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Leave out lines 12 to 15 and insert ("and those limits and that threshold shall be the amounts").

Baroness Hollis of Heigham: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 64A to Lords Amendment No. 64. In moving this amendment, I shall speak also to Amendment No. 64B.

These amendments remedy the damage caused by the introduction to Government Amendment No. 64 of changes put forward by noble Lords opposite at Third Reading--changes that I condemned as ill judged, irresponsible and imprudent and that I urged the House to reject. Noble Lords opposite sought to introduce into the Bill a change that my right honourable friend the Chancellor of the Exchequer has said he will make at a later date. But the way they sought to do so would have had extremely damaging effects. They would have removed access to certain contributory benefits for up to 1 million low paid workers, four-fifths of them women. They would have cut future SERPS occupational and personal pensions for millions of others and would have reduced national insurance contribution revenue by approaching £1.5 billion a year without any consideration of whether the financial circumstances were right.

It is not, and never has been, the Government's intention to make this change to the lower earnings limits in April 1999. The Chancellor never said that it was. As he explained, he would not implement the change until accompanying measures were in place to ensure that people did not lose access to contributory benefits as a result. That is why, as I explained to your Lordships at the time, despite the noble Lord's amendment, the Government would not and did not introduce the measure into the Bill.

The other place has now had the debate--at some length--so unnecessarily wished upon them by noble Lords opposite. The result is the amendments before us today, amendments which clearly and unequivocally reject the changes proposed by noble Lords opposite and repair the damage that those changes would otherwise have done to the Government's carefully considered package of proposals for restructuring the national insurance system.

The Government's proposals have been widely welcomed. They will help to make work pay. If the new structure was in place today, each and every employee paying national insurance would pay £1.28 a week less. Our proposals will also encourage employers to create jobs for people moving from welfare into work and they

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will simplify the administration of the scheme for business. The overall effect will be to improve work incentives and make it more attractive to employ those moving from welfare into work. The Government will build further upon these measures in future reforms, but only when the time is right and when the benefit implications have been properly addressed.

Amendments Nos. 64A and 64B clearly show that the other place believes that the Government's approach to the reform of the national insurance system is the right one. The noble Lord opposite said at the time that his prime concern was to allow the other place the debate which it has now had. As a result, I urge the House to support the Government's reforms by agreeing to Amendments Nos. 64A and 64B.

Moved, That the House do agree with the Commons in their Amendment No. 64A to Lords Amendment No. 64.--(Baroness Hollis of Heigham.)

Lord Higgins: My Lords, the noble Baroness said a moment ago that your Lordships had unnecessarily wished upon the Commons the amendments we are now considering. It is often said that the purpose of this noble Chamber is to be a revising Chamber. However, what we did in our amendment was not to ask the Commons to think again but to give it an opportunity for the first time to consider the important issues raised in our debates. It is surely entirely appropriate, even more so than asking the Commons to think again, that your Lordships should have sought to do that. I reject wholeheartedly the noble Baroness's charge that this was in any way irresponsible.

It is, of course, the case, as the noble Baroness rightly pointed out, that the sums of money are considerable. I shall return to that in a moment. The fact is that we asked the other place to look at measures which were widely thought, particularly in the media in reports of Budget day, to have been part of the Budget. Therefore, I regret the fact that the other place was not prepared to accept the amendment which your Lordships put before it; or, indeed, if the other place did not like the exact terms, to amend the amendment.

To some extent, this whole issue turns on timing. I do not wish to weary the House again--we debated the matter at some length at Third Reading--about the way in which the Chancellor of the Exchequer has behaved. It is now clearly on the record that he went before the Treasury Select Committee and in terms said that he had said something in his Budget speech which only a superficial examination demonstrates he did not say. I regret that. It would have been more appropriate simply for him to have apologised and to have explained why the misunderstanding arose. It is widely thought that he used the words he did in the Budget speech to create the impression that he was going to give concessions which he is not at the moment prepared to do. To be absolutely frank, I cannot conceive of any of the Members of your Lordships' House who have previously been Chancellor of the Exchequer behaving in the way in which the present Chancellor of the Exchequer behaved in front of the Treasury Select Committee. However, I leave the matter there and turn to the issues of substance raised by the noble Baroness.

