CHARITIES will suffer essentially the most as a consequence of the rise in employers’ National Insurance contribution, the House of Lords has been told.
During the Second Reading, on Monday, of the National Insurance Contributions National Insurance Contributions (Secondary Class 1 Contributions) Bill Bill, the Bishop of Southwark, the Rt Revd Christopher Chessun, was one in every of several speakers to predict its effect on hospice care — much of which originated in Christian foundations, he reminded the House. “Additional government help is not going to address the shortfall, despite the urgent need highlighted in the controversy in one other place on the Assisted Dying Bill,” he said.
But the Lords declined by 46 to 61 votes to just accept an amendment to the Bill from the Liberal Democrat Baroness Kramer. The amendment said that the Bill risked worsening pressures within the NHS and the social-care sector, penalised part-time work, and put jobs and economic growth in danger.
The Bill increases the speed of Secondary Class One National Insurance contributions from 13.8 per cent to fifteen per cent, and reduces the secondary threshold from £9100 to £5000. The Financial Secretary to the Treasury, Lord Livermore, said that “some impacts could be felt beyond businesses.”
Baroness Kramer said: “Hospices, which face a £30-million bill, have warned that they could should withdraw beds. Research from the Nuffield Trust shows that the price of adult social care alone would exceed £900 million next yr.”
Bishop Chessun spoke of the 1976 Church of England agreement that meant that ministers of faith ceased to be classified as self-employed and embraced employer National Insurance. The annual national figure, including the clergy, was about £10 million, excluding large numbers of staff directly employed by parishes.
“For my diocese, the quantity is around £390,000,” he said. “Our principal income source for paying all stipend-related costs comes from voluntary parish giving, which is restricted, and we now have still not heard from the Treasury whether it could extend the Listed Places of Worship Grant Scheme, which supplies VAT refunds for listed-church repairs.
“Our parishes and dioceses sustain extensive social outreach in addition to support for other charities. Does His Majesty’s Government appreciate the chance of staff and clergy reductions and the closure of buildings as a consequence of those measures, within the worst-case scenario?”
He also drew attention to the expected impact of the proposed increase on the transport sector devoted specifically to serving children with special educational needs and disabilities (SEND).
Lord Scriven (Liberal Democrat) told the House: “Research has highlighted that the extra cost of the NIC hike will force hospices to cut back services if they can not attract more public donations. The cost to the common hospice is more likely to be within the region of £200,000 per yr.”
Charities of all kinds were experiencing large increases in demand for his or her services, Baroness Sater (Conservative) said. She described those services as “life-saving interventions that usually are not just nice-to-haves but must-haves”.
Baroness Porter (Conservative) also spoke of the impact on charities. The short-term costs could be felt most immediately by those involved directly with charities. “The downstream impacts, longer-term, can be much more far-reaching, affecting everyone, undermining social cohesion, and weaking our communities,” she said.
Lord Livermore defended the Government’s motion and position, referring to a £100-million boost for adults’ and youngsters’s hospices, and £26 million of revenue to support children and young people’s hospices. Tax relief for charities and their donors had been price just over £6 billion previously tax yr, he said.
The end result of the Listed Places of Worship Grant Scheme was currently being assessed by the Department for Culture, Media and Sport, he told Bishop Chessun. With reference to the SEND transport, the Government had announced £2 billion of latest grant funding for local government in 2025-26.
