Skip to main content

National Insurance Contributions (Reduction in Rates) Bill

Volume 834: debated on Tuesday 12 December 2023

Second Reading

Relevant document: 3rd Report from the Delegated Powers and Regulatory Reform Committee

Moved by

My Lords, the past few years have been a somewhat unhappy lesson in living through history, be that the impact of a once-in-a-generation pandemic or the shock waves of the largest conflict in Europe since World War II. Covid and Putin’s illegal invasion of Ukraine have forced this Government to take tough decisions to protect the public purse. Thankfully, the choices we have made are paying off: inflation is falling, this year’s growth is more resilient than expected and debt is forecast to reduce. This makes it possible to pay back working people while ensuring that public money remains sound.

Thanks to this Government’s long-term plan, this Bill will slash taxes for 29 million working people. It has three measures: the reduction of the national insurance contributions—or NICs—class 1 primary main rate; the reduction of the NICs class 4 main rate; and the removal of the requirement to pay class 2 NICs. The measures all fundamentally deliver on a core priority for this Government: allowing working people to hold on to their hard-earned cash. I shall explain each of the measures in more detail.

First, the Government’s changes to the employee class 1 NICs main rate will reduce it by two percentage points to 10% on earnings between £12,570 and £50,270, from 6 January 2024. This is a change that puts working people first. For example, the average worker on £35,400 will see and feel an annual improvement of £450 to their payslip at the start of the new year. An average full-time nurse will see an annual gain of over £520. Families with two earners on the average income will be £900 better off, because this Government believe that hard work should be rewarded.

Our remaining two measures focus on NICs for the self-employed. The Chancellor highlighted the importance of the self-employed in his Autumn Statement speech, commenting that:

“These are the people who literally kept our country running during the pandemic: the plumbers who fixed our boilers in lockdowns, the delivery drivers who brought us our shopping and the farmers who kept food on our plates”.—[Official Report, Commons, 22/11/23; col. 333.]

This fantastic workforce also deserves to be recognised. Of course, to be self-employed you need to be organised, efficient and responsible, and the Government should not get in the way of that. The self-employed want to stand on their own two feet, and the Chancellor stands ready to support this with two tailored interventions. The first is a cut in the class 4 rate by one percentage point, from 9% to 8%. The second removes the requirement for the self-employed with annual profits above the income tax personal allowance to pay class 2 NICs. Those who wish to pay voluntarily will still be able to do so. Both measures will be in force from 6 April 2024.

These changes simplify the system for self-employed taxpayers, bringing it closer to the system for employees. These measures mean that a typical self-employed plumber will gain £410 a year. The Government intend to fully abolish class 2 NICs, reducing needless complexity and freeing up valuable time. Further detail about this reform will be set out next year. As a result of changes in the Bill, a self-employed person who is currently required to pay class 2 NICs every week will save at least £192 per year. Taken together with the cut to class 4 NICs, this will benefit around 2 million people. Importantly, those with profits under the small profits threshold of £6,725, and others who pay class 2 voluntarily to get access to contributory benefits, including the state pension, will continue to be able to do so. No low-income, self-employed people who pay voluntary NICs will be asked to pay more.

The Government are committed to tax cuts that reward and incentivise work, and which grow the economy in a sustainable way. The tax cuts in this Bill will be worth over £9 billion a year—the largest ever cut to employee and self-employed national insurance. These measures will give 29 million working people an average yearly saving of over £450. That is fair and that is right. Nor will these measures benefit only those already in work. According to the Office for Budget Responsibility, these reductions in tax will lead to an additional 28,000 people entering work, because ensuring that work pays will encourage more people to seek employment. Be in no doubt that we are doing the right thing by standing with the hard-working people of this country and ensuring that their contributions are recognised and fairly rewarded.

My Lords, in the era of never-ending real wage cuts, high inflation, high taxes, high interest rates and the cost of living crisis, any help for hard-pressed households is welcome, but that cannot hide the Government’s sleight of hand. Let us remember that last year the Government were prepared to increase the national insurance contribution rate for employees from 12% to 13.25%. They did not really feel that there was any need to help the poorest then. Now that they are doing incredibly badly in the opinion polls, some bribes are obviously coming out and this 2p cut is just one example.

Of course, people will not be fooled by the bribes; they will remember what the Government have done to them. Since March 2021, the income tax personal allowance and thresholds have been frozen and will remain frozen until 2027-28 or maybe even beyond. In 2022, the UK had a tax-to-GDP ratio of 35.3% compared to the OECD average of 34%, and it is going to get worse because of fiscal drag: millions more people are going to be paying income tax and national insurance contributions because of that.

