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Mr. Leigh: This has the makings of an interesting debate, and we can be justified in looking forward to the Minister's reply. It will enable the Government to clarify their attitude to the way in which employers should provide for their employees. What sort of tax and national insurance system do we want to create?
To be fair to the Government, some argue that the tax system should provide no allowances. They argue that it should be entirely neutral, and that the Government should have no role in trying to persuade people to adopt particular modes of behaviour. That, they say, is why the married persons allowance and the mortgage allowance should be swept away. That is a point of view, although it is not one with which I agree, and it is relevant to our debate about national insurance contributions. The Government could say, "We are not interested in what provision employers make for their employees. It is not our business whether the provision involved relates to small matters such as Christmas parties or big matters such as health care or pensions."
An employer may wish to provide not just a perk--something enabling him to avoid paying tax--but something that he considers to be essential to himself and his employee. The Government could say, "Whatever extra provision the employer makes for his employee, we are justified in taxing it." Again, that is not a point of view with which I agree, but the issue is now so confused that the Government should explain their position.
Doing the right thing for society means saving for the future, for pensions, for health care that the NHS may not be able to deliver and for many other purposes. We can persuade people to do that only if we envisage a partnership between employee and employer. We are talking about good employers, not about fly-by-nights who try to do everything through sub-contractors, and do not care about their employees. When employers make provision for employees, we should welcome that, rather than saying, "This is another opportunity for us to raise £220 million in tax. The public will not notice, because it is buried deep in the Red Book. No employees will be affected. It will be a tax on employers, and they will not complain too much."
I understand where the Government are coming from, in terms of trying to raise money. What I cannot understand is the mixed message that they are sending to employers and employees about how good employment practices can be created. My hon. Friends are making the powerful point that we cannot possibly catch up with countries such as Germany and France in terms of health care provision for all employees--all people--simply by raising more taxes to pay for the national health service.
If we are to improve health care for everyone, we must encourage private sector involvement. At present, people--many on marginal incomes--are given no encouragement to provide for their own private health care: indeed, they are given positive disincentives. What harm can it do to tell good employers that it is a good idea for them to help their employees with private health insurance, if they have reason for doing so?
Mr. Bercow:
Although many large companies already provide such assistance in the form of corporate medical insurance schemes, should we not do more to encourage small businesses to provide the same level of support, given that they constitute 99.6 per cent. of firms in Britain? They employ about 50 per cent. of the private sector work force, and generate two fifths of our national output. Should not Ministers be far more sensitive to their needs?
Mr. Leigh:
Of course Ministers should be sensitive to the needs of small employers. At present, arrangements involving private health insurance are very much the prerogative of larger, wealthier companies. As my hon. Friend said, if we are to make any progress on the matter, we must try to find ways of encouraging smaller employers to make such provision.
There is, of course, nothing wrong with employers providing child care. However, I cannot understand why the Government are putting all their efforts and resources into child care. For Ministers, child care is a totem of their political correctness. Child care is the one thing that they are going to achieve--and I have no argument with that. If a good employer wants to help his employees with child care, I would welcome it. However, I cannot understand why the Government are promoting that type of social insurance--which in itself is an excellent thing to do--while ignoring all other concepts of social insurance.
Child care is important, but making provision for one's old age, health and even travel are equally important. I therefore hope that Ministers will not simply dismiss this group of amendments, but deal with the arguments. Surely the House is entitled at the very least to a clear manifestation of the philosophy behind the Government's objectives. Are they simply trying to raise money, or are they trying to send clear moral messages to employees and employers about how they should try to create a better society? We look forward to hearing the Minister's speech.
Mr. Howard Flight (Arundel and South Downs):
All that I wish to add to the points that have already been made in the debate is that Governments of any party never consider the knock-on effects of this type of action.
The old sectors of our economy are hard pressed--they are suffering from major competition and examining ways of saving money. What will be the consequence of the Government's proposed new stealth tax? The consequence of the Government's proposal to subject provision of child care, health care and other services to national insurance is that the old companies will cease to provide those benefits to their staff. I say to the people of Britain, "Just remember: when you lose your health care, you have this Government to thank for it."
What about the new economy? Cisco says, "You just try assessing national insurance contributions on our share schemes. If you do, we'll move our research and development business overseas." The new economy is much rougher and tougher, and it probably will not even begin providing health care or other benefits. Nevertheless, the new economy will not simply lie down and accept this type of stealth tax.
Therefore--both on the specific issues of health care and child care, and on the wider issue of this wretched, bamboozling national insurance stealth tax--the Government are failing to take account of the impact of their actions on ordinary British citizens and on the quality of the total package that they receive from their employers.
The Minister of State, Department of Social Security (Mr. Jeff Rooker):
I shall do my best to respond as briefly as possible to this group of amendments. I should like, first, to deal with the stealth tax bit of Opposition Members' speeches. Those hon. Members are simply playing around--and destroying the English language on an unparalleled scale--with such nonsense.
I am holding the regulatory impact assessment of the Child Support, Pensions and Social Security Bill, which was published last year, when the Bill was published, and is available free of charge. It contains 10 pages explaining the regulatory impact of the Bill on national insurance contributions. Some stealth tax! I also have the Inland Revenue's document on "Class 1A National Insurance Contributions on Benefits in Kind", which, in draft, was sent to more than 1 million companies and employers. Some stealth tax! It is absolute nonsense to say that we are making proposals that people do not know about.
Mr. Quentin Davies:
Will the Minister give way?
Mr. Rooker:
I will not give way now.
We ask the House to disagree with both amendments. The national insurance provisions in the Bill are a step towards the alignment of tax and national insurance benefits. They are part of a package for implementing the recommendations in Martin Taylor's report "The Modernisation of Britain's Tax and Benefit System".
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