National Insurance Contributions Bill — House of Lords, 2022-02-07
Topic: Mixed Topics
James Younger (Conservative, Centre-right): My Lords, this group of government amendments in my name responds to the recommendations of the Delegated Powers and Regulatory Reform Committee report and sets the upper secondary threshold, the so-called UST I thank the committee for its diligent care in scrutinising the Bill and noble Lords for their thoughtful comments in Grand Committee. The Government have further reflected on these views and have tabled Amendments 12, 13 and 14 in response to the report of the DPRRC and noble Lords’ comments in Committee Clause 10 provides an exemption from self-employed NICs in respect of self-isolation payments provided to support those on low incomes so that they can self-isolate and help stop the spread of coronavirus. Clause 10(2)(d) currently provides that the Treasury may, in relation to any part of the United Kingdom, designate new schemes that are corresponding or similar to the schemes specified in Clause 10(2)(a) to 10(2)(c). Payments under schemes designated in that way will benefit from the exemption in Clause 10(1) and will not be taken into account for the purposes of computing the amount of profits in respect of which class 4 and 2 contributions are payable. The committee recommended that the power in Clause 10(2)(d) be subject to the negative procedure rather than no procedure. The amendment in my name to Clause 10 makes this change Secondly, Clauses 3(1) and 6(6) allow the Government to extend the period for which the freeport and veterans relief are available. The committee recommended that the power to extend the relief for freeport employers and employers of veterans should be subject to the affirmative procedure rather than the negative procedure. The Government have taken on board the DPRRC’s recommendation and agree that it is appropriate that these powers are subject to the draft affirmative procedure. The two amendments to Clause 12 make these changes. In summary, the Government take the work of the DPRRC very seriously, and Amendments 12, 13 and 14 go a long way towards accepting its recommendations I turn to the amendments that set the upper secondary threshold for these measures. Government Amendments 1, 4 and 7 to 11 simply put on the face of the Bill what secondary legislation is out of time to do. This is not new policy or a change to public expectation. Ordinarily, rates and thresholds are set annually through a rerating exercise, which involves the Government of the day laying affirmative regulations. The debates for the 2022-23 rates and threshold will take place in this House on 23 February. However, due to the timing of this Bill and to ensure that the thresholds are in place for 6 April, the upper secondary thresholds for these measures need to be set in primary legislation I will now explain what an upper secondary threshold is. It is the threshold up to which employers can claim a zero rate of NICs. After this point, employers will be liable to secondary class 1 NICs at the standard rate. Without an upper secondary threshold, employers would be eligible for unlimited relief. There is a threshold for freeport employers and a separate threshold for employers of veterans The upper secondary threshold for the freeport measure is £25,000 per annum and was first announced in the Freeports Bidding Prospectus published in November 2020. The upper secondary threshold for the veteran measure is £50,270 per annum and was first announced when the policy was consulted on in July 2020. Both these figures have been reconfirmed by Ministers in this House and in the other place during the passage of this Bill. The Chancellor also confirmed these thresholds at the Autumn Budget 2021 There are justified policy reasons for the different thresholds. The freeport measure has been designed to support growth in underdeveloped areas, so general support is required. The veteran measure has been designed to support veterans as they transition into civilian life, and therefore a targeted, more generous annual threshold is required to help them to overcome the barriers to employment I trust that noble Lords will recognise that this is a formality and will vote in favour of this amendment. I beg to move.