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National Insurance Contributions Bill

We will be able to discuss the detail in Committee. Members from Opposition parties, and perhaps some on my own Benches, will want to probe a number of points in detail. Although we are simplifying things in carrying out this change, there are complexities around it and interplaying factors in respect of how individuals are affected—[Interruption.] I am trying to say that I accept that there are criticisms of the package that we have put forward. However, when it is taken in the round and in the context of the reforms that we have introduced over a long period, few will be absolute losers as a result of the overall package. The changes will mean that from 6 April 2009, all employers will have to calculate, record and report additional information for employees with earnings above the upper accruals point. Although that will require changes to their payroll records, the information is essential for state second pension purposes and the calculation of contracted-out rebates. As we have just discussed, there has been some speculation about potential losses in state second pension entitlement and rebates. Although the proposals to introduce the upper accruals point in 2009 will affect some high earners, state second pension accruals and rebates for that group are still expected to be higher than those envisaged in the pension White Paper. In conclusion, the Bill is important and necessary. It allows us to implement a personal tax package that reduces child poverty, in which I am particularly interested. I am proud of that. It also takes pensioners out of income tax and creates one of the simplest personal tax structures of any developed country. Furthermore, it allows us to return to the timetable for the introduction of a simple flat rate state second pension scheme. I commend it to the House.