Employment Allowance (Excluded Persons) Regulations 2020

Lord Tunnicliffe Excerpts

Tuesday 3rd March 2020 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I will be extremely brief. I am supportive of this change. It seems appropriate that the employment allowance is focused on the smallest businesses. I fully accept what the Minister says: that small businesses will be far more motivated to take on additional staff than any large business by this—in effect—grant.

On reading this, it seems that one of motivations is to make sure that the employment allowance is covered by only the de minimis regulations in the EU. Am I correct that it is the Government’s long-term policy focus to direct this aid towards small businesses, and that this is not just an accommodation to what they see as an EU framework—in other words, that it portends the future? Can the Minister give us any further assurance that any money saved will be redirected into the small business community?

[Lord Tunnicliffe (Lab)]

My Lords, the Explanatory Memorandum states:

“The purpose of this reform is to target the Employment Allowance to support smaller businesses.”


It directs us to Employment Allowance: Excluded Persons Regulations 2020, a document published in January this year, which repeats that statement:

“This reform is designed to focus the Employment Allowance at the original intended beneficiaries: smaller businesses.”


This is rubbish. You have businesses that can currently claim this £3,000, you have a very large group of businesses whose NI bill is less than £100,000—for which the rules will not change one iota as a result of this SI—and you have another group in the £100,000-plus category that will get nothing. It may be the Government’s intention to focus on smaller businesses, but this SI has no such effect. In fact, the sole impact of this SI is to save the Government money. I do not mind this, and the statutory instrument is perfectly reasonable. I just do not like the fact that false claims are made in this document. Unless the noble Lord is able to give me the assurance that the noble Baroness, Lady Kramer seeks, it seems improper to claim that taking money from one group while doing nothing about another somehow focuses more money on the group that you are not going to change.