National Insurance Contributions Bill

Part of the debate – in the House of Commons at 5:14 pm on 4th November 2013.

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Photo of Ian Swales Ian Swales Liberal Democrat, Redcar 5:14 pm, 4th November 2013

I warmly welcome the proposals in the Bill. We have already heard the statistics on its impact, including that 90% of the money involved will go to companies with fewer than 50 employees. That represents real help for small businesses up and down the country. I also welcome the fact that it will be much simpler to apply for the allowance, and that businesses will no longer have the kind of issues they are experiencing with the present scheme.

It is certainly true that people and businesses respond to financial incentives, and it is no wonder that national insurance is sometimes called a jobs tax, because it can be a disincentive to employing people. It raises the bar to employing people and, given the importance of creating jobs in our economy, it is great to see that bar coming down. The Federation of Small Businesses has stated that the Bill will affect not only jobs; investment will also increase, as will the pay of the staff. I warmly welcome the FSB’s conclusion. Let us contrast these measures with the previous Government’s proposed 1% increase for employers and employees in April 2011. The independent Centre for Economics and Business Research said that that measure would have taken 57,000 jobs out of our economy—proving the point that national insurance can indeed be a big incentive either to employ people or fire them.

I welcome the proposals relating to offshore oil and gas employees. Quite a number of them live in my constituency, and many have had great difficulty with the intermediary companies that employ them. The confused nature of the national insurance arrangements can cause them personal issues when they start to claim pensions, for example, so I welcome the simplifying measures and look forward to the remaining measures required to give offshore oil and gas workers the right status in our economy.

The tax avoidance measures are also welcome. They are part of an ongoing campaign by the Government, who have already increased by 2,500 the number of staff employed to deal with tax avoidance and evasion. There is a lot more to be done, but we should all warmly welcome clauses 9 and 10, which will apply the general anti-abuse rule. This will prevent offshore payroll companies from avoiding national insurance.