Draft Social Security (Contributions) (Re-Rating and National Insurance Funds Payments) Order 2001

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Dawn Primarolo: Class 2 contributions for the self-employed secure access to benefits. The level remains, for the second year, at just £2 a week, which is a reduction in real terms. It is available to all self-employed people, and if such a low level—which did not pertain under the previous Government—does not help the self-employed, I am at a loss to know what will.

Self-employed people earning less than the income tax personal allowance will pay about £240 a year less in contributions. That will especially benefit lower income earners, but all self-employed people will benefit from the reduction.

Anyone with profits of £9,950 will pay a reduced contribution. That will provide a boost to lower earners and new businesses, just as the Government have been doing throughout the tax system and in other Government Departments to help new and growing businesses. The proposals reinforce our message of ensuring that those on low incomes pay a fair rate, regardless of whether they are self-employed—I have explained how people on lower incomes will pay less—and do not pay disproportionately compared with those who earn far more. Exactly the same principle applies to employees in the PAYE scheme. It is a good deal for the self-employed, who receive huge benefits as a result of the structure, and I commend it to the Committee.

Mr. Jack: On a point of order, Mr. Illsley. I received notice of my appointment to the Committee only on Monday. Perhaps the card was dispatched last Thursday but for various reasons did not reach me until Monday. However, I should be grateful if through your good offices some effort might be made to ensure that when such complex orders are to be considered in Committee, more than just a few days' notice is given of their impending arrival, especially with regard to Members' selection. If more detailed work is to be done, for example through the Library, to elicit facts on some of the issues that the Paymaster General criticised Opposition Members for not having raised, a little more time would enable a more informed debate to be organised. I should be grateful if that message could be conveyed through the usual channels.

The Chairman: The right hon. Gentleman is right in assuming that if the Committee of Selection sits on Wednesday, the cards notifying Members of their selection to a Committee are sent out the same day. Obviously, the Committee cannot be responsible for delays in the postal system. On his more substantial point about the order's complexity, it would be far better if the right hon. Gentleman were to raise the matter through the usual channels to try to secure some agreement on better notification or a longer period before such issues are set down for debate.

11.46 am

Mr. Clappison: I want to make it clear that I am not satisfied with the explanation that we have been given on the matter. The figures that we cited relate to the overall effect on the self-employed, and I am therefore minded to press the matter to a Division. In doing so, I make it clear that we do not oppose industry's receiving a reduction in national insurance contributions, but we are worried about the self-employed, and we want to use the Division to show our objection to the whopping increases that they are being forced to endure.

Question put:—

The Committee divided: Ayes 7, Noes 2.

Division No. 1]

Allen, Mr. Graham
Gardiner, Mr. Barry
Jones, Mr. Jon Owen
Pond, Mr. Chris
Primarolo, Dawn
Todd, Mr. Mark
Truswell, Mr. Paul

Clappison, Mr. James
Jack, Mr. Michael

Question accordingly agreed to.


    That the Committee has considered the draft Social Security (Contributions) (Re-rating and National Insurance Funds Payments) Order 2001.

Committee rose at thirteen minutes to Twelve o'clock.

The following Members attended the Committee:
Illsley, Mr. Eric (Chairman)
Allen, Mr.
Clappison, Mr.
Gardiner, Mr.
Hall, Mr. Patrick
Jack, Mr.
Jones, Mr. Jon Owen
Pond, Mr.
Primarolo, Dawn
Todd, Mr.
Truswell, Mr.

The following also attended, pursuant to Standing Order No. 118(2):

Tonge, Dr. Jenny (Richmond Park)

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Prepared 23 January 2001