'The Secretary of State shall as soon as practicable after the end of the fiscal year 200405 and as soon as practicable after the end of each fiscal year thereafter lay before Parliament a report setting out the number of self-employed persons entitled to—
(a) the guarantee credit alone;
(b) the guarantee credit and the savings credit; and
(c) the savings credit alone.'.—[Mr. Clappison.]
Brought up, and read the First time.
I beg to move, That the clause be read a Second time.
New clause 4 is about pension provision for the self-employed and how they fare under the state pension credit. As a result of evidence that it received during its investigation, the Select Committee on Work and Pensions directed its attention to this subject. In its memorandum to that Committee, the Association of British Insurers categorised the position of the self-
employed as an anomaly within the pension credit proposals. The Association said:
''One of the stated aims of Government pension policy is to ensure that all pensioners share in rising prosperity. The current system manifestly fails to ensure that this is the case for the self-employed. The Pension Credit proposals will extend this inequitable situation. ABI urges Government to grasp this nettle and address the issue of pension provision for the self-employed. We endorse the recommendations put forward by the Pension Provision Group, namely that the self-employed, as a group, ought to be brought into the State Second Pension (S2P). Doing so would allow all self-employed persons to benefit from S2P—thereby enabling them to gain access to the savings credit element of the Pension Credit.''
That submission quotes the Pension Provision Group. In its December 2001 report, the group concluded that excluding the self-employed from the state second pension when it moved to being a flat-rate pension would further increase the gap between pension provision for employees and the self-employed. The group, which examined precisely that question, said:
''Last November the Government published its outline Pension Credit proposals, and we decided we should take the opportunity to review this report in the light of them. Our view is that Pension Credit, as proposed then, and in the absence of our recommendations in this report, would further widen the pensions gap between employees and those in self-employment.''
At the time that the report was published, the Government said in a written parliamentary answer:
''We also welcome the group's report on pension provision and self-employment. It makes a useful contribution to the debate on this important issue.''—[Official Report, 19 December 2001; Vol. 377, c. 384W.]
Apparently, it was a useful contribution in December 2001, but it does not seem to have got much further. In a later reply, to my hon. Friend the Member for Havant (Mr. Willetts), the Minister said:
''As with SERPS, self-employed people cannot join the State Second Pension because they do not pay class 1 national insurance contributions.''—[Official Report, 20 March 2002; Vol. 382, c. 429.]
That is right; the self-employed do not pay class 1 contributions, but they do pay class 2 and class 4 contributions. Although their national insurance liability remains below that of employees who pay class 1 contributions, self-employed persons above the lowest rung of earnings pay ever more in combined class 2 and class 4 contributions. Their liability has increased significantly because of changes that the Government have already made. Indeed, that is something of an understatement, given that those on moderate incomes have seen a whacking increase in their contributions,; even before we take into account the effects of the Budget that was unveiled last week.
According to figures supplied by the House of Commons Library, if we take into account class 2 and class 4 contributions, the national insurance liability of a self-employed person earning £30,000 a year has increased from £1,350 in 1997–98 to £1,881 in 2002—a £531 increase. Those are the figures up to this year, but when the Budget takes effect, the same person will be a further £253 worse off. The liability of a self-employed person earning £30,000 a year will, therefore, have risen £784 since 1997; from £1,350 to £2,134.
The increase in contributions at higher levels of income is even more dramatic. The national insurance liability of a self-employed person earning £50,000 a
year, for example, will have increased by more than £1,000 since 1997 because of the Budget and earlier changes. Indeed, the Budget means that contributions for self-employed people at every level of income will increase over the levels for 1997 and 2002.
Many self-employed people have seen whacking increases in their national insurance contributions. According to the Association of British Insurers and the Pension Provision Group, however, the Government are offering such people nothing in return; beyond their entitlement to the basic state pension, they have been excluded from the Government's plans. To put it mildly, many may feel a sense of grievance about their contributions. I need hardly remind the Committee that a substantial number of our constituents are self-employed; there are more than 3 million self-employed people in the country. They form one of the most productive and important groups in the economy and often provide vital services.
