National Insurance Contributions
1/316. What assessment she has made of the potential impact of the National Insurance Contributions (Secondary Class 1 Contributions) Bill on the early years sector.
As a Government, we have had to take tough decisions to get the public finances back on track. In 2025-26, the entitlements budget will be over £8 billion, with a further £75 million to support the sector in this pivotal expansion year. We have also announced the largest ever uplift to the early years pupil premium. Early years is central to our mission to give every child the best start in life.
Early years providers are being hammered. In many cases, their national insurance costs per staff member are almost doubling. A large number are small businesses in the private sector, while others are schools that are taking children before they go into reception classes. All of them—both primary schools in the state sector and small private providers—are worried about the extra costs being imposed on them. Can the Minister assure my constituents and, indeed, people throughout the country that families will not face higher costs and that those childcare places will still be there? Can he assure the House that we will have more childcare places at the end of this Parliament than we had at the start of it?
Unlike the Conservative party, we are on the side of working parents, and high-quality education will be available to every child. As for the hon. Gentleman’s substantive point, it would help if the Conservatives were honest. They would not reverse the rise.
I call the shadow Minister.
The decision not to compensate nurseries for the national insurance increase has already pushed providers “to the brink”, according to the Early Years Alliance, and many in schools, including schools with nurseries, are worried that they will be next. Local councils received a bill of £1.8 billion as a result of the national insurance increase, but received compensation for less than a third of that because the indirect costs were not covered. Can the Minister reassure the House that compensation for the increase will cover all the costs to schools, not just the direct costs?
The Government have announced that public sector employers will receive compensation for the increase in their national insurance contributions, including school-based nurseries and maintained nursery schools, but in line with the arrangements for other areas, there will be no additional NICs funding beyond that.