Secondary Class 1 Contributions) Bill. He explained that these measures represent tough but necessary decisions to repair public finances and rebuild public services after inheriting an unsustainable fiscal situation. The revenue raised from the bill will play a critical role in repairing the public finances, and any future changes exempting certain groups would necessitate higher borrowing, lower spending or alternative revenue-raising measures.

Other contributors (14)
  • Gregory Stafford Con Farnham and Bordon

    Mr Stafford questioned why parts of the NHS should not be exempt from national insurance contributions like other public employers. He did not specify a position on whether to support or oppose the bill but asked for clarity.

  • Roger Gale Con Herne Bay and Sandwich

    Mr Gale raised concerns about the allocation of funds, suggesting that people might prefer their taxed income spent generously on children's hospices rather than on deals like spending millions on the Chagos islands. He did not provide a clear position on supporting or opposing the bill.

  • Gareth Davies Con Grantham and Bourne

    Mr Davies supported Lords amendments 1B, 5B, 8B, and 21B. He argued that these amendments seek to address two serious consequences of the Bill: reducing health and social care services and affecting small businesses negatively. Mr Davies emphasised that the Government's rationale is flawed since they are taxing public services on which everyone relies.

  • Sammy Wilson DUP East Antrim

    Mr Wilson questioned the rationale for the Bill, highlighting that while NHS will be exempt from these changes, other health and social care services such as dental services, social care, etc., will suffer. He did not specify a position on supporting or opposing the bill.

  • Edward Leigh Con Gainsborough

    Sir Edward Leigh stressed the importance of addressing the funding shortfall faced by St Barnabas Hospice, citing £300,000 annual losses and urging the Government to reconsider the national insurance hike's impact on palliative care.

  • Gareth Davies Con Montgomeryshire

    Gareth Davies highlighted the inconsistency in the Government's funding announcement for hospices, noting that £100 million of capital funding will not address operational costs. He called for exemptions through Lords amendments 1B and 5B.

  • Daisy Cooper Lib Dem St Albans

    Daisy Cooper criticised the Government's lack of foresight in introducing national insurance hikes without considering their impact on healthcare providers. She advocated for exemption powers through Lords amendments 1B and 5B to protect community services integral to NHS functioning.

  • Roger Gale Con Medway

    Sir Roger Gale underscored the devastating effects of increased national insurance on hospices, emphasising that it is essentially a tax on jobs critical for patient care. He pointed out the absence of Labour MPs during the debate as evidence of their disinterest.

  • Sammy Wilson DUP Fermanagh and South Tyrone

    Wilson agrees that services will be affected negatively and that businesses might cut back on staff, leading to a loss of national insurance contributions. He suggests this could become an own goal for the Government if they fail to raise revenue while causing economic pain.

  • Daisy Cooper LD West Somerset

    Cooper supports the idea of derogations for health and social care providers, criticising the £24 billion fiscal drag as economically damaging. She suggests alternative measures such as a digital services tax on large online media companies to raise necessary revenue.

  • Jerome Mayhew Con Broadland and Fakenham

    Mayhew argues that the Bill's proposals, particularly clauses 1 and 2, are damaging for healthcare providers who cannot diversify or raise prices. He cites the example of hospices facing additional costs and warns against funding state-assisted dying through taxing palliative care.

  • Gregory Stafford Con Wycombe

    Stafford supports Lords amendments 1B and 5B, highlighting the financial strain on social care due to increased national insurance contributions. He criticises the Government for providing only capital spending instead of revenue support.

  • Gregory Stafford Con Lewes

    The amendment will have a net cost on the Exchequer and affect independent care providers, home care companies, pharmacies. The measure is contrary to the Government's policy of bringing healthcare closer to communities.

  • James Murray Lab Easington

    While acknowledging the concerns raised by Opposition Members, the government has put extra funding into public services like GPs and dentists. The employment allowance is being doubled to £10,500, meaning very small businesses will not pay any national insurance contributions when employing up to four people earning the national living wage.

Government Response

The Government seeks to disagree with Lords amendments 1B, 5B, and 8B as they put at risk the funding that the Bill seeks to raise. The Minister highlighted that any exemptions from paying national insurance would necessitate higher borrowing, lower spending or alternative revenue-raising measures. He emphasised that the Bill will play a crucial role in fixing public finances.

Shadow Response

Gareth Davies

The shadow Minister supported Lords amendments 1B, 5B, 8B, and 21B. He argued that the Bill will create financial black holes for small businesses and health services, particularly hospices which would lose up to £30 million next year alone. The shadow Minister claimed that very small businesses will feel the greatest impact from the changes in the Bill. However, he missed the opportunity to acknowledge that the approach being taken is similar to what was done during his time in government with the health and social care levy.

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