Since March 2022, the threshold for national insurance contributions has also been frozen. Due to the impact of inflation on VAT, higher duties, income tax and national insurance, the additional tax yield is expected to be around £57 billion in 2027-28. This shows that the Government’s claim that they are handing things back to the people is really a work of fiction. The cut in the main rate of national insurance for employees from 12% to 10% and changes in rates for the self-employed will hand back, according to the OBR, £2.2 billion in 2023-24 and £9.4 billion in 2024-25, rising to £10 billion in £2028-29. That is a total of nearly £50 billion.

What are the Government going to collect through national insurance contributions for the same period? According to the OBR, despite the cut in the rate, they will collect £62 billion—£12 billion more than the cut they are handing back. That is all because of fiscal drag. Can the Minister explain why the cut in the national insurance contribution rate does not fully wipe out the increase in revenues from the contributions? Whichever way anyone looks at it, this cut is part of an impression management exercise. It is a small part of the additional taxes that the Government have already collected and will continue to collect.

In line with their usual practice, the Government are handing a lower amount of the national insurance cut to the less well-off and more to the rich. The annual median wage for an employee is £29,669, so a median-wage earner will get a cut of just £341 a year. Those earning more will collect far more. The median earners will still pay a higher proportion of their income in national insurance contributions than wealthier individuals: the Resolution Foundation concluded that the Budget favoured the richest 20% of earners. It will be interesting to see whether the Minister wants to deny that.

As people in London and the south-east of England tend to have higher wages, they will collect a bigger national insurance cut compared to the rest of the country. Due to the Government’s failure to address regional disparities, inequalities will now be widened. In the last tax year, 21 million adults had a taxable income of less than £12,570 and, as a result, were not liable to pay any national insurance contributions. Due to fiscal drag, that number is now around 19 million. The national insurance cut delivers zero benefit to 19 million adults, the majority of whom are women. This includes families who have been robbed of nearly £3,000 a year by the Government’s two-child benefit cap. As usual, the poorest are invisible to the Government. Can the Minister please explain the impact of the national insurance cut on regional and gender inequalities?

The national insurance cut provides little comfort to most families. Savings for median earners are immediately wiped out by the higher price of food, energy, transport, interest rates, mortgage payments, rents and council tax—there is no benefit. The Resolution Foundation estimates that, due to sluggish economic growth, persistent inflation and higher taxes, the average household will be £1,900 a year poorer by January 2025, compared to December 2019—that is a real legacy of the Government. There is no redistribution or levelling up; nothing in the Bill matches that.

The Government could have helped the 19 million adults receiving zero benefit from the national insurance cut by abolishing VAT on domestic fuel, or by cutting the standard rate of VAT, but they chose not to do that. The cost could have been met by clawing back the benefit of the 2% national insurance cut from the richest individuals—for example, by making the national insurance contribution rate more progressive for individuals on higher incomes. Patriotic Millionaires have urged the Government to tax them more, but the Government do not even want to do what the rich are urging them to—possibly because those rich people are not in the Conservative Party.

In case the Minister is tempted to say that the Government have helped the poor by increasing benefits, I remind her that the real value of benefits has fallen since 2010. The Government could have addressed the anomalies in the national insurance contribution laws. For example, there is no economic or moral reason for exempting capital gains, dividends and investment income from national insurance payments. The individuals enjoying exemptions use the National Health Service and social care system, but do not pay anything towards them. If a rich person with capital gains has an accident, a taxpayer-funded ambulance and the NHS would come to the rescue, so why do they not pay national insurance contributions? What is the moral and economic justification? The Government could have raised billions of pounds by eliminating that anomaly.

The Government could also have hit the tax avoidance industry. I know many accountants who are busy converting incomes to capital gains so that certain individuals not only pay tax at a lower rate but dodge national insurance contributions. The Government have done absolutely nothing to deal with that. Of course, getting rid of the tax avoidance industry helps with economic efficiency as well, but again the Government are oblivious to that. Can the Minister explain why investment income in the hands of comparatively few people continues to be exempt from national insurance payments? What is the justification for this? If she wishes, I would be delighted to participate in any debate that she might wish to call on this.

My Lords, I will make a short intervention in this debate to ask the Minister a few questions about the allocation from the National Insurance Fund to the NHS following the introductions of the measures in the Bill.

