Finance (No. 3) Bill

This is a very useful debate. I particularly enjoyed the three well-informed and well-evidenced speeches on energy policy and the implications of the proposed tax changes for the North sea. A bit of my past tempts me to follow the theme of energy, but instead, I shall talk about the impact of the Budget decisions and statements, and of the Bill, on aspects of social security. Welfare states across the world, not least in Europe, are in many respects on the defensive and under political attack. They are in difficulties because of demography—the ageing of our populations—and the impact of the economic situation on public finances, but also because of a loss of confidence in parts of public opinion in the foundation stones underlying our welfare states. I shall ask two questions of the Budget. The first is on the future of our national insurance system and the crucial contributory principle, and secondly, I want to address whether we are wholly right to pursue the policy, which we are now doing quite rapidly, of raising the age at which our people can claim old age pensions in the light of increasing life expectancy. On the contributory principle, I would welcome Ministers' comments on paragraph 1.77 of the Red Book, which states:"““The Government believes that integrating the operation of income tax and National Insurance Contributions…can remove distortions, reduce burdens on business and improve fairness.””" However, what are the likely impacts of that on the contributory principle? To be fair—I want to be fair, because I do not think that I am making a partisan point—the Government say that they"““will maintain the contributory principle””," which I welcome, but how can we bring about that administrative change, which presumably affects people of different age groups and income levels differently, while maintaining the contributory principle? That is a genuine question to which I am seeking an answer.