National Insurance Contributions (Secondary Class 1 Contributions) Bill: Motion to disagree to Lords Amendment 2

What happened: On 19 March 2025, the House of Commons voted by 310 to 183 to reject Lords Amendment 2 to the National Insurance Contributions (Secondary Class 1 Contributions) Bill. The amendment, passed by the House of Lords, would have maintained employer National Insurance contribution rates and thresholds at existing levels for NHS-commissioned services including GPs, dentists, social care providers, pharmacists and hospices. By voting to disagree with the Lords amendment, the Commons upheld the government's original policy of raising employer National Insurance without carving out those exemptions.

Why it matters: The vote means that primary care providers, hospices and social care organisations that operate as independent contractors will face the full impact of the employer National Insurance increases introduced in the October 2024 Budget. The government's position is that direct compensation for additional employer National Insurance costs will apply only to central government departments, local government and public corporations, not to independent contractors such as GPs, dentists or charities running hospice services. Opponents of the measure argued that hospices, GP surgeries and community pharmacies, many of which rely heavily on fundraising rather than direct government grants, will face significant cost pressures that could lead to reduced staffing and services. The government countered that it is providing wider funding settlements, including an additional £889 million for general practice, £880 million in new social care grant funding, £100 million for hospice buildings and £26 million in revenue support for children's hospices, alongside a doubling of the employment allowance from £5,000 to £10,500.

The politics: The vote divided almost entirely along party lines. All 309 Labour and Labour and Co-operative MPs who voted supported the government's position, with no Labour rebels. Every Conservative, Liberal Democrat, Scottish National Party, Reform UK, Plaid Cymru, Green and Democratic Unionist Party MP who voted opposed the government, alongside five independents. The Liberal Democrats had been among the parties most vocal in supporting the Lords amendments relating to primary care providers. The bill had attracted controversy since the Budget, with opposition parties characterising the employer National Insurance rise as a "jobs tax" and pointing to economic figures showing the economy contracted in the period since the policy was announced. The government maintained throughout that it inherited an unsustainable fiscal position, including what it described as a £22 billion black hole in the public finances, making the measure necessary.