Oral Answers to Questions

Debate between David Gauke and Nick de Bois

Tuesday 24th June 2014 Commons Chamber

[Mr Gauke]

If the hon. Lady wants to cut taxes for 24 million people, she might want to consider increasing a personal allowance to £10,500, which is exactly what the Government have done, rather than doubling the 10p rate of income tax as the previous Government did. As for taxes on property, it was this Government who introduced the annual tax on envelope dwellings, ensuring that there is a contribution to the Revenue from owners and occupiers of properties held in a corporate envelope. Again, I really do not think that on this issue the Labour party has a leg to stand on.

[Nick de Bois (Enfield North) (Con)]

6. What recent assessment he has made of the effectiveness of his long-term economic plan.

National Insurance Contributions Bill

Debate between David Gauke and Nick de Bois

Monday 4th November 2013 Commons Chamber

[Mr Gauke]

My hon. Friend makes two valuable points, but I detect that you do not want me to dwell on the issue, Madam Deputy Speaker.

[Nick de Bois (Enfield North) (Con)]

The Minister has talked about wages. Interestingly, the Federation of Small Businesses has said that about 29% of its members will use the employment allowance to give a pay rise to some of their employees, which they have been unable to do because of the economic circumstances. Does that not show that this policy is a way of delivering sustainable growth and sustainable wages, and not just a gimmick that will do more harm than good?

[Mr Gauke]

My hon. Friend is absolutely right. It is worth bearing it in mind that tax plays an important role in the cost of living. If taxes are put up, it increases the pressure on the cost of living. Ultimately, that is where the policies of the Labour party would lead.

National Insurance Contributions Bill

Debate between David Gauke and Nick de Bois

Thursday 13th January 2011 Commons Chamber

[Mr Gauke]

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

We have reached the final stage of the House’s deliberations on the National Insurance Contributions Bill. The first part of the Bill, on which we perhaps spent less time, introduces a 1% increase in the class 1 employee and employer and class 4 self-employed rates of national insurance contributions from April this year. As some hon. Members will remember, that was announced by the previous Government in the 2009 pre-Budget report. Although not part of the Bill, we intend to reverse the impact of the previous Government’s tax on jobs by increasing the employer national insurance threshold and income tax personal allowance. Those changes are part of a progressive package of measures that shifts the burden of Labour’s taxation away from lower earners and lower-paid jobs.

First, I remind the House that the provisions will increase the employer rate from 12.8% to 13.8%. That is a fact I am sure we should all get right. That 1% increase will also apply to class 1A and 1B contributions that are paid by employers on benefits in kind and pay-as-you-earn settlement agreements. Secondly, the Bill will increase the employee main rate from 11% to 12%. The same 1% rise will also apply to class 4 contributions paid by the self-employed, which will rise from 8% to 9%. Thirdly, the additional rates of employee class 1 and self-employed class 4, payable on earnings or profits above the upper earnings limit and the upper profits limit respectively, will rise from 1% to 2%. Compared with the plans that the Government inherited, more than £3 billion a year is being returned to employers through the threshold rise, and even more to individuals through the increase in the personal allowance.

Our actions will mean that some 880,000 low earners in the UK will be taken out of income tax altogether. Around 950,000 low earners will no longer pay national insurance contributions, although their benefit rights will be protected. Employees earning under £35,000 a year will pay less income tax and national insurance contributions and employers will pay less national insurance contributions on all workers earning less than £20,000 a year. We are keen to reduce the burden in this area although, as I set out earlier, it appears the shadow Chancellor wants substantially to increase that burden.

The regional employer national insurance contributions holiday for new businesses, contained in the second part of the Bill. That provision encourages employment and enterprise in the areas of the UK that are most dependent on public sector employment. Our aim is to help those regions in the transition to a more sustainable economic model based on private sector growth and investment. That is why we are introducing a holiday from employer national insurance contributions for qualifying new businesses in targeted countries and regions. The measure will reduce the costs of taking on staff and provide support in the vital early stages of business development. In order to ensure affordability, the holiday is limited to the first 10 employees taken on in the first year of business. For each of those workers, the holiday will last for 12 months, unless the closing date for the scheme—5 September 2013—is reached before the 12 months have elapsed.

In the Budget, we estimated that new businesses would save around £940 million of national insurance contributions over the next three years, giving them the ability to hire more staff, expand their business and invest in the recovery.

[Nick de Bois]

Will the Minister advise whether he envisages any problems from perhaps less than scrupulous companies that might go into pre-pack administration? Would they be able to claim the benefit if their new business started after a pre-pack administration, for example? If that is the case, will he take some measures to consider what can be done about this?