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

**What happened:** The House of Commons passed the National Insurance Contributions (Secondary Class 1 Contributions) Bill at its Third Reading on 17 December 2024, by 354 votes to 202. The Bill raises the rate of employer secondary Class 1 National Insurance contributions from 13.8% to 15%, while also lowering the threshold at which employers begin paying those contributions. This was the final Commons vote before the Bill moved to the House of Lords, and it enacted one of the central revenue-raising measures announced in the October 2024 Budget. **Why it matters:** The Bill increases the cost of employing staff for every business, charity, and independent public service provider in the UK. The Government argues this is necessary to raise additional revenue, estimated at around £25 billion, to fund investment in public services including the NHS. Critics in the debate focused heavily on the impact on organisations that sit outside direct public sector employment but deliver publicly commissioned services, including GP surgeries, care homes, hospices, charities, and childcare providers. These organisations cannot recoup higher wage costs in the way commercial businesses might, and the debate heard estimates including a £940 million additional burden on adult social care providers, roughly £20,000 extra per GP surgery annually, and around £47,000 in additional costs per nursery. **The politics:** The vote divided almost entirely along party lines. All 312 Labour MPs and 37 Labour and Co-operative MPs present voted in favour. Every Conservative, Liberal Democrat, Scottish National Party, Democratic Unionist Party, Green, Plaid Cymru, and Reform UK MP who voted did so against, producing a combined opposition of 202 noes. Three Independents voted with the Government and seven against. The Liberal Democrats tabled amendments seeking to exempt care home operators, domiciliary care providers, and GP practices from the higher rate, and separately to create a reduced rate for registered charities, but these were rejected. The Conservatives tabled their own amendments and a new clause. The Government framed the measure as a response to what it described as a deteriorated fiscal inheritance, while opposition parties argued it broke explicit pre-election pledges not to raise National Insurance and would damage the very services the Government claimed to be protecting.