Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2018

Debate between Lord Young of Cookham and Baroness Primarolo

Tuesday 6th March 2018 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, these draft regulations, which have passed in the other place, make no changes to the structures of the national insurance and benefits systems, and are a routine annual exercise to account for the rise in prices. As noble Lords know, this Government are committed to a welfare system that is fair to the taxpayer while also protecting Britain’s most vulnerable.

To put the regulations in context, the Welfare Reform and Work Act 2016 legislated to freeze the majority of working-age benefits, including child tax credit and working tax credit, for four years—in other words, up to 2020. The Act helped to put our welfare system on a sustainable long-term path. Exempt from the freeze are the disability elements of the child tax credit and working tax credit. The guardian’s allowance is also exempt. As in previous years, we are now legislating to ensure that the guardian’s allowance and the disability elements of child tax credit and working tax credit increase in line with the consumer price index, which had inflation at 3% in the year to September 2017. Alongside our commitment to fiscal discipline, the Government, through the draft regulations, are exercising their demonstrable commitment to protecting those who need protection the most.

What the regulations mean in practice is that we will maintain the level of support for families with disabled children in receipt of child tax credit and for disabled workers in receipt of working tax credit. The regulations also sustain the level of support for children whose parents are absent or deceased. To add further context to these regulations, universal credit is replacing a number of means-tested working-age benefits, including tax credits. Once all tax credit claimants have migrated on to universal credit, the uprating of tax credit elements will no longer be necessary.

The social security regulations make changes to the rates, limits and thresholds for national insurance contributions and make provision for a Treasury grant to be paid into the National Insurance Fund if required. These changes will take effect from 6 April 2018. Re-rating increases these figures by inflation to protect taxpayers from rising prices and increases to the costs of living.

These regulations will result in around £130 billion of national insurance contributions to the Exchequer, working directly to support the NHS, pensioners and the bereaved. On class 1 national insurance contributions, the lower earnings limit is the level of earnings at which employees start to gain access to contributory benefits. These include the state pension, contributory employment and support allowance and contribution-based jobseeker’s allowance. The lower earnings limit will rise in line with inflation from £113 to £116 a week, or £6,032 on an annual basis.

Employees have to pay class 1 NICs at 12%. The primary threshold is a level of earnings—£8,424 on an annual basis—above which class 1 NICs have to be paid. The threshold will rise with inflation to £162 a week. The upper earnings limit is the level at which employees start to pay class 1 NICs at 2% instead of 12%. The Government have committed to align this threshold limit with the UK’s higher income tax threshold of £46,350 on an annual basis.

Employers have to pay national insurance at a rate of 13.8% from an earnings level called a “secondary threshold”. This threshold will also rise with inflation to £162 a week, as it has been aligned with the primary threshold for employees since April 2017. The Government are also committed to reducing the cost to businesses of employing young apprentices and young people. The level at which employers of people under 21 and of apprentices under 25 start to pay employer’s contributions will therefore rise from £866 to £892 a week.

Class 2 NICs provide access to contributory benefits for the self-employed—in other words, the state pension. The weekly rate of class 2 NICs that has to be paid will rise in line with inflation to £2.95—a flat rate for all the self-employed. The small profits threshold is the level of profits above which the self-employed have to pay class 2 NICs. This threshold will rise with inflation to £6,205 a year.

The self-employed also have to pay class 4 NICs, at a rate of 9% on profits above £8,164 a year. That limit will now rise with inflation to £8,424. The self-employed then pay 2% instead of 9% above what is termed an upper profits limit. That limit will rise from £45,000 to £46,350 a year. Finally, class 3 contributions allow people to voluntarily top up their national insurance record. This allows access to the state pension. The rate for class 3 will increase in line with inflation from £14.25 to £14.65 a week.

The regulations also make provision for a Treasury grant of up to 5% of forecasted annual benefit expenditure to be paid into the National Insurance Fund, if needed, during 2018-19. This would be a routine transfer with no wider fiscal impact. A similar provision will be made in respect of the Northern Ireland national insurance fund.

I trust that this has been a useful overview for noble Lords of the changes that we are making, and I commend the draft regulations to the House. I beg to move.

