National Insurance Contributions (Secondary Class 1 Contributions) Bill Committee: Amendment 1

Parliament voted on 17 December 2024 to reject Amendment 1 to the National Insurance Contributions (Secondary Class 1 Contributions) Bill. The amendment, moved by Liberal Democrat MP Pippa Heylings, would have introduced a lower employer National Insurance rate for a defined set of health and social care providers, including regulated care homes, domiciliary support services, GP practices, dental services, pharmacy providers, hospices, and charitable health and care organisations. It was defeated by 351 votes to 100. The bill raises the employer NI rate from 13.8% to 15% and reduces the per-employee earnings threshold at which the liability begins from £9,100 to £5,000 per year, both taking effect from April 2025. Amendment 1 would have carved out those specified health and care employers from the higher rate, meaning they would pay less than the standard 15%. The sectors named in the amendment cannot easily pass higher payroll costs on to customers or raise prices, and many rely substantially on public funding. By rejecting the amendment, Parliament confirmed that these employers will face the same rate increase as all others from April 2025. The vote divided almost entirely along party lines. All 312 Labour MPs and all 36 Labour and Co-operative MPs who voted did so against the amendment. The Liberal Democrats provided the largest bloc in favour, with 71 of their 72 MPs voting aye. The SNP, DUP, Greens, and Plaid Cymru also voted for the amendment, as did five independents. Two Reform UK MPs voted aye while five had no vote recorded. The Conservative Party's interventions in the debate focused on their own amendments and a new clause rather than this specific proposal, though speakers including Gareth Davies criticised the bill's overall impact on employment and argued that the OBR projected 76% of the tax would be passed on to workers through lower wages and higher prices. The division sits within a broader political contest over the government's NI changes, which Opposition parties have framed as a breach of pre-election commitments.