Bolton: MPs react to impact of rise in National Insurance

It comes as national insurance contributions increased by 1.25 percentage points yesterday.

Bolton’s South’s MP, Yasmin Qureshi, has said that the workforce is an area in need of support, and she is ‘increasingly worried’ over the impact this could have on the workforce, and those already financially struggling.

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Ms Qureshi said: "The Labour party and I have said repeatedly that this National Insurance rise is a tax on jobs and a tax on growth, at a time when we need to be supporting the workforce and businesses to facilitate growth.

"I am increasingly worried about the impact this NI rise will have on people at a time when the cost-of-living crisis is deepening and people are struggling to pay their bills, heat their home, and feed their families.

"At the heart of this issue is a Chancellor and Government devoid of any understanding as to the issues people face in Bolton every single day."

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Chris Green MP for Bolton West has put the rise down to the need to fund the NHS and the care sector, as well as the impact of Covid and lockdown economically.

He said: “We spent a vast amount of money during Covid, and now we have to foot the bill.

“The reason for the increase in National Insurance is to fund the NHS and the care sector.

“Both have gone through a terribly difficult time during Covid and lockdown.

“And we all knew right from the beginning that getting through it would be at a huge cost to the country.”

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The UK Government predicts the tax rise will raise £39 billion over the next three years to help reduce the Covid-induced NHS backlog and reform adult social care for the long term.

From April 2023 onwards, the NI rate will decrease back to the 2021-22 level, with a new 1.25% health and social care levy legally introduced.

The Federation of Small Businesses believe this will have a big impact on care homes which are already up against high energy costs, labour shortages and widespread workplace absences due to Covid.

Melanie Ulyatt, FSB’s National Vice-Chair, who runs a care business, said: “There are many challenges facing the adult social care sector, while demands on care providers are only intensifying with another increase in employment costs from today.

“The Government can show it is serious about helping the sector thrive by setting up a task force to consider social care issues from every angle, ensuring that the direction of travel is similar across departments and agencies.

“Putting in place measures to raise the profile of social care and tackle labour shortages is a necessary step.

“Failure to act will exacerbate the acute crisis in social care recruitment, making it harder for vulnerable people to get the levels of care they need.

“We were pleased to see the Government followed our recommendation to expand the Health and Care visa to include social care workers, a change which came into effect in mid-February and which will last for 12 months.  

“Many care workers rely on their cars to get them to clients’ homes and care settings, so we think allowing them to claim the higher rate of tax relief for their full mileage would be a good move to help offset their transport costs, especially as fuel prices have risen sharply over the last year, while in many areas public transport does not represent a viable alternative.  

“As well as speaking with us, firms which are struggling should also reach out to their local authorities – in many locations covid support grants are still yet to be allocated.”

Care home impact

With an ageing population already increasing the demand for carers and support services, FSB view getting more people to consider a career in adult social care, as will boosting retention levels, as a key step forward.

In order to do this, one of the solutions they have called for is to extend the £3,000 apprenticeship incentive, after it ended on 31 January, to encourage firms in England who are willing to take on an apprentice to do so, and help with costs at a time when the cost of employment is increasing.

The UK’s largest business group is also encouraging those within the care sector to check their eligibility to access the newly uprated Employment Allowance, which benefits around 60,000 health and social care businesses annually.