The Institute for Fiscal Studies estimates that 19% of the National Insurance Fund is paid directly to the NHS. My first question to the Minister is, will she confirm that that percentage is correct? When Governments quote figures going to the NHS, they always talk in cash terms, but when we see a reduction in funding for the National Insurance Fund, it is good to know exactly what we are talking about. Will the Minister confirm the percentage allocated to the National Health Service from the National Insurance Fund?

Secondly, will the Minister assure your Lordships’ House that the cash value currently paid in funding to the NHS from the National Insurance Fund will not be reduced as a result of these measures? Would she be good enough, after this debate, to provide the forecast figures for both the percentage and the cash terms of the money paid from the National Insurance Fund to the NHS? Should there be any shortfall, will she give an undertaking on behalf of the Government that that reduction—that loss of funding—will be made good by the Government from general taxation: that it will be earmarked not as extra funding but as replacement funding, should there be any reduction as a result of the measures in the Bill?

I absolutely appreciate that national insurance Bills are incredibly complicated, having dealt with them in the past in another place, so if the Minister does not have that information at her fingertips, which I would entirely understand, I would be more than happy for her to write to me and the relevant spokespersons in the House with those figures. While reducing national insurance has the implications that the Minister has rightly identified, it also has a potential downside, and we need to know what that is. Will the funding of the National Health Service be protected?

My Lords, I start by thanking the noble Baroness, Lady Primarolo, because the point she raised is one I think we did not raise in our discussion of the Autumn Statement and perhaps did not have the front of our minds as this Bill went through. The link between national insurance contributions and funding of the NHS is critical. In thinking about it, I am astonished that an impact statement did not discuss those consequences, and I do not remember them being raised by the OBR or in other discussion papers. The issue the noble Baroness has raised is critical, and I thank her very much for asking that we all share in the Minister’s reply. Again, I have sympathy for the Minister: I doubt very much whether she has these numbers at her fingertips.

The Liberal Democrat Benches are obviously not opposing the Bill, but I would like to set a bit of context. I shall refer to the work of the Resolution Foundation, quoted extensively by the noble Lord, Lord Sikka, which last week published the third and final phase of its report Ending Stagnation and provided us with updated numbers that graphically expose the price that UK households are paying for that economic stagnation. If real pay growth had continued to follow the trend from before the 2008 financial crisis, the average British worker would be £10,700 a year better off—a really significant figure. There are almost 9 million younger Brits who have never worked in an economy that has sustained rising wages. As a consequence of that impact on wages, the UK is now Europe’s most unequal large economy. That used not to be true. Our poorer families are now a staggering 27% worse off than their French and German counterparts. That is a measure we rarely look at, but it is critical. Obviously, when ordinary families are trying to cope with stagnant wages and a cost of living crisis, it is particularly unacceptable for a Government to dress up a rise in taxes as tax cutting.

By 2028-29, the freezing of the national income tax thresholds adds £45 billion a year—not over that time, but a year—to taxpayers’ annual tax bills, offset by the rate cuts we are discussing today only to the tune of £10 billion annually. If this Government were a private company, I suspect that trading standards would have a very dim view of an entity that presented an annual increase in charges of £35 billion as a cut. The public will be none too impressed when they find out the hard way, as I said in the Autumn Statement debate, that a typical earner will pay £400 more next year in tax and NICs after these measures, and a middle-income earner will pay £1,200 more. Like the noble Lord, Lord Sikka, I used that debate to point out the inequality of the distribution of the rate cut, with five times as much going to the top fifth of earners, compared with the bottom fifth. That distribution is a choice. Interestingly, the noble Lord, Lord Dobbs—who is not in his place today, perfectly understandably—described himself in that debate as a struggling self-employed person. When the Government decided that they needed to look most closely at and give most support to the top fifth of earners, perhaps they had the noble Lord in mind.

I note that the NIC rate cuts offer some relief to self-employed workers. This is a group that particularly lost out during Covid. The sector is, frankly, also suffering from HMRC’s harsh and shambolic loan charge regime, which is doing little to stop promoters mis-selling tax products, but is continuing to drive to breakdown and even suicide individuals who got caught up in the loan charge because they followed advice in good faith. To date, as the Minister will know, HMRC has referred 10 suicides to the IOPC, and three more are contested.

We have to change the way we deal with the self-employed sector. I very much hope that the Government will—as they often promise but never actually do—follow through on the 2017 Taylor review, which called for and fashioned principles for the update of working relationships, taking them from the past into today’s world of business. In that, there is new opportunity for the self-employed.

