APPENDIX 16
Letter to Clerk of the Committee from
Aberdeen City Council (CP 14)
I refer to your letter dated 29 April 1999 regarding
the above and am pleased to reply on behalf of Aberdeen City Council.
We would commend the proposed scope of inquiry
of the House of Commons Social Security Committee and I would
personally be willing to assist in further developments on this
subject, particularly in so far as they may relate to the Social
Exclusion agenda, although I do not claim to have technical expertise
in the subject of the Contributory Principle.
At this stage, I would offer the following comments
for inclusion:
(1) As I understand it, the principle of
a contributory scheme is that a fund be built up in order to meet
future liabilities. There is no published evidence as to the proportion
of benefits paid through Social Security system directly met from
contributions.
(2) The cost of benefits far exceeds the
amounts collectable through the contributory principle and is
heavily subsidised through taxation.
(3) There are mixed perceptions within the
general public as to National Insurance and the contributory principle
in that many people view National Insurance simply as another
form of taxation but others see the contributions as being for
their future pension entitlement and also for their health care.
(4) The contributory principle is only of
advantage if a fund is established and built up over a period
of years, thus eliminating the responsibility of future generations
to fund the benefit entitlements of the population as it reaches
retirement age.
(5) Society should recognise its responsibility
to fund the welfare system and accept that this be through the
taxation system rather than a false contributory scheme which
would be unaffordable were it to be operated as a fund in its
own right.
(6) There could be a cut-off point whereby
a fund was established for those coming into employment for the
first time and they make contributions similar to what applies
for employers' superannuation schemes.
I trust that these comments are of some assistance
at this stage and I look forward to further developments on this
matter.
Peter Cassidy
Director of Social Work
13 May 1999
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