Debate contribution: Front-line Services: Employers’ National Insurance Increase

Debate contribution by Ms Diane Forsythe on 13 January 2025.

MLA

Ms Diane Forsythe

Party at the time

Democratic Unionist Party

Date

13 January 2025

Type

Debate contribution

Business

Private Members' Business

Heading

Front-line Services: Employers’ National Insurance Increase

Assembly identifier

Official Report component 4738658

Read the official Assembly record

Text

I beg to move

Thank you, Mr Deputy Speaker. I move the motion with huge concern for what is about to hit us on 1 April 2025. Since the Labour Government came to power over our United Kingdom last year, they have acted unpredictably and with incredible detriment to so many of us. First, it was their shocking removal of the winter fuel payments, seriously hurting some of the most vulnerable in our society. Then, in the autumn statement, it was the unexpected announcement of the increase in employers' National Insurance contribution, imposing a hugely destructive impact on employers, their businesses, our public services and our voluntary and community sector. The fact that both of those significant decisions were not in the Labour election manifesto and were not consulted on is disgraceful. We tabled the motion to call on all in the Northern Ireland Assembly to recognise the huge impact and the need for us, as elected representatives, to take steps to protect our businesses, public services and community and voluntary sector. We know that the Labour Budget has caused increased anxiety for many of our small business owners and their staff, who make our high streets and town centres thrive. They provide essential services to the most vulnerable and are at the cutting edge of manufacturing and food production in all our communities. It is alarming that, following the Budget announcement, the Office for Budget Responsibility downgraded its projections for growth in real household incomes. It warned that employers are likely to pass on the higher tax to employees, there will be lower nominal wages and labour supply will be impacted by a reduction in employment and a reduction in hours for those who stay in work. The impact will be far-reaching throughout our society, with lower wages and higher prices. Many businesses are considering redundancies and pausing their growth plans on the back of that announcement. It is incredibly detrimental to our economy and our workers, who may be paid less or even be out of work. Small businesses are the lifeblood of our economy in Northern Ireland, and we want to see them grow. However, this Budget will see an increase in the employers' National Insurance contribution and a decrease in the threshold at which businesses start making those contributions. Combining those factors with an increase to the national minimum and living wage will result in a rising cost of doing business, and that leaves many of us feeling as though we are being taxed to death. Hospitality Ulster in particular has warned that trying to balance the books from the pockets of high street businesses will simply leave hospitality as collateral damage, threatening jobs, future investment, price increases for consumers and business viability. We have seen reports, recently, of investments being on hold due to the rise in National Insurance contributions. We also have the impact of the increased costs being passed to consumers, which businesses will need to do to remain profitable. However, with the cost-of-living crisis, the public do not have the disposable income to be able to pay those increased prices for goods and services. The childcare sector is one that has been prevalent. Childcare is widely accepted as critical economic infrastructure and is a key priority of the Executive. A sector that is already under pressure sees the increases to employers' National Insurance contributions leading to a number of settings considering closure, and, again, if they remain open, they will need to pass on the additional cost to the public, which will see childcare costs increase further when it is already unaffordable to many. That is a real risk, with many businesses facing a cliff edge on 1 April 2025. We need to protect our local businesses and local economy, including our childcare sector, and we also need to highlight the risk that this increase by the Labour Government will have for our public services in Northern Ireland. Through a series of Assembly questions for written answer, I have identified some of the increases in the cost of the National Insurance contributions across different Departments and their arm's-length bodies. I will give you a flavour of those. For Infrastructure, it is an additional £9 million; Justice, an additional £10 million; DAERA, an additional £0·8 million; the Department for the Economy, an additional £6·8 million; Communities, £2 million; Health, some £100 million; and Education, through the Education Authority's employer National Insurance contribution, an additional £51 million. I also note the health service businesses, such as GP practices, dentists and community pharmacies, which will face increases but do not operate in a business environment in which they can pass increased costs on to the end consumer. They are expected to continue to provide the same high-quality health services with significantly higher overheads. Most local councils are looking at an increase in the region of £1 million, which will be passed on to ratepayers without any intervention. That is huge. In Northern Ireland, we are already under significant financial pressure. Our DUP leader, Gavin Robinson MP, has long led the fight to achieve a fair funding model for Northern Ireland. Whilst we have made progress, we are not there yet. Facing increases of tens of millions of pounds in employers' National Insurance contributions from April will have a destructive impact on our public services. We simply do not have the money to fund that. I ask the Finance Minister to, please, seek clarity urgently on the total additional cost to Northern Ireland and on how much of that will be provided by the Treasury and the Labour Government who imposed this extra cost of employment on our public sector. It was widely reported recently that, in Scotland, only three fifths of the additional costs will be funded by Treasury. That falls well short. We need to know where we stand in Northern Ireland. I also take the opportunity to highlight, once again in the Chamber, the incredible contribution of our voluntary and community sector to the delivery of front-line public services in Northern Ireland. On government-funded contracts, supplemented by fundraising, they deliver critical services to the public across all of our Departments. They will all be subject to this substantial increase to employers' National Insurance contributions, but have been advised that there will be no subsequent increase to their funding from Departments to cover it. There will inevitably need to be a reduction in service provision under the existing funded projects as the costs of employing staff go up. The impact of reducing service provision is a reduction in our front-line public services. That is of huge concern. I have previously made the point that the Executive need to identify the full scale and reach of public services and public-sector outcomes that are delivered by our voluntary and community sector. The failure to do so has, I believe, exposed us to a much bigger risk than is fully realised. The voluntary and community sector groups provide direct health services, including mental health support, to thousands of people across Northern Ireland, with direct referrals from the Department of Health and GPs into the sector. A recent Northern Ireland Council for Voluntary Action (NICVA) survey, which had responses from 68 organisations representing a breadth of organisations in size and scale across the voluntary and community sector in Northern Ireland, showed that 76% of them expected major financial impacts, with many facing additional annual costs of between £5,000 and £200,000 from April 2025. One social care provider anticipates annual costs of up to half a million pounds. The reduction in the capacity of our voluntary and community sector will have devastating effects on our healthcare system and wider public services. I wish to specifically mention the impact on organisations that support victims of domestic and sexual abuse in Northern Ireland. Those organisations will have the additional cost of tens of thousands of pounds per regional body imposed upon them. That will reduce the capacity of Women's Aid, Nexus and others to support services at a time when the Executive are prioritising ending violence against women and girls and of high levels of murders of women in Northern Ireland. Northern Ireland is one of the most dangerous places in Europe for a woman to live, and we cannot afford to see those services reduced. The increase in employers' National Insurance contributions from 1 April, which has been imposed on us, will be of huge significance; it is a cliff edge, and we need action. I ask the SDLP to reach out to its sister party, Labour, for any intervention that may be possible, but, in keeping with what the motion is asking for, it is imperative that the Minister of Finance works with Executive colleagues to:

"ascertain the total additional cost of increased employers' National Insurance contributions for the public sector, including independent providers"

and the voluntary and community sector. We also ask the Minister:

"to lobby the Chancellor of the Exchequer for the funding required to meet this shortfall in full, protect jobs and incomes and place the delivery of front-line public services on a stable footing."

I commend the motion to the House.

1,526 words. Text as published by the Northern Ireland Assembly.

Assessment

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Assessed 21 October 2026 at 11:43 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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