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Our survey of the history of National Insurance since Beveridge has led us to conclude that the National Insurance scheme has been undermined, both directly as a result of successive governments' policies and indirectly as a result of economic and social change. (Paragraph 32)
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| (b) | We have concluded that there is a fundamental distinction in origin and purpose between benefits which people have earned on the basis of their contributions to cover identified risks, and benefits paid by the state to people on low incomes. (Paragraph 72)
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| (c) | Having examined systems of means-testing in some detail, we conclude that some answers to the criticisms of means-testing are possible but that there are structural reasons inherent in means-testing which run the risk of undermining key objectives of the present Government of tackling poverty, making work pay and equipping people to take control of their lives. (Paragraph 107)
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| (d) | We agree with the Social Security Advisory Committee, who when they looked at this issue concluded:
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| "In the fields of incapacity, disability and unemployment, we see little scope for developing private provision to an extent which would impact on state benefits. There is clearly a market for private insurance in these fields and it will doubtless continue to develop, as it has done in recent years to meet new needs. However, we believe that the state should remain the major provider of benefits for long-term sickness, disability and unemployment. The universal coverage of the state scheme is its great virtue and is essential for the protection of the most vulnerable who might find private cover difficult to afford or even to obtain, if they represented a high risk." (Paragraph 111)
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| (e) | We consider that a compulsory rate of saving for pensions may be essential to ensure that everyone is helped to make proper provision for their old age. This is particularly important for those on modest incomes who face a number of competing financial demands and where making provision for old age will not always receive the priority it deserves. (Paragraph 119)
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| (f) | We conclude that a wholly means-tested benefits system would be cheaper, but would have an unacceptably large number of losers, would have severe consequences on work and savings incentives, and would be a bureaucratic nightmare leading to high error rates and fraud. (Paragraph 129)
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| (g) | We are doubtful of the willingness of people at the present time to pay contributions at the level necessary to fund Mr Field's proposals for a New Stakeholder Pension. (Paragraph 135)
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| (h) | We hope it may be possible for the Department of Social Security to consider whether it would be worthwhile to produce an analysis to show the impact on means-tested benefits and the likely financial implications which would result from the abolition of contribution conditions for National Insurance benefits. (Paragraph 139)
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| (i) | We have concluded that social security has a wider role than simply providing a safety net for the poor. Tackling poverty is a key goal and means-tested assistance such as the Minimum Income Guarantee and Working Families Tax Credit are important in providing extra money. But tackling poverty can not be the only objective of a social security system in today's society; it must have a wider role in tackling inequality and underpinning individuals' steps towards independence and responsibility and, as social insurance, should help protect individuals against the adverse consequences, including a drift into poverty, as a result of unexpected life events such as illness or injury. (Paragraph 140)
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| (j) | We have concluded that, unless there is a significant change of policy, there is likely to be a growing surplus in the National Insurance Fund as a result of benefits being linked to prices, and contribution income, based on earnings, rising at a faster rate. However, we agree with the Secretary of State that any use of the surplus must be sustainable in the long term. (Paragraph 142)
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| (k) | The Government Actuary's figures show that, in order to pay for earnings uprated benefits, the combined contribution rate for employers and employees would have to rise by 3.2 percentage points by 2020-21 and by 7.6 percentage points by 2060. In the context of real earnings growth, we recommend that the Government should consider this as one option for funding improvements to benefits. (Paragraph 143)
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| (l) | We recommend that the Department of Social Security should work with the Department for Education and Employment and the Qualifications and Curriculum Authority to develop appropriate guidance for schools to include an understanding of National Insurance in the citizenship curriculum. (Paragraph 144).
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| (m) | We recommend that eligibility for Incapacity Benefit, Jobseeker's Allowance and the basic state pension should be extended to people earning £30 or more a week. (Paragraph 145)
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| (n) | In order to assist low paid workers to enter the 'zero rate band' for National Insurance contributions, we recommend that the lower edge of the zero rate band be frozen in cash terms, thus allowing inflation gradually to raise the number and proportion of workers entitled to National Insurance Benefits. (Paragraph 146)
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| (o) | We recommend that the Government give serious consideration to using the surplus in the National Insurance Fund to pay for a non means-tested benefit for carers of disabled people paid at the rate of Incapacity Benefit. (Paragraph 147)
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