Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential cumulative impact of (a) National Insurance contributions and (b) the Employment Rights Act on overall hiring costs for UK businesses.

A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to employer NICs. The TIIN sets out the impact of the policy, including on businesses. The Government decided to protect the smallest businesses from the changes to employer NICs by increasing the Employment Allowance from £5,000 to £10,500. This means that this year, 865,000 employers will pay no NICs at all, and more than half of all employers will either gain or will see no change.

As set out in the government’s published impact assessments for the Employment Rights Bill, there are a range of channels through which the measures in the Bill could benefit the economy, as well as potential offsetting effects. Final impacts will depend on further policy decisions that are for secondary legislation.