Terminally ill children will suffer because of national insurance rises, says MP

Terminally ill children will suffer as a result of the Government’s plans to increase employers’ national insurance contributions, an MP has claimed, as the Commons rejected a bid to exempt hospices from the tax hike.

SNP MP Dave Doogan urged the Government to protect children from the “grasping hand” of the National Insurance Contributions (Secondary Class 1 Contributions) Bill.

The draft legislation proposes to increase the rate of employers’ national insurance contributions (Nics) by 1.2 percentage points to 15%, with payments starting when an employee earns £5,000, down from the current £9,100.

Exempting certain organisations from the proposed rise would result in “higher borrowing, lower spending or alternative revenue-raising measures”, Treasury minister James Murray said.

Peers had tabled amendments to the Bill, pressing the Government to allow ministers to introduce exemptions for the health and social care sector, including hospices, care homes, GP practices, dentists and pharmacies.

MPs voted 312 to 190, majority 122, to reject the introduction of exemptions.

Speaking in the Commons, Mr Doogan said: “These are not contractors that can go and develop new markets somewhere else, their market is exclusively within the NHS and within health and social care, up and down these islands.”

The MP for Angus and Perthshire Glens added: “Many properly commercial businesses won’t manage to pivot their way out this one, but GP practices, pharmacies, and care providers, and nurseries and hospices certainly won’t manage to pivot their way out of this attack from Labour.

“I want to mention hospices in particular. When Macmillan Cancer Care speak, it doesn’t matter what colour your rosette is, you should listen, we should all listen to when they speak and they have highlighted clearly what this means for end-of-life care.

“And if I think to myself over the last 15 years of chaos in the United Kingdom, most of it economic, if I think of the lost decade of Brexit and the catastrophic affect on the UK’s economy and the material welfare of people up and down these islands, and I think: who can we blame?

“Who is culpable? Who has got their fingerprints all over it? Well I tell you something, it’s not terminally children in hospices, who will suffer a debilitating effect on the care that they’re provided with as a result of this Bill.

“And the minister and his Government could do a very simple thing to give them a derogation from the grasping hand of this Bill, and protect children in the worst of all imaginable circumstances.”

Earlier in the session, Mr Murray said: “The revenue raised from the measures in this Bill will play a critical role in repairing the public finances and rebuilding our public services.

“Now clearly, any future changes which would exempt certain groups from paying national insurance would have cost implications and as I’ve made clear, that would necessitate higher borrowing, lower spending or alternative revenue-raising measures.”

Mr Murray said an assessment by HM Revenue and Customs (HMRC) found around 250,000 employers will see their secondary class 1 national insurance contributions liability decrease, while 940,000 employers would see an increase. Around 820,000 employers would experience no change.

He said the Treasury would “continue to monitor the impact of these policies in the usual way”.

The Lords also put forward an amendment which would require the Chancellor to present a review of the impact of the tax rise on a range of sectors, including hospices, small charities and businesses, the hospitality industry and children’s nurseries.

This was defeated, with MPs voting 314 to 196, majority 118.