First by-election of the new Parliament

Labour moved the Writ at the start of business yesterday to begin the process for the election of a new Member of Parliament to represent Oldham West and Royton which for 45 years has been represented by the late Michael Meacher. It looks a safe bet for a Labour hold as Mr Meacher had a majority of almost 15,000. Interestingly, the first by-election in the last Parliament was also in Oldham but in the other Oldham constituency, Oldham East and Saddleworth.

Today the main business is the Second Reading of the European Union (Approvals ) Bill which has already been through the House of Lords. It appears a largely technical measure the purpose of which is to approve two draft decisions of the Council of the European Union. Both rely on Article 352 of the Treaty on the Functioning of the European Union, which allows the Union to take action to attain one of the objectives set out in the treaties, provided it has the unanimous support of all member states.The first decision will enable the Former Yugoslav Republic of Macedonia to be granted observer status in the European Union’s Fundamental Rights Agency. The second measure is a decision of the Council enabling the EU tripartite social summit to continue to operate.

This is followed by the final stages of the National Insurance Contributions (Rate Ceilings ) Bill.. The Government announced it would introduce into legislation a tax lock to rule out increases in the main rates of income tax, VAT or National Insurance over the course of this Parliament. The National Insurance Contributions Bill legislates for this, and provides that, for the duration of this Parliament, the rate of Class 1, Class 1A and Class 1B National Insurance contributions (NICs) paid by employees, employers and third parties will not exceed the current rates. The Bill also provides that the Upper Earnings Limit (UEL) should not exceed the Higher Rate Threshold for income tax. 

The main benefit of the legislation will be preventing any increase in Income Tax rates, VAT rates, or individual, employee or employer rates of National Insurance, above the current rates. On 14 July, the Government published the Finance Bill 2015-16. Clauses 1 and 2 provide for the ‘tax lock’ for income tax and VAT. Statutory provisions regarding NI cannot be included in the annual Finance Bill. The National Insurance Contributions Bill was therefore introduced to prevent any increase in the current rates of Class 1 NICs, and any increase in the UEL above the higher rate threshold.

Published by David Nuttall

Business and Political Consultant

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