PARLIAMENTARY DEBATE
National Insurance Contributions - 3 December 2024 (Commons/Commons Chamber)

As we set out in the autumn statement, the Government have set aside funding to support the public sector with the additional cost of employer national insurance contributions. The amounts are £4.7 billion in 2025-26, £4.7 billion in 2026-27, £4.8 billion in 2027-28, £4.9 billion in 2028-29 and £5.1 billion in 2029-30. The Government plan to update Parliament on allocations by Department as soon as possible.

The funding for the impact on public sector organisations includes funding for the devolved Governments, which is allocated through the Barnett formula in the usual way. It is the responsibility of the devolved Governments to manage devolved workforces. Might I say that if the bill is somewhat higher in Scotland, that may be due to the Scottish Government’s decisions about the size of the public sector?

We recognise that the decision on national insurance contributions is a tough one, but we also recognise that it was necessary for the Chancellor to set out a Budget that included a record set of promises on home building. We are set to build 1.5 million homes over the course of this Parliament, investing in social and affordable housing. That is what will benefit the hon. Member’s constituents who need a decent home.

My hon. Friend is absolutely right. The problem with Conservative Members is that they are all happy to say that they want more funding for the NHS; they are just not prepared to pay for it. What they need to realise is that, in government, we have to take tough decisions to ensure that we can fund public services and fix the public finances.

As my hon. Friend will know, many hospices are independent charities and therefore will be able to access the employment allowance, which we have doubled to £10,500 a year, as well as the other wider tax reliefs in the tax system for charities, such as business rates relief and gift aid. Of course, hospices often have statutory obligations with the NHS as well, so I suggest that hospices discuss their contracts with their integrated care boards.

If the shadow Minister would like to know which public sector organisations will be compensated, he could look at what his Government did with the health and social care levy, because the definition of public sector organisations—it is a regularly cited definition—is set out through the Office for National Statistics. We will reimburse Departments and other public sector organisations.

I do not think the shadow Minister listened to my response to the previous question, in which I set out very clearly the definition of the public sector for the purposes of national insurance contributions. Look at what the OBR has said: yes, it recognises that we are asking businesses to contribute more and that this will have an impact, but it also says that the employment level will rise from 33.1 million to 34.3 million by 2029, meaning an increase in the employment level over this Parliament.

We recognise that we have taken a tough decision to increase the rate and broaden the base through changes to the secondary threshold. I welcome the work done by the organisation mentioned by the hon. Lady in her constituency, but perhaps the need for advice would be less if public services were stronger. One of the reasons we are taking these difficult decisions on taxation, welfare and spending is precisely to ensure that these public services can provide the service that people need.

The Liberal Democrat spokesperson began her question by saying that we all want public services; the problem is that not all of us in this Chamber are prepared to pay for them. That is exactly why we have to take difficult decisions to ensure that we can fund our ambitious plans for the NHS, education and indeed housing. The impact of the impact assessment is published in the tax information and impact note, which is published alongside the legislation, which I am sure the hon. Lady will have seen. It comes down to the basic point that we have to make tough decisions on taxation if we want to fund those public services.