National Insurance Contributions Bill

Published date : 06 September, 2021
I beg to move, That the clause be read a Second time.


I rise to support amendments 1 and 2 and new clauses 1 to 3 in my name.

I went over the reasoning for these amendments in some detail on Second Reading and in Committee, so I am sure the House will be relieved to hear that I do not intend to go into quite that level of detail again. The arguments I made then still stand, that the Government should not forgo tax revenues or give advantages to some businesses that are not available to others in terms of national insurance exemptions without securing meaningful commitments in return and in advance.

For that reason, we believe reciprocal benefits should be baked in from the start, both in the strategic economic objectives that we presume are being sought and in ensuring the very best employer behaviour, so that we are incentivising the kind of corporate behaviour that we want to see and encouraging future manufacturing to develop in that way.

We particularly wish to see greenports evolve—greenports are the Scottish Government’s model for freeports—to help tackle the climate crisis and to ensure the protection of workers’ rights. SNP amendments 1 and 2 would help to ensure that freeports and greenports do not end up contributing to a race to the bottom on workers’ rights and broader standards.

New clauses 1 and 2 get to the heart of the matter, by ensuring that employers within the designated freeports pay, as a minimum, a living wage to all staff they employ; by setting out how businesses can ensure that no goods passing through freeports are in any way the product of, or have benefited from the contribution of, slave labour; by setting out how freeports can contribute towards achieving legally binding climate change commitments; and by ensuring that the environmental impact of freeports is properly considered in each case, so that they can be seen as an exemplar, rather than simply being compliant with existing legislation.

We believe firmly that if national insurance exemptions are to be made available, they should be for enterprises that are helping us to transition towards a low-carbon economy. In those new clauses, we have specified two categories of manufacture—wind turbines and electric vehicles—that we consider should be covered. The opportunity is inherent within new clause 2 for the Secretary of State to designate a much wider range of products that also can contribute towards that objective.

We have a choice here: we can grant these incentives and hope—this depends on one’s political taste—that we let 1,000 flowers bloom or that the invisible hand of the market will somehow deliver the economic and social objectives being sought; or, with some judicious framing of the Bill, we can help to increase the likelihood of achieving a set of positive outcomes from those objectives.


I thank the hon. Gentleman for that intervention, but I do not believe that is the outcome. If we are looking to incentivise, these are a substantial set of incentives, and they have to be for the promotion of what I have described. A phrase that may be familiar in his Thirsk and Malton constituency is, “You shouldn’t get owt for nowt”. That is simply the intention here: to make sure we are getting these objectives that are being sought.


As I say, the hon. Gentleman and I will have to agree to disagree on that. If the Minister or the Government do not believe the new clause can meet the objectives in the way I have set out, it is open to them to try to achieve those objectives in some other way. I have no huge expectation of this new clause making it into the Bill, but the intention is clear, the new clause is clear and the Government should be using this incentive to drive exactly the sort of outcome I have set out.

On new clause 3, the Scottish Government are to be commended for the way in which they have sought to recognise the contribution of our health and social care heroes and how they have responded magnificently throughout the pandemic. It remains a source of great disappointment that the UK Government have not followed suit or supported that by allowing one-off payments to be made free of tax and national insurance, instead treating them as a top-up to wages rather than as a bonus. Rather than having the Scottish Government gross up those payments, as the Minister has previously argued should happen, surely it would be better if the UK Government were simply to exempt the payments from NI. I am certain that if that power was devolved to the Scottish Government to exercise, that is exactly what the Scottish Government would do. This shows the limitations of the current devolved fiscal settlement and the requirement to operate within what are, in essence, fixed budgets, which would make it impossible for the Scottish Government to make those payments net without impacting on other spending lines.


I beg to ask leave to withdraw the motion clause.

Clause, by leave, withdrawn.

New Clause 4

Employment allowance for national insurance contributions

‘(1) In section 1(2)(a)(1) of the National Insurance Contributions Act 2014 (employment allowance for national insurance contributions), for “£4,000” substitute “£16,000”.

(2) The provisions of subsection (1) will remain in force until 30 September 2023 and will then expire unless continued in force by an order under subsection (3).

(3) The Chancellor of the Exchequer may by order made by statutory instrument provide that the provisions which are in force will continue in force for a period not exceeding two years from the coming into operation of the order.

(4) No order will be made under subsection (3) unless a draft of the order has been laid before and approved by a resolution of both Houses of Parliament.

(5) The Chancellor of the Exchequer must lay before Parliament a review of the effects of the provisions in subsection (1) on employment, the performance of small businesses and GDP growth no later than 30 September 2023.”—(Sarah Olney.)

This new clause would quadruple the employment allowance from £4,000 to £16,000 for two years. At the end of the period, the Chancellor of the Exchequer would be required to assess its effects and would be able to seek parliamentary approval for the policy to continue for up to a further two years.

Brought up, and read the First time.

Question put, That the clause be read a Second time:—


On Third Reading, allow me to place on record, as I believe is customary, my grateful thanks to the Clerks for their support throughout and my thanks to my party’s researchers, Scott Taylor and, in particular, Salma Saade, for the assistance they have given me throughout the passage and scrutiny of this Bill.

This Bill could have done a great deal more, and we regret very much that it does not. There is some irony, as the hon. Member for Ealing North (James Murray) said from the Opposition Front Bench, that while there is a discussion raging outside this House about national insurance, that is not what we have been touching on in the debate this evening. We should recognise that national insurance is a tax that affects the young and the lowest paid disproportionately. Exemptions that are targeted effectively, as I have tried to draw out through the passage of the Bill, can achieve much, but blanket increases simply increase and exacerbate existing inequalities in our society. It is not a burden for the Minister to carry solely by himself, but I hope very much that in the coming hours and days the Government will reflect carefully on that.

In drawing my remarks to a close, I thank the Minister for his engagement throughout. I hope that that engagement continues with the Scottish Government as we proceed to deliver the outcomes that this Bill on its own perhaps now will not.

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