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Lord McIntosh of Haringey: My Lords, I looked behind me to see if anyone else was going to join in and answer came there none. I am grateful to both noble Lords for the extent to which they have welcomed the order. I choose those words carefully.

It is, of course, true that the Treasury has taken over the responsibility for these contribution matters from the Department of Social Security. If we look back at the Taylor report on the tax and benefits system, which was produced for the Chancellor of the Exchequer in 1998, we can see why, in rational terms, this is the right thing to do. It has to do with empire building; it is the best way to handle these complex issues.

I appreciate the point made by the noble Lord, Lord Higgins, that it deprives us, to some extent, of a broader debate in the House on social security benefits and contributions policy. But it is up to the House to seek for itself opportunities to debate these matters; it is not necessarily a matter for the Government, as we do not have government time in the House.

I take the point made by the noble Lord, Lord Higgins, about the No. 2 order. He is correct, it is a negative order. It has not come before the House for that reason. I hesitate to say this because the noble Lord may do it next year, but the way to ensure that we debate both of them together is to pray against the negative order. In that way they can both be debated at the same time--without intending to overturn the order, of course; that is well understood. The question of how the matter is debated is a matter for the usual channels.

Turning to the issue of the climate change levy, I am grateful for the general support of the noble Lord, Lord Goodhart. I can confirm to the noble Lord, Lord Higgins, that the burden of the climate change levy is equal to the change in contributions--in other words, the proposals are revenue neutral in total. In aggregate, of course, they must be. They cannot be neutral for individual companies or individual industries. If they were, the proposals would not be worth making.

The whole point is to put some kind of squeeze on excessive fuel use to meet our obligations under Kyoto. If we did not do that we would be failing in our international obligations. This is a way to do it. The noble Lord, Lord Higgins, describes it as crude, but it is a way of doing it without running the risk of being accused by those on the Benches opposite of introducing a stealth tax.

We recognise that there are certain high energy consumption industries. There are rebates of up to 80 per cent for some of those industries and there are rebates for those who are good in the use of renewables, but, in principle, there must be pressure on fuel use by industry otherwise we could not meet our

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obligations. We do not apologise for the package of the climate change levy and the reduction of national insurance contributions.

Lord Higgins: My Lords, in that case, to some extent, have not the Government taken on the obligations with regard to the climate change levy but then offset it and partially, at any rate, ameliorated its impact on manufacturing industry and so on? Have the Government had any reaction from those overseas who would regard this as in some way not fully meeting the obligations?

Lord McIntosh of Haringey: My Lords, the net effect of this, including the rebates for certain industries and the rebates for the use of renewable energy, is calculated to meet our obligations. Therefore no reaction is expected from overseas on that point.

Turning to the issue of Class 4 contributions, the noble Lord, Lord Higgins, queried the rise in the upper limit for Class 4 contributions for the self-employed. There are two principal issues involved here. First, the upper limit is in line with employees' national insurance contributions, and therefore we are achieving concordance between the regime for employees and the regime for the self-employed. I hope that that will be agreed as being a sensible way to proceed; there is no good objective reason why they should be treated differently.

Secondly, while I acknowledge that the upper limit is rising faster than inflation, even at the larger figure it is still at 124 per cent of average earnings. That contrasts with a figure of 156 per cent of average earnings under the noble Lord's own government in the early and middle 1980s. Even with this increase we are still not clobbering the self-employed in the way that the noble Lord's government did in their early years.

I am disappointed to find the charges again being made, almost two years later, that this is another tax or even a stealth tax. Indeed, it was not in the Chancellor's Budget speech in 1999, but a lot of detail of the tax and benefits system does not get into the Chancellor's speech. It was in the Budget documentation; it has been heavily aired over the past few years; and we have not been in any way shy of defending it and promoting it as encouraging the progressive element in national insurance contributions for the self-employed. The noble Lord, Lord Goodhart, rightly pointed out that if we did not do something we would end up with a regressive tax on the self-employed, which does not make good sense. In total, the self-employed are getting a very good deal out of the tax and benefits system. They are paying some 2.5 billion a year less in contributions than they are receiving in benefits. I do not think that there is any good cause for complaint.

The noble Lord, Lord Higgins, then raised a point about the National Insurance Fund. He asked why there should be a Treasury grant when the fund is in surplus. I can confirm that the fund is in surplus, to something like 2½ times the recommended minimum. But that is the recommended minimum; and as the

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noble Lord, Lord Goodhart, said, the Treasury grant of 2 per cent is a nominal figure, and will not be taken up unless it is actually needed.

The National Insurance Fund is the difference between two very large figures. It can change very rapidly. In 1993-94, under the previous regime, there was a change that brought the National Insurance Fund into deficit by 6 billion almost overnight. We do not think it at all undesirable to be cautious, perhaps even on occasion more cautious than the Government Actuary, in seeing to it that the National Insurance Fund is fully protected.

Lord Higgins: My Lords, I am sorry to interrupt the noble Lord. In his opening remarks, he said that this had been recommended by the Government Actuary. I have difficulty in finding where that is said.

