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Lord Hunt of Kings Heath: My Lords, as the noble Lord knows, the decision on personal care was taken by the Government because they believed that resources should best be targeted, first, in ensuring that care provided or supervised by registered nurses in nursing homes was the appropriate way to spend our resources, alongside the millions of pounds that we expect to spend on intermediate care. The noble Lord will recall that the Government's decision to consult on the issue of statutory guidance was welcomed because of the widely differing policies of local authorities. The Audit Commission report said that local authority practice was wildly inconsistent, lacking rationality and often not related to service policies. Overall, I believe that the statutory guidance will lead to much greater consistency, but I give an assurance to the noble Lord that in relation to the specific issue he raised we will meet representatives of the people concerned. We are very interested in discussing these matters with them.

Baroness Greengross: My Lords, is the Minister aware that great concern has been expressed that partners, not just spouses, may have their income taken into account, not for their own care but for the care of their partner? Can the noble Lord reassure the House that when the Government reach their final decisions they will ensure that such a situation does not continue?

Lord Hunt of Kings Heath: My Lords, the draft guidance sets out largely the current legal position and the circumstances in which a partner's resources may be taken into account under Section 17 of the Health and Social Services and Social Security Adjudications Act 1983. In some cases it may indeed be to the advantage of a user to be assessed with his or her partner, as the draft guidance points out. But we are certainly willing to look at making the guidance clearer on this issue in the light of comments.

Baroness Carnegy of Lour: My Lords, for clarity, can the noble Lord tell the House precisely what freedom local authorities will have within the context of statutory guidance to do what they think is right?

Lord Hunt of Kings Heath: My Lords, Section 7 of the Local Authority Social Services Act 1970 provides that local authorities must in the exercise of their social services functions, including the exercise of any

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discretion conferred by any relevant enactment, act under the general guidance of the Secretary of State. To act legally outside the terms of Section 7 guidance, a council would need to show that it had properly considered the guidance and had good reasons for acting differently; for example, because of particular local circumstances. However, I can reassure the noble Baroness that the statutory guidance that will be issued as a result of the consultation process can be regarded as the minimum requirement. It will be open to any local authority to be more generous in its charging scheme than that which is set out in the statutory guidance.

Earl Howe: My Lords, is the Minister aware that there is concern about the Government's seemingly ever-increasing use of setting national priorities and instituting ring-fenced budgets to go with them? While ring-fenced budgets have their place, they inhibit the freedom of local authorities to charge the kind of rates they might wish to charge, thereby putting an additional strain on what is an already tight social services budget.

Lord Hunt of Kings Heath: My Lords, the noble Earl's charge would have more strength to it were it not for the evidence of the Audit Commission report. It found a whole host of different charging mechanisms, which showed great inconsistency between local authorities. The charges often lacked rationality. Some local authorities applied a flat rate charge to all, irrespective of their circumstances. Some charged according to the user's means with no regard for the level of service. There was great concern among users and their representatives about how that impacted on individuals. I believe that statutory guidance is justified in this case. It was certainly warmly welcomed by most, if not all, representative organisations. The fact that local authorities can decide to be more generous than the guidance leaves them with a great deal of discretion. A further point is that Torbay council, whose model the statutory guidance has worked on, has shown that where a local authority operates a rational and fair scheme it will be to the benefit of many of its residents.

Earl Russell: My Lords, I note that the Minister made no response to the concern of my noble friend Lord Clement-Jones about people being required to pay charges out of income support. Would not a more informed discussion of this subject be possible if the Government were to commission research on the minimum income entitlement necessary to maintain good health?

Lord Hunt of Kings Heath: My Lords, I know that the noble Earl consistently raises the issue of good health and its relationship to wider social security benefits. It is certainly a matter that warrants consideration. The draft guidance clearly states that service users should not have their incomes reduced below basic levels of income support as a result of

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charges. That principle has been widely welcomed by those responding to the consultation and will improve the record of many local authorities.


Lord Carter: My Lords, after the Second Reading of the Social Security Contributions (Share Options) Bill, my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is being made in another place on the local elections.

Social Security Contributions (Share Options) Bill

3.5 p.m.

Lord McIntosh of Haringey : My Lords, I beg to move that this Bill be now read a second time.

