Social Security (Contributions) (Re-rating and National Insurance Funds Payments) Order 2006

I thank both noble Lords for their contributions and questions. I will try and deal with them as fully as I can. The noble Lord, Lord Skelmersdale, referred to orchestras. I thought that might be touched on this afternoon. Officials in HMRC have been in discussion with the Arts Council, Musicians Union, the Department for Culture, Media and Sport and the Association of British Orchestras, to ensure that this matter is resolved as quickly as possible, taking account of fairness to other employers. The Arts Council has engaged Birwin Leighton Paisner as legal advisers. The intention is that as many orchestras as possible should be represented by BLP to minimise any expense incurred through legal and accountancy fees, and ensure consistency of treatment of musicians engaged under similar terms. The first stage is to establish whether there is a liability. To start with, BLP plans to provide information on the contractual terms under which soloists and conductors are engaged so that HMRC can decide whether there is a liability for these groups. The next stage will be to quantify that liability, if any, and then to see whether they can pay. This is an ongoing matter, and a constructive process is under way. The basis on which this uprating took place is rooted in RPI and gives us the September number which is the starting point. But it is fundamentally rounding which gives rise to some of the differences, and I will try to highlight some of them. If you look at the small earnings exception, the current figure is £4,345, and with RPI it would be rounded up to the next number ending in five, which gives us the £4,465 that we have before us. The weekly contribution for class 3 contributions is indexed by RPI and rounded up to the nearest 5p. The upper profit limit is based on 52 times the upper earnings limit; the lower profits limit is aligned with the personal allowance. The thrust of that, we maintain, is broadly in line with RPI. I hope that fills in some of the detail. A question was raised about the actuary’s report and, in particular, the difference in the transfer to Northern Ireland figures between 2005-06 and 2006–07. I have no ready explanation. It would be best if I wrote to the noble Lord on that—as well as on his point about the difference between the original and revised estimates for the current year, particularly the impact on widow’s benefit—rather than just give him a glib answer off the cuff. I will write to him to ensure that he has that information in full. In relation to the point raised by the noble Lord, Lord Oakeshott, on whether this fund really exists, to a certain extent some of the accounting might be notional, but it is a real fund. Accounts for it are drawn. Clearly, the surplus on the fund is invested in gilts, which helps to pay for public expenditure. But it is important to maintain that position because this concerns contributions and entitlements. Therefore, we think that the integrity of the fund is key and will remain. I hope that has dealt with each of the points that were raised. I will follow up on the few specific points raised to make sure that a full explanation is given. I confirm that this order raises the small earnings exception to £4,465, the class 4 lower profits limits to £5,035 and the upper profits limit to £33,540. It also raises the weekly class 3 contribution rate to £7.55. As I have said, all the increases announced are broadly in line with inflation. I commend the order to the Committee. On Question, Motion agreed to.