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Mr. Christopher Chope (Christchurch): What did the Secretary of State say to the chairman of BMW on 22 December?
Mr. Dennis Skinner (Bolsover): "Good morning"?
Mr. Byers: I did not say "Good morning"--or "Guten Morgen" for that matter. I said that the grant aid would be subject to an investigation that would take four to five months; he replied that that was disappointing and that he would have to report it to his board. The conversation was all about investing in the R30 model, which is the new investment that BMW had planned for the Longbridge site.
It is interesting that, after our conversation, the chairman set up a team at BMW that worked with my Department to make a submission to the European Commission in support of the European aid; it was submitted on 24 February. Most important, the company continued its investment in the Mini: I believe that members of the Select Committee who visited Longbridge last week saw that, until a few weeks ago, the Mini assembly line was being installed at Longbridge, and it remains there. Those are clear indications that BMW was committed to Longbridge until, as Professor Samann said last week, 1 to 16 March this year, when the decision was taken to pull out.
Points of Order
4.22 pm
Mr. John Bercow (Buckingham): On a point of order, Madam Speaker. I seek your guidance. Have you received a request from the Secretary of State for Education and Employment to make a statement about the future of grammar schools? There has apparently been a change of heart on the part of the Government. On 8 December, during an Adjournment debate in Westminster Hall, the Minister for School Standards clearly told me and other right hon. and hon. Members, at column 265WH, that she had no intention of being dragged into the trap of stating her personal views on the future of grammar schools. However, over the weekend, we have received news that the Secretary of State has provided moral succour and personal encouragement to the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Stretford and Urmston (Ms Hughes), in campaigning for a grammar school ballot in Trafford. My question is simple: if the Government's policy has changed and Ministers now want to work hand in glove with educational vandals in that respect, should we not be informed of that in the House and given the opportunity to subject the Secretary of State to proper scrutiny?
Madam Speaker: I have not been informed of such a request, nor do I believe that the Secretary of State is seeking to make a statement on that issue. May I give the hon. Member some guidance? If he raises points of order in future, it will be better if he is brisk about them and comes immediately to the point. They will then be more appreciated by the occupant of the Chair and by the entire House.
Mr. Tam Dalyell (Linlithgow): On a point of order, Madam Speaker. Over the weekend, there have been a number of reports, some of them somewhat garbled, that guidelines for the use of NATO and UN forces in Kosovo have come into the hands of those whom they ought not to have reached. To clarify the matter and for the sake of the whole situation in Kosovo, not least that of UN forces, has there been a request to make a statement from Ministers at either the Ministry of Defence or the Foreign and Commonwealth Office?
Madam Speaker: I have to tell the hon. Gentleman that I have received no indication that anyone from the Ministry of Defence seeks to make a statement on that issue. I direct him to the use of parliamentary questions, with which he is very familiar.
Orders of the Day
Child Support, Pensions and Social Security Bill
[2nd Allotted Day]
Mr. David Willetts (Havant): I beg to move amendment No. 62, in page 68, line 37, at end insert--
'( ) Nothing in this section shall apply to any childcare provision by the employer, which shall be exempt from Class 1A National Insurance contributions.'.
Madam Speaker: With this it will be convenient to discuss amendment No. 63, in page 68, line 37, at end insert--
'( ) Nothing in this section shall apply to any healthcare provision by the employer, which shall be exempt from Class 1A National Insurance contributions.'.
Mr. Willetts: Clause 69 is the stealth tax clause. It is the clause that imposes employers national insurance contributions on a range of benefits in kind, from Christmas parties to rape alarms. Its purpose is to raise £225 million of extra revenue without the Government being caught out by anybody spotting what they are up to. The clause is where the damage is done.
