Class 4 National Insurance Contributions

Debate between Lord Young of Cookham and Lord Rooker

Wednesday 15th March 2017 Lords Chamber

[Lord Young of Cookham]

The noble Lord will know that we have taken a number of measures to promote enterprise. We have reduced corporation tax and we are investing in infrastructure and broadband. I do not want to reopen a discussion that we have had for the last two or three weeks about the single market and Brexit, but what has happened is that there was an announcement last week and there were then discussions with parliamentary colleagues and others. Against the background of those discussions, the Government have decided not to proceed. This is not an unparalleled development in the political system. It is a measured and proportionate response to some very real reactions that we got from colleagues down the other end.

[Lord Rooker (Lab)]

Can I give the Minister two messages for the Chancellor? First, the greatest unfairness in national insurance—as I look around the House, this will not go down very well—is the cut-off point at age 65. Whether people are on salaries or pensions, national insurance is general taxation and it should cover everybody who has a relevant income. I cannot see how that could be covered by this lock. My second message is more widespread. It comes from the mid-1990s, when some of us on the Front Bench were sent to Templeton College, Oxford, on the basis that one day we might be Ministers. The abiding lesson that I took away from that seminar was a simple one: it is never too late to avoid making a bad decision.

[Lord Young of Cookham]

I am working out the exact impact of that—if you have made a bad decision, how do you get out of it?

[Lord Rooker]

Reverse it.

[Lord Young of Cookham]

If the noble Lord is saying that if you make a bad decision it is never too late to undo it, I understand that. On his other point, there is an argument for harmonising tax and national insurance; this debate has been going on for some time. It is not without its consequences. National insurance is a contributory benefit—you contribute to your state retirement pension. If you have retired and drawn your pension, what is the argument for continuing to make national insurance contributions if your pension is not going to go up as well? Harmonising is a complex issue, which we will of course continue to look at. But I have to say, it is not something that the Labour Government did while they were in office.