MPs vote against exempting GP practices from NICs hike

MPs have voted against exempting GP practices from having to pay increased National Insurance contributions (NICs) from April.

Last month, the House of Lords passed an amendment to upcoming NICs legislation which said that specified employers, including those contracted to provide NHS GP services, should only need to contribute 13.8%.

This would freeze their contribution at the amount previously paid in employer NICs rather than the rise to 15% announced in the 2024 Autumn Budget. 

While the Government has already set out exemptions for some employers such as NHS hospital trusts, these do not apply to GP practices and other employers.

Despite the amendment receiving strong majority support in the House of Lords, it was voted down by the House of Commons yesterday.

Exchequer secretary to the Treasury James Murray called on MPs to ‘disagree’ with the amendment in a motion which received 307 votes in favour and 182 votes against.

During the debate, Mr Murray said that ‘direct support’ for NIC increases ‘obviously applies to central Government, local government and public corporations’, but not to GP practices, pharmacies, and social care providers, who are all ‘important independent contractors’.

‘Pressures on social care or GPs, as I have been outlining, are considered in the round in terms of their funding settlements,’ he told MPs.

Mr Murray also emphasised that the Budget measures announced last year will mean the NHS receives ‘an extra £22.6bn over two years’ and he pointed to the recent GP contract boost of £889m which is ‘an essential part’ of what the Budget and NICs increases deliver.

Several MPs spoke out in support of GP practices and other health and care providers, with Liberal Democrat James MacCleary saying that, unlike private businesses, surgeries ‘cannot pass their costs on to their patients’.

He continued: ‘Every extra pound spent on national insurance is a pound less spent on patient care, staffing and appointments. The Government’s failure to exempt them will mean fewer face-to-face consultations and longer waiting times, contrary to the Government’s claimed objectives.’

His party – who introduced the amendment in the Lords – criticised the Government’s decision, calling it a ‘health tax’ on GPs.

Daisy Cooper, the Liberal Democrat Treasury spokesperson, said: ‘Labour MPs today have voted for a health tax on GPs, dentists, pharmacies, hospices and care homes, and it is patients who will pay the price.

‘The Liberal Democrats are proud we have led the fight to exempt health and care providers from this misguided tax hike, and we will not give up now.

‘On April 6th worried social care providers and GP surgeries are going to be hit with bills they simply cannot afford. Rachel Reeves must finally see sense, U-turn on this disastrous policy and exempt health and care providers from this damaging jobs tax.’

The BMA’s GP Committee had previously warned that the increase to NICs as well as the National Living Wage would cost GP practices an extra £180-200m nationally.

However, LMC modelling found GP practices would see an average 4.2% increase to their funding per patient following 2025/26 contract changes, taking into account new costs.