Peers agree to end stand-off over employers’ national insurance rise in hospices

An employers’ national insurance rise has moved closer to becoming law after peers agreed to end a stand-off over the changes.

Peers said on Monday they had reached the “end of the road” to make changes, after MPs rejected their previous efforts to alter the Treasury-backed National Insurance Contributions (Secondary Class 1 Contributions) Bill.

Once it receives royal assent, the Bill will raise the rate of national insurance which employers pay on earnings from 13.8% to 15%, and the lower earnings threshold at which employers start paying contributions from £9,100 to £5,000.

Peers had tried to exempt healthcare settings from the changes, which would include hospices, care homes, GP practices, dentists and pharmacies.

Charities

They also tried to set up a carve-out for small businesses and organisations from the lower earnings threshold, and to require the Chancellor to review the impact of the changes on several sectors, which would include charities, dentists, farms, hospices and shops.

MPs rejected the Lords’ proposed changes, amid fears they would interfere with the public purse, and because “a further review is not necessary”.

Speaking in the upper chamber, Treasury minister Lord Livermore said: “I would like to assure all noble Lords that giving careful consideration to and properly assessing the impact of this Bill is a priority for this Government.”

He committed to “continually monitoring and assessing the impacts and effects of these policies going forward”.

Scrutiny

Conservative shadow Treasury minister Baroness Neville-Rolfe told peers: “There is a strong feeling echoed externally in our hospices, in hospitality, on the high streets, and in many other places that this Bill is not the best way to meet the challenges the country faces, and that it will endanger the growth we need so badly.

“However, my Lords, this is a House of scrutiny and the other place has taken a different view.

“As a responsible opposition, we will not seek to defeat this Bill no matter how deeply we feel about it.”

Liberal Democrat Treasury spokeswoman in the Lords Baroness Kramer said “we’ve come to the end of the road on this Bill”, in terms of whether peers could continue with a parliamentary tussle, known as “ping-pong”, to suggest further changes.

She warned of a “cascade of small businesses that are coming in now, going into voluntary insolvency because of the increase in costs that they’re facing this April”.

Peers agreed not to insist on further amendments, in place of the changes which MPs have already debated in the Commons.