In his Budget statement, the Chancellor said that he wanted people to move from employment to self-employment and that he wanted to ease the transition for those who sought to do so. However, the Government's pension plans and the whacking increase in national insurance contributions do little to help the self-employed. We need only consider some of the facts that the Pension Provision Group provides about the self-employed to see why it is so important that we consider the Bill's implications for them.
Over the past 20 years, self-employment has grown, become more diverse and expanded into new, non-traditional occupations, while contracting in others. More people now move between self-employment and employee status. The growth of dependent self-employment and subcontracting means that work previously done by employees is now done by self-employed people. There are ever more self-employed people, and ever more of our constituents are moving between self-employment and employment.
Those facts led the Pension Provision Group to conclude that the distinction between employed and self-employed people in state pension provision was outdated. The group's analysis of the pension situation of the self-employed leaves, at the very least, a large question mark as to whether all self-employed people make appropriate provision for their retirement. The group found that self-employment increased the risk of retiring on a very low income, particularly for those working in personal services, and that:
''Those with experience of self-employment tended to retire later than their employee counterparts and were more likely to work beyond state pension age. This partly reflected a desire (and ability) to continue working, but also in some cases a financial need to do so.''
Those interesting conclusions were submitted to the Select Committee in the course of its inquiry in relation to the Bill about how the self-employed would fare under the proposals. It is important to raise the issue, because the position of the self-employed seems, in some respects, to have been overlooked in the proposals; that is the view, at
least, of authoritative groups commenting on the proposals, as well, possibly, as that of the self-employed. A representative of the Federation of Small Businesses described the self-employed in this context as ''a forgotten army''.
We shall try to remember them. We raise the subject in order to ventilate it and look forward to hearing from the Minister what the Government's response is to this, to the important submissions that were made to the Select Committee and to our concerns about how self-employed people will fare under the proposals.
I support a good deal of what the hon. Member for Hertsmere (Mr. Clappison) said. It is important that the Conservatives have raised the issue of the self-employed, whose pension provision is often neglected. I shared his near-despair at the Minister's written answer in response to the Pension Provision Group that it was a useful contribution to the debate; that is the worst brush-off that one can imagine. That contribution does not seem to have informed policy since. The distinction between employed and self-employed is much less clear-cut—
I do not want to interrupt the hon. Gentleman's train of thought. However, before he gets too despairing, it was the Government that set up the Pension Provision Group. We are not afraid of debate, of looking for alternatives or of developing blue-sky policies. The hon. Gentleman would not have had the report if the Government had not established the group.
It is to the Government's credit to set up a group if they are prepared to listen to its conclusions. If they entirely ignore its conclusions, I am not sure that that is to their credit; in fact one could argue that the money should not have been spent on it.
I should like to expand on a point made by the hon. Member for Hertsmere about the two kinds of self-employment. Traditionally, the assumption has been that pension provision is less of an issue for the self-employed person with a business that will provide their pension—although that might not turn out well—or who can make their own private provision. However, the new self-employed might not have a business with assets; if they move between employment and self-employment, treating them as a group distinct from employees is a less tenable position than ever. As the hon. Gentleman suggests, crediting them into the state second pension, thereby encouraging them to save, would be a good thing to do.
I differ from the hon. Member for Hertsmere in what that should imply for the national insurance contributions made by the self-employed. When we compare them with the employed, we tend to forget the national insurance contributions of employers; the combined contribution represents a 20 per cent. rate per worker, whereas a self-employed person currently only pays 7 per cent. plus the class 2 contribution. The Treasury has estimated that the gap between the benefits received by the self-employed in retirement pension and the contributions that they make is substantial; possibly as much as £2 billion.
