PROCEEDINGS OF THE COMMITTEE RELATING
TO THE REPORT
WEDNESDAY 17 MAY 2000
Members present:
Mr Archy Kirkwood, in the Chair
| Ms Karen Buck | Dr Doug Naysmith
|
| Mr David Crausby | Mr Laurence Robertson
|
| Mr Andrew Dismore | Mr Desmond Swayne
|
| Mrs Joan Humble | Mr Gareth Thomas
|
| Mr Edward Leigh |
|
The Committee deliberated.
Draft Report, (The Contributory Principle), proposed
by the Chairman brought up and read.
Ordered, That the report
be read a second time, paragraph by paragraph.
Paragraph 1 read, amended and agreed to.
Paragraphs 2 to 21, read and agreed to.
Paragraph 22 read, amended and agreed to.
Paragraphs 23 to 32 read and agreed to.
Paragraphs 33 and 34 read, amended and agreed to.
Paragraphs 35 to 39 read and agreed to.
Paragraph 40 read, amended and agreed to.
Paragraphs 41 to 71 read and agreed to.
Paragraph 72 read, amended and agreed to.
Paragraphs 73 and 74 read and agreed to.
Paragraph 75 read, amended and agreed to.
Paragraphs 76 to 89 read and agreed to.
Paragraph 90 read, amended and agreed to.
Paragraphs 91 to 106 read and agreed to.
Paragraph 107 read, amended and agreed to.
Paragraphs 108 to 110 read and agreed to.
Paragraph 111 read, amended and agreed to.
Paragraphs 112 to 115 read and agreed to.
Ordered, That further
consideration of the Chairman's draft report be now adjourned.
- (The Chairman.)
[Adjourned till Wednesday 24
May at Ten o'clock.
WEDNESDAY 24 MAY 2000
Members present:
Mr Archy Kirkwood, in the Chair
| Ms Karen Buck | Dr Doug Naysmith
|
| Mr David Crausby | Mr Laurence Robertson
|
| Mrs Joan Humble | Mr Desmond Swayne
|
| Mr Andy King | Mr Gareth Thomas
|
| Mr Edward Leigh |
|
The Committee deliberated.
Consideration of the Chairman's draft report resumed.
Paragraphs 116 to 118 read, amended and agreed to.
Paragraph 119 read, amended, divided and agreed to.
Paragraph 120 (now Paragraph 121) read, amended and
agreed to.
Paragraphs 121 to 133 (now Paragraphs 122 to 134)
read and agreed to.
Paragraph 134 (now Paragraph 135) read, amended and
agreed to.
Paragraphs 135 to 137 (now Paragraphs 136 to 138)
read and agreed to.
Paragraph 138 (now Paragraph 139) read, amended and
agreed to.
Paragraph 139 (now Paragraph 140) read, as follows:
'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 for the most urgent cases. 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.
The Government is committed to getting
people into work as a key element in its strategy in combatting
poverty. But in today's insecure world, working people who may
not be poor still need help in ensuring that they are able to
use periods in work in order to make proper provision for life's
contingencies, in order to avoid poverty in the future. National
Insurance provides a means of collectively providing social protection,
whilst not undermining an individual's capacity to make additional
self-provision.'
Amendment proposed in lines
5 and 6 to leave out the words 'tackling inequality and' - (MrLawrence
Robertson.)
Question put, That the Amendment be made.
The Committee divided.
| Ayes, 2 | Noes, 6
|
| Mr Laurence Robertson |
Ms Karen Buck |
| Mr Desmond Swayne | Mr David Crausby
|
| Mrs Joan Humble
|
| Mr Andy King
|
| Dr Doug Naysmith
|
| Mr Gareth Thomas
|
Other amendments made.
Question put, That the paragraph, as amended, stand
part of the report.
The Committee divided.
| Ayes, 6 | Noes, 2
|
| Ms Karen Buck | Mr Laurence Robertson
|
| Mr David Crausby | Mr Desmond Swayne
|
| Mrs Joan Humble |
|
| Mr Andy King |
|
| Dr Doug Naysmith |
|
| Mr Gareth Thomas |
|
Paragraphs 140 and 141 (now Paragraphs 141 and 142)
read and agreed to.
Ordered, That further
consideration of the Chairman's draft report be now adjourned.
- (The Chairman.)
Report to be further considered
upon Wednesday 7 June.
[Adjourned till Wednesday 7
June at Ten o'clock
WEDNESDAY 7 JUNE 2000
Members present:
Mr Archy Kirkwood, in the Chair
| Ms Karen Buck | Dr Doug Naysmith
|
| Mr Andrew Dismore | Mr Laurence Robertson
|
| Mrs Joan Humble | Mr Desmond Swayne
|
| Mr Edward Leigh | Mr Gareth Thomas
|
The Committee deliberated.
Consideration of the Chairman's draft report resumed.
Paragraph 142 (now 143) read as follows:
'A number of contributors made the case for abolishing
the Upper Earnings Limit. The TUC
argued, "while there may be political obstacles
to changes, equity and the health of the NI Fund demand fundamental
reform. The levying of contributions on all earnings over the
threshold is long overdue." Professor Lister said "as
the alignment of the tax and National Insurance thresholds moves
the contribution system closer to the tax system, the logical
next step would be to abolish the regressive upper earnings limit
on contributions. This would raise £4.2 billion a year, which
could be used to extend membership of the scheme at the bottom."