Lord McIntosh of Haringey: My Lords, I did not say that it was recommended by the Government Actuary. I said that we are perhaps being even more cautious than the Government Actuary would wish us to be. I do not apologise for that, because I believe it is the right approach. When the National Insurance Fund as the potentiality of being as volatile as it is, it is right for us to be particularly cautious.

Those were the three major points raised by both noble Lords. I am grateful to them for expressing them. The noble Lord, Lord Goodhart, ended by suggesting that there should be a new review of the tax and benefits system. A very thorough review was carried out by Martin Taylor in 1998. This has provided the basis of our changes to Class 2 and Class 4 contributions for the self-employed. Of course, we shall continue to keep those contributions under review. I think it will be evident that the policy that we have for national insurance contributions is one that takes a number of years to introduce in full. I do not want to promise that it is complete now. When the occasion arises, we shall not be in any way afraid of carrying out a further review. But the review carried out by Martin Taylor, which we have been implementing since 1998, was undertaken with the intention of improving work incentives, encouraging job creation and building a fairer national insurance system. We have achieved that by new higher starting-points for paying employees' and employers' contributions; a single rate of employers' contributions instead of the multiple rates that we inherited; and a new structure of self-employed contributions which gives help where it is needed most--to the lower-earning self-employed. We have been able to do this, as I say, through the prudent management of the National Insurance Fund. I give way to the noble Lord.

Lord Goodhart: My Lords, before the noble Lord sits down, he has not dealt with my point as to why the small earnings exemption for the self-employed was not increased so that it kept more or less in touch with the lower earnings limit for the employed.

Lord McIntosh of Haringey: My Lords, that is a fair point. My answer partly covers it, in saying that we do

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not do everything in one year. However, I think it would be prudent if I wrote to the noble Lord on the point.

This year's order, including the negative order, helps to bring forward those conscious policies that have been adopted following the Taylor report. We believe that they are well justified. I commend the order to the House.

On Question, Motion agreed to.

Company and Business Names (Amendment) Regulations 2001

8.34 p.m.

Lord McIntosh of Haringey rose to move, That the draft regulations laid before the House on 2nd February be approved [6th Report from the Joint Committee].

The noble Lord said: These regulations give full effect to the Company and Business Names (Chamber of Commerce, Etc) Act 1999, a Private Member's measure introduced in another place by Mr Andrew Lansley, the honourable Member for South Cambridgeshire.

The regulations amend the 1981 Company and Business Names Regulations. They specify a number of expressions, and their Welsh equivalents, that include the term "chamber", which cannot be used in a company or business name without permission from the Secretary of State. These expressions cover the range of activities that would be expected of a chamber. They include chamber of business, chamber of commerce, chamber of training and enterprise, and their Welsh equivalents--which I shall gladly read out if anyone wants to challenge my Welsh pronunciation. The regulations provide that companies and businesses whose names include these expressions prior to their entry into force on 10th May will not be affected.

To set the regulations in context and explain their purpose, I shall set out briefly the statutory regime governing the use of certain sensitive expressions in a business or company name and then say a little about the 1999 Act.

Under the existing 1981 regulations, provided for in the Companies Act 1985 and the Business Names Act 1985, companies or businesses must seek permission from the Secretary of State or other relevant body before they can register or use any one of a number of prescribed words or expressions in their name. These include, for example, words which imply business pre-eminence or representative status such as "association", or "authority"; or words which imply specific functions such as "charity", "insurance" or "co-operative". The purpose of these safeguards is to ensure that companies and businesses cannot use names which might give a misleading impression of the nature of their business or of their stature.

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The British Chambers of Commerce (BCC) expressed concern that business could be misled by rogue companies or businesses which used the name chamber of commerce but did not perform the functions that are commonly understood by the term. In answer to these concerns, the Company and Business Names (Chamber of Commerce, Etc.) Bill was introduced and was fully supported by the Government in acknowledgement of the role of the British Chambers of Commerce and the Scottish chamber in promoting public recognition of the title "chambers" as one which is synonymous with quality and integrity.

The 1999 Act ensures that the Secretary of State consults at least one representative body in determining whether expressions such as "chamber of commerce", "chamber of trade" and similar expressions may be used as part of a registered company or business name; it names the BCC and SCC as such bodies for the purposes of the Act; and it provides that the Secretary of State may issue guidance on the factors to be taken into account in considering applications for the use of such expressions.

The regulations we are considering today have the support of both the BCC and the SCC, which have been fully consulted on them and on their impact on business. They believe that both the 1999 Act and these implementing regulations will protect business from those organisations which might seek to pass themselves off as bona fide Chambers but who not represent their interests.

To assist those companies that wish to use any of the expressions listed in the regulations, guidance has been prepared on the factors which the Secretary of State will take into account in considering applications for use in a name. These include the body's purpose and constitution, its independence, representative nature and geographical location. The Government undertook that the BCC and SCC would be fully consulted on the guidance and both have confirmed that they agree with what is proposed. A copy of the guidance has been placed in the Library.

The regulations will contribute to the BCC's and SCC's wider efforts to build confidence in and maintain the integrity of the chamber movement. I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 2nd February be approved [6th Report from the Joint Committee].--(Lord McIntosh of Haringey.)

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