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Mr. Bercow: I beg to move amendment No. 6, in page 3, line 1, leave out from beginning to end of line 3 and insert—
'(2) For the purposes of this Act the secondary percentage is
(a) 12.8 per cent. the "full percentage", for all employers who do not provide health insurance;
(b) 11.8 per cent., the "reduced percentage", for employers who do provide health insurance in respect of those employees for whom they provide health insurance.'.
The Chairman of Ways and Means (Sir Alan Haselhurst): With this it will be convenient to discuss the following amendments: No. 7, in page 3, line 1, leave out from beginning to end of line 3 and insert—
'(2) For the purposes of this Act the secondary percentage is
(c) 12.8 per cent., the "full percentage", for all employers who are not themselves subject to Class 4 contributions, as set out in section 3 below;
(d) 11.8 per cent., the "reduced percentage", for employers who are self employed, meet the conditions of subsection (3) below, and are, themselves subject to Class 4 contributions, as set out in section 3 below.
(3) The reduced percentage is available to employers that have business turnover less than £1,000,000 per annum.
(4) For the purposes of subsection (3) above, the business turnover of all persons in partnership with the employer is taken in aggregate. The reduced percentage is available only if the aggregate meets the conditions of subsection (3).'.
No. 12, in page 3, line 1, leave out from beginning to end of line 3 and insert—
'(2) For the purposes of this Act the secondary percentage is
(a) 11.8 per cent., the "reduced percentage", on the costs of employment, on which Class 1 Secondary National Insurance Contributions are levied, of employees who meet the conditions set out in subsection (3) below;
(b) 12.8 per cent., the "full percentage", on the employment costs of all other employees.
(3) For the purposes of this Act, the reduced percentage is payable on the costs of employment of an employee, on whom Class 1 Secondary National Insurance Contributions are levied, where the employee is employed by a service company, which has turnover less than £1,000,000, of which the employee is also the main shareholder. For these purposes, main shareholder means that the employee owns more than 75 per cent. of the ordinary share capital of the service company that employs him.'.
No. 15, in page 3, line 1, at end insert—
'except for employers contributions in the public sector which will remain at 11.8 per cent.'.
No. 8, in page 3, line 12, leave out from beginning to end of line 14 and insert—
'(2) For the purposes of this Act the secondary percentage is
(a) 12.8 per cent. the "full percentage", for all employers who do not provide health insurance;
(b) 11.8 per cent., the "reduced percentage", for employers who do provide health insurance in respect of those employees for whom they provide health insurance.'.
No. 9, in page 3, line 12, leave out from beginning to end of line 14 and insert—
'(2) For the purposes of this Act the secondary percentage is
(c) 12.8 per cent., the "full percentage", for all employers who are not themselves subject to Class 4 contributions, as set out in section 3 below;
(d) 11.8 per cent., the "reduced percentage", for employers who are self employed, meet the conditions of subsection (3) below, and are, themselves subject to Class 4 contributions, as set out in section 3 below.
(3) The reduced percentage is available to employers that have business turnover less than £1,000,000 per annum.
(4) For the purpose of subsection (3) above, the business turnover of all persons in partnership with the employer is taken in aggregate. The reduced percentage is available only if the aggregate meets the conditions of subsection (3).'.
No. 13, in page 3, line 12, leave out from beginning to end of line 14 and insert—
'(2) For the purposes of this Act the secondary percentage is
(a) 11.8 per cent., the "reduced percentage", on the costs of employment, on which Class 1 Secondary National Insurance Contributions are levied, of employees who meet the conditions set out in subsection (3) below;
(b) 12.8 per cent., the "full percentage", on the employment costs of all other employees.
(3) For the purposes of this Act, the reduced percentage is payable on the costs of employment of an employee, on whom Class 1 Secondary National Insurance Contributions are levied, where the employee is employed by a service company, which has turnover less than £1,000,000, of which the employee is also the main shareholder. For these purposes, main shareholder means that the employee owns more than 75 per cent. of the ordinary share capital of the service company that employs him.'.
Mr. Bercow: We move speedily on to a group of amendments that may absorb our attention for a little longer than the previous group. The amendments embody several important issues on which I want to focus in some detail.
Mr. Bercow: I am glad that the hon. Gentleman's enthusiasm for these debates is as boundless as mine.
I want to consider together amendments Nos. 6 and 8. The Paymaster General will be aware that the Bill as drafted imposes an increase in national insurance contributions on employers that applies universally.
The Government have advanced the rationale that the purpose of the measure is to provide the wherewithal to finance improvements in the national health service. The gravamen of our argument on the amendments is that many businesses already provide health insurance for their employees and that it is fair in those circumstances that
they should be relieved of the additional burden that I, in my understated way, described as "brazen, brutal and a triumph of hope over reality" a few moments ago.It appears that the Government have no intention of providing that relief, but it seems—at any rate to Conservative Members—that there is merit in doing so. I would, therefore, like to say something in relation to amendments Nos. 6 and 8 at the outset. They would enable employers who are providing health insurance packages for their employees to be relieved of the 1 per cent. increase in the national insurance contribution. For the avoidance of doubt, if the amendment were accepted—obviously, I am keenly hopeful that the Committee will be persuaded of the merits of the arguments and will vote accordingly—employers who already provide health insurance for their employees will continue to pay what is described in the amendments as "the 'reduced percentage'" in national insurance contribution of 11.8 per cent., whereas those who provide no health insurance—
John Mann: Will the hon. Gentleman give way?
Mr. Bercow: In a moment, if the hon. Gentleman will contain himself.
Employers who provide no such insurance for their employees will be obliged to pay the increase and will therefore pay 12.8 per cent.
I am eagerly enthusiastic to explain some of the background to, and arguments for, our proposition but I am afraid that I can resist the hon. Member for Bassetlaw (John Mann) no longer.
John Mann: Before the hon. Gentleman elucidates further, I have a question on the clarification of definitions. When he talks about employers providing for their employees, does he mean individual employees or the company? In other words, where a company only provides such insurance to a percentage of the work force, how would that affect his proposal?
Mr. Bercow: I think that the hon. Gentleman means "provides only" rather than "only provides", but we will not quibble unduly about the semantics as the purport of his remarks is reasonably clear. He raises a fair point and my answer, which I shall try to make clear for the benefit of the Committee, is that someone would be eligible as an employer for payment of the reduced percentage as opposed to the increased percentage if, and only if, he or she as an employer were providing health insurance for a substantial majority—probably the majority, if not all—of his or her employees.
Mr. Bercow: The hon. Gentleman is a hard taskmaster and not easily pleased. I should have thought that my answer was so abundantly clear that only an extraordinarily clever person could fail to see the point, but I give way.
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