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MPs have voted down a Lords amendment to the National Insurance bill that would have exempted pharmacies from having to pay higher rates from April 1. 

Following a House of Commons debate yesterday (March 19), parliamentarians voted by 307 to 182 to defeat the amendment, which was proposed by Liberal Democrat peer Elizabeth Barker in February and voted through in the House of Lords. 

Labour MPs rejected the amendment resoundingly, with Conservative MPs, Liberals and small parties all having supported it. The debate also saw other amendments to chancellor Rachel Reeves’ national insurance bill voted down. 

Baroness Barker’s amendment sought to exempt pharmacies and other providers such as GPs and care homes from the 1.2 per cent hike and lower eligibility threshold to be introduced in the financial year beginning in April. 

But Labour’s exchequer secretary to the treasury, James Murray, told parliament: “Many of the amendments from the other place put at risk the funding that the [National Insurance Contributions Bill] seeks to raise, so let me be absolutely clear: to support the amendments is also to support higher borrowing, lower spending or other tax rises. With that in mind, I now turn to the first group of Lords amendments.”

After MPs from other parties raised concerns around the impact the new national insurance arrangements will have on care providers – community pharmacy has been estimated as taking a potential £50m hit annually – Mr Murray said: “Primary care providers who are independent contractors will not receive the direct support that the Government provide to Departments and other public sector employers. 

“The pressures that those providers face are considered in the round before funding is provided to them.”

Of the ongoing pharmacy contract negotiations, he said: “The final funding settlement will be announced in the usual way, following the consultation.”

Liberal Democrat MP for Glastonbury and Somerton Sarah Dyke said: “The combined effect of changes to the national insurance contributions and the national living wage could add an extra £25,000 to each pharmacy in rural Somerset, affecting their viability.

“Given the rate of pharmacy closures in Glastonbury and Somerton is nearly double the national average, my constituents will be hard hit by this tax hike.”

Company Chemists’ Association chief executive Malcolm Harrison said: "We are obviously disappointed with the outcome of this vote. 

“Pharmacy businesses earn as much as 90-95 per cent of their income from delivering NHS care and services through the community pharmacy contractual framework (CPCF). 

“Wes Streeting has confirmed that the community pharmacy contractual agreements for 2024/25 & 2025/26 are in the ‘very final stages.’ 

“We can only hope that the additional financial strain the increased Employers National Insurance Contributions will place on pharmacies will be recognised in any settlement reached.”