National Insurance Contributions (Secondary Class 1 Contributions) Bill: Second Reading

Parliament voted on 3 December 2024 to give a second reading to the National Insurance Contributions (Secondary Class 1 Contributions) Bill, passing it by 332 votes to 189. A second reading is the first substantive vote on a bill's principles, meaning MPs approved the measure proceeding through Parliament. The bill raises employer National Insurance Contributions from 13.8% to 15%, reduces the per-employee earnings threshold at which employers become liable from £9,100 to £5,000 per year, and doubles the Employment Allowance from £5,000 to £10,500 while removing the previous eligibility cap. The vote advances the government's single largest revenue-raising measure from the October 2024 Budget, intended to fund the NHS and other public services. From 6 April 2025, most employers will pay NICs on a wider portion of each employee's earnings and at a higher rate. The government argues that over half of all employers will pay no more or less than before once the doubled Employment Allowance is factored in, and that small employers can hire up to four workers on the national living wage without paying any NICs at all. Opponents contend the changes will suppress wages, deter hiring, and place real burdens on small businesses, charities and voluntary sector organisations that the Employment Allowance cannot fully protect. The vote divided almost entirely along party lines. All 328 Labour and Labour and Co-operative MPs who voted backed the bill; every Conservative, Liberal Democrat, SNP, Reform UK, Plaid Cymru, Green and DUP MP who voted opposed it. Four independents voted in favour and three against. The Liberal Democrats, despite being an opposition party, joined the Conservatives in the no lobby, making this a broad cross-opposition rejection rather than a simple government-versus-official-opposition split. The bill subsequently passed its third reading in March 2025 by 339 votes to 172.