National Insurance Contributions Bill

By any international comparison this country is doing well economically. Having said that, we have a long way to go. There are many other countries that would die to have low inflation, low interest rates and the levels of unemployment that this country has, as well as, alongside that, our level of investment in the public good and in public services. There are so many countries that would aspire to achieve the combination of economic stability and economic success alongside social justice, which arguably has been uniquely the success of this Government. That is in the context of the global challenges that lie ahead. We are not complacent. We recognise that the challenges that will come at us in future from India and China require us to raise our national game even further in skills, innovation, long-term planning and in sensible and active regional policy. We recognise also that there is a constant need for the Government to be encouraging the country to be dynamic and to be accelerating the pace of change. It is necessary to recognise the real challenges that come as a consequence of globalisation. It would be churlish of any Opposition Member to start lecturing the Labour party on economic policy or economic performance. The worst thing that business could face would be a return to boom-and-bust economics. That was the legacy that the Government sought to tackle, and we have done so incredibly successfully. My hon. Friend the Member for Stoke-on-Trent, South, (Mr. Flello) made an excellent contribution to the debate. He hit the nail on the head when he said that the issue here is the importance of fairness and equity and the idea that all taxpayers should fulfil their proper responsibilities as equal citizens of this country, wherever they live, whatever their income levels and whatever sector they work in. I agree entirely with my hon. Friend. I am pleased that the hon. Member for Twickenham (Dr. Cable) said up front that he supports the objectives that are set out in the Bill. He was right to talk about a spectrum of behaviour. However, I challenge the hon. Gentleman on one of his points. He said that this is not a moralistic issue, but entirely a practical one. I believe that people paying proper and fair levels of taxation is a moral issue in terms of the sort of society and economy that we want to be encouraging. The hon. Gentleman is right in saying that we cannot just have a moral approach. I accept that we must be very careful about the practical consequences. However, it is my view that we are dealing with a moral issue. The hon. Gentleman and others spoke about the retrospective nature of the proposed measures. Probably the best justification for retrospection is for me quickly to remind the House of what has happened year after year. In 1991, we had unit trusts. In 1993, there were gold bullion and tradable commodities. In 1994, there were diamonds and fine wine. In 1995, we had grants of options in third party companies. In 1996, there were own company share awards and options. In 1997, we had trade debt and restricted covenants. In 1998, there were conditional shares. In 1998 there were also readily convertible assets. In 1999, we had the exercise of options. In 2003, there were employee benefit trusts. There were also adjustable options. Also in 2003 there was national insurance contributions alignment to schedule 22 to the Finance Act 2003. In 2004 there was national insurance contributions alignment to sections 86 to 95 of the Finance Act 2004. All those examples reinforce the need to move in the direction in which the Bill takes us. Anyone considering these matters objectively, while understandably raising some concerns, would have to agree that on balance—the balance of judgment—this is the right thing to do.