Summary of the National Insurance Contributions Bill
In his Budget speech on 20 March 2013 the Chancellor, George Osborne, announced the introduction of a new Employment Allowance: from April 2014 businesses, charities and community sports clubs would be entitled to claim up to £2,000 from their annual payment of secondary Class 1 National Insurance contributions (NICs). Class 1 NICs are paid by both employees and employers on the employee’s earnings.
The employee’s share is known as the primary contribution, the employer’s as the secondary contribution. Employers are liable to pay secondary Class 1 NICs at 13.8% on all employee earnings above the secondary threshold, set at £148 a week. This tax cut is estimated to cost £1.26 billion in 2014/15, rising to £1.73 billion by 2017/18.
The main purpose of the National Insurance Contributions Bill 2013-14 is to implement the new allowance. The Bill also contains a number of miscellaneous measures announced in Budget 2013 relating to the scope of NICs.
Progress of the Bill
This Government Bill was presented to Parliament on 14 October 2013. This is known as the first reading and there was no debate on the Bill at this stage.
Keep up to date with all the proceedings and documentation, including amendment papers, on the National Insurance Contributions Bill and find out how a bill becomes an Act of Parliament.
House of Commons Library analysis
The House of Commons Library produces briefing papers to inform MPs and their staff of key issues. The papers contain factual information and a range of opinions on each subject, and aim to be politically impartial.
The Library has published a briefing paper for second reading.
What happens at second reading?
At second reading the House debates the whole principle of the bill. It usually takes place no sooner than two weekends after first reading.
The Member in charge or the Minister moves the motion 'that the bill be now read a second time'. MPs then debate the bill.
At the end of the debate the Speaker determines whether there are any objections to the motion being debated and asks for the Ayes and Noes.
Members voice their opinion, and if no objections are made, the bill passes second reading without a vote. If the Speaker believes Members have voiced disagreement, a division is called and a vote taken.
What happens after second reading?
If the motion at second reading is agreed to, the Bill will go to a Public Bill Committee for consideration.
If the Bill passes second reading, and the programme motion is agreed, the Bill will progress to a Public Bill Committee which will conclude by 28 November 2013.
The programme motion would also schedule the report and third reading stages to take place over one day. If the carry over motion is agreed the Bill will be resumed in the next session of Parliament if not previously concluded in this session.
Watching proceedings from the public gallery
UK residents and overseas visitors can watch proceedings in the House of Commons by visiting the public gallery.
This article was produced by the Commons Digital Outreach Team. Follow the @HouseofCommons on Twitter for updates on the UK House of Commons Chamber.