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Mr. Bercow: No, I will not give way, and I make that clear beyond doubt. I always enjoying the inquisition of the hon. Gentleman, but focusing on the specific costs of a scheme that has not yet been introduced and for which approval from the Secretary of State has not yet been sought let alone provided is a trifle illusory on the hon. Gentleman's part. Depending on one's preference, the extremely detailed interest that he takes in the subject is either a tribute to his parliamentarianism or a commentary on what a sad anorak he is. I do not know the answer to that, but the Committee will form its view on the dilemma that I have just unveiled.
Mr. Bercow: I admire the hon. Gentleman's diligence and I am impressed by the exercise that he is giving to his knee muscles, but I wish to make progress. There are other amendments to consider and other right hon. and hon. Members might wish to speak if any time is left. Massively though I enjoy my periodic skirmishes with the hon. Member for Bassetlaw, we should not be so self-indulgent as to imagine that the House of Commons consists of the hon. Members for Bassetlaw and for Buckingham alone. The hon. Gentleman must not forget constituencies beginning with the letter A—or indeed those beginning with the letters C to Z.
The Government's proposal is clearly a tax on jobs and an attack on the most vulnerable members of the business community. My hon. Friends and I have focused much in recent times on our championship of the vulnerable. The crusading theme of the leadership of the Conservative party by my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) is the absolute determination that a one nation Tory party should identify with, and champion the cause of, the vulnerable, the oppressed, the downtrodden and those who have been consistently let down and betrayed by the Government—who have been treated with indifference, disdain and contempt by a Government who fondly imagine that everyone in business and employing others is somehow wealthy and undeserving of the concern of a modern Government.
Our position is this. We are arguing for the relief for unincorporated businesses proposed in amendments Nos. 7 and 9 because 3 million self-employed business people have average incomes that are significantly lower than the average salaries of employees, yet the Bill effectively forces them to pay the NICs increase twice. We are trying to offer some relief and succour to the self-employed by exempting small unincorporated businesses—defined in the amendments as those with a business turnover of less than £1 million—from the increase in employers' NICs. That would help the self-employed—market traders, household decorators, builders, retailers and a plethora of others—to employ more staff, to keep the staff that they have, and to stay afloat despite the competitive pressures and Government imposts that rain down upon them. My hon. Friends and I are concerned about those people because we know what tough times they face and how difficult the climate is.
I remind Labour Members that our arguments enjoy the support of an organisation that toils effectively and creditably on behalf of the self-employed—the Federation of Small Businesses—and refer them to the comments of John Walker, its policy chairman, about the increased national insurance contributions that are expected from the self-employed.
Mr. Pound: The policy chairman?
Mr. Bercow: Yes, the hon. Gentleman will find that that is accurate. I know that—I would have a problem with my short-term memory if I did not—because I met the good Mr. Walker this morning. He explained to me, eloquently and in detail, the damaging effects of the Government's policy and the helpfulness of the amendments in offering relief to benighted businesses the length and breadth of the land.
- "It is a tragedy that the Chancellor has decided that the self employed will also pay higher National Insurance Contributions. The average income from self employment is just £13,890 compared to an average income from employment of £21,842 per annum. This undermines any attempts the Chancellor has made to help the low paid."
Mr. Hendrick: It is kind of the hon. Gentleman to give way to me again. Does he agree that the figure of around £13,000 that he quoted is most likely to be the amount that many self-employed people are advised to pay themselves by accountants who look after their best interests, especially as regards income tax?
Mr. Bercow: That is an interesting intervention, and I am sure that the hon. Gentleman will want to develop the point further. It is probably relevant, but it does not have a great impact on the thrust of the amendments.
This morning, I visited a business that would benefit from the amendments—the appropriately named Buckingham Coffee Lounge. It is appropriately named not only because it is near to Buckingham gate—it is situated at 19-21 Palace street, SW1, a short canter from the Palace of Westminster—but because I visited it as the interested Member of Parliament for Buckingham as well as in my capacity as a Treasury spokesman. I met Mr. Jose Pose-Silva, who is a member of the Federation of Small Businesses. He explained that the impact of the Government's NIC increase on an unincorporated business such as his will be to raise costs by about £500 a year. He faces paying £500 a year extra unless the Government are prepared to provide some relief. That is a regrettable state of affairs, and I should like it to be changed.
