National Insurance Contributions Bill

No, I will not, if the hon. Gentleman does not mind. He has not been here for all of this very long debate, and in the few remaining moments I want to reply to the amendments of the right hon. Member for Bromley and Chislehurst (Mr. Forth). So the idea that people could not comprehend this measure or that they did not have sufficient details from the Government is a misunderstanding on the part of Conservative Members. The confusion, moreover, is perpetuated in the amendments, which seek to do lots of different things and contradict—[Interruption.] Yes, I suppose that it is a case of betting both ends against the middle. Amendment No. 5 would have the effect that regulations made under the provisions in the Bill could apply only to tax measures made after the Bill had been passed. Clearly, that would undermine the deterrent effect of the statement of 2 December 2004, and put at risk national insurance yield of £95 million in 2004–05. I disagree with the hon. Member for Christchurch, as I do not think that that is an insubstantial sum. It could also put at risk all the 2005–06 yield of £240 million, as the end-of-year bonus season could escape liability for national insurance. Amendment No. 5 would also produce an anomalous result between tax and national insurance. The Opposition spoke about human rights challenges, but the amendment would mean that people using an avoidance scheme that gets caught by any of the tax provisions having effect from 2 December 2004 would have to pay back their income tax liabilities, but not their national insurance liabilities. Amendments Nos. 6 and 20 would increase uncertainty. Ironically, or perhaps deliberately, they would contradict amendments Nos. 5 and 16. They would remove proposed new section 4B(5), which specifies that regulations cannot have effect before 2 December 2004. The amendment would therefore extend the scope of retrospection, and mean that there would be no limit on how far back Ministers or regulations could go. I am sure that Opposition Members would not want that. Amendment No. 16, like amendment No. 5, would undermine the deterrent effect of the 2 December 2004 statement. As I described earlier, it would put at risk substantial amounts of revenue, as bonuses paid through the contrived schemes could escape the national insurance liability if the operative date for the regulations were 11 October 2005. That would produce another anomalous result: tax would be collected through a scheme whose purpose was considered to be avoidance, but the national insurance liability under the same scheme would not be collected. Frankly, that would be an unreasonable—to put it politely—use of legislation. Amendment No. 19 would restrict the scope of regulations that may be made for modifying any provision of any enactment for the purposes specified in proposed new section 4C(2). That would mean that the regulations could not amend primary legislation, so that where such legislation deals with matters in 4C(2)—such as contributions, contributory benefits and pension scheme matters—it could not be amended, even where not to amend it would be to the detriment of employees. The current arrangement is to allow such amendments where that is fair to employees and ensures that they receive their entitlement as a result of a change of national insurance liability. Amendment No. 9 is unnecessary, and frankly unwise. It would omit proposed new section 4C(5)(g), which enables regulations to be laid that will redetermine matters to the benefit of contributors. Without that provision, it is possible that increased entitlements that arise from retrospective legislation will be denied by virtue of a previous determination. That is, when people are deemed to be required to pay national insurance, that will affect their entitlement to contributory benefits. The amendment would prevent increased benefit entitlement being assigned to those individuals. I shall deal briefly with amendment No. 18, which addresses the Bill’s impact on the provision of statutory payments, such as maternity, paternity, adoption and sick pay. Retrospective regulations made under the powers in the Bill could have an effect on entitlement to those statutory payments. Eligibility for statutory payments is based in part on the employee’s average weekly earnings assessed over a specified calculation period. As a result of an avoidance scheme an employee may therefore receive less than they may have been entitled to if they had paid the correct amount instead of the lower amount. The amendment would prevent the employee from receiving that additional payment. I think that the right hon. Member for East Yorkshire (Mr. Knight) thought that the Bill prevented the restoration of those statutory payments, whereas it is the amendment that does the damage. The Bill provides for that to happen. Therefore I urge hon. Members to reject amendments Nos. 5, 6, 16, 19, 20 and 9. They undermine the deterrent effect of the 2 December 2004 statement, increase uncertainty for employers, are detrimental to employees and will put at risk a substantial amount of national insurance money that is due to the national insurance fund. If the amendment is put to the vote, I urge my hon. Friends to vote against it.