National Insurance Contributions (Reduction in Rates) Bill - Second Reading

Part of the debate – in the House of Lords am 4:29 pm ar 12 Rhagfyr 2023.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Baroness Vere of Norbiton Baroness Vere of Norbiton The Parliamentary Secretary, HM Treasury 4:29, 12 Rhagfyr 2023

I absolutely accept that the noble Baroness is right to say that you can look at it in a different fashion but, in terms of whether what the Government are doing is progressive, it is fair to say that people on lower incomes are benefiting, as a proportion, to a greater degree. Of course, the Government have intervened when it comes to cost of living. That has been cash and that is not about percentage of income. It is all around our energy price guarantee, increases to the national living wage and looking at the uprating of benefits, which will rise by much more than inflation is forecast to be next year. So there are lots of different factors to take into account and sometimes one can be quite blunt when dealing with a tax cut that is, frankly, going to benefit 29 million people.

The noble Lord, Lord Sikka, asked why national insurance contributions do not apply on unearned income. National insurance contributions are part of the UK social security system, which is based on a long-standing contributory principle centred on paid employment and self-employment. ‘Twas ever thus. Of course, a future Government may make substantial changes to that which would again increase the tax burden—but this Government are content that we will maintain the contributory principle.