We thought from the exchanges that we have already had with Ministers that the Government were arguing that everything that bore income tax as a benefit in kind should also bear employers national insurance contributions. That was very much the tenor of the Minister of State's remarks in Committee. He said:
The problem for the Minister is that the Chancellor of the Exchequer has knocked that argument away in his Budget statement. The right hon. Gentleman proudly announced that when it comes to child care, although that is taxable as a benefit in kind, it will not be subject to national insurance contributions for the employer. Paragraph 4.47 is entitled "Encouraging employers to provide childcare." It states:
That has an unfortunate consequence for the Minister of State. It leaves the ingenious doctrine that he formulated in Committee looking rather threadbare. He cannot say that he must impose national insurance contributions on all these items because they are taxable, because the Chancellor has taken credit for doing exactly the opposite. He has chosen something that will bear tax but does not have to bear national insurance contributions.
Amendment No. 62 takes the Chancellor at his word. It would deliver what the right hon. Gentleman was talking about in his Budget statement and would exempt child care from employers national insurance contributions. Perhaps this is the triumph of optimism over experience, but we rather hope that the Government will accept the amendment. It is absolutely in line with what the Chancellor said in the Budget. It would be a challenge even to the Minister of State's ingenuity to work out why he should whip his right hon. and hon. Friends to vote against an amendment that merely implements one of the Chancellor's announcements.
Mr. Edward Leigh (Gainsborough):
Perhaps I can help my hon. Friend to understand why the Government may not want to accept the amendment. If the provision is on the statute book, it will be in tablets of stone and they will be committed to it, whereas if it is not, the Chancellor can always change his mind in future.
Mr. Willetts:
My hon. Friend makes an ingenious suggestion. I hope that he is not right, but he may be. We shall be interested to see what grounds, if any, the Minister offers for not accepting the amendment.
Mr. Steve Webb (Northavon):
I intervene on a point of clarification. We are listening to the debate with genuine interest. The amendment refers to child care. Is that a reference only to employer workplace-provided child care? Does it include vouchers? What comes within the scope of the amendment?
Mr. Willetts:
I would be happy to accept the definition that the Chancellor offered in the Red Book. If the Minister offered a revised text of the amendment so that it exactly followed the lines of the Red Book, I would be happy with that. The Red Book states:
Amendment No. 62 would merely implement through the Bill what the Chancellor said that he wanted to do in the Budget. We know from the fascinating exchanges between my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) and the Minister in Committee that changes to national insurance contribution rates may be better implemented in social security legislation than in Finance Bill measures.
If the Government do not do so now, it is not clear that they will be able to do so in the Finance Bill, so they may have to wait for some other social security legislation. Given that we want to get on with the policy, I do not see why the Minister would not choose to use the vehicle conveniently before us, so I hope that he will accept amendment No. 62.
Amendment No. 63 applies the same philosophy to payments for insurance for medical care. If the Government recognise that employers NICs do not have to be applied to every taxable benefit, and if they proudly make a virtue of exempting child care from employers NICs, our view is that exactly the same arguments apply to health care and medical insurance.
The trigger for the change is the taxation of the benefit in kind, not the other way round. The national insurance does not cause the tax to be paid; the tax causes the national insurance to be paid.--[Official Report, Standing Committee A, 2 March 2000; c. 675.]
The Minister of State was formulating what we could flatteringly regard as the Rooker doctrine. In effect, he was saying, "If there is a tax liability, there should be a national insurance liability as well." We could understand that doctrine. We might not agree with it, but at least it was coherent and consistent.
To encourage employers to help employees with childcare, all provision in kind will remain exempt from employer class 1A national insurance contributions when these are extended to other employee benefits from April 2000.
3 Apr 2000 : Column 645
The Chancellor has therefore made it clear that it is possible for a benefit in kind to bear tax and that it does not need automatically to bear employers national insurance contributions as well.
4.30 pm
This employer NICs exemption will apply to direct provision, childcare vouchers and payments under contracts between employers and third party providers.
We would be happy with a provision that exactly matched what the Chancellor said. If any change in the drafting were needed to clarify the amendment, we would welcome that.
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