The Bill is part of the Government's response to meet the legitimate concerns of companies about the effects of aligning the income tax and national insurance treatment of employee share options. Before 6th April 1999, national insurance liability on employee share options arose solely at the date of grant of the option, to the extent that the option was granted at a discount. The income tax liability on the other hand has for many years crystallised at the date of exercise of the option. That differential treatment ended in 1999. Options granted on or after 6th April 1999 relating to shares which are readily convertible into cash are now subject to similar treatment under the national insurance rules as under the income tax and PAYE rules. Provided that the option is not capable of being exercised more than 10 years following its grant, there is no national insurance liability when the option is granted: instead, the liability arises at the date of exercise of the option, and the figure is the same as that which is chargeable to income tax.

Following that change in treatment, many companies expressed concern that the unpredictability of their secondary national insurance charge as employers has led to accounting difficulties and created uncertainty. The liability of a company as the secondary contributor is uncapped, and is dependent on the volatility of the company's share price.

Following a period of consultation, we introduced measures last year which went a long way towards meeting those concerns. We announced that employers would be able to ask their employees to bear the secondary national insurance charge on their share option gains. The announcement was made on 19th May 2000 and has been welcomed by the business community and its advisers. The legislation has allowed companies to remove the accounting difficulties and the uncertainty that the national insurance charge presented.

Last year's legislation was drafted to cover all options which had already been granted. But in practice it has been difficult for employers to negotiate

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with employees terms which change options already held by them. So for many companies that granted options between 6th April 1999, when the changes to the national insurance treatment took effect, and 19th May 2000, when the new rules for options were announced, the problem has remained. The point was raised in debate in this House last year, when the noble Lords, Lord Higgins and Lord Goodhart, mentioned their concern that the measures enacted last year did nothing to address historical liabilities on existing share options. They called on the Government to give some form of relief against the excessive liabilities faced by companies which granted options during the period between 6th April 1999 and 19th May 2000. Indeed, it was on the understanding that the Government would come back with such proposals, if necessary, that the Opposition gave their support to last year's measures.

The Government have been true to their word, and I suggest to the House that the present Bill meets the concerns in a simple and practical way. The Bill gives companies a simple and straightforward mechanism for settling their national insurance liabilities on the options they have granted between 6th April 1999 and 19th May 2000, and to do so early, in advance of the date when the actual gain is made by the employee. Companies that choose to take advantage of this will calculate the amount of national insurance due by reference to the accrued gain up to 7th November 2000, the day before the pre-Budget Statement when the proposals were announced.

Companies will be required to notify the Inland Revenue and pay the appropriate charge within a period of 92 days of Royal Assent of the Bill. In this way, the measures allow companies effectively to cap their national insurance liability by reference to the share price on 7th November last year, thereby giving companies the certainty they wanted. The company benefits by avoiding the need to make further provisions against profits. It will be able to remove the provision for the liability from its balance sheet and save national insurance costs in relation to any further upward movement of the share price. The Bill offers early settlement as a quid pro quo for certainty.

The measures were given an immediate welcome by the business community. A large firm of advisers described them as a,

    "silver lining for firms struggling under the cloud of low share prices ... allowing companies to foster greater employee share ownership and account for their liabilities in a more meaningful, predictable way".

I should say to the noble Baroness, Lady Noakes, that that statement came from the Pricewaterhouse Coopers Bristol branch and was published in the Western Daily Press on 13th November 2000.

I turn now to the detail of the Bill, outlining the measures clause by clause. Clause 1 defines the share options gains as those arising from options granted between 6th April 1999 and 19th May 2000 and exercised, assigned or released after 7th November

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2000. To take advantage of the arrangements, companies must notify the Inland Revenue within 92 days of Royal Assent of the Bill.

Clause 2 exempts such gains from the existing national insurance charge and substitutes a special contribution. This is at a rate of 12.2 per cent, which is the rate of secondary--that is, employer--contributions applicable during the tax year 2000-01. It is payable on the deemed gain, if any, as if the option had been exercised on 7th November 2000.

Clause 3 covers various situations where options are exchanged, or rolled over, for other options, or for consideration which may include a mixture of cash and other options. The provisions are necessarily complex, but they effectively confine the special contribution to options exchanged at parity. The existing national insurance charge remains in so far as the option is exchanged in excess of parity to prevent the use of this relieving Bill as a vehicle for avoidance.