My Lords, the Labour Party supports this Bill, and we welcome the cuts in national insurance that it contains. We have long argued that taxes on working people are too high, and that we want them to be lower.

We have been consistent in this view. We opposed the manifesto-breaking increase in national insurance that the Prime Minister tried to implement last year, when he was Chancellor. When he introduced his 1.25% increase in national insurance contributions for employees and employers—his so-called health and social care levy—we described it at the time as

“a new tax on working people and their jobs”.—[Official Report, Commons, 14/9/21; col 845.]

When it became clear to him that the Labour Party was correct to say that this was the worst possible tax rise at the worst possible time, he attempted a partial U-turn, and then, eventually, the increase in national insurance was rightly reversed.

Unfortunately for working people, this reprieve to their living standards was short-lived, as it was quickly followed by the Government’s disastrous mini-Budget, which crashed the economy and sent interest rates and mortgage rates soaring. Interest rates have now risen 14 times to a 15-year high of 5.25%, while the average two-year fixed-rate mortgage at one point rose from 2.6% to over 6%. As a result, families re-mortgaging since July have seen their mortgage payments rise by an average of £220 per month. Some 1.6 million families have seen their mortgage deals end this year. Next year, a further 1.5 million families will face a similar fate.

According to the Resolution Foundation, this Parliament is now on course to be the first ever in which real household incomes fall. We are now seeing the biggest ever fall in living standards since records began. The cut in national insurance that the Bill contains is not the full story on tax, nor does it represent the reality that many British people now face.

Despite what the Government would like us to believe, and in contrast to the claim the Minister made in her opening speech that the Government are paying back working people, the reality—as the Institute for Fiscal Studies, the Resolution Foundation and the House of Commons Library have all made clear—is that taxes are going up, not down. As the noble Baroness, Lady Kramer, implied, it is important that we are all honest about that point. The truth is that the tax burden will now rise every single year for the next five years, rising to its highest ever level and making this the biggest tax-raising Parliament ever. Indeed, new data published just this week by the OECD showed that the UK’s tax burden has now increased to its highest rate ever on record.

Prior to the Autumn Statement that announced the cut in national insurance we are debating today, the Government had already put in place 25 tax rises amounting to £90 billion and the equivalent of a 10p increase in national insurance. This 2p cut does not remotely compensate for the tax increases already announced. As my noble friend Lord Sikka pointed out, the Resolution Foundation has calculated that, even after this cut to national insurance, households will still be £1,900 worse off.

These cuts to personal taxation are more than eclipsed by increases in taxes that the Government have previously announced. For example, the freezing of national insurance and income tax thresholds for six years is now expected to cost taxpayers £45 billion. This fiscal drag means that nearly 4 million more people will pay income tax and 3 million more people will pay the higher rate. The combined effect is an average tax rise of £1,200 per household.

According to Paul Johnson from the Institute for Fiscal Studies, the cut in national insurance rates

“pales into … insignificance alongside the … increase in personal taxes created by the six year freeze in allowances and thresholds”.

The IFS has calculated that, extraordinarily, almost every single person in the UK liable for income tax or national insurance will now be paying higher taxes overall. As a result, the tax burden will now reach 37.7% of GDP by the end of the forecast period, an increase equivalent to an astonishing £4,300 of additional tax for every household in the country. This is a tax- raising Government.

The actual lived experience of the British people is not that their taxes are going down; it is that their taxes are going up. The reality that working people face is not that they will be better off; it is that they will be worse off. We should all be honest about that fact. We should be honest, too, about the reasons why: taxes are so high in this country because growth is so low. The UK’s growth record over the past 13 years has been poor by international standards. We have languished in the bottom third of OECD countries, with 27 OECD economies growing faster than us since 2010. Over the next two years, no fewer than 177 countries are forecast by the IMF to grow faster than the UK. For this year and next, we will be 35th out of 38 OECD countries for growth.

The latest outturn figures for GDP show that there was no growth at all in the third quarter of this year. In the Autumn Statement, the Office for Budget Responsibility downgraded its forecast for growth in each of the next three years, so that growth in 2024 is now forecast to be just 0.7%—more than half the 1.8% predicted as recently as the Budget in March. The Bank of England’s view is that even that is too optimistic; its latest forecast shows no growth at all in any of the next three years—no growth this year, next year or in 2025.

