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Employer National Insurance Contributions
04 December 2024
Lead MP
Mel Stride
Debate Type
General Debate
Tags
EconomyTaxationEmployment
Other Contributors: 24
At a Glance
Mel Stride raised concerns about employer national insurance contributions in the House of Commons. Other MPs contributed to the debate.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
Moves that increasing the rate of employers’ National Insurance contributions to 15% will lead to increased costs for businesses and lower wages, resulting in job losses. Criticises Labour's manifesto promises on economic growth as unrealistic and misleading.
Toby Perkins
Lab
Chesterfield
Challenges Mel Stride's interpretation of OBR figures, suggesting the Conservatives misled the OBR.
Paul Waugh
Lab Co-op
Rochdale
Questions how the Conservative Party can criticise broken manifesto pledges when they themselves broke their promise on National Insurance Contributions in 2019.
Jeevun Sandher
Lab
Loughborough
Accuses Conservatives of leaving the UK with high energy prices and inflation, poor housing insulation and reliance on natural gas, while criticising Labour's economic record.
Torsten Bell
Lab
Swansea West
Refers to ONS data showing productivity fell by 0.9% in the year leading up to the election, questioning the Conservatives' claim of a strong economic record.
Paul Holmes
Con
Hamble Valley
Defends Conservative's promise on growth during the last general election against Labour’s lower projections under current Government.
Andrew Murrison
Con
South West Wiltshire
Emphasises that more than 1 million jobs were created during their 14 years in government despite various crises, questioning the credibility of Labour's economic policies.
Dave Doogan
SNP
Angus and Perthshire Glens
Questions whether increasing borrowing is an effective way to 'fix' the economy as seen during initial months of the current Government.
Kanishka Narayan
Lab
Vale of Glamorgan
Asks if the shadow Chancellor agrees with his leader's stance on Truss's mini-Budget, questioning its effectiveness due to communication issues.
Caroline Nokes
Con
Romsey and Southampton North
Asked the shadow Chancellor to clarify why the Office for Budget Responsibility made a correction to its figures concerning compensation for public sector employers and adult social care. She questioned the transparency of Labour's fiscal stance.
Luke Taylor
Lib Dem
Sutton and Cheam
Recognised the impact of the national insurance hike on small businesses, which are vital to local economies. He suggested that Small Business Saturday could be an opportunity for the Government to reconsider its stance.
Toby Perkins
Lab
Chesterfield
Asked whether opposition parties should provide alternatives when criticising government measures and questioned if Labour had viable policy proposals.
Wendy Morton
Con
Aldridge-Brownhills
Discussed the impact of Government decisions on organisations such as air ambulances and hospices, suggesting exemptions might be necessary.
Daisy Cooper
Lib Dem
St Albans
Warned against the negative consequences of increasing national insurance contributions for small businesses and social care providers. She outlined alternative methods to raise funds as proposed by her party, including reversing tax cuts given to big banks and reforming capital gains tax.
Paul Holmes
Con
Hamble Valley
The national insurance rise is a vindictive proposal that undermines growth, taxes wealth creators and small businesses, borrows excessively, and makes the economic situation worse. The lack of growth under Labour means public services will suffer, fewer jobs will be created, and more businesses will close. I challenge the Government to outline what they would do instead of this measure to fund public services without borrowing £9 billion for public sector pay rises. The hospitality sector in my constituency faces significant challenges due to these measures, leading to potential staff reductions, venue closures, and stifled expansion.
Yuan Yang
Lab
Earley and Woodley
N/A - No substantial contribution provided
Kevin Bonavia
Lab
Stevenage
After inheriting the ruins of 14 years of Conservative failure, this Government has made tough decisions to balance the books. The national insurance rise is balanced with protections for small businesses, including an increased employment allowance and support for public sector employers. Unlike the previous government who imposed the highest tax burden since WWII, Labour does not ask for a penny more out of workers' pay packets. These decisions are necessary for fixing the foundations of our economy and unlocking funding to rebuild public services.
Lisa Smart
Lib Dem
Hazel Grove
Small businesses are struggling due to rising prices, interest rates, and input costs. The Liberal Democrats are particularly worried about the impact on health and social care providers, including GP practices and community pharmacies. Raising the employment allowance will shield only the very smallest organisations, leaving many still negatively affected. She mentioned specific examples from her constituency: a childcare company that allocates 70% of its revenue to staff wages and a GP practice operating as a legal partnership which lacks flexibility to absorb increased costs. The rise in national insurance contributions will force reductions in clinical staffing, impacting patient care and increasing waiting times.
Louise Jones
Lab
North East Derbyshire
The Labour Government refuses to balance the books on the backs of the poor, workers or people striving for a better life. Instead, they choose to invest in services, children and those who fight every day to keep us safe. These increases will strengthen public services, promote economic stability, and invest in workforce future prosperity. She acknowledged that national insurance contributions are essential for funding healthcare and pensions.
Alicia Kearns
Con
Rutland and Stamford
The Budget forced businesses to compromise on growth. Local organisations such as St Barnabas Lincolnshire, the air ambulance service, GP practices, nurseries, advice services, care agencies, hospitality businesses, and independent shops have written to me expressing concerns over this stealth tax. The tax will affect rural communities most severely.
Danny Beales
Lab
Uxbridge and South Ruislip
The issue is one of economic responsibility. We need to invest in rebuilding public services rather than cutting taxes at the same time. We understand that there are no magic money trees, unlike previous Tory Governments who crashed the economy and wasted taxpayers' hard-earned money. We have a plan to invest in public services like the NHS, schools, and armed forces.
Clive Jones
Lib Dem
Wokingham
Paul and Melissa Johnson, directors of Home Instead, predict a national insurance increase costing £45,000 annually. Other costs such as the minimum wage rise will add another £55,000. This could result in business closures or scaled-back operations impacting elderly clients and local authorities. Jones suggests that tax increases on big banks, online gambling companies and social media giants would have been a fairer approach. He calls for an exemption of social care from national insurance contributions or protection from its effects.
Jake Richards
Lab
Rother Valley
Richards reminds the House that Labour has previously raised national insurance to support NHS reforms and modernisation, delivering shortest waiting times and highest public satisfaction in history. He argues that Tory opposition then mirrors current opposition to difficult decisions on tax now. He challenges the Opposition's lack of alternatives for funding their commitments while criticising Conservative past failures regarding hospital construction and asylum system funding.
James Wild
Con
North West Norfolk
The debate is about trust and promises broken by Labour. The IFS stated that increasing National Insurance was a breach of Labour’s manifesto promise not to raise taxes on working people. This £25 billion jobs tax impacts businesses, charities, and public services negatively, causing a loss of 940,000 business in net terms with an average annual tax increase of £800 per employee. Charities face higher bills by £1.4 billion, and adult social care providers will see a £2.8 billion hit. The lowest paid workers are particularly affected, with the OBR expecting this measure to raise £17.7 billion annually.
James Murray
Lab Co-op
Ealing North
The Government has made tough choices, such as raising employer national insurance contributions, which will return national insurance revenues as a proportion of GDP to previous levels without increasing taxes for working people. This measure protects small businesses and charities by doubling the employment allowance to £10,500 and removing business size thresholds. While some employers will face challenges, the majority will see no change or less cost due to these adjustments.
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