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Timing is, in a sense, the essential part of this issue, which is why we put forward an amendment referring specifically to 1999-2000. If, as appears to be the case, the Chancellor does not propose to go ahead with his original proposal--indeed, he has gone so far now as to have it voted down in the Commons so he himself did not appear to defend it--it would have been perfectly appropriate for the Government to have put down an amendment to the amendment saying that they did not like the dates and that they would change them.

Baroness Hollis of Heigham: My Lords, I am grateful to the noble Lord for giving way. He stated that the Chancellor was not going ahead with his original proposal. I have to say, and it has been said dozens of times, that the Chancellor never made that as an original proposal. The noble Lord should not attribute to the Chancellor words which were not given.

Lord Higgins: My Lords, I may have misunderstood what the noble Baroness has just said. If she is saying that the Government are not at any stage proposing to go ahead with what the Chancellor said in his Budget speech, that would be an interesting statement. However, at all events, it would have been perfectly appropriate for the Government to have changed the dates. The Government did not change the dates and they are not now proposing to accept the amendments in the form in which they were originally tabled.

Why are they not prepared to put dates on what the Chancellor felt appropriate to put forward in his Budget speech? My purpose today is to get an answer from the noble Baroness in that regard. If the Chancellor thought it appropriate to go ahead and mention this--it was very much a central part of the press coverage which he received--it is not inappropriate for us to ask to have a date put upon it. The reality is that we have not had a date put upon it.

The Red Book did not contain the £1.5 billion figure which one would expect. The purpose of the Red Book is to set out the Government's plans for the economy for the following four or five years. Yet we have something here which the Chancellor put in his Budget speech but we have no idea whether it will happen in those five years or at a time beyond the next election. If economists and others are to judge correctly what the Government's position is, the expenditure should be set out in the appropriate place. But that has not happened. We are therefore forced to the conclusion that it will happen in the next Parliament. I hope very much that that will not be the situation. One cannot have a sum of £1.5 billion knocking around in the forecast for the next four or five years without people having some idea in which year this will take place.

The noble Baroness said that we ought to say where we will find the money. Alas, that is not the task of those on this side of the House. If we were on the other side of the House, it would be our task. However, the Chancellor has floated this idea--we are now told that it was no more than an aspiration--without saying where he will find the money in the following years. That has not turned up. We are not clear about the reason for the delay.

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I should say in passing that we reject the argument put forward by the noble Baroness both at Third Reading and again today that our amendment would have the effect which she set out on 1 million low-paid people and so on. The Government themselves made clear that when these proposals are implemented they intend that every employee in the country who has had an income of between £64 and £81 a week will have his position protected. What we are not clear about is the reason for the delay.

There seem to be two obvious reasons. First, the Chancellor does not know where he will get the money from. If that is the case it is appropriate to put that in the Red Book. The second reason is that the Government have not yet thought how to protect the position of those with incomes of between £64 and £81 a week. As the Chancellor took the trouble to mention this specifically in his Budget speech, we are entitled to ask the Minister to give the options for protecting people in this particular group. The impression created at the moment--it is difficult to draw any other conclusion--is that the Government do not have the remotest idea of how to carry out what the Chancellor said in the second part of the controversial paragraph which has now been quoted so often both in your Lordships' House and in the other place.

This is an ideal opportunity for the noble Baroness to clarify the position and to say whether this matter will be delayed until we have the Green Paper on pensions reform. This has become a very movable feast. When these proposals were first put forward after the election we were told that the Green Paper would be published in the early part of this year and then in the middle of the year. The noble Baroness will correct me if I am wrong, but we understand from press reports and leaks, that it will not be until the latter part of the year--perhaps the final quarter--that we shall get the Green Paper on pensions reform. Can she now say when we shall get it and specifically whether the Chancellor's proposals for protecting those earning between £64 and £81 will be included in the Green Paper? If that is not the case, are we to get the news before that or some time yet further in the future?

It is helpful to have this debate this afternoon. We want to move the matter forward. It is an important matter. Therefore, first, when are we now likely to get the proposals which the Chancellor foreshadowed--it was no more than that, although it did not seem that way at the time? Secondly, can the Minister say what the options are for protecting those in the income groups to which I have referred? Finally, can she say when we are likely to have the Green Paper? The amendment was entirely appropriate and in no way irresponsible. Indeed, I believe we would have been failing in our duty if we had not given the other place the opportunity on a specific amendment to debate this very important issue.

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