[Baroness Primarolo (Lab)]

My Lords, I do not wish to detain the House for long today but I want to ask the Minister some questions specifically about the tax credits and guardian’s allowance regulations. I should say that I asked a Minister similar questions in a debate last week on social security. I had asked her some questions about the freeze on tax credits, child benefits and child tax credits, and she responded by saying:

“I respond by simply saying that the Treasury is responsible for these benefits and it announced the 2018-19 rates”,—[Official Report, 27/2/18; col. GC 13.]


and so on. I decided that as a former Treasury Minister it was a good idea to come today to ask a former Treasury Minister, and a current Treasury Minister in this place, some questions about child benefit.

I am grateful for the noble Lord’s introduction of the orders, but I want to focus on the question of rising inequality and poverty among children in our country. According to the Resolution Foundation, inequality is projected to rise to record highs by 2022-23, and it says that this is a sad,

“story of the poorest working-age households being left behind”.

The driver of this is the freeze in most working-age benefits. According to the Resolution Foundation, by 2020, child benefit beyond the first child will be worth less than 32 years ago and child benefit for the first child will be at its lowest level in real terms in the past 20 years.

Child poverty is on the increase, and absolute child poverty, in particular, is rising. Yet we see the shocking prospect, in a country which has the sixth-largest economy in the world, of more and more children’s and families’ lives being blighted by poverty. The Child Poverty Action Group says that as a result of the cumulative cuts to social security, we are pushing more children into poverty. Its analysis is that 1 million more will be in poverty, two-thirds of them in working households.

Does the Minister accept those figures as correct? Does he accept that as a result of the freeze, 10.5 million households will see their average yearly income cut against a backdrop of rising food prices, now standing at 4.1%, at exactly the same time as the Treasury is saving £4.7 billion, more than originally estimated, by the freeze in those benefits?

I am sure that the Minister will say, and I would not disagree, that the best way out of poverty is work, but he knows as well as I do that families face precarious work situations, zero-hours contracts and rising inflation. It is a heady cocktail that they cannot fight by themselves, and the Government need to step in.

The Explanatory Memorandum which accompanies the orders makes it clear that the Treasury was not required to review the impact of the freeze on child benefit, as the decision had been taken before. I ask the Minister three simple questions. How will the Government stop the rise in child poverty? Will he agree to publish an assessment of the benefit freeze and its impact on child poverty? Finally, will he go back to the Treasury to persuade it that it needs to reconsider the decision to freeze child benefit, bearing in mind the vast amount of money that it has saved, to share some of it with mothers by giving it to them as an increase in their child benefit so that they can spend it on their children in times of desperate challenge for families?

Speaker’s Statement

Debate between Lord Young of Cookham and Baroness Primarolo

Wednesday 16th May 2012 Commons Chamber

[Madam Deputy Speaker (Dawn Primarolo)]

We now come to the results for the election of the Chair of the Backbench Business Committee. Nominations closed at 5 o’clock this afternoon for candidates for the post of Chair of the Backbench Business Committee. One nomination has been received. A ballot will therefore not be held tomorrow. May I be the first to congratulate Natascha Engel on her—[Hon. Members: “Hear, hear!”]—popular re-election as Chair of the Committee?

[The Leader of the House of Commons (Sir George Young)]

May I be the second to congratulate the hon. Lady on that unanimous vote of confidence in her performance as Chair of the Backbench Business Committee, and may I say how very much I and the Deputy Leader of the House look forward to working with her again in the forthcoming Session?

Business of the House

Debate between Lord Young of Cookham and Baroness Primarolo

Thursday 19th April 2012 Commons Chamber

[Sir George Young]

We take very seriously information about the quality of service. My understanding is that Royal Mail publishes such information every quarter. Of course I will raise with Department for Business, Innovation and Skills Ministers the case of the two postal districts to which my hon. Friend has referred to see whether we can get those specific performance statistics. If they are deficient, I hope that Royal Mail will take the appropriate steps and drive up the quality of service to the level to which my hon. Friend’s constituents are entitled.

[Madam Deputy Speaker (Dawn Primarolo)]

I thank the Leader of the House, the shadow Leader of the House and the 48 Members who were able to participate in business questions.

