PARLIAMENTARY DEBATE
National Insurance Contributions: Healthcare - 14 November 2024 (Commons/Commons Chamber)
Debate Detail
This Government inherited a £22 billion black hole in the public finances, broken public services and a stagnant economy. Upon taking office we were told that the deficit the previous Government recklessly ran up in my Department alone would mean delivering 20,000 fewer appointments a week instead of the 40,000 more we promised. The Chancellor and my right hon. Friend the Secretary of State were not prepared to see further decline in our NHS. That is why we put in an extra £1.8 billion to stop the NHS going into reverse this year.
We built on that at the Budget, delivering the significant investment that the NHS needs to get back on its feet, backing staff with investment in modern technology, new scanners and new surgical hubs, and rebuilding our crumbling primary and secondary care estate. Alongside that, we delivered a real-terms increase in core local government spending power of around 3.2%, which will help to address the range of pressures facing the adult social care sector, including £600 million in new grant funding for social care. We are now working through exactly how that money will be allocated, as per normal processes. As the Secretary of State set out yesterday, we will ensure that every pound is invested wisely to deliver the Government’s priorities and provide value to taxpayers.
The Department will set out further details on the allocation of funding in due course, including through NHS planning guidance and the usual consultations, including on the general practice contract. As part of these processes, we will consider the impact of changes announced to employer national insurance contributions in a fair and open way over the next five months, before the changes come into force in April 2025.
Many in the health sector will have been pleased to hear the announcement of the extra funding for the NHS, only for their joy to be struck down by the realisation that a manifesto promise not to raise national insurance contributions had been broken. That was compounded further by the discovery that a raft of frontline care providers—care homes, hospices, care charities, pharmacies and GPs, to name but a few—will not be exempt from the NI rise, leaving them with crippling staff bills and the threat of closures and redundancies. The hospice sector expects the cost to be £30 million—closures and redundancies. The initial assessment of the cost to GPs is £260 million—closures and redundancies, at the expense of 2.2 million appointments. For the care sector, the changes will cost £2.4 billion, dwarfing the £600 million in social care support that was announced. Does the Minister accept that it is inevitable that council tax will have to rise to support the increase in NICs?
For the first time, the National Pharmacy Association has announced collective action. Its chair said:
“The sense of anger among pharmacy owners has been intensified exponentially by the Budget, with its hike in national insurance employers’ contributions and the unfunded national living wage increase, which has tipped even more pharmacies to the brink.”
Will the Minister clarify who is exempt from NI? Will the Government admit that they got it wrong and make a change? The Prime Minister, Health Secretary and Chancellor have all said that allocations will be made “in the usual way”. Will the Minister clarify what the usual way is? Will mitigations be put in black and white to the House and the public? Is this part of the £20 billion, or new funding?
More importantly, will the Minister lay out a concrete timetable for hospices, care homes, GPs, pharmacists and all other allied health professionals, who are making decisions now? This seems to be another example of a big headline from the Labour party but no detail.
As I said, we will go through the allocation of additional funding in the normal process, which will be faster than under the previous Government because we are committed to giving the sector much more certainty. The normal process, as the hon. Gentleman should know from his time in government, is to go through the mandate and the planning guidance and to talk to the sector about the allocations due next April, as I said in my opening statement.
“serve to directly undermine access and patient care.”
The Government have promised to recruit more GPs, but hiking national insurance puts that pledge in jeopardy. Surgeries are set to see eye-watering increases in staff costs, equivalent to 26,786 appointments in West Sussex alone. GPs will have no choice but to cut services and staff numbers, and patients will pay the price.
Does the Minister agree that stronger primary care, with faster appointments and fewer people having to go to hospital, is better for both the NHS and patients? If so, will she protect services and press the Chancellor to end this GP penalty?
We are also working closely with the NHS, in a new relationship, to understand its needs. That is a dynamic conversation, because we want to understand what is happening in local systems as we continue to invest in them.
“This will affect what they can do to support our communities and subsequently put more pressure on the NHS and local authorities. The impact on disabled people and older adults who rely on regular, consistent, high-quality care will be profound.”
I do not believe that the Government intended to hammer the disabled or older people who need care, so will the Minister prove me right and look at the policy again?
On the social care sector, when we help the hospices and social care providers, which are charities and small organisations in particular, can perhaps do so without subsidising some of the hedge funds that are now investing heavily in social care? We do not want to add to their profits while supporting the small charities involved.
“you came to our practice in June and told us you wanted to support the family Dr. Costs for the NMW and NI will come to approx £50k—we are a small practice of 7000 patients—how is this helping us?”
Can the Minister answer Caroline’s question?
Will the Minister confirm whether consideration has been given to the fact that the rise in national insurance contributions will not affect the NHS as a whole, as the block grant for us in Northern Ireland will cover it? However, GP practices in my constituency of Strangford will suffer, and unlike high street businesses or manufacturing, they cannot increase prices to cover that impending rise, leaving practices with no option other than to reduce hours in order to stay solvent. Does the Minister agree that this is the last thing already overstretched GP practices need, and will she commit to take this issue back to the Treasury for reconsideration as it relates to healthcare businesses such as GPs, dentists and pharmacies?
We absolutely understand the precarious nature of general practice and, in particular, I understand the really serious issues around health and social care in Northern Ireland. The hon. Gentleman knows that, and he makes a good case for the sector. We want to ensure that it supports people in Northern Ireland with the good primary and community care they deserve.
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