Shadow culture secretary Stuart Andrew has criticised the government’s “cruel” decision to increase national insurance contributions (NICs) for charities, ahead of the tax rise coming into force next week.
Writing for the Daily Express today, the former civil society minister said: “This reckless and irresponsible jobs tax will have catastrophic consequences for our charities, who provide critical support to individuals who are facing poverty, illness, and injustice.”
Andrew noted umbrella bodies NCVO and ACEVO’s letter to chancellor Rachel Reeves, which received more than 7,000 signatures, estimating a £1.4m cost to the sector.
He criticised the government’s refusal to offer further support for charities in its response, “either not knowing or not caring about the damage it would cause”.
Andrew said that many charities had already begun to cut services and make redundancies while others were bracing themselves for the additional NICs costs.
‘We are committed to protecting charities’
“As a former fundraiser in the charity sector, I know that having to find extra income to cover costs is not something you can do overnight,” he wrote.
“Under the last Conservative government, we provided millions in support for charities during the cost-of-living pressures.
“We are committed to protecting charities, hospices and other key frontline services from the NICs rise and in parliament, we voted to exempt charities from the additional costs of national insurance increases.
“I have seen firsthand the budgets of hospices. They will be pushed to the brink by this huge rise in costs and the last thing charities need is a Jobs Tax which pushes them into the corner.
“As we embark on our new policy renewal programme, we are committed to supporting charities and hospices as they continue their vital work.
“We will fight for the future of our charity sector in this time of uncertainty and hold this disastrous Labour government to account.”
Government: ‘One of the world’s most generous tax regimes’
A government spokesperson said: “We support our charities through one of the world’s most generous tax regimes for the sector which provided £6bn in relief for the sector last year alone, including exemptions from paying business rates.
“This comes on top of doubling the employment allowance to protect the smallest charities and creating a new Civil Society Covenant to usher in a new era of trust and partnership to tackle some of the country’s biggest challenges.”
In her response to ACEVO and NCVO’s letter in November, Reeves said that the government does “recognise the need to protect the smallest businesses and charities”, citing its doubling of the employment allowance as the NICs rise comes into force on 6 April.
On further support to the sector, Reeves said: “The government delivers a number of grant and support programmes which help VCSEs, including the Community Organisations Cost of Living Fund last year and the ongoing Social Enterprise Boost Fund.
“We remain committed to ensuring that the sector is recognised and valued for the crucial support it provides to so many people and look forward to continuing to work together.”
Some 1,500 charities received funding from the Community Organisations Cost of Living Fund, which formed the main part of a £100m package of support for charities announced by former chancellor Jeremy Hunt.
