Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2021

Lord Blunkett Excerpts

Monday 8th February 2021 Grand Committee

[Lord Blunkett (Lab) [V]]

I am grateful to the noble Baroness, who so often in the time she has been on the Front Bench has impressed with her clarity and detail. In fact, I did not really need to have read the Explanatory Notes because she has covered the situation extremely well. However, I thought I would join this Grand Committee discussion on these statutory instruments both to support my noble friend on the Front Bench and to make one or two points which I think should be made in the light of the changes.

The first relates to the national insurance uprating. I have no objection to these regulations except in thinking that there needs to be much wider debate about the regressive nature of the national insurance system. There needs to be a challenge—it is as much a challenge for my own party as it is for the present Government—to the nonsense that the more you earn, the less you pay in national insurance, given the new cut-off of £50,270 at the upper rate and the 2% contribution. There is also the silly situation where those who are over statutory retirement age and continue to earn do not pay national insurance. At a time when we need every penny we can get, this seems an area for future exploration. We just need to be honest with people who are doing very well while over the age of retirement. There are now very many of them—well over 1 million—who could make a small contribution. Associated with that is the reconsideration of the 2% contribution. I think this would be seen to be fair and would avoid having to top up the national insurance scheme by £200 million. I just lay that on the table.

I also wanted to contribute in relation to working tax credits and their associated uplift. As the Minister has already indicated, under Schedule 77 to the Act there was a temporary uplift of £1,045, or £20 a week, for working tax credits and associated credits, but also, of course, for universal credit. While there has been great public attention on universal credit, people have not necessarily understood that—if there is no change of heart by the Government—the £1,045-a-year uplift will be withdrawn.

I cannot read the Chancellor of the Exchequer’s mind for 3 March, but I can read the minds of those around me and those I used to represent. A reduction of £20 a week for people in the situation we are describing —including those we are dealing with tonight—is a substantial sum of money, even if it is not for those making the decisions.

I think the Minister has good contacts; she certainly ought to have, given how competent she has displayed herself to be over recent months. I appeal to her to get the message across to Treasury colleagues that it would be seen as grossly unfair at this time if people were to have withdrawn from them what is for them a very large sum of money, but is in greater government spending—in terms of the level of borrowing we have at the moment—a very small contribution to ensuring that people can survive. While I am in no way against the changes that have been described, they overlay a much more difficult and controversial situation that I felt it necessary to put on record this evening.