Agenda and minutes

Report of the Assistant Director Resources

Report of the Group Director of Services

In increasing National Insurance Contributions (NIC), the government will be funding social care reforms at the cost of the poorest and the youngest in our community.  Younger workers and households relying on welfare will be hardest hit by this tax increase.

The increase in NIC contributions could dissuade local companies from hiring people on a permanent basis due to higher employee NIC payment, leaving Darlington workers faced with more unstable working conditions.

Youth unemployment is particularly high in Darlington (11.7% for 20-24 year olds compared to a national average of 7.7%) and the Tees Valley already, raising NIC is likely to exacerbate this problem. On top of this, the average 25-year-old, lucky enough to find work, will be paying an extra £12,600 over their working lives from the NIC increase. 

The Joseph Rowntree Foundation estimates that two million families on low incomes who face imminent cuts to benefits will have to pay £100 more in NIC annually.

This extra cost will have a devastating effect on over 10,000 Darlington families who are already facing an historic £1,040 cut to their annual incomes when Universal Credit and Working Tax Credit are reduced on 6th October 2021.

The TUC estimates that 2.3 million workers, many of which are key worker households, will be worse off as a result of government plans to cut Universal Credit. Many of those on Universal Credit (40% of claimants) are already in work. Many thousands of families in Darlington will be affected by these hard-hitting changes to benefits and tax.

This Council resolves that the double blow of increasing National Insurance and reducing the £20 uplift for those on Universal Credit could have a devastating effect on families in Darlington and around the country, already struggling to make ends meet.

This Council agrees to:

a.       Call on government to rethink these plans as a matter of urgency.

b.       Call on MPs Peter Gibson (representing Darlington) and Paul Howell (representing Sedgefield and parts of Darlington) to explain their rationalisation for supporting the NI rise and the cut to the £20 uplift to Universal Credit both of which will have devastating economic consequences for many thousands of working and out of work people in Darlington.

c.       Call on the Economy and Resources Scrutiny Committee to look at the impact of the NI increase and the cut to the £20 uplift on Universal Credit on Darlington’s people and economy.