Previous SectionIndexHome Page

National Insurance Contributions

3. Ann Winterton (Congleton) (Con): If he will make a statement on levels of national insurance contributions. [993]

4. Mr. David Ruffley (Bury St. Edmunds) (Con): What representations he has received regarding the yield from employees' national insurance contributions. [994]

The Chief Secretary to the Treasury (Mr. Des Browne): National insurance contribution rates are set in the Budget. The estimated national insurance contribution receipts for 2004–05 are £77.9 billion, as stated in the 2005 Budget. The Government receive a number of representations on a wide variety of issues.
26 May 2005 : Column 856
The Government's aim is to ensure that there is a fair system for individuals, employers and taxpayers. That is why, in 1999, the Government made the largest reforms to the national insurance system since the 1970s, including abolishing the entry fee and employee contributions, raising the threshold for contributions and aligning it with the personal allowance for income tax. Finally, it simplified the structure of employers' national insurance contributions.

Ann Winterton: Bearing in mind that national insurance is a form of direct taxation, will the Chief Secretary reaffirm to the House the Chancellor's implied assurance during the recent general election campaign that there would be no increase in national insurance rates during this Parliament?

Mr. Browne: The hon. Lady will be aware that we made our commitments on tax in our election manifesto, which I am sure that she has read. We have given an undertaking not to change the higher or basic rate of tax. I am not going to be drawn on this issue by a member of a party whose own spokesperson during the course of the election campaign said:

That was the shadow Chancellor, speaking on "The Daily Politics" on 21 April.

Mr. Ruffley: May I draw the attention of the House to the Hansard for 27 November 1996? The then Labour shadow Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr. Brown), said that

Is that still the Chancellor's view?

Mr. Browne: The Chancellor can speak for himself on those issues. The national insurance position is that we have raised it in the context of further investment in the national health service, which the country overwhelmingly supported. I remind Conservative Members that the extra money contributed towards real growth in NHS spending, which was the result of the legacy of the Conservative Government's underspend in that sector for many years.

Miss Anne Begg (Aberdeen, South) (Lab): It is still the case that many benefits, including incapacity benefit and the basic state pension, depend on national insurance contributions, but many women continue to find it difficult to build up sufficient credits, particularly if they have home care responsibilities. A woman looking after two elderly relatives for 15 hours each per week is a good example. It means that, although she is working for 30 hours a week, because each commitment is 15 hours—less than the required 16 hours—she will not receive any national insurance credits. Will the Chief Secretary undertake to look further into this problem to assess whether there is a way of widening the basis for credits in order to allow more women to build them up to qualify either for a basic state pension or incapacity benefit?

Mr. Browne: I thank my hon. Friend for that question. This matter exercises the minds of many hon. Members, and employers face logistical difficulties in the
26 May 2005 : Column 857
circumstances that she describes. We keep these matters under constant review, but the House will know that it was the legacy of pension-age people in poverty, especially women, that caused this Government, in our early years, to give attention to increasing the pension for such people by means of the pension credit system.

Rosie Cooper (West Lancashire) (Lab): Does my right hon. Friend agree that making the right investment at the right time will ensure the growth and modernisation of the NHS, the employment of more doctors, nurses and health professionals and that use remains free at the point of delivery, and that that is precisely what the electors of West Lancashire voted for on 5 May?

Mr. Browne: I thank my hon. Friend for that question, and take this opportunity to welcome her to the House of Commons and to congratulate her on her election. She has reminded the Opposition of the success of the Government's investment in the NHS, and their catcalls in response say it all. Of course, extra investment was needed, and the Government's approach was correct. By 2008, we will have 80,000 more nurses, midwives and health visitors, 25,000 more doctors and 100 new hospitals. Yesterday, the shadow Chancellor did not answer the important question in respect of that investment in the NHS: does he support it, or would he reverse it?

Ms Dari Taylor (Stockton, South) (Lab): I warmly welcome my right hon. Friend to his post. Does he accept that ordinary families in my constituency warmly welcome extra investments in the NHS? We now have better services for people with cardiac problems and cancer, and especially for women with breast cancer who desperately need help. Will my right hon. Friend reassure the House that the extra investment that we have been promised will be delivered, and that services will be even better in the future?

Mr. Browne: I thank my hon. Friend for her welcome.

Mr. Dennis Skinner (Bolsover) (Lab): There is not all-party agreement on this issue.

Mr. Browne: I hear what my hon. Friend the Member for Bolsover (Mr. Skinner) says from a sedentary position. I believe that there is all-party agreement on this, and I am sure that that is true in constituencies across the country. I have no doubt that some hon. Members claimed credit for that in their election literature. The money has assured better health outcomes and reduced waiting lists. The additional resources and the linked package of reforms will ensure the delivery of our priorities in respect of health.

Mr. Owen Paterson (North Shropshire) (Con): The Minister should remember that he is a Scottish Member and that, in the election, English voters did not favour his party with a majority. He is now a Minister of the Crown, responsible to this House, so will he say whether there will be any element of national insurance increase during this Parliament?

Mr. Browne: The hon. Gentleman gives me an opportunity to remind the House that his party stands
26 May 2005 : Column 858
for election in Scotland on a banner that proclaims it as the Conservative and Unionist party. The people of Scotland understand that the Conservative party is a UK party. The hon. Member for North Wiltshire (Mr.   Gray) took the same point to the level of caricature, and it cost him his Front-Bench position. I have already answered the hon. Gentleman's question, and it is not my intention to be drawn on this issue.

Mr. Wayne David (Caerphilly) (Lab): The changes in national insurance contributions have provided much-needed investment in the NHS. However, will the Government make a commitment that public funds will not be diverted from the NHS to subsidise the private sector?

Mr. Browne: My hon. Friend knows how much the Government have invested in a public health service that remains free at the point of delivery and that the changes and modernisations announced in our election manifesto will ensure that we achieve the level of delivery that our investment predicates.

Mr. Richard Spring (West Suffolk) (Con): May I add my congratulations to the Chief Secretary, but has he had the opportunity to read a collection of essays published this week entitled "The New Egalitarianism" by Mr. Patrick Diamond, who is imminently to be head of the reshaped Downing street policy unit?

In those essays, he not only calls for the removal of the national insurance ceiling, but recommends a capital transfer tax to prevent people from passing assets to their children to avoid inheritance tax. In view of the importance of that new role for Mr. Diamond, what contact have Treasury Ministers had with him to discuss his views? Does he offer a foretaste of what is to come?

Mr. Browne: I thank the hon. Gentleman for his welcome. I have never met the individual in question. In fact, I do not even know of him. As I understand it, he is not head of the policy unit and the description the hon. Gentleman gives does not properly describe the individual's future. It is not my understanding that he is about to take up the position that is suggested. The individual does not represent the Government's position and does not speak in any way for the Government on national insurance or on inheritance or any other tax. The Government made our position clear on those matters in our manifesto.

Next Section IndexHome Page