Amendment made: 3, page 4, line 25, leave out “the 1992 Act” and insert

“whichever of the 1992 Acts would otherwise apply”.—(Jesse Norman.)

This amendment corrects an error by replacing a reference to the Social Security Contributions and Benefits Act 1992 with a reference to that Act and the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

Third Reading

I beg to move, That the Bill be now read the Third time.

Mr Deputy Speaker, I must say that I too am delighted that this Bill has been the occasion for our return to proper voting procedures in this House.

I am very grateful to all hon. and right hon. Members who have participated in the passage of this legislation, particularly in Committee. I also thank the Committee’s Chairs, my right hon. Friend Caroline Nokes and Yvonne Fovargue, for helping the Committee to take the Bill through its scrutiny so effectively.

I begin by reminding the House of the Bill’s provisions and overarching goals. It contains four measures: an employer NICs relief for employees in freeports; an employer NICs relief for employers of veterans; an exemption for Test and Trace support payments from self-employed NICs; and changes to disclosure of tax avoidance schemes legislation with regard to NICs. In addition to those measures, the Government tabled a minor technical amendment to ensure that the policy intent is met in the Bill.

As you will be aware from your intimate scrutiny of the Bill, Mr Deputy Speaker, the employer NICs relief applies to employees in freeports. The measure will support the delivery of the Government’s freeports programme. In so doing, it will help to attract new businesses to freeports and regenerate communities by creating jobs, boosting investment and spreading prosperity. It is the Government’s intention to designate freeports in all four devolved nations. Therefore, while the legislation currently provides for a relief in England, Wales and Scotland, it is the Government’s intention to legislate for this relief in Northern Ireland as soon as it is practicable. In fact, the Bill gives the Government the power to set out the detail of the employer NICs relief in Northern Ireland in secondary legislation once engagement with the Northern Ireland Executive is complete.

Secondly, the Bill contains an employer NICs relief for employers of veterans. I do not need to tell you, Mr Deputy Speaker, that our veterans provide an extraordinary national service, as recent events have reminded us, but we know that some of them face difficulties in obtaining secure and fulfilling employment. It is only right that we do all we can to change this situation. This measure provides full employer NICs relief on earnings up to £50,270 in a veteran’s first full year of civilian employment. It amounts to a saving of up to £5,500 per hired veteran and it will constitute a real boost to their employment prospects.

Thirdly, there is the exemption for test and trace support payments for self-employed NICs. As Members will recall, and as we have recapitulated already, last September the Government announced a £500 support payment for low-income individuals told to self-isolate but who could not work from home and would lose income as a result. Shortly afterwards, the Scottish and Welsh Governments announced similar schemes. Last year we introduced regulations to exempt payments under support schemes from employee and employer class 1 and class 1A NICs. This Bill will extend the exemption to the self-employed. It will ensure that these workers are treated consistently with their employed counterparts and that they do not have to pay NICs on support payments. It will retrospectively exempt test and trace support payments from class 2 and class 4 NICs to the 2021-22 tax year and it will ensure that in future these test and trace support payments will not be included in profits liable to class 2 and class 4 NICs.

Finally, the Bill includes a measure that makes changes to the disclosure of tax avoidance schemes regime for NICs. Legislation in the Finance Act 2021 enhanced the operation of the DOTAS regime, and the Bill includes changes to an existing regulation-making power in the Social Security Administration Act 1992. This will ensure that HMRC can act decisively when promoters fail to provide information on suspected avoidance schemes. It will also enable HMRC to warn taxpayers about suspected avoidance schemes at an earlier stage than at present.

As I have outlined, this Bill contains a range of relatively small yet significant measures that will advance this Government’s policy objectives. It supports the levelling-up agenda and regional growth, it boosts the prospects of our armed services veterans, and it strengthens the Government’s powers to tackle promoters of avoidance schemes. I reiterate my very strong and sincere thanks to Members who have engaged in the series of stimulating discussions and debates that we have had on these measures over the past few weeks. On that note, I commend the Bill to the House.