Committee on Standards and Committee of Privileges

Debate between Lord Young of Cookham and Baroness Primarolo

Monday 12th March 2012 Commons Chamber

[The Leader of the House of Commons (Sir George Young)]

I beg to move, motion 2

That—

(1) The following new Standing Order be made, to have effect from the date specified in paragraph (6) of this order—

‘Committee on Standards

(1) There shall be a select committee, called the Committee on Standards—

(a) to oversee the work of the Parliamentary Commissioner for Standards; to examine the arrangements proposed by the Commissioner for the compilation, maintenance and accessibility of the Register of Members’ Financial Interests and any other registers of interest established by the House; to review from time to time the form and content of those registers; and to consider any specific complaints made in relation to the registering or declaring of interests referred to it by the Commissioner; and

(b) to consider any matter relating to the conduct of Members, including specific complaints in relation to alleged breaches in any code of conduct to which the House has agreed and which have been drawn to the committee’s attention by the Commissioner; and to recommend any modifications to such code of conduct as may from time to time appear to be necessary.

(2) The committee shall consist of ten Members, and at least two and no more than three lay members.

(3) Unless the House otherwise orders, each Member nominated to the committee shall continue to be a member of it for the remainder of the Parliament.

(4) The committee shall have power to appoint sub-committees consisting of no more than seven Members, and at least two lay members, and to refer to such sub-committees any of the matters referred to the committee.

(5) Lay members may take part in proceedings of the committee and of any sub-committee to which they are appointed and may ask questions of witnesses, but lay members may not move any motion or any amendment to any motion or draft report, and may not vote.

(6) The quorum of the committee shall be five members who are Members of this House, and the quorum of any sub-committee shall be three members who are Members of this House.

(7) The committee and any sub-committee may not proceed to business unless at least one lay member is present.

(8) The committee and any sub-committee shall have power—

(a) to send for persons, papers and records, to sit notwithstanding any adjournment of the House and to adjourn from place to place;

(b) subject to the provisions of paragraph (9) of this order, to report from time to time;

(c) to appoint legal advisers, and to appoint specialist advisers either to supply information which is not readily available or to elucidate matters of complexity within the committee’s order of reference.

(9) Any lay member present at a meeting at which a report has been agreed shall have the right to submit a paper setting out that lay member’s opinion on the report. The Committee shall not consider a motion that the Chair make a report to the House until it has ascertained whether any lay member present wishes to submit such a paper; and any such paper shall be appended to the report in question before it is made to the House.

(10) The committee shall have power to order the attendance of any Member before the committee or any sub-committee and to require that specific documents or records in the possession of a Member relating to its inquiries, or to the inquiries of a sub-committee or of the Commissioner, be laid before the committee or any sub-committee.

(11) The committee, or any sub-committee, shall have power to refer to unreported evidence of the former Committees on Standards and Privileges and to any documents circulated to any such committee.

(12) The committee shall have power to refuse to allow proceedings to which the public are admitted to be broadcast.

(13) The Attorney General, the Advocate General and the Solicitor General, being Members of the House, may attend the committee or any subcommittee, may take part in deliberations, may receive committee or subcommittee papers and may give such other assistance to the committee or sub-committee as may be appropriate, but shall not vote or make any motion or move any amendment or be counted in the quorum.’

(2) The following new Standing Order be made—

‘Lay members of the Committee on Standards: appointment, etc.

(1) Lay members shall be appointed to the Committee on Standards by a resolution of the House on a motion made under the provisions of this order and shall remain as lay members in accordance with the provisions of this order.

(2) No person may be first appointed as a lay member if that person is or has been a Member of this House or a Member of the House of Lords; and any person so appointed shall cease to be a lay member upon becoming a Member of this House or of the House of Lords.

(3) No person may be appointed as a lay member unless that person has been selected on the basis of a fair and open competition.

(4) A person appointed as a lay member may resign as a lay member by giving notice to the House of Commons Commission.

(5) A person appointed as a lay member shall be dismissed from that position only following a resolution of the House, after the House of Commons Commission has reported that it is satisfied that the person should cease to be a lay member; and any such report shall include a statement of the Commission’s reasons for its conclusion.

(6) Subject to the provisions of paragraphs (2), (4) and (5) of this order, a person appointed as a lay member shall continue as a lay member for the remainder of the Parliament in which that person was first appointed.

(7) A person first appointed as a lay member who has been a lay member for the remainder of one Parliament may be re-appointed by a resolution of the House in the subsequent Parliament, and the provisions of paragraph (3) of this order shall not apply to any such re-appointment. The period of re-appointment shall be specified in the resolution of the House for reappointment and shall not exceed two years from the dissolution of the Parliament in which the person was first appointed as a lay member, and a resolution under this paragraph shall cease to have effect on the dissolution of the Parliament in which the resolution of the House for reappointment was made.

