Commons Sense

House of Commons · Westminster Hall

Employer National Insurance Contributions: Charities

07 January 2025 · 25 other contributors · 9,576 words

Opened by Joe Robertson Con Isle of Wight East

Responding minister: Stephanie Peacock

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

At a glance

Joe Robertson raised concerns about employer national insurance contributions: charities in Westminster Hall. A government minister responded.

Key points

  • The rise in national insurance contributions for employers, coupled with a reduction in the threshold from 9,100 to 5,000, has significantly impacted charities.
  • Charities deliver nearly 17 billion worth of public services annually and are crucial in supporting local government responsibilities.
  • Joe Robertson asks the Government to reconsider the national insurance changes and proposes exempting all charities or focusing on health and social care provider charities.

Key requests to Government

Joe Robertson asks the Government to rethink these national insurance changes and considers exempting all charities from such contributions or at least focusing on health and social care provider charities.

How the debate unfolded

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

Opened the debate

Joe Robertson Con Isle of Wight East

The rise in national insurance contributions for employers and the reduction of the threshold from £9,100 to £5,000 has affected charities significantly. Charities deliver nearly £17 billion worth of public services annually and are essential in supporting local government responsibilities. Sarah Elliott, CEO of NCVO, highlighted that this change represents a major shock for the sector since the pandemic, leading to potential drastic service cuts due to an additional cost of £1.4 billion.

Other contributors (25)
  • Abtisam Mohamed Lab Sheffield Central

    The former chief executive of a community regeneration organisation speaks on the direct impact of cuts on local charities and welcomes the Government's commitment to resetting relationships with the third sector, although concerned about the national insurance increase.

  • Alison Bennett LD Mid Sussex

    In West Sussex and Brighton and Hove, Age UK faces doubling its fundraising target due to combined cost increases from changes in NICs and cuts to winter fuel payment. Alison Bennett argues that this goes against the sentiment of prioritising NHS funds.

  • Blake Stephenson Con Mid Bedfordshire

    The MP highlights the impact of increased staffing costs on charities such as The Greensand Trust in Mid Bedfordshire and expresses concern about staff cuts that may be necessary due to financial constraints.

  • Clive Jones LD Wokingham

    Charities like The Cowshed and First Days have been disadvantaged by national insurance charges. Clive asks if the Minister is content with putting bankers’ bonuses first instead of support for people facing evictions, homelessness.

  • Edward Morello LD West Dorset

    Weldmar Hospicecare will have to raise an additional £600,000 next year, while Julia’s House faces nearly £250,000 in additional costs. These charities provide care in the community and alleviate pressure on NHS.

  • Graham Stuart Con Beverley and Holderness

    Charities are essential in supporting vulnerable groups, such as users of Citizens Advice. Graham Stuart advocates for the Government to reconsider its stance on employers' NI contributions affecting charities. Asked the Minister if it would be worth reviewing NI changes if they cost more than expected for NHS.

  • Helen Grant Con Maidstone and Malling

    The Heart of Kent hospice faces costs of more than £200,000 per annum due to changes in NICs and the national living wage. Helen Grant argues that this undermines vital services and puts pressure on the NHS.

  • Jack Rankin Con Windsor

    Raises concerns about charities like Thames Valley Air Ambulance and Thames Hospice that face substantial additional costs, questioning whether the Government's actions are accidental or a misunderstanding of how these organisations function.

  • Jim Shannon DUP Strangford

    In Northern Ireland, charities will face costs ranging from £5,000 to £200,000 annually due to the NI changes. Jim Shannon agrees that charities are crucial for local communities and could collapse under this new financial strain.

  • Joe Robertson SNP Dunfermline and West Fife

    Thanked the Minister for addressing arguments made in the debate and urged her to make strong representations to the Chancellor, suggesting that money taken from charities could be returned.

  • John Milne SNP North East Fife

    Age UK estimates that £150,000 per year will be required for Horsham constituency to cope with changes and the extra charge. John Milne argues that this is the wrong time for such a measure given one in five pensioners are living in poverty.

