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National Insurance Contributions Bill

I shall give way to any Member who has taken an interest in the Bill for the past few hours; otherwise, I shall make progress. A criticism that can be made of the Government in respect of the past 11 years or so is that a lot of additional complication has been added into the system; if some of that is now being reversed, that is welcome. I suppose I can boil our criticisms down to four succinct points. First, the simplification has come with a large sleight of hand; as has been pointed out, the Bill is part of a process that enables the Government to raise something in the order of £1.5 billion of additional revenue. The situation was fairly anomalous before, when the marginal rate of tax being paid by people earning in the region of £38,000 or £39,000 was considerably higher than that paid by those earning in the region of £28,000 or £29,000. That dip in the graph in that income area could have been seen by many on lower incomes as being unfair on them if they took the view, as I do, that national insurance contributions are, to all intents and purposes, income tax under a different guise. I understand the argument that they are not the same because they are calculated and levied on a different basis. However, many people looking at their payslips at the end of the month will find it anomalous that some people on higher incomes pay lower marginal rates than some of those on lower incomes. I understand the logic of that aspect of the changes, but had the simplification been revenue-neutral, it would have been more widely welcomed than this measure, which combines it with a large additional tax take. Our second objection is that abandoning the multiplier of 7.5 per cent., which Members who have been consistently interested in the Bill have discussed at length, represents a loss of discipline. It is always easier to loosen one's belt than to regulate one's diet. The Government would have better advised, having raised the level of tax take beyond what would have been considered conceivable by Chancellors prior to this Government's coming to office, to look more often at how they can maintain and impose greater discipline on themselves instead of looking at ways to raise the tax take further. My third point has been discussed at length by the hon. Member for South-West Hertfordshire (Mr. Gauke)—the ability of this House to scrutinise changes that may take place in future. We share the concerns that Conservative Members have expressed in that regard. Even if one takes the view that the current Government are benign and benevolent in all their intentions—certainly, most people take that view of the Financial Secretary, if not of the Government—one can see that it is nevertheless desirable that safeguards should be put in place to prevent future abuses. I think that most people would agree that those safeguards are now less onerous than would otherwise have been the case. My fourth point is about part 2, which we have not discussed at such length. As the Conservative spokesman said, as regards the state pension we are getting the pain at least four years before we get the gain. He did not say, of course, because Conservatives never do, that the need to reconnect the link with earnings and price increases has come about because the Conservative party broke it in the first place. Passing over that for the time being, it remains the case that these provisions are being coupled together in the minds of the public, yet we cannot expect the state pension to have that link restored until 2012 at the earliest. My party does not think that the provisions in the Bill are sufficient for pensioners, particularly poorer pensioners and women pensioners. The Bill is not the most controversial measure, principally because it is a means to an end rather than an end in itself. Those who object to the Chancellor's Budget and to the Government's overall tax policy, and have rushed into the Chamber to make those objections, have good reasons to do so in many cases, and those are legitimate debates. However, the Bill is about enabling these changes to take place, and that is a separate argument from whether the changes have merit in themselves. I have plenty of views about the merits of the Government's policies and their last Budget. I also have reservations about aspects of the Bill that I feel less strongly about. The Bill is not particularly controversial, but it does have limitations that give us cause for concern; that is why we will not support it.