Clause 4 covers three types of situation. First, the situation where an employee has agreed, under the provisions introduced last year, to bear the employer's national insurance liability on the option gain. The clause ensures that the same tax relief allowed to the employee under that measure will apply also to the special contribution he makes under the present Bill. Secondly, the clause prevents a possible double tax relief which could arise when relief was given on the one hand when a secondary Class 1 liability is replaced by a special contribution under the Bill, and again if the payment is not made within the 92-day deadline laid down in the Bill. Thirdly, the clause makes a technical adjustment to the PAYE rules to take account of the fact that tax relief in respect of the special contribution is not given at the same time as the contribution is actually paid.

Clauses 5 and 6 contain interpretation provisions and ensure that the Bill applies to Northern Ireland.

In Committee in another place, the Government accepted the force of many opposition amendments either by accepting the changes or by introducing amendments of their own. In this way, the deadline for paying the special contribution under the Bill was extended from 60 to 92 days following Royal Assent. This will give companies more time to decide whether settlement would be in their best interests. The rule was also changed which originally required companies with a nil liability nevertheless to submit a formal notice within the deadline. We accepted that this placed an unreasonable burden on businesses and we introduced an amendment deeming the notice to have been given.

The Opposition agreed to withdraw other amendments and new clauses on the understanding that we would put forward changes of our own when the Bill was considered on Report. This we did, and as a result the effectiveness of the rollover measures has been improved to remove an avoidance opportunity in the earlier drafting of the Bill and to make substantial improvements to the operation of the rollover provisions in Clause 3.

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I am afraid that we shall have to propose three minor amendments in Committee. The first, in Clause 3, corrects a technical point regarding the Bill's interaction with other national insurance contributions legislation and as such is necessary to ensure that the Bill works effectively. The other two, in Clause 5, prevent an interpretation which might attract NIC avoidance and thus prevent any mischief. The amendments will not change the widely understood basis on which this special contribution is calculated. If the Bill is given a Second Reading this afternoon, those three amendments will be tabled for later on in the day.

Moved, That the Bill be now read a second time.--(Lord McIntosh of Haringey.)

3.15 p.m.

Lord Higgins: My Lords, as always, the House will be grateful to the noble Lord, Lord McIntosh, for his clear exposition of these matters. However, having listened to his remarks, no one could possibly doubt that these are matters of great complexity. Indeed, in some respects it will be difficult to comprehend them other than by reading what he has said, rather than by listening.

When I looked at the proceedings in another place, what struck me was that this Bill was programmed to provide that consideration of the Bill, which eventually began at around 2.30 p.m., should be concluded by 3.30 p.m., with the Third Reading taken at 4.15 p.m. I see that the Deputy Chief Whip seated opposite smiles at my remarks. But during my 33 years in another place it would have been inconceivable to limit in any way the length of time spent in debate on a Bill of this technical complexity. We have reached an extraordinary state of affairs when that is the case. Moreover, the Motion goes on to deal with consideration of Lords amendments and so forth. No doubt the noble Lord, Lord McIntosh, will be able to tell the House whether questions on any such Motions shall be put forthwith. On a matter which is this technical--it has some political content, but overwhelmingly we face here the task of ensuring that the details of the legislation are right--it is not acceptable for the House to be put in this position.

This has been a classic way for social security legislation to be dealt with since 1997. To a large extent, it reflects the degree to which the Department of Social Security has been taken over by the Treasury. More specifically, it reflects a failure to recognise that national insurance contributions have become a tax in everything but name; I repeat, in everything but name. The proceeds entering government coffers as a result of this legislation will have absolutely nothing to do with insurance and still less will this mean that those paying them will receive additional benefits as a result. Quite simply, this is yet another stealth tax.

If one looks at the history, the matter has been batted back and forth between the Treasury and the Department of Social Security in an extraordinary fashion. As the noble Lord mentioned, a 12.5 per cent national insurance contribution from employers on unapproved option schemes was announced originally

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by the Chancellor of the Exchequer in March 1999. Then, as a result of that, in March 2000 it was suggested that there should be consultation to amend the legislation, which clearly was not right. By May 2000 we had debated the Child Support, Pensions and Social Security Bill. The noble Lord, Lord Goodhart, and I took part in those discussions. The first debates were taken at midnight, with very little notice of what was being proposed. The second debate, on Report, was also taken very late in the evening.