(8) No person may be re-appointed as a lay member other than in accordance with the provisions of paragraph (7) of this order.

(9) No motion may be made under the provisions of this order unless—

(a) notice of the motion has been given at least two sitting days previously, and

(b) the motion is made on behalf of the House of Commons Commission by a Member of the Commission.

(10) The Speaker shall put the questions necessary to dispose of proceedings on motions made under the provisions of this order not later than one hour after the commencement of those proceedings.

(11) Business to which this order applies may be proceeded with at any hour, though opposed.’

(3) The following new Standing Order be made, to have effect from the date specified in paragraph (6) of this order—

‘Committee of Privileges

(1) There shall be a select committee, called the Committee of Privileges, to consider specific matters relating to privileges referred to it by the House.

(2) The committee shall consist of ten Members, of whom five shall be a quorum.

(3) Unless the House otherwise orders, each Member nominated to the committee shall continue to be a member of it for the remainder of the Parliament.

(4) The committee shall have power to appoint sub-committees consisting of no more than seven Members, of whom three shall be a quorum, and to refer to such sub-committees any of the matters referred to the committee.

(5) The committee and any sub-committee shall have power—

(a) to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to adjourn from place to place and to report from time to time;

(b) to appoint legal advisers, and to appoint specialist advisers either to supply information which is not readily available or to elucidate matters of complexity within the committee’s order of reference.

(6) The committee shall have power to order the attendance of any Member before the committee and to require that specific documents or records in the possession of a Member relating to its inquiries be laid before the committee or any sub-committee.

(7) The committee shall have power to refer to unreported evidence of the former Committees on Standards and Privileges and to any documents circulated to any such committee.

(8) The committee shall have power to refuse to allow proceedings to which the public are admitted to be broadcast.

(9) The Attorney General, the Advocate General and the Solicitor General, being Members of the House, may attend the committee, may take part in deliberations, may receive committee papers and may give such other assistance to the committee as may be appropriate, but shall not vote or make any motion or move any amendment or be counted in the quorum.’

(4) From the date specified in paragraph (6) of this order—

(a) Standing Order No. 121 (Nomination of select committees) shall be amended, in line 12, by leaving out ‘the Committee on Standards and Privileges’ and inserting ‘the Committee of Privileges, the Committee on Standards’;

(b) Standing Order No. 149 (Committee on Standards and Privileges) shall be repealed;

(c) in Standing Order No. 150 (Parliamentary Commissioner for Standards), in each place where the words ‘Committee on Standards and Privileges’ occur, there shall be substituted the words ‘Committee on Standards’.

(5) From the date specified in paragraph (6) of this order, the Order of the House of 19 July 2010 (Liaison Committee (Membership)) shall be amended by leaving out ‘Standards and Privileges’ and inserting, at the appropriate place in alphabetical order, ‘Privileges’ and ‘Standards’.

(6) The date specified for the purposes of paragraphs (1) and (3) to (5) of this order is the first sitting day of the first month after the month in which the House agrees a resolution under Standing Order (Lay members of the Committee on Standards: appointment, etc.) appointing two or three lay members of the Committee on Standards.

[Madam Deputy Speaker]

With this, we shall discuss amendments (b), (c) and (a) to motion 2, and motions 3 and 4 on pay for Chairs of Select Committees.

[Sir George Young]

On 2 December 2010, the House agreed, without Division, to a motion agreeing with the principle set out in the twelfth report of the Committee on Standards in Public Life that lay members should sit on the Select Committee on Standards and Privileges. The House invited the Select Committee on Procedure to bring forward proposals to implement that.

The Procedure Committee published its proposals in its sixth report of the current Session, which was published on 7 November last year. The Government, and I am sure the whole House, are very grateful to that Committee for its work. The motion draws extensively on the work of the Procedure Committee, and follows consultation with that Committee, the Standards and Privileges Committee and others. I am pleased to say that the Procedure Committee has written to confirm that it broadly accepts the approach that we propose to take, and the support of the Standards and Privileges Committee is apparent from the welcome decision of the right hon. Member for Rother Valley (Mr Barron) to add his name to the motion.

