Orders of the Day — National Insurance Contributions Bill

Part of the debate – in the House of Commons at 5:38 pm on 13 May 2002.

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Photo of John Bercow John Bercow Shadow Chief Secretary to the Treasury 5:38, 13 May 2002

The hon. Gentleman has not grasped the reality of the situation in which we find ourselves. We have a two-tier system. Last year, 250,000 people without insurance paid for their operations. It should not be necessary in the year 2002 for people to use their life savings to save their own lives. My hon. Friend the shadow Secretary of State for Health has said that people are having to pay, and he does not want that situation to become worse. He recognises the need for reform and he is considering the various options. He knows that the Government have made a mess of things. I say to Mr. Rammell that my hon. Friend has probably forgotten more about the national health service than the Secretary of State knew in the first place.

Mr. Chas Roy-Chowdhury spoke about the savage imposition on married women, as reported in the Financial Times on 3 May. He is the head of taxation at the Association of Chartered Certified Accountants. He said:

"This extreme and disproportionate increase for those currently paying the lower rate is grossly unfair and is a case of the Government wishing to wring as much money as possible from everybody, even widows and older women. Many of these women"— this is hardly a laughing matter, even for Mr. Miliband

"are near retirement, and the last thing that they need is this tax hike to upset their finances."

There is speaking with forked tongue, the breaking of promises and picking on the most vulnerable. It is clear that there are no depths now to which new Labour will not sink.

John Whiting is a tax partner at PricewaterhouseCoopers and president of the Chartered Institute of Taxation. He often quizzes people as to what is the second biggest tax after income tax. It is not value added tax, it is not corporation tax and it is not petrol duty. It is the national insurance contribution. As he said:

"We now have a top tax rate of 41 per cent., and another hole in the fiction that national insurance contributions are anything other than a tax."

What has been the reaction of business to what has been unveiled by the Chief Secretary and his ministerial colleagues? The CBI says:

"It is the worst kind of tax rise as it adds straight to the cost base and is unrelated to profits."

The head of the Engineering Employers Federation, Martin Temple, observes:

"£3 billion of extra costs is £3 billion less to invest."

Nick Golding of the Forum of Private Business labels the rises

"a further disincentive to employ."

Ian Fletcher of the British Chambers of Commerce attacked the rise as "indiscriminate".