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Social Security
05 May 2020
Lead MP
Jesse Norman
Debate Type
General Debate
Tags
TaxationEmploymentBenefits & Welfare
Other Contributors: 10
At a Glance
Jesse Norman raised concerns about social security 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
The draft legislation aims to increase the employment allowance by £1,000 for small and medium-sized businesses, providing them with up to £4,000 off their employer national insurance contributions bills. The Employment Allowance was introduced in 2014 to help businesses reduce costs associated with employing staff, especially smaller ones with a NICs liability under £100,000. This measure is expected to benefit more than half a million eligible businesses, providing an average gain of about £850 each and bringing the total cost over this Parliament to more than £2.3 billion.
Jesse Norman
Con
Hereford and South Herefordshire
The draft regulations allow for an increase in the employment allowance, providing support to businesses by reducing their employer national insurance contributions bills. This measure is expected to benefit more than half a million eligible businesses with an average gain of about £850 each and will bring 65,000 additional businesses under the threshold where they do not pay any NICs.
Wes Streeting
Lab
Ilford North
The Opposition recognises that the proposed increase in employment allowance is intended to help small businesses and charities, but given the current economic crisis, this measure alone will not be sufficient. There are serious financial challenges for these organisations with many reporting a projected loss of income and disrupted cash flow. The Labour Party calls on the Government to extend support measures such as the furlough scheme with greater flexibility.
Neil Grey
SNP
Caithness, Sutherland and Easter Ross
Acknowledges the Minister's positive actions on the Roadchef Employee Benefits Trust issue but challenges him regarding the minimum wage. Encourages the UK Government to follow the Scottish Government’s lead in engaging with business to encourage more employers to pay the real living wage, especially for under-25s. He expresses gratitude towards House staff and acknowledges the irony of virtual participation being led by a particular Leader of the House. Welcomes an increase in employment allowance but would have liked it to go further, supporting his party's manifesto commitment. Supports UK Government assistance to small employers during the crisis but calls for flexibility in schemes like furlough and CBIL, and more grants available. Calls for devolving control of national insurance to Holyrood for better economic decisions and opposes restrictions on employment allowance eligibility.
Kim Johnson
Lab
Liverpool Riverside
Welcomes the proposed changes in employment allowance as they provide assistance to many struggling small and medium-sized enterprises. Acknowledges that the economic decisions now will determine the length of recession faced going forward. Supports the increase in maximum employment allowance from £3,000 to £4,000 for tax year 2020-21, which reduces about 65,000 businesses' national insurance contributions bill to nil. Highlights his constituency's digital and creative industries, contributing significantly to the local economy, and their support by the Federation of Small Businesses (FSB). Expresses concerns about some businesses falling through the cracks despite available funding, urging the Government to provide more support for SMEs to weather the crisis.
Sarah Olney
Lib Dem
Richmond Park
Welcomes the change in employment allowance but raises issues of groups missed out by the Government's plans during the pandemic, such as self-employed individuals and those on regular short-term contracts. Emphasises support for entrepreneurs who will lead us out of the economic crisis post-pandemic and calls for more flexibility in the furlough scheme to include part-time furlough options.
Steven Bonnar
SNP
Glasgow North East
I support the increase in the employment allowance, which is welcome for companies and organisations affected by uncertain times. However, I would like to see a further increase to £6,000 per year as it does not cover all firms and organisations such as charities and amateur sports clubs. The UK Government's restrictions on eligibility particularly hamper single-employee companies and may lead to the closure of many businesses due to financial constraints.
Layla Moran
Lib Dem
Oxford West and Abingdon
While the increase in the employment allowance is welcome, new eligibility restrictions are causing concern for small businesses and charities struggling during this economic crisis. These limitations unfairly disadvantage larger charities that fear closure due to a lack of financial support. More needs to be done to fund charities properly at this time and ensure SMEs are covered by the allowance despite operating from people's homes.
Tim Farron
Lib Dem
Westmorland and Lonsdale
The employment allowance increase is welcome but it will only benefit businesses that can stay in operation. The focus must be on ensuring small businesses and charities survive until we are out of lockdown, especially those in the tourism and hospitality sectors affected by the pandemic. Committing to a 12-month funding settlement for these businesses is necessary to avoid delayed collapse and loss of jobs.
Jim Shannon
DUP
Strangford
Welcomed the Minister’s announcement today and thanked HMRC for providing support to small businesses, charities, self-employed individuals, and vulnerable groups. Emphasised the need to ensure that these measures are comprehensive enough to cater to all categories of people who require assistance due to the pandemic.
Jesse Norman
Con
Hereford and South Herefordshire
Acknowledged contributions from Members, emphasised the extensive support already provided by Government through various schemes such as the coronavirus jobs retention scheme, business interruption loan scheme, self-employment scheme, statutory sickness pay, charity support grants, tax reliefs, and local authority funding. Discussed specific points raised by other MPs, including employment allowance eligibility criteria, dividends for self-employed individuals, devolution of national insurance contributions to Scotland, and charity support.
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Assessment & feedback
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