Public sector National Insurance: Plaid Cymru criticise lack of transparency and urgency

UK Minister refuses to give update on discussions with Welsh Government 

During a debate on the Finance Bill on Wednesday (27 November), Plaid Cymru Treasury spokesperson, Ben Lake MP, raised concerns about the financial strain on public services caused by the increase in employer National Insurance contributions. 

Welsh Local Authorities are facing huge increases in costs due to the rise in Employer National Insurance. Ceredigion County Council, in Mr Lake’s constituency, is facing an increase of over £4 million in its costs due to the reduction of the income tax threshold to £5000 coupled with the increase in Employer National Insurance contributions. 

The Ceredigion Preseli MP asked when the UK Government would announce how much money would be provided to the Welsh Government to plug the shortfall caused by the increase in employer National Insurance contributinos for the public sector. 

The Exchequer Secretary to the Treasury, James Murray MP, responded that he “will not give inside information on any ongoing discussions between the Treasury and devolved Governments”. 

Mr Lake responded by criticising the UK Government for a lack of transparency and urgency on the matter. 

  

Speaking in the House of Commons, Ben Lake MP said: 
 
“One of the measures that has a bearing on the provision of public services is the increase to the employer national insurance contributions. 

“I understand the Treasury is in discussion with the devolved Governments and local Government across England to ascertain precisely how much extra funding support is required to offset the increased cost upon their services. 

“Will the Minister give us an update on those discussions and when he believes local authorities and, indeed, the devolved Governments will know how much money in additional support they will receive?” 

  

The Minister, James Murray MP, responded: 

“I am afraid I will not give the hon. Gentleman inside information on any ongoing discussions between the Treasury and devolved Governments. 

The policy for reimbursing increases in employer national insurance contributions is well established. The last Government followed a similar process in relation to the health and social care levy, whereby Departments, employees and other direct public sector employees are typically refunded the entire increase and third parties, contractors and so on are not. 

“As for the devolved Governments’ settlements, they have their own process to go through with the Treasury. I am sure the hon. Gentleman will understand why I cannot give a running commentary on that, but I am sure that his colleagues will pick that up.” 

  

After the session, Ben Lake MP added: 

“The Minister’s answer will not give much comfort to local authorities across Wales, or indeed the rest of the UK, who are grappling with budgetary uncertainty. 

“The lack of clarity on when additional support might be confirmed only exacerbates the challenges faced by public services already under immense strain. Communities deserve assurances that essential services will not be further jeopardised by funding gaps caused by UK Government policy decisions. 

“I will continue to press for greater transparency and urgency on behalf of people across Wales who rely on public services.” 

 

This starts with you

We can make Wales a safer, better place to live. Sign up today and show your support.