Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the threshold number of full time equivalent employees on the (a) National Living Wage and (b) the average national wage that can be employed before an employer is liable to pay employer National Insurance Contributions from April 2022.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
An employer which is eligible to claim the Employment Allowance (EA) will be able to hire up to 3 employees on the National Living Wage who work 35 hours a week, for an entire year, before they have an employer National Insurance Contributions (NICs) bill in 2022-23: https://www.gov.uk/national-minimum-wage-rates
An employer which is eligible to claim the EA will be able to hire up to 1.5 employees on the median national wage in 2021 before they have an employer NICs bill in 2022-23: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2021
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if his Department will make an estimate of the potential number of (a) business exits, (b) insolvencies in 2022-23; and what assessment he has made of (i) the potential extent of business mergers and consolidation in 2022-23 in (ii) the effect of (A) business exits, (B) insolvencies and (C) business consolidation on employment rates.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
Support schemes such as the CJRS and government-backed loans kept insolvencies and business exits below normal levels throughout much of the pandemic.
To protect businesses from aggressive creditor action during Covid enforced restrictions there was a temporary ban on Winding Up Petitions (WUP) for Covid-19-related debt. As the economy returns to normal trading conditions, it is right that creditor powers are restored.
Insolvencies returned to pre-covid levels in September 2021, coinciding with the end of the WUP ban. It is too early to assess the full impact of support ending on business consolidation as some support schemes, such as the rent moratorium, are still in place.
Vacancy levels are higher than normal. As a result, we expect that the employment rate should remain relatively stable in the face of business exits and consolidation in 2022-23.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what research his Department has commissioned on the impact of the rise in Employer National Contributions on (a) the employment rate and (b) wages.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Office for Budget Responsibility set out their assessment of the economic effects of the Levy in their latest Economic and Fiscal Outlook, including the impact on labour supply and wages. This can be found here: https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate his Department made, prior to the decision being taken, of the potential impact of the rise in Employer National Insurance Contributions on (a) the employment rate and (b) wages.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
I refer the Hon Member to the answer that was given on 19 November 2021 to PQ UIN 75954.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential effect on levels of (a) pay and (b) employment of raising employment allowance.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government currently has no plans to increase the Employment Allowance (EA).
Since its introduction in April 2014, the EA has already been significantly increased, including rising from £3,000 to £4,000 in April 2020. This increase benefitted around 510,000 businesses, of which 65,000 businesses were estimated to be taken out of paying National Insurance contributions entirely.
Asked by: Margaret Ferrier (Independent - Rutherglen and Hamilton West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the proportion of payroll employee jobs effected by the rise in (a) employee ad (b) employer National Insurance Contributions from April 2022.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government has not made an estimate of the proportion of payroll employee jobs affected by the rise in National Insurance contributions from April 2022 as this information is not available.
Individual employees are not directly impacted by the employer National Insurance rise which is paid by employers.