Yesterday (March 19), MPs rejected an amendment to the law that would have exempted pharmacies from next month’s hike in employer National Insurance contributions (NICs).
A majority of 307 MPs voted against the amendment, with 182 voting in favour.
Read more: BREAKING: MPs reject pharmacy national insurance rise exemption
Among those who voted against exempting pharmacies from the rise were pharmacy minister Stephen Kinnock and both pharmacist MPs – Sadik Al-Hassan and Taiwo Owatemi.
Al-Hassan is the Labour MP for North Somerset and former PillTime superintendent, while Owatemi is the Labour MP for Coventry North West, former chair of the All-Party Pharmacy Group (APPG) and current government whip and Lord Commissioner of the Treasury.
“Robbing Peter to pay Paul”
Speaking in yesterday’s debate, Labour MP for Ealing North James Murray said that the “revenue raised” by the NICs rise “will help to fund public services, including the NHS and other social care providers” and “amendments would put much of that funding at risk”.
“The amendments from the [House of Lords]…do not recognise other policies the government has in place or most seriously undermine the funding this bill seeks to secure,” he said.
Read more: ‘Trying to stop a disaster’: Lords vote to exempt pharmacies from national insurance hike
“To support these amendments is also to support higher borrowing, lower spending or other tax rises,” Murray told MPs, adding that the government has inherited a “£22 billion black hole” and that the bill makes some “difficult but necessary decisions”.
But Liberal Democrat MP for St Albans Daisy Cooper said the amendments were sent by the Lords as they “create a fairer society” and this “should be a driving force in [MPs’] consideration” of them.
She added that the NICs hike is “effectively robbing Peter to pay Paul”.
Read more: ‘Actions speak louder than words’: MPs rally to halt NICs hike
Liberal Democrat MP for Glastonbury and Somerton Sarah Dyke said pharmacies “could be put at risk”, adding that the NICs increase will “increase the pressure on GPs and other services who will also be badly impacted by this decision”.
Conservative MP for Aldridge-Brownhills Wendy Morton told MPs that “Labour broke [its] promise” of not increasing NICs - which was part of its 2024 general election manifesto.
And fellow Conservative MP for Gosport Dame Caroline Dinenage said Labour “should be absolutely ashamed of themselves” as “just four” Labour MPs out of 404 were present in the Commons debate to defend their decision to reject the amendments to the bill.
“Trying to stop a disaster”
The new government’s first budget in October saw Chancellor Rachel Reeves announce that employer NICs would rise in April 2025 by 1.2 percentage points to 15%, while the threshold at which employers start paying them will reduce from £9,100 per year to £5,000.
Last month, the House of Lords voted for pharmacies to be exempt from the hike with a 130 majority, with 305 for and 175 against and Labour members accounting for over 90% of those voting against the amendment.
Read more: Collective action! Pharmacies to cut hours and services from April 1
Liberal Democrat Baroness Kramer said at the time that the Lords “are trying to stop a disaster” and are “not going to sit here while pharmacies basically cut their hours and services”.
Earlier this month, Liberal Democrat MP for North Shropshire Helen Morgan also warned in a House of Commons debate that community pharmacies will be “clobbered by not only the NICs hike, but the increase in business rates, which will affect high street retailers”.
Read more: IPA warns ‘wrecking ball’ budget will cost sector over £125m
And the rise in NICs was this week referenced by the National Pharmacy Association (NPA) amid “a swathe of new costs due to hit pharmacies from the start of next month” such as national living wage and business rates increases.
It urged its 6,000 member pharmacies in England “to start the process from April 1 of reducing opening hours and services, if no new and sufficient funding is delivered” as part of historic collective action.
In November, the Independent Pharmacies Association (IPA) warned that the “overall cost” of the rise in employer NICs and national minimum wage would equate to £12,002 for an average pharmacy per year – totalling more than £125 million for the sector as a whole.