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Social Security (Contributions) (Amendment No. 2) Regulations 2009

Again, I thank the Minister for tabling these statutory instruments. An interesting part of these amendments is the increase in the level of class 3 voluntary NICs as a result of the victory of the noble Baroness, Lady Hollis, during the passage of the Pensions Act 2008. As my noble friend Lord Skelmersdale said then, as welcome as the increased flexibility will no doubt be to those who find it difficult to make up the minimum contributions necessary for a full state pension, contributors will be paying for it. The timing of the increase is also unfortunate. At a time when unemployment is rising, the Government are increasing the cost of employment. In carrying out his work, the Government Actuary, Mr Trevor Llanwarne, used an earnings growth figure of 3.2 per cent for 2009-10. The Treasury has forecast 2.7 per cent growth for the same year. Both forecasts are thought to be wildly optimistic by most commentators. How would more pessimistic assumptions affect the calculations? Similarly, unemployment levels have also changed since the Pre-Budget Report. These will affect the use of the fund. Will the Minister comment on whether the surpluses in the fund will be sufficient to cope with these dramatic variables? The surplus is currently used to subsidise the National Health Service and other government spending. Would using the surplus to fill the gaps that I have identified have such a significant impact on government revenues that there could be other consequences, such as a tax increase?