I rise to speak to Lords amendments 1, 2, 3 and 4. The Liberal Democrats are extremely concerned that this tax rise risks dire consequences for social care, primary care, the NHS, hospices and charities, many of which are delivering vital healthcare in the community. Thousands of care providers are already on the brink of bankruptcy, and this national insurance increase risks tipping them over the edge.
The OBR estimates that this hike will bring in £10 billion a year rather than the £25 billion estimated by the Government, once employers change their behaviour in response to the tax and once public sector employers are compensated. Yes, we know that finances are stretched, and that the Government inherited an incredibly difficult situation, but the Government could have raised that amount of money through much fairer tax changes, and we Liberal Democrats have come up with many suggestions. For example, they could have reversed Conservative cuts handed to the big banks; increased the digital services tax; doubled the rate of remote gaming duty; and introduced a fair reform of capital gains tax, so that the 0.1% of ultra-wealthy individuals pay their fair share. This may be something particular to Totnes, but many wealthy constituents have told me that they wish they were being asked to pay more tax.
The Liberal Democrats have called on the Government to exempt social care providers and GPs from the employer national insurance tax rise. On average, the tax rise will cost each GP practice an estimated £20,000 a year. The Government have announced an additional £889 million in the 2025-26 GP contract, but have failed to spell out how much of that they believe practices will need to use to pay the additional tax burden, and how much will be left to meet unmet patient needs. What is clear is that the national insurance rise will mean that the uplift to the GP contract is in fact far smaller than it appears, because a proportion will need to be returned directly to the Treasury—robbing Peter to pay Paul, as many Members have said.
What assessment have the Government made of how much of the recent uplift in the GP contract will practices need to use to offset the rise in national insurance? Rowcroft hospice, which is in the constituency next door, but which serves us, says the NIC rise is expected to add £225,000 to annual costs. One of my GP surgeries says that its costs will go up by £187,000, and the Devon Mental Health Alliance estimates the cost increase at £375,000, potentially resulting in a loss of 25,167 staffing hours.
One GP said to us:
“I have been a GP for 10 years and a doctor for 15. It is exhausting and, frankly, I just feel like giving up. This is not an attractive or stable job for training doctors.”
The Devon Mental Health Alliance, which is a strategic partnership, uniting five leading charitable organisations in Devon, said:
“As a sector, we play a critical role in easing the burden on the NHS by preventing thousands of people from needing GP appointments, hospital care, or sitting on waiting lists for treatment. By addressing health issues at their root and offering early intervention and prevention, this sector acts as a frontline defence, reducing demand on overstretched NHS services.”
It cannot fill the black hole by increasing revenue efficiencies or risk management. The organisation estimates costs of £375,000 next year and, as I have said, that could mean losing 25,000 staffing hours. That would mean that more people in Devon with complex needs will not be able to access its services.
Minister, at a time when we have a mental health crisis across all ages and communities, this extra financial impact on voluntary sector services is short-sighted and will only heap more pressure on the NHS. If we do not value the work done in primary care, particularly by GPs, we are putting the health of our constituents across the country at risk, putting more pressure on GPs who are already working at full capacity and threatening reforms to the NHS, which has already been brought to its knees by chronic underfunding over the past decade. I strongly urge the Government to reconsider the NICs rise for GPs, social care providers and all of those working to support health and wellbeing in the communities that we represent.
Just to finish, I would like to echo what others have said about the total absence of Government Back Benchers who have felt able to come in and speak in support of their hospices, their social care providers and their voluntary sector organisations, because they could not come in here and defend a Government policy that they know is indefensible.