---

Social Security (Contributions) (Re-rating) Order 2008

I have a question or two. We have had a very good run, and the Minister has been very assiduous and helpful this afternoon. In earlier debates, the noble Lord, Lord Skelmersdale, acutely put his finger on some of the key contents of the Government Actuary’s departmental report, and he was right to do so because we know that the established procedure is that the Government Actuary recommends that a minimum balance of one-sixth of the estimated annual benefit expenditure should be kept in the fund, and that it would not be safe to go below that because it would prejudice the potential future payment of benefits. However, as the noble Lord, Lord Skelmersdale, rightly said, if we look at 2008-09, the estimated balance in the National Insurance Fund, to which this order contributes, is £56,000,000,000; that is not one-sixth or 16.7 per cent of the estimated benefit expenditure, but 81.5 per cent. At what point does the Government Actuary ever get round to saying that there is more money in the fund than the Government know what to do with? If we look at appendix 9—I am sure the noble Lord, Lord Skelmersdale, has it in front of him—there is a forward projection about the balance at the end of the years 2008-09 to 2012-13. I accept that they are estimates and there will be lots of variables and assumptions in them, but the balance at the end of the year as a percentage of benefit payments goes from 81.5 per cent at the end of 2008-09 to 136.3 per cent of benefit expenditure. We will need to wait until the Budget to see what fiscal drag is doing to whatever else is available to the Chancellor, because fiscal drag brings in more and more money in a surreptitious way by more people falling into higher rates of tax, year in, year out. However, the point made by the noble Lord, Lord Skelmersdale, in the context of an earlier order, is apposite, but perhaps not in terms of the National Pensioners Convention. I hope the Minister will take the trouble to go to the next convention. They are usually held in Blackpool and are very congenial events, but not for government Ministers. I have been and survived, but only just, and I am only a Liberal Democrat—I am sounding slightly facetious. One would think that there is an embarras de richesse in the National Insurance Fund. Of course these are big numbers and things can happen, but what advice does the Government Actuary give? Does he not tap Ministers on the shoulder and say that it is getting a bit out of hand? To a lay person—certainly to the pensioners mentioned by the noble Lord, Lord Skelmersdale— these figures look like gross. Taken together with the fiscal drag that we will see in the Budget, it will be very difficult to understand when a Minister explains it at Blackpool. What serious discussions are taking place between the GAD, the Treasury and the DWP about how these provisions, which are accumulating in a way that is very difficult to describe to hard-pressed pensioner households, are going to be dealt with in future?