State Pension Reform

Baroness McIntosh of Pickering Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

We are publishing later this week, along with the Bill, a detailed impact assessment of the changes over a series of decades. In the White Paper we have published today, the hon. Gentleman will see a chart that shows that, for I think at least 35 to 40 years, a majority of people affected by the changes will gain rather than lose.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I congratulate my hon. Friend on what the Government have achieved and seek clarification on two points. From which budget will the NHS and other public sector employers have to find the additional national insurance contributions? Are small employers in constituencies such as Thirsk and Malton being asked to increase national insurance contributions as well as contribute towards a private pension scheme?

[Steve Webb]

In answer to my hon. Friend’s first question, the NHS as an employer already pays the reduced rate of national insurance from its own resources; it will have an increased rate of national insurance. Obviously the Exchequer will have an increased revenue. It will be a matter for the Chancellor of the day to decide what to do with that increased revenue, but the NHS as an employer will pay more national insurance—that is a fact.

In answer to my hon. Friend’s question about small firms in her constituency, very few small firms run contracted-out defined-benefit pensions, so the only people paying increased national insurance will be those who are contracted out who run these special final salary schemes. We have allowed those schemes to adjust their rules to offset the cost if that is how they choose to proceed, but most small firms will not be affected.