I am grateful for the opportunity to speak on this Bill’s Third Reading on behalf of the Opposition. As I have made clear several times, we are not going to oppose the Bill, but we have used the various debates on it to raise important questions about some of the approaches that Ministers have decided to take. I would like to use the opportunity of Third Reading to reiterate some of the sticking points where we do not feel that we have had enough clarity.

I spoke earlier about clauses 1 to 5 and then moved on to discuss clauses 6 and 7, which introduce a new zero rate of secondary class 1 national insurance contributions for the employers of armed forces veterans. As I made clear on Second Reading and in Committee, we believe that this is a vital issue. Veterans deserve the Government’s full support as they seek civilian employment after their service to our country. Other Members may remember that both on Second Reading and in Committee I asked the Minister and his colleagues to explain why the employers’ relief for veterans is for 12 months—much less than the relief for employers in freeports, also introduced by the Bill, which is three years.

In Committee, I made it clear that I felt that the Exchequer Secretary’s response during Second Reading had failed to address my question about why the Government had chosen to make veterans’ employers’ relief available for only one year. The Financial Secretary responded by expanding on the Government’s position. In relation to the relief for freeport employers, he said that the intention was

“to create circumstances in which they can have long-term secure employment, in particular with all the employment rights that come with more durable employment.”––[Official Report, National Insurance Contributions Public Bill Committee, 22 June 2021; c. 18.]

At another point in Committee, the Minister said about the Government’s plans for freeport employers:

“The way in which this measure has been structured is focused towards longer-term employment, as the relief runs for three years…From that point of view, it reflects a commitment by the Government to create high-quality and stable longer-term employment.”––[Official Report, National Insurance Contributions Public Bill Committee, 22 June 2021; c. 6.]

What my colleagues and I find hard to understand is why the Government, despite what the Minister has said throughout the passage of the Bill, do not seem to want to design a system for veterans that both supports transition into civilian life and, at the same time, like the scheme in freeports, seeks to create long-term employment with employment rights.

I thank the right hon. Gentleman for his intervention and for adding to the debate. I certainly recognise what he says about the importance of supporting veterans into civilian employment in the first six months and the first year. The question from the Opposition to which we did not have a satisfactory response is why, in addition to that, there is not a consideration or an option of support for long-term durable employment with employment rights. As that point was made several times by the Minister in relation to the relief for employers in freeports, why does the same support for longer-term employment not apply to veterans as well?

During discussions in Committee, the Minister pointed to a consultation with interested parties about how to design the scheme and mentioned how different parties had been “well sighted” on the options, so I looked at the Government’s consultation to understand what different parties had said. I was expecting to see questions about the length of the relief and whether 12 months or longer would be appropriate, but all I could find was a statement saying:

“The Government has announced that this relief will be available for the first 12 months of a veteran’s civilian employment.”

There did not seem to be any option or question about whether a longer relief would be appropriate.

Moving on to other measures we debated during the passage of the Bill, clause 10 provides a national insurance contributions exemption for payments made under a self-isolation support scheme. As we have heard, that ensures that these payments are not taken into account for the purposes of computing profits liable to class 4 NICs or for the purposes of class 2 NICs. As I set out on Second Reading and in Committee, we welcome this exemption from national insurance contributions for payments made under a self-isolation support scheme. It is crucial that people who need support to self-isolate receive it, so we welcome any steps that make the system for self-isolation payments more effective and less subject to administrative burden.

The Minister may recall that during the debate in Committee there was a brief discussion about why the exemption for class 2 and class 4 contributions was not implemented earlier. We discussed the comments that the Exchequer Secretary made on that point on Second Reading, and in Committee I asked the Minister to confirm exactly when the Treasury announced, by way of ministerial statement or other appropriate means, that the exemption for national insurance contributions would be extended to class 2 and class 4 contributions for payments made under a self-isolation support scheme. The Minister responded by saying:

“I do not have the date that he describes at hand, and I am happy to write to him on that.”––[Official Report, National Insurance Contributions Public Bill Committee, 22 June 2021; c. 22.]

I am sure he will forgive me if I have missed his letter on this matter, but my office and I cannot find a record of its having been received, so perhaps he could write to me this week, for the first time or again, to confirm that point.

