The House of Lords has voted in favour of exempting the health and social care sector from the upcoming National Insurance increase, which is due to take effect in April.
In a significant development, peers supported an amendment to the National Insurance Contributions (Secondary Class 1 Contributions) Bill by 305 votes to 175—a majority of 130. The amendment, proposed by Liberal Democrat peer Baroness Barker, aims to ensure that care providers, NHS GP practices, NHS-commissioned dentists, NHS-commissioned pharmacists, charitable health and care providers, and hospice services will continue to pay their current National Insurance contributions.
Baroness Barker highlighted the financial strain that the increase, combined with the rise in the minimum wage, would place on health and social care providers. She cautioned that these additional costs could threaten the sustainability of many essential services.
She remarked: “The Government has acknowledged the impact on parts of the public sector and introduced some exemptions. However, these exemptions do not extend to all providers, including dentists, pharmacists, care services, and hospices—organisations that are integral to both the health service and wider social care provision.”
Baroness Barker also pointed out that social care represents a substantial proportion of local authority budgets, and councils have limited resources to absorb these financial pressures.
In a further challenge to the Government, the House of Lords also voted for a more detailed assessment of the impact of the National Insurance increase. Peers supported a Conservative-led amendment by 182 votes to 144, requiring the Government to review and report on the effects of the rise on specific sectors within six months.
The decision by the Lords reflects ongoing concerns within the sector about the financial sustainability of care services and the potential knock-on effects on the NHS and local authority-funded care. Stakeholders in health and social care will now await the Government’s response to these votes and any potential changes to policy as a result of these legislative developments.
In response, Professor Martin Green OBE, Chief Executive of Care England, said:
“This is a huge moment for the social care sector and a testament to the relentless campaigning from care providers, local trade associations, national bodies, the Care Provider Alliance, and Providers Unite. For too long, social care has been overlooked, but yesterday’s vote proves that when we come together, our voices can no longer be ignored. This exemption would be a vital lifeline for thousands of providers already on the brink, and will recognise the essential role social care plays in our society.
But let me be clear – this fight is not over. The Bill now returns to the House of Commons, and it is up to the Secretary of State, the Prime Minister, and every MP to decide whether they will stand with social care or allow a sector that millions rely on to collapse under the weight of unsustainable costs. They must be on the right side of history and act now to protect the future of care in this country.”
Care England urges MPs to uphold the Lords’ exemption and demonstrate their commitment to a sustainable social care system. The Government must act decisively to shield the sector from further financial strain and ensure providers can continue delivering the care that people desperately need.
