National Insurance Contributions (Reduction in Rates) Bill: HL Bill 25 of 2023–24

The National Insurance Contributions (Reduction in Rates) Bill is a government bill that was introduced in the House of Commons on 23 November 2023. The bill has been fast tracked by the government and it completed all its House of Commons stages on 30 November 2023.

The bill was introduced in the House of Lords on 4 December 2023 and is due to have its second reading and all other stages on 12 December 2023.

The purpose of the bill is to give effect to three changes to national insurance contributions (NICs) announced by the chancellor, Jeremy Hunt, in the autumn statement on 22 November 2023. These were:

• The reduction of the main rate of class 1 employee NICs from 12% to 10%. This would take effect from 6 January 2024.
• The reduction of the main rate of class 4 self-employed NICs from 9% to 8%. This would take effect from 6 April 2024.
• The abolition of class 2 self-employed NICs. This would take effect from 6 April 2024.

During its House of Commons stages the bill received broad cross-party support and it passed without amendment. However, the opposition criticised the government for the wider economic context in which the bill’s measures were being introduced, including the assessment from the Office for Budget Responsibility (OBR) that most of the gains from reducing NICs rates would be counteracted by freezes to both income tax and NICs thresholds.