We also debated clause 11, which widens existing regulation-making powers so that regulations can be made for national insurance to mirror the amendments to the disclosure of tax avoidance schemes procedures—DOTAS—that are included in the Finance Act 2021. As I made clear in earlier debates, we welcome any measures that help HMRC to tackle tax avoidance. In earlier debates I also took the opportunity to draw Ministers’ attention to a point made by the Chartered Institute of Taxation: that it believes there is a hard core of between 20 and 30 promoters of tax avoidance schemes, identified by HMRC, who clearly do not play by the rules. I asked the Minister whether he recognised this number, and, as he may recall, welcomed his confirmation that HMRC recognises the number of 20 to 30 hardcore promoters. He said, however, that he did

“not think that it would be prudent to make an estimate or assessment of what the appropriate number of promoters is or could be.”

It is therefore important that we have a better understanding of what progress we have actually made. The Minister said that

“over the past six years, more than 20 promoters have left the market.”––[Official Report, National Insurance Contributions Public Bill Committee, 22 June 2021; c. 24.]

However, he did not sign up to a commitment or a target for the coming years. I would welcome him writing to me in the coming days to explain what the number of hardcore promoters was six years ago, so that I can understand whether those who have left the market have been replaced by new promoters.

Finally, to conclude—I am very conscious, Mr Deputy Speaker, of your and Madam Deputy Speaker’s steer about what not to focus on in this debate—it is frustrating to rely only on newspaper briefings to know what is going on. I had hoped, as the Treasury Minister is the first to address the House of Commons since we first heard that the Government might be considering a national insurance rise, that we could have heard the position from him directly today. I leave the thought in his head that we would like to know why the Government’s plan for social care is one that hits hardest low earners, young people and businesses creating new jobs.

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 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.

First, I put on record my thanks to the Minister and the Government for bringing forward the Bill. It is good to see the finished article. On behalf of my party, and given where we stand and what we want to put forward, may I say that we were very happy to support the Government tonight.

I will make a couple of very quick comments. The Minister and I had an exchange earlier about new clause 3, but I was dismayed and shocked to hear from a Marie Curie nurse that her covid thanks package was subject to tax and national insurance. The central office was administering that in Scotland. In Northern Ireland, we understood that the bonus was an income, yet the Northern Ireland Executive made the decision to make payments of up to £735 an individual. That meant that those who qualify for the full award, which many do, pay tax at 20% and national insurance at 12% and still receive approximately £500 in their pay packet at the end of the month. We very clearly made that decision, and I think the Government have recognised that, because it is a recognition that these public service staff deserve a substantial boost and need it.

I very much welcome the Minister’s comments about freeports. I know that the final decision lies with the Northern Ireland Assembly, and he has referred to that already. I very much look forward to us in Northern Ireland playing our part and taking advantage of what the Government have brought forward here tonight.

Sir Mike Penning was right in his intervention that the first 12 months for any veteran are really important, because that is the time they need support most. I am therefore very pleased to see that measure. I also welcome the Minister’s decision to ensure that there is no ambiguity with regard to the Northern Ireland aspect of the Bill, as amendment 3 replaces a reference to the Social Security Contributions and Benefits Act 1992 with a reference to that Act and the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

As I highlighted in my previous contribution on the Bill, it seems that we have to remind Europe almost daily in this House that Northern Ireland is an integral part of the UK. It is determined to treat us as a third nation when it suits for duty free and taxation, but not when it does not suit for representation and European healthcare. If I may, Mr Deputy Speaker, I put on record that this week, my party leader, my right hon. Friend Sir Jeffrey M. Donaldson will be making a major statement on this issue. I hope that the Government will take note of what we are doing and what we are saying, because it has some effect on the future and where we are in relation to the Northern Ireland protocol.

I believe that the capacity is here to work together for all of the United Kingdom of Great Britain and Northern Ireland. It is always my hope that we do that, and I hope that that is what the Minister has put forward today will do. I look forward to working with the Minister through the Northern Ireland Assembly if that is possible and if it is still in place. We will wait to see what happens.

Question put and agreed to.

Bill accordingly read the Third time and passed.