Because I was caught somewhat unawares by this, my initial reaction was simply to say: if someone pays this national insurance contribution because the share price seems likely to rise, will they receive a refund if subsequently it drops down in the water, so to speak, when it is cashed in? I have not yet received a reply to that question. Perhaps the noble Lord could make clear the situation in his later remarks.

In November 2000, there was another pre-Budget report which accepted that some companies would have difficulties with the arrangements in cases where the options had already been given to employees. Further changes were then made, the effect of which was to establish a position where the employees also paid the employer's liability. Finally, there have been problems in regard to options granted between 6th April 1999 and 19th May 2000 with which the Bill seeks to deal.

What a way to legislate. This has been an unbelievable mess from beginning to end. I therefore ask one final question in regard to procedural issues: why are these problems being dealt with in this Bill rather than in the Finance Bill, which I understand is currently going through another place? No doubt the noble Lord will explain that.

There are objections in principle to the Bill. It essentially penalises companies--start-up companies in particular--which feel that they cannot afford to pay normal market rates of remuneration but offer options instead. This is very much in line with the Government's failure to comprehend some of these problems in relation to the IR35 matter, which also concerned entrepreneurial companies. I understand that the latest news today is that, while the High Court judgment has not come out firmly in favour of those appealing from the professional contractors group, it does mean that they will gain some advantage inasmuch as the situation will have been clarified.

This is another example of the way in which actions taken by the Government tend to suppress entrepreneurial activity rather than otherwise. If I am right--no doubt the noble Lord will confirm this--the result of all the changes which have been made since the idea was originally introduced by the Chancellor will be to tax employees not at the normal rate of tax on normal remuneration but, effectively, at a significantly higher rate of tax. I think I am right--these matters are so complex that it is difficult to be certain about anything--that it will be at a rate of something like 47.32 per cent.

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We are faced with a measure which, in principle, has much to be said against it. Having said that, it would seem that the Government are seeking to put matters right with the Bill. We will certainly support doing that during the later stages of the Bill's consideration.

The problems stem from options issued between April 1999 and May 2000 in a number of respects. However, the extent to which there will be a burden is likely to be reduced, because on the operative date--I know that the noble Lord, Lord Goodhart, has concerns in regard to whether the operative date ought to be 7th November 2000, as it is in the Bill at present--many companies will find that the options are now under water and will involve no liability.

There are problems, however, in regard to the option of the one-off charge made available to companies by the Government. Companies must decide whether to pay the special one-off charge, which would then, if I understand it correctly, discharge their obligation altogether. However, the implication if they do not go ahead with that option is that the market will think that they do not expect their share price to rise. This will obviously have repercussions in the market.

Of course, there may be good reasons for companies to decide not to go ahead. It may be, quite simply, that they do not have the cash available to take advantage of the opportunity presented to them by the Government, or there may have been staff changes and so on. None the less, the overall effect is that that is likely to be taken by the market, to some extent, as an indication of what the companies expect their share prices to do and whether they think it is worth while taking the option given to them by the Government. Overall, of course, there is a shift from companies to employees which appears to involve a very high rate of tax on individuals if they wish to go ahead.

In another place, my honourable friend Mr Howard Flight succeeded, as the Minister has rightly acknowledged, in putting forward a number of amendments. The length of time in which a decision can been taken has been extended to 92 days. That is welcome. In addition to the three technical amendments mentioned by the noble Lord in opening, we still have concerns about the roll-over relief position. I shall not go into that matter in detail at this stage--I would be here a considerable time were I to do so--but there are still matters which we think should be considered.

We hope that the Government will be sympathetic to our attempts to bring the legislation into a form which, if not easily comprehensible--and the Chartered Institute of Taxation has described it in its present form as one of the most complex matters that has ever come before it for consideration--at least into a form where it is correct overall, even if it is difficult to comprehend.

I am not sure whether I should say that we shall be third time lucky with this legislation and get it right, or whether it is going down for the third time--possibly both. In all events, there are problems with the Bill. We

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do not think that the basic approach has been right--the matter has been badly handled--but, because it gives relief to the groups that we believe deserve encouragement in their entrepreneurial activities, we shall not oppose the Bill.

3.27 p.m.

Lord Goodhart: My Lords, like the noble Lords, Lord McIntosh and Lord Higgins, I took part in the debates on the Child Support, Pensions and Social Security Bill, as it then was.

It is obviously right that profits obtained by an employee from the exercise of an option should be taxable as income and subject to national insurance contributions on the same basis, unless the options fall within the class of approved share option schemes where tax relief is available.