Before turning to the provisions of the motions, I will remind the House briefly of the background to the proposals. I need hardly remind Members that the expenses scandal rocked public faith in the House to its foundations. One part of that crisis lay in the House’s approach to disciplining Members, which, as the Committee on Standards in Public Life observed, did not command full public confidence. As Chair of the Standards and Privileges Committee at the time when the Committee on Standards in Public Life inquired into these matters, I said that the then Standards and Privileges Committee:

“would be very happy to consider having outside members sitting on the Standards and Privileges Committee…particularly to assist us in coming to judgments where people may feel at the moment we are possibly too lenient.”

The Committee on Standards in Public Life recommended in November 2009 that

“there should be at least two lay Members who have never been Parliamentarians on the Standards and Privileges Committee”,

who

“should be chosen through the official public appointments process and formally approved by the House”.

The House endorsed that recommendation after its debate on 2 December 2010. I will not attempt to summarise all that was said on that day, but the most powerful case was made by the right hon. Member for Rother Valley. He said:

“Lay members provide the public with reassurance that the Committees are not cosy gentlemen’s clubs, where deals are stitched up and scandals are hushed up. They can also bring valuable outside experience and expertise with them.”—[Official Report, 2 December 2010; Vol. 519, c. 999.]

He referred to the lay members of the Speaker’s Committee for the Independent Parliament Standards Authority. As a member of that committee, I can assure the House that the contribution of lay members is invaluable.

I have already referred to the specific recommendation of the Committee on Standards in Public Life that lay members should never have been parliamentarians. That is reflected in the motion, which also mirrors the statutory definition of lay members used for the Speaker’s Committee on IPSA.

Amendment (b), tabled by the hon. Member for Mansfield (Sir Alan Meale), runs contrary to the letter and, more importantly, the spirit of the Kelly recommendations. I invite him to consider whether it would really enhance the credibility of the House’s disciplinary procedures to appoint as a lay member a former hon. Member who left the House in 2005. I fear that that might be portrayed not as a fresh start but as a return to the bad old days, and of course public perception is part of the issue that we are seeking to address. I urge him not to move his amendment and invite the House to reject it if it comes to a vote.

Of course, there is a difference between agreement in principle that a change should take place and agreement on how it will operate in practice. A number of significant issues have been raised about lay membership of a Select Committee, and I will explain briefly how those issues have been tackled in the motions.

The first issue, identified by the Procedure Committee, was that although there had been no suggestion that lay members were appropriate for the consideration of privilege matters, there was no straightforward way to exclude them from such business within the structure of a single Committee. The solution proposed by that Committee, which the main motion today incorporates, was to create two separate Committees, one on standards and one on privileges. That is actually a reversion to the position that existed until 1995.

As the Procedure Committee recommended, provision has been made in motions 3 and 4 for the Chair of the Committee on Standards to inherit the pay now received by the Chair of the Committee on Standards and Privileges. The Government have also made it clear in their response that the Chair of the Committee on Standards, like that of the current Committee, should be drawn from the Opposition Benches. In accordance with the current arrangements, that does not need to be set out in Standing Orders.

Our intention today is not to change the composition of the Committees. The two Committees may have a common membership, and they may choose to elect the same Chair. Even if that is not the case, the Committee of Privileges is likely to meet less often and will be able to consider only matters referred to it. In those circumstances, and following the precedent of the Committee on Members’ Expenses, pay for the Chair of the Committee of Privileges is unlikely to be appropriate.

Business of the House

Debate between Lord Young of Cookham and Baroness Primarolo

Thursday 23rd February 2012 Commons Chamber

[Sir George Young]

I am grateful to my hon. Friend. We debated the police grant a few days ago, which would have given him an opportunity to raise the matter. I am delighted to hear of the reduction in crime in his constituency, which shows what can be achieved within challenging financial targets. We have slashed bureaucracy, saved up to £200 million through national procurement and made the police more accountable to the public, and we are moving towards the first elected police and crime commissioners. I am delighted to hear of the good results in his constituency.

[Madam Deputy Speaker (Dawn Primarolo)]

Thank you very much, Leader of the House. I think the House will be interested to know that 51 Members participated in business questions today.

Business of the House

Debate between Lord Young of Cookham and Baroness Primarolo

Thursday 15th September 2011 Commons Chamber

[Madam Deputy Speaker]

That was the question.

[Sir George Young]

It sounded from the question as though this is a matter that has been devolved to the Scottish Government. None the less, I will raise the issue that the hon. Gentleman has just touched on with my right hon. Friend the Secretary of State for Scotland to see whether there is a role for the Westminster Government to play.