National Insurance Contributions Bill

Debate between Lord Hanson of Flint and John Healey

Thursday 13th January 2011 Commons Chamber

[Mr Hanson]

The key issue—this is one reason I have suggested an annual report—is that 1,500 is significantly less than the trajectory we would hope for and which is necessary to achieve a take-up of 400,000 by the end of the scheme. It is already six or seven months since the Exchequer Secretary announced the scheme, and we effectively have two years this September—until September 2013—before completion. A target take-up of 400,000 and today’s take-up of 1,500 show that the trajectory is not there.

I intend to withdraw the new clause—the Minister can relax in that knowledge and take it as a helpful contribution to the debate—but I hope he will still reflect on the fact that one reason we have asked for an annual report is to ensure that we are able to know every year what the trajectory of the take-up is and in which regions and sub-regions it is occurring. If, for example, by the end of 2011, 30,000 or 40,000 businesses have taken up the scheme, and there is a capacity of 400,000 and just two years left of the scheme, a considerable effort would be needed to generate those new businesses in the two years.

If the Minister does not want to build in failure to his scheme, he needs to monitor that and, if need be, consider the suggestions we will make later about expanding the scheme into other regions, such as London and the south-east, to ensure that the 400,000 take-up that he wants is met. I will make the case later, supported by my right hon. and hon. Friends, that high levels of public sector employment in London and the south-east region will be hit by public spending cuts; without the necessary debate on those issues generally, that will happen as much in London and the south-east as in north Wales, the north-west, Yorkshire, Scotland, Northern Ireland and other parts of the United Kingdom.

If we do not have the trajectory of take-up that the Minister anticipates, we might end up with a scheme that, after three years, does not deliver a take-up of 400,000. At the same time, colleagues in London and the south-east and eastern regions will have been impacted by public spending cuts, but their constituents will not have benefited from that scheme. In tabling the new clause and amendments, I was trying to give the Exchequer Secretary some flexibility to enable him to design the scheme, review it and bring back suggestions accordingly. More importantly, hon. Members on both sides of the House, including the hon. Member for Wimbledon (Stephen Hammond), whose constituency will not benefit from the scheme, can assess its impact.

We welcome the holiday and think it will have a positive impact, although it will not compensate for the things that my hon. Friend the Member for Luton North (Kelvin Hopkins) mentioned. We will have to consider what its outputs are, whether we achieve them and whether the scheme is successful, and we will return to these matters in parliamentary questions. I hope that the Exchequer Secretary will reflect on some of those issues before the Bill reaches another place. I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

Clause 3

Increased product of additional rates to be paid into National Insurance Fund

[John Healey (Wentworth and Dearne) (Lab)]

I beg to move amendment 8, page 2, line 2, at end insert

‘The National Audit Office shall report to Parliament by the time of Royal Assent on the Finance Act 2011 on the sum that would be required from the product of additional rates in order for the health service allocation to grow in real terms in every year.’.

It is good once again to face the Exchequer Secretary across the Dispatch Box, although not so good to do so from the Opposition side and with him on the Government side. However, he is a serious Minister doing a serious job. He showed that in the way he responded to my right hon. Friend the Member for Delyn (Mr Hanson) and the debate on the first group of amendments. I hope that the Exchequer Secretary will feel that amendment 8 and the amendments that were not selected were intended to be helpful to the Government. With them, we are offering to him, his boss the Chancellor and his colleagues in government the opportunity to act to prove to the public that they will honour the promises the Government made about protecting NHS funding and ensuring it sees a real funding increase each year, not a real cut.

The Bill and national insurance contributions legislation more generally are about raising and allocating national insurance funds and contributions paid into that fund. The NHS has had a special place in that legislation certainly since 2002, when we decided to move, from April 2003, to raise an extra 1% on earnings above £43,800 and to allocate all that extra income to the health service and the NHS. The amendments we tabled, including amendment 8, give the Government the chance to do the right thing by the NHS and the British people. Amendment 8 in particular lays the groundwork for the Exchequer Secretary and his colleague the Chancellor to make the right decisions in order to honour their promises in the Budget.

There were big improvements as a result of Labour’s investment in the NHS over the past decade—51,000 extra doctors, 98,000 extra nurses, patient satisfaction at an all-time high—and it is hard to remember that in 1997 there were more than 280,000 people waiting more than six months to get into hospital for the operations they needed. I make that point to explain the broader context to amendment 8, as I am conscious that the House is debating a relatively narrow provision.