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National Insurance Contributions Bill

I thank the noble Lord, Lord Newby, for his support. Like him, I rejoice that this is not a tax for the purposes of today's debate. Although deciding whether national insurance is a tax is an interesting topic that we can debate from time to time, for the purposes of the proceedings of your Lordships' House, we are happy that it is not a tax, because it allows us to debate the issue and use our skills on the topic. I heard what the noble Lord, Lord Newby, said about not ruling out the upper earnings limit by increasing it by a particular amount at any point. I conceded that. However, if it is to be realigned, that is a subject for Parliament, just as in the Finance Bill so is the realignment of personal allowances at a rate other than that produced by Rooker-Wise. The Minister took us back to the Crewe by-election bung. I will return to that in the next group of amendments and I shall not respond to any of those points at the moment. The burden of the Minister’s argument is that the amendment does not do the trick because it does not produce an acceptable result without further tinkering and intervention and would result in a Bill every year. I am not convinced that that is correct and that this cannot be dealt with by tinkering with either the rounding in this Bill or, potentially, the rounding in the Income Tax Act to keep alignment. I have not done the detailed modelling but I cannot believe that it is beyond the wit of a rounding clause to get it to that point. I do not accept that for the sake of a few tens of millions of pounds, there is an insuperable objection to putting a restriction on the Government’s unlimited power to raise national insurance by increasing the upper limit. The Minister has not addressed the point that the current limitation imposes a clear limit and that the Bill takes that limit away and puts nothing in its place.