After taking account of the effect of contracted out rebates,
the net sum raised would be in the region of three billion pounds.
We note the Government Actuary's assessment that, unless the policy
of uprating earnings limits with price inflation is changed, people
earning above the Upper Earnings Limit will see their contributions
falling significantly over time as a percentage of their total
earnings. We are pleased that the Chancellor announced above
inflation increases in the Upper Earnings Limit for April 2000
and 2001, but we recommend that it be abolished altogether in
order to make the National Insurance contribution rates fairer.'
Amendment proposed in Paragraph 142 (now 143), line
13 to leave out from'it' to the end
of the sentence and insert 'as part of his strategy
to create greater alignment between tax and National Insurance
thresholds, he go further and align the Upper Earnings Limit with
the level at which higher rate tax becomes due. This would not
only ensure greater consistency between tax and National Insurance
rules, but also raise some additional revenue for the National
Insurance Fund which could be used to fund improvements to the
system.' -
(The Chairman.)
Question put, That the Amendment
be made.
The Committee divided.
| Ayes, 1 | Noes, 6
|
| Mr Gareth Thomas | Ms Karen Buck
|
| Mr Andrew Dismore
|
| Mrs Joan Humble
|
| Dr Doug Naysmith
|
| Mr Laurence Robertson
|
| Mr Desmond Swayne
|
'We have also considered the question of whether
National Insurance contributions should be raised to pay for improvements
to benefits, to diminish reliance on means-tested benefits. The
question arose, in particular, in connection with our recommendation
that the basic state pension should rise in line with earnings.
We decided, on balance, that we were prepared to recommend
higher National Insurance contributions to pay for the indexing
of the basic pension with earnings. 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. We consider that in the context of real earnings
growth, this is manageable.'
Amendment proposed in Paragraph 143, in line 4 to
leave out from first 'We' to end of sentence. - (Mr Andrew
Dismore.)
The Committee divided.
| Ayes, 5 | Noes, 2
|
| Mrs Karen Buck | Mr Laurence Robertson
|
| Mr Andrew Dismore | Mr Desmond Swayne
|
| Mrs Joan Humble |
|
| Dr Doug Naysmith |
|
| Mr Gareth Thomas |
|
Other amendments made.
Question put, That Paragraph 143, as amended, stand
part of the report.
The Committee divided.
| Ayes, 5 | Noes, 2
|
| Mrs Karen Buck | Mr Laurence Robertson
|
| Mr Andrew Dismore | Mr Desmond Swayne
|
| Mrs Joan Humble |
|
| Dr Doug Naysmith |
|
| Mr Gareth Thomas |
|
Paragraph 144 read as follows:
'The research we commissioned from Mr Young prompted
consideration of much higher rises in contribution rates to pay
for more radical reform. We have concluded that, before rises
of the scale envisaged could be contemplated, considerably more
work needs to be done to promote the National Insurance scheme
and its advantages, and to give the public at large a greater
sense of ownership of the National Insurance Fund and the benefits
to which it gives rise. We recommend that Government plans
to teach citizenship in schools should include an account of the
National Insurance scheme; how it works; and the values behind
it.'
Amendment proposed in Paragraph
144 in line 5 to leave out from 'we' to end of sentence - (Mr
Desmond Swayne.)
The Committee divided.
| Ayes, 2 | Noes, 5
|
| Dr Doug Naysmith | Mrs Karen Buck
|
| Mr Desmond Swayne | Mr Andrew Dismore
|
| Mrs Joan Humble
|
| Mr Laurence Robertson
|
| Mr Gareth Thomas
|
Other amendments made.
Paragraph 145 read, amended and agreed to.
Paragraph 146 read and agreed to.
An amendment proposed after Paragraph 146 to insert
a new paragraph.
'The history of friendly societies and similar institutions
reminds us of the importance of non-state collective action. There
remains an important role for the private sector insurance arrangements
for supplementary state social security. This role will increase
as society becomes more affluent. That a risk may have once been
insurable does not mean that it will remain so in the future.
The state should continue to act to pool risks which
a commercial market cannot insure but we expect that the boundaries
of this role will not remain fixed, Beveridge said that social
security "...must not stifle incentive, opportunity, responsibility".
We must frame our state provision to ensure that it does not.'
- (Mr Desmond Swayne.)
| Ayes, 2 | Noes, 5
|
| Mr Laurence Robertson |
Mrs Karen Buck |
| Mr Desmond Swayne | Mr Andrew Dismore
|
| Mrs Joan Humble
|
| Dr Doug Naysmith
|
| Mr Gareth Thomas
|
Paragraph 147 read, amended
and agreed to.
Resolved, That the Report,
as amended, be the Fifth Report of the Committee to the House.
Ordered, That the Chairman
do make the Report to the House.
Resolved, That the provisions
of Standing Order No. 134 (Select committees (reports)) be applied
to the report.
Ordered, That several
papers be appended to the Minutes of Evidence.
Ordered, That the Appendices
to the Minutes of Evidence taken before the Committee be reported
to the House.
[Adjourned till Wednesday 14
June at half-past Ten o'clock.
| 
