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National Insurance Contributions Bill

I agree with my hon. Friend's point and thank him for making it. It is true that the package of changes results in some people paying slightly more income tax, but overall the changes that we have put in place since 1997 mean that households are very much better off than they were previously, as a result of all the reforms that we have introduced. May I say to the right hon. Member for Wokingham (Mr. Redwood) that no one loses out because of the withdrawal of the earnings-related element of state second pension or because of the new cap on state second pension or national insurance contributions rebate? The introduction of the upper accruals point would affect the state second pension entitlement or contracted-out rebates only for high earners and their employers—those earning above the upper earnings limit of about £35,000 a year. The right hon. Gentleman's point is taken. However, as I have said, in the context of the whole range of changes that we have made, higher earners will still—even in the short term—receive a slightly higher state second pension entitlement or contracted-out rebate compared with the intended pensions White Paper outcome, as they will still receive a small gain in state second pension or contracted-out rebate between 2008 and 2012. There are a number of swings and balances that in the end lead to benefits rather than negatives.