It has, of course, been a long-standing problem that there have been different tax bases for income tax and national insurance contributions. It is right that those differences are now being greatly narrowed in this and other cases. The difference in the bases gave rise to a number of weird and wonderful NIC avoidance schemes--for example, payment in gold bars or other commodities, such as bismuth. I am not quite sure what bismuth is used for, apart from stomach pills.

The Government were therefore right to impose NIC liabilities on profits from the exercise of share options given to employees as part of their remuneration package. However, the bubble gave rise to an unforeseen problem. Share values increased so far that the employer's prospective liability for secondary Class I contributions became potentially enormous. Accounting requirements made it necessary to include provisions in current balance sheets for the potential liability for Class I contributions on the future exercise of the options. The result was that these liabilities made some IT companies nominally insolvent. Their power to borrow was, of course, adversely affected--or "seriously compromised", as I think the expression now is.

The Government stepped in by allowing employees to agree with employers that the employees should be liable for both primary and secondary contributions on the proceeds of the exercise of the option. That seems reasonable because, if an option is exercised when shares are standing very high, the employees can sell some of them to pay for the national insurance contributions. But that, as has been explained, left the problem of companies that granted options between April 1999, when the new grants of options became potentially liable to secondary Class 1 contributions on profits on the sale of shares, and May 2000, when companies were allowed to agree with employees that the employees should be liable for the secondary Class 1 contributions.

We accept that the problem needed to be dealt with and that the Bill is a suitable way of dealing with it. There is, however, one issue that I want to raise. The Bill proposes that companies should elect whether to stick with liability under the present rules or whether

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to agree to pay national insurance contributions on the basis of a notional sale on 7th November 2000. As the noble Lord, Lord Higgins, said, in a considerable number of cases those options were already valueless at November 2000 prices, and no problem arises there.

Although the value of shares was, by November 2000, well off its peak, it has gone down a great deal further since then. Companies whose options had some value as at 7th November will, therefore, be faced with a difficult decision if share values are now significantly below their value at that date. Do they elect to pay national insurance contributions on the value of the option as at 7th November 2000, if that is more than the current value of the shares; or do they stick with the present rules on NIC liabilities and avoid the charge as at November 2000, but at the same time face the risk that the shares might take off again and land the company with a large liability in the future? This is a particular problem for companies that are short of cash, as many companies in the and IT fields now are. Clearly, many may have difficulty in raising the money to pay for a liability based on the value as at November 2000 and having to be paid immediately.

The companies have 92 days in which to decide this question. The decision would be a great deal easier if liability to secondary Class 1 contributions was based on the value of the options not at 7th November last but at the date when the Bill is enacted or possibly the date when it was first introduced in the other place. This would avoid the problem that companies that wish to cap their liability can do so only by paying national insurance contributions on an unrealised gain that has since disappeared. I await the Government's answer on that issue.

3.33 p.m.

Baroness Noakes: My Lords, I support the Bill. Indeed, it would be difficult not to do so given that it is intended to modify the unfortunate impact of earlier legislation. I should not go so far as PricewaterhouseCoopers' Bristol office, but I agree with the general thrust of what it said.

I should declare an interest at the outset as a non-executive director of a company which stands to benefit from the enactment of the Bill, having granted a large number of options to key staff in the period covered by the Bill.

The real regret is that the Bill is necessary at all. It is a consequence of a decision taken by the Government to penalise unapproved share options by the imposition of employers' national insurance contributions.

The gains from unapproved share option schemes are now taxed very heavily, as my noble friend Lord Higgins said--at 47.32 per cent where the employee pays the national insurance contributions. There are ways of setting up share option schemes which do not involve this penal level of taxation. But they are highly restrictive schemes; the rules run to many pages in the Finance Act. Many companies find that the schemes simply do not allow them to reward key employees in

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the way in which they need. That applies to the enterprise management scheme, even after the recent relaxation in the Budget.

Many start-up companies, many new economy companies, many high growth businesses and many turn-around businesses find that they have to go outside the approved share option schemes and turn to unapproved share option schemes to reward key staff in the necessary way. These businesses are now penalised by the cumulative impact of tax and national insurance.