Mr. Mark Field (Cities of London and Westminster): My hon. Friend may be feeling some trepidation about having visited a business in my constituency without my consent. I hope that he took advantage of all that the Buckingham Coffee Lounge could give him not only in economic matters but in relation to its no doubt excellent products.
Is not the real concern that the measure will force many businesses that are happy to remain small and flexible as unincorporated businesses to incorporate in order to avoid such punitive taxes? Does not that go against the alleged highbrow pro-enterprise instincts of the Government? Under the current arrangements, companies can choose to avoid national insurance contributions by paying in the form of dividends instead of salaries. This is an absurd measure that will bring in no additional revenue to the Treasury.
Mr. Bercow: I am obliged to my hon. Friend for providing that welcome and timely in-flight refuelling. I hope that he accepts my personal apology for having failed to inform him of my intended visit in advance, in accordance with parliamentary convention. I am grovelling to him, and I hope that he will excuse me.
As always, my hon. Friend makes a compelling point. The Buckingham Coffee Lounge is a small unincorporated business that is struggling to make its way, providing a decent service and trying to prosper. As such, it should be helped, not hindered, by Government. The best way to do so is to provide it with better tax treatment than it presently enjoys. Labour Members should go to the Buckingham Coffee Lounge. It provides an excellent service, and the gentleman who runs it would benefit from
our policies and suffer from theirs. If they do not want to support policies that would help it, they should at least have the decency to patronise it.Amendments Nos. 12 and 13 are designed to help personal service companies. Hon. Members will be familiar with the lengthy and detailed debates about IR35 that we enjoyed—if enjoyed be the word—during the previous Parliament.
Mr. Bercow: I am disappointed that the hon. Gentleman's reaction to my reference to IR35 is to say, in an extremely distasteful and impolite fashion, "Oh God!" because these matters are of the gravest concern to many thousands of small independent contractors who have been hammered by this Administration. There may not be many such businesses in the hon. Gentleman's constituency, but if that is his attitude to them, I can only say that I have a more accommodating and respectful attitude to the businesses of Buckingham than he has to those of Ealing, North.
Mr. Pound: I was not speaking from any blasphemous origins, but merely out of deep regret and sadness. I was calling on the deity to intervene and redirect the hon. and bumptious Member for Buckingham (Mr. Bercow) back to the subject under discussion because his tour d'horizon of every health care provider in Europe and every coffee house in Westminster is exhausting the legendary patience of hon. Members.
7 pm
Mr. Bercow: The hon. Gentleman must speak for himself. I happen to think that the impact of increased national insurance contributions is important and will be damaging. I am concerned that people who provide health care packages for their employees, people whose businesses are unincorporated and, indeed, people who are involved in personal service companies should be offered a ray of light at the end of the tunnel. The fact that the hon. Gentleman is prepared to compound and exacerbate the depredations that they have suffered from five years of a Labour Government, with further imposts contained in the Bill, does not surprise or impress me. Like my hon. Friends, I want to ease the plight of vulnerable businesses that create the wealth that the hon. Gentleman and his colleagues have an insatiable and legendary appetite to spend. I want those companies to have some hope.
We are not proposing to remove IR35. That would not be within the scope of the Bill and would not be permitted. The Professional Contractors Group is principally and legitimately concerned with that agenda. However, we are proposing to provide relief on the increase in national insurance contributions to benefit personal service companies. That is sensible. The amendments would exempt individuals who are involved in personal service companies from the increase in employers' NICs. They would still pay increased NICs as employees, but would not be penalised twice. That is fair, decent, right, proper and, if we persuade Labour Members to support us in the Lobby, will be effective.
Let us be clear about what will happen to personal service companies if they are not given the relief that we advocate: they will face big increases in costs. The cost
of the Budget changes to a personal service company with an annual income of £100,000 will be £1,865. That is a big deal. It is an important subject and should not exhaust the self-proclaimed legendary patience of the hon. Member for Ealing, North (Mr. Pound) or any other hon. Member. That is what we are here to debate. I look forward to hearing his well-informed, erudite and scintillating contribution.Our amendments are good. We intend to press them to a vote. We look forward to hearing whether anyone from another political party supports them. I commend them to the Committee.
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