That is the economic reality faced by the British people—the reality of 13 years of failure. Growth and living standards are down; mortgage rates and taxes are up. The tax burden will now rise every single year for the next five years, rising to its highest ever level and making this the biggest tax-raising Parliament ever, with an average tax rise of £1,200 per household. While the cut to national insurance is welcome, the British people will conclude that it is simply too little, too late.

My Lords, I am enormously grateful to all noble Lords who have taken part in this relatively short debate. As your Lordships might expect, I did not agree with all the points, statistics and bits of data that were shared, and I will obviously have my own, but I will try to stick within my wheelhouse and stay within the realms of national insurance today.

However, I want to comment on the general thrust from the noble Lords, Lord Sikka and Lord Livermore, and the noble Baroness, Lady Kramer. It was just extraordinary. I feel really pleased that everybody has now come round to the Conservatives’ way of thinking that taxes are too high, and we need to think about reducing them and we must do so responsibly. I am grateful for that vindication of the Conservatives’ policy when it comes to personal taxes. We agree that they are too high, but of course many of the tax rises that are forecast to come into place—I absolutely accept that taxes will go up, although this national insurance cut reduces them—are already announced and baked into the figures.

I did not hear many noble Lords recognising the reasons why we needed to put taxes up—

I was very tactful not to point out that the Minister, as with all Conservatives— I think they have probably signed an oath somewhere—did not mention Brexit and the economic damage it has done, which is a fundamental part of all this. In giving the history of the things that have gone wrong, it is best not to lecture the House when the Government are deliberately leaving out one of the key culprits.

My Lords, I definitely was not lecturing the House—far be it from me to do so. However, it would obviously not be a debate without a Liberal Democrat mentioning Brexit.

I am going to move on from that general observation that I am pleased that there is this political groundswell now back behind the Conservatives for lower taxes, which is excellent—

My Lords, I apologise for intervening, but just to back up the Liberal Democrats, it is not just Brexit. As the Minister will know, since 2010, between £450 billion and £1,500 billion of taxes have not been collected due to avoidance, evasion, fraud and error. If only a fraction of that had been collected, the Minister can imagine how the whole country would have been transformed. If the Minister is looking to expand the debate, here is a point to talk about.

The Minister is definitely not looking to expand the debate but is trying to make progress. I hear what the noble Lord says, and if he has read the Autumn Statement, which I am sure he has, he will have seen the announcements made in it about tax avoidance.

Moving on to comments made by noble Lords, I think it is probably not worth rehearsing and rehashing the elements around fiscal drag. Again, I want to put some numbers on record, because there is an opportunity to do so. Thanks to the cut in employee national insurance contributions announced at the Autumn Statement and to above-average increases to starting thresholds since 2010, an average worker in 2024-25 will pay more than £1,000 less in personal taxes than they would otherwise have done. That statement has attracted some interest, and I reassure noble Lords that the calculations underlying this statistic are based on public information, including a published estimate of average earnings. They are robust and could be replicated by an external analyst. This goes back to what I was trying to say about data. Lots of people will do calculations on different bases, but at the end of the day, from the Government’s perspective, we want taxes to come down—this is a start—but of course we will do it only in a responsible manner. However, personal taxes for somebody on an average salary of £35,400 have come down since 2010.

The noble Lord, Lord Sikka, asked about distribution analysis, and the national insurance cuts will of course benefit everybody who pays national insurance. That includes 2.4 million people in Scotland, 1.2 million in Wales, 800,000 in Northern Ireland, et cetera. The latest published HMRC data for 2021 shows that the largest proportion of income tax payers reside in the south-east, followed by London. It will be the case when one has a tax cut that those who pay the largest amount, and the numbers of people who pay tax if they are located in certain areas, are therefore going to see the largest reductions.

However, we have also looked at the impact on women—again, an issue raised by the noble Lord, Lord Sikka. NIC charges apply regardless of personal circumstances or protected characteristics. The equalities impact will reflect the composition of the NIC-paying population. Of course, that feeds into whether we would like women to be paid more. Of course we would. That is why rewarding work will see 28,000 people come into jobs—and I very much hope that they will be well- paid jobs and will be taken up by women.