  • Lee Dillon LD Newbury

    Criticizes the lack of impact assessments before implementing changes, citing West Berkshire Mencap and Volunteer Centre West Berkshire as examples of organisations struggling to meet new financial demands.

  • Patrick Hurley Lab Southport

    Discusses the economic legacy of previous policies, arguing that while the current Government did not raise taxes on working people as promised, it is failing to address systemic issues in services like social care and healthcare. Pressed the Minister on the clarity around public service cuts to fund tax cuts proposed by the Conservative party.

  • Peter Fortune Con Bromley and Biggin Hill

    Speaks about the impact on local charities such as South East London Mind and Aurora Nexus, which face significant increases in tax bills that could reduce service provision.

  • Richard Foord LD Honiton and Sidmouth

    The MP agrees that national insurance needs prioritisation for hospices to provide proper investment in palliative care, as stated in the Terminally Ill Adults (End of Life) Bill.

  • Saqib Bhatti Con Meriden and Solihull East

    Raises concerns about the impact of increased national insurance contributions on local charities, citing examples from his constituency. Warns that over £1 billion a year could be lost to the charity sector due to this policy.

  • Sarah Dyke LD Glastonbury and Somerton

    The Balsam Centre in Wincanton will face an additional £40,000 cost next year due to the NI changes. Sarah Dyke supports Joe Robertson's position that charities are vital for public service delivery.

  • Seamus Logan SNP Aberdeenshire North and Moray East

    Addresses Scotland-specific concerns, noting the Scottish Government's estimate of additional costs at £750 million compared to offered support of £300 million. Inquired about where the Government is obtaining resources to fill public finance gaps.

  • Shockat Adam Ind Leicester South

    Highlights the urgent need for exemptions or additional funds for charities such as Jasmine House and Vista, which are facing closure due to increased costs from national insurance changes.

  • Roger Gale Con Herne Bay and Sandwich

    Money donated to charities such as Shooting Star and Demelza House should not be siphoned off to the Treasury. Sir Roger Gale calls for an exemption from NI contributions for all charitable organisations. Sought clarification on whether the extension of children’s hospices grant meets NI costs for such institutions.

  • Sorcha Eastwood Alliance Lagan Valley

    In Northern Ireland, violence against women and girls is at crisis levels, with charities warning about potential closures of services due to budget cuts. Sorcha Eastwood questions the Government’s commitment to halving violence against women and girls.

  • Tom Gordon LD Harrogate and Knaresborough

    Unpaid carers face an additional £90,000 in NICs. Harrogate's police treatment centre faces £160,000 of employer NICs next year.

  • Victoria Collins LD Harpenden and Berkhamsted

    Age UK in Hertfordshire faces an additional cost of £85,000 per annum. The Hospice of Saint Francis had to turn away people from its health and wellbeing services due to increased costs.

  • Wendy Chamberlain LD North East Fife

    The MP supports Joe Robertson's private Member’s Bill, the Gambling Act 2005 (Monetary Limits for Lotteries) Bill, which would remove the charity lotteries cap to allow charities to raise more money without costing taxpayers.

  • Wendy Morton Con Aldridge-Brownhills

    The Midlands Air Ambulance Charity, which receives no Government funding, should be given the same exemption as NHS trusts for daily missions. Wendy Morton suggests that charities like air ambulances deserve similar consideration.

Government Response

Stephanie Peacock

The Parliamentary Under-Secretary of State for Culture, Media and Sport

Discussed measures taken in autumn Budget to protect small businesses and charities, such as doubling employment allowance from £5,000 to £10,500. Acknowledged financial pressures on voluntary organisations due to state cuts over past years but stressed need for tough decisions for economic stability. Mentioned specific funding boosts of £100 million for hospices and £26 million for children’s hospices. Highlighted further support through social care grant increase (£880 million) and homelessness funding (an additional £233 million). Discussed major reliefs provided by her Department such as gift aid and business rates relief. Mentioned funding support through various schemes like the VCSE energy efficiency scheme, social enterprise boost fund, and Know Your Neighbourhood fund. Highlighted the role of the National Lottery Community Fund in supporting voluntary organisations with grant awards totalling over £900 million. Emphasised ongoing engagement with charities and voluntary groups across the UK.

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