Charities in ‘real danger’ due to employers’ national insurance rise, Tories say

Charities are in “real danger” following the Government’s plans to increase employers’ national insurance contributions, Tory MPs have argued.

Shadow culture secretary Stuart Andrew said the Government’s “charity tax” will cost the charitable sector £1.4 billion, and called for an impact assessment.

Culture Secretary Lisa Nandy said the Chancellor is “very aware of the importance of creative industries”, as she was pressed by MPs during culture, media and sport questions.

“Was the Secretary of State blindsided by the Budget like the Defra (Department for Environment, Food, and Rural Affairs) Secretary claims? Or was she aware and has she done, as we’ve asked several times, a sector-by-sector impact assessment?

“And if not, why not? And if so, will she publish it?”

Ms Nandy replied: “Unlike the last government, we do actually like one another and work together across Government, and so I had a number of discussions about the Budget with the Chancellor in advance.

“She is very aware of the importance of creative industries and all of our sectors to the UK economy, that’s why we’ve put them at the heart of our industrial strategy and our economic plan, and we’re working closely with industry to make sure they continue to thrive.”

Mr Andrew said charities face a £1.4 billion bill, adding: “Where does the Secretary of State suggest organisations like those find the money to pay this charity tax? And who will fill the gaps if charities have to scale back on the work as a result of this Government’s decision?”

Ms Nandy replied: “Under the last government, charities were facing a perfect storm – not only did they get very little in the way of support from the government, and in fact were silenced and gagged and told by one of the charities’ ministers to ‘stick to their knitting’, which is deeply offensive in my view.

“But they also were dealing with the rising pressures of the cost-of-living crisis and the mess that his government made of running this country.”

He said: “Can she outline what pressure she will bring on to the Treasury to make sure this policy changes? Because the charitable sector is in real danger under this Government’s decision.”

Ms Nandy replied: “The Health Secretary and I have already had a discussion about the particular situation facing hospices, it’s something that he is acutely aware of, and is working with the hospice movement to provide the best possible support.”

Shadow culture minister Saqib Bhatti said the Budget had created a “perfect storm for hospitality and tourism businesses across the country”, adding: “UKHospitality is sounding the alarm, saying that this Budget is a ‘blow’ for the tourism and hospitality sectors.”

“It’s still not got back under the last few years of the Conservative government. It’s still not got back to where it was before Covid, when we had 41 million visitors to the UK, it’s now at 38 million.”

Conservative MP Andrew Snowden pressed the Government on the impact of the national insurance policy on football clubs.

The Fylde MP told the Commons that Wigan Athletic FC has reported a £13 million loss in the last financial year, adding: “How does the Secretary of State feel that club will be able to make themselves more financially resilient following the significant impact that national insurance contributions will have on their finances?”

Sports minister Stephanie Peacock replied: “We’re continuing the work of the previous government by introducing our own Football Governance Bill, that will hopefully put football on a sustainable footing.”