The noble Lord, Lord Sikka, talked about better-off households. Distribution analysis published at the Autumn Statement shows that a typical household at any income level will see a net benefit in 2023-24 and 2024-25, following government decisions made from the Autumn Statement 2022 onwards. Low-income households will see the largest benefit as a percentage of income. Furthermore, looking across all tax, welfare and spending decisions since the 2019 spending round, the impact of government action continues to be progressive, with the poorest households receiving the largest benefit as a percentage of income in 2024-25. I know that the noble Lord feels that we do not focus on those on the lowest incomes, but he is not correct in that regard.

You cannot eat a percentage of income. Going out and buying a loaf of bread costs you just the same whether you are a high earner or a low earner. So, using the percentage of income comparator to understand the cost of living pressures that people are living under and who is getting the most benefit is not the appropriate measure. If you use the cash number, you realise how much purchasing power arrives for people at the bottom end and how much more purchasing power arrives for people at the top end. That is the appropriate benchmark.

I absolutely accept that the noble Baroness is right to say that you can look at it in a different fashion but, in terms of whether what the Government are doing is progressive, it is fair to say that people on lower incomes are benefiting, as a proportion, to a greater degree. Of course, the Government have intervened when it comes to cost of living. That has been cash and that is not about percentage of income. It is all around our energy price guarantee, increases to the national living wage and looking at the uprating of benefits, which will rise by much more than inflation is forecast to be next year. So there are lots of different factors to take into account and sometimes one can be quite blunt when dealing with a tax cut that is, frankly, going to benefit 29 million people.

The noble Lord, Lord Sikka, asked why national insurance contributions do not apply on unearned income. National insurance contributions are part of the UK social security system, which is based on a long-standing contributory principle centred on paid employment and self-employment. ‘Twas ever thus. Of course, a future Government may make substantial changes to that which would again increase the tax burden—but this Government are content that we will maintain the contributory principle.

I thank the Minister for giving way. I hear what she says, but people who have what the Minister calls unearned income—some people may call it “rentier income”, which is perhaps a clearer expression—can still use the National Health Service. If there was an accident, an ambulance would arrive, even though they had not paid any national insurance. If the need arises, they can still get social care. So why are they not required to pay? They simply are free riders. If they paid, the Government could have made an even bigger cut in national insurance.

This potentially leads on to the next question from the noble Baroness, Lady Primarolo, about the percentage of mixed receipts that goes to the NHS. It is about 20%; 80% comes from elsewhere. Those people who pay taxes on their unearned income will, of course, pay into the general fund.

As the Minister knows, the taxes levied on dividends and capital gains are lower than the taxes on wages. If she wants her point to stand, can she explain why capital gains and dividends are taxed at a lower rate than wages? What is the justification for that?

I suspect that we are now moving into an area of debate where is not appropriate to go today, because there is business still to come in the House; I know that my noble friend is desperately waiting to get up.

I go back to the point made by the noble Baroness, Lady Primarolo. Obviously, the balance of the national insurance fund is monitored closely. The most recent report from the Government Actuary’s Department—GAD—forecast that the fund will be able to self-finance for at least the next five years. But, of course, the Treasury has the ability to top up the NIF from the consolidated fund when needed. Indeed, this has been done in the past—it was routinely done in the 1990s—so it is not right to say that the cut in NICs puts any pressure at all on any payment to the NHS or otherwise; that is set independently from the national insurance fund.

I do not wish to detain the House but, frankly, that is not the question I was asking. I was asking the Minister about something that she has confirmed: 20% of the 100% that the NHS gets comes from the national insurance fund and it is equated to a cash value. If there is less in the national insurance fund, less cash goes to the NHS. The simple question I asked was not about whether the NHS will still get the 100%; it was about whether the 80% will become 81% or 82%. It is quite a techy point and I do not want to delay the House, but it makes quite a difference to the cash that the NHS receives. I was just asking the Minister to confirm and clarify that; I am not seeking to score any points off her.

I am grateful to be able to clarify that it is not set on a percentage basis at all. The amount of money that goes to the NHS is set in actual terms; for example, it is £160 billion in 2023-24 and will be £162.5 billion in 2024-25. It has nothing to do with the percentage of anything.

I will write to the noble Baroness, Lady Kramer, on the Taylor review and everything that she raised. That would probably be the most appropriate thing to do.

For the time being, I am grateful to all noble Lords who have taken part in the debate and I beg to move.

Bill read a second time and committed to a Committee of the Whole House.

My Lords, now that we have concluded Second Reading, Members have a further hour to table amendments to this Bill. Members wishing to table amendments should contact the Public Bill Office. We will resume proceedings on the Bill at the point shown on the annunciator after the Statement and the debate on the overseas electors regulations.