For key management staff, the impact of losing nearly half the gains by way of tax and national insurance is significantly demotivating, given that such schemes are intended to motivate people towards wealth creation. I hope that the Government will re-examine the role of share option schemes in wealth creation in this country. I hope that they will look again not simply, as I believe was stated in the Budget report, at the corporation tax aspect of share option schemes but also at the employee end of such schemes.

As I said at the outset, I do not want to oppose the Bill, because it will provide necessary relief. But it is not a perfect measure. Reference has been made to its sheer complexity, and to Clause 3 in particular. It has confounded many technical experts, and I freely confess that it defeated me.

I should be glad if the Minister would respond to some detailed points on the application of the Bill's provisions. First, Clause 1(5) refers to regulations that the Inland Revenue will make regarding the notice to be given under Clause 1. When will draft regulations be published? The Minister will be aware that many companies need to know as soon as possible whether they can take advantage of the Bill's provisions and precisely how that can be done, as they will have only 92 days following Royal Assent both to give notice under the terms of the clause and to pay the amount calculated under Clause 2.

Secondly, why must the time limit of 92 days run from Royal Assent? That is linked to my previous question. If the regulations are not available in draft form at an early stage, companies may find these matters difficult to deal with once the Bill is enacted. Would it not be fairer to specify a time-limit which would run from the date when the regulations are published? The Inland Revenue has said that it intends to publish regulations immediately after Royal Assent; but what happens if it does not do so? If the Inland Revenue, for one reason or another, fails to meet that time-scale, it will automatically impact on the time that is available to companies in meeting their time-limits under the Act. Will the Minister say how the Inland Revenue intends to publicise both the existence of the regulations and the impact of Royal Assent--that is, when the 92-day limit runs out. For a company trying to run its business, it is hard enough to keep track on that business, let alone monitoring when Royal Assent is given to a Bill or when a government department has issued regulations.

Thirdly, will the Minister explain how unlisted companies are affected by the new provisions? Will all companies that are not listed at 7th November 2000

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automatically be treated as resulting in a nil charge under Clause 2 as the shares are not "readily convertible assets"? If the Minister cannot give that assurance, will he say how he expects valuations to be completed and agreed within the 92-day period? In my experience, share valuations of unlisted companies are one of the most time-consuming activities for taxpayers, their advisers and the Inland Revenue. If there is no blanket exemption for unlisted companies, will the Minister confirm that all unlisted companies would be unwise to rely on the deemed notice provisions of Clause 1(6)? If it turns out that a liability should have arisen and no notice was given under Clause 1, the unlisted company's share options will not qualify for the Inland Revenue's discretionary extended deadline powers under Clause 2(5) because that clause requires a notice actually to have been given.

Fourthly, and lastly, will the Minister assist taxpayers and their advisers by requiring the Inland Revenue to publish a simple version, with worked examples of the how the roll-over provisions of Clause 3 are expected to apply? The provisions of this clause will be relevant in the calculation of share option gains long after the 92-day limit has expired. As I believe was stated earlier, this is very complex legislation. As I said, I do not wish to hold up the Bill, but if ever there were a candidate for the tax simplification skills demonstrated under the leadership of my noble and learned friend Lord Howe of Aberavon, Clause 3 would be that candidate.

3.40 p.m.

Lord McIntosh of Haringey: My Lords, I am grateful to noble Lords for their response to the Bill. I acknowledge its complexity; indeed, if it is beyond the noble Baroness, Lady Noakes, what hope is there for the rest of us? Interestingly, the noble Lord, Lord Higgins, concentrated the thrust of his remarks largely on process, rather than on the content of the Bill. I shall try to respond both to his points on process and to those on content.

On the first point--namely, the way in which the Bill was programmed in another place--I am afraid that I am not really able to help the noble Lord. I believe that the rules on comity mean that it would be improper for me to comment on the procedures in another place. Of course, it is open to the Opposition to do so at any time, but it is not a matter for me. Such matters are for the authorities in the House of Commons.

The noble Lord's second point struck me as strange. He seems to think that this provision would put money through a stealth tax into the "Government's coffers", which, I believe, was the phrase that he used. I have to tell the noble Lord that the best estimate we can make is that the Bill will cost the National Insurance Fund 160 million in forgone national insurance contributions in future years. If the noble Lord wishes to count that as a stealth tax, I should point out that it is negative stealth tax. Indeed, when the noble Lord

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enters into a general election process at any time, I believe that his campaign guide ought to take that into account. I give way.

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