Stephanie Peacock

It is a pleasure to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Isle of Wight East (Joe Robertson) on securing this debate, and I thank Members from across the House for their contributions. As the Minister for Civil Society, I have seen at first hand the huge contribution that charities and voluntary groups make to our country; and as the MP for Barnsley South, by working directly with local groups, I have seen the impact that they have in my area. As part of the autumn Budget, the Government took a number of difficult decisions on tax, welfare and spending to fix the public finances, fund public services and restore economic stability. In an open letter to the voluntary sector on this issue, the Chancellor stated that raising the rate of employer national insurance contributions was one of the most difficult decisions in the Budget. I will address the specific point around the change to national insurance alongside some of the questions and issues raised in the debate, before discussing the wider support that the Government provide to the sector. The Government recognise the need to protect the smallest businesses and charities, which is why we have more than doubled the employment allowance, from £5,000 to £10,500. That means that more than half of employers, including charities with NI liabilities, will either gain or see no change next year. In addition, we are expanding the eligibility of the employment allowance by removing the £100,000 eligibility threshold to simplify and reform employer NI, so that all eligible employers now benefit. Almost all charities are eligible for the employment allowance, as outlined in the HMT guidance. The changes will mean that a small to medium-sized charity could employ up to four full-time workers on the national living wage and pay no employer NI, to give one example.