Peers have renewed their attempts to block government plans to raise employers’ national insurance for health and social care workers.
Over the past month, the House of Lords has delivered a series of defeats on the bill to increase National Insurance Contributions (NICs) from13.8% to 15% – and lowering the earnings threshold from £9,100 to £5,000.
Peers had attempted to secure exemptions for hospices, care homes, GP practices, dentists and pharmacies – but MPs rejected their plans.
On Monday, peers approved proposals for a new law to allow ministers to introduce such exemptions further down the line – meaning the NICs plans remain stuck in parliamentary limbo.
The bill will continue to be batted between the Commons and the Lords until agreement is reached, in a process known as “ping-pong”.
Liberal Democrat peer Lord Scriven called his amendment an “olive branch” after weeks of deadlock with the government.
The plans do not deny “the right of the government to raise revenue”, he said, but instead gives ministers “a tool to act swiftly with the consequences of what may happen and probably what will happen in health and social care.”
Labour Treasury minister Lord Livermore said any changes to exempt certain groups from NICS “would have cost implications necessitating higher borrowing, lower spending or alternative revenue raising measures.”
The government recognised the “vital role” played by hospices, he said – highlighting the extra £100m being provided to the sector, with a further £26m in funding for the support of terminally ill children and young people.
Charities, including hospices, also benefit from the increased employment allowance that would reduce their national insurance bill, he argued.
On Monday, peers also approved two other changes to the NICs Bill.
Peers voted for a measure that would open the way for a carve-out for small businesses and organisations from the lower earnings threshold at which employers start paying contributions by 276 to 165.
The Lords also supported by 273 votes to 172 a Tory amendment which would require the Chancellor to present an impact assessment of the tax rise on a range of sectors, including hospices, small charities and businesses, the hospitality industry and children’s nurseries.