National Insurance Contributions (Secondary Class 1 Contributions) Bill: Motion to disagree to Lords Amendment 3

What happened: The House of Commons voted on 19 March 2025 to reject Lords Amendment 3 to the National Insurance Contributions (Secondary Class 1 Contributions) Bill, passing the motion to disagree by 314 votes to 187. The amendment had been passed by the House of Lords and sought to modify the government's employer National Insurance contribution changes, specifically in relation to NHS-commissioned services and related providers. By voting to disagree, the Commons preserved the government's original policy of raising the rate of secondary Class 1 National Insurance contributions paid by employers.

Why it matters: The vote means that the government's employer National Insurance changes proceed without the carve-outs the Lords had sought to introduce. Employers across the economy, including independent contractors who provide NHS-commissioned services such as GPs, dentists, community pharmacies, social care providers and hospices, will face the increased contribution rates without a direct exemption. The government confirmed it will provide direct support to central government departments, local government and public corporations to cover their higher costs, but that primary care providers operating as independent contractors will not receive equivalent direct relief. Their funding pressures are instead expected to be addressed through broader funding settlements negotiated separately. The Bill also permanently doubles the employment allowance from £5,000 to £10,500, which the government argues partially offsets the impact on smaller employers and charities.

The politics: The vote divided along strict party lines. All 312 Labour and Labour and Co-operative Members who voted backed the government; every Conservative, Liberal Democrat, SNP, Reform UK, Plaid Cymru, DUP and SDLP Member who voted opposed it. The debate was dominated by opposition challenges over the impact on hospices, GPs and pharmacies, with the government pointing to wider funding settlements and the employment allowance increase as mitigation. The Bill has been contested throughout its passage, with opponents arguing the rise amounts to a tax on employment that is already slowing economic growth, while the government maintains the measure is necessary to repair public finances inherited in a damaged state.