This might sound odd, and not very pro-business, but in some ways the self-employed have historically under-paid national insurance relative to the benefits that they get from the system. Although they receive less than employees, they do not receive much less—essentially sickness benefits—but they pay less than half the amount of national insurance; so they actually get a substantial subsidy. If they were to be brought into the state second pension, there would be a case for looking at whether there should be a compensating rise in national insurance.
I agree with the hon. Gentleman that we need to look at the whole issue. However, does he not agree that while that might have been the case in the past, the gap between what the self-employed pay in national insurance contributions and what employed people pay, not taking into account the employers' contribution, is closing?
Only to a point, in that I do not disregard the employer. Clearly an individual makes a choice to become an employee with an employer who effectively knocks the 10 per cent. off his wages. In a sense, the employee is paying the combined amount, so there might be some convergence. However, I would still argue that the difference between 7 per cent. class 4 and 20 per cent. class 1 in terms of employee plus employer is hugely relative to the difference in benefit. While I agree that the state second pension should be the province of the self-employed, there might need to be an offsetting national insurance rise. However, the new clause is quite proper. It is important that the Government respond to concerns about the pension position of the self-employed and I welcome the opportunity to debate it this afternoon.
The Budget that was presented last week in the House was promoted on the two themes of fairness and enterprise. We know that the Government intend all pensioners to benefit from these provisions, so it is curious that some 1.4 million people will not have as full a benefit as they possibly might receive under the Bill. In terms of enterprise, we know that it is self-employed people who form the small businesses that go on to become larger businesses and create the wealth of the nation.
Work patterns are changing, as has been said. The Government have pushed out the boundaries of those who will be covered by S2P, and those within S2P are not just those who were formerly within SERPS; there has been some change. Given that the Government have looked at the area afresh and that this is a major revisiting of pensions legislation, I have to register a note of disappointment that an opportunity has been missed. Because of the 1.4 million people who will not be brought within S2P and who will gain significantly less benefit from the savings credit part of S2P, I commend the clause to the Committee.
I support new clause 4, particularly as a veteran of the forgotten army of the self-employed. Having been a member at one stage, I know the difficulties; I am only pleased that I am no longer one and am back in Her Majesty's employment. It is a delight so to be.
I should like to draw attention to the report proposed in the new clause. It would set out ways in which the self-employed can be monitored. The measures would allow for the monitoring of the effectiveness of pension credit in providing support to those who have been self-employed throughout their working lives. Should it prove to be ineffective in supporting such people, it would offer a signal as to the need for reappraisal.
As we have already heard from my hon. Friend the Member for Hertsmere—in a much more eloquent way than I can put it—self-employment expanded rapidly during the 1980s. In 1981, the total number of people who were self-employed was about 2 million; roughly 8 per cent. of those in employment. By 1991, the total had risen to 3.4 million, 13 per cent. of those in employment. During the 1990s, that expansion slowed, so that in 1999 3.2 million, 12 per cent. of those in employment, were self-employed. Experience of self-employment in the UK has become much more widespread over the last 20 years.
One implication of that development is that self-employment now represents a more significant factor in the provision people need to make for retirement. I believe that the new clause would allow that to be monitored in detail. A study by Knight and Mackay was cited by the Pension Provision Group in its recent report on pension provision for the self-employed. It estimated how significant the impact of changing patterns of employment would be on men and women reaching retirement age in the next 15 to 20 years. It suggested that at least 28 per cent. of men aged between 40 and 49 in 1994-95 will have spent some time in self-employment by the time they retire—I am one of those—compared with 20 per cent. of men who are now at about state pension age.
The significance of those figures is realised when examined in the context of patterns of pension provision, particularly the levels of pension developed by the self-employed. In 1998, the Pension Provision Group found that one in 10 self-employed people had a personal pension to which contributions had been made in the past but which were no longer being made, but that some 40 per cent. of self-employed people had never had a personal pension.
The group also suggested that there were indications that a number of self-employed people may be failing to build up a qualifying record for the basic state pension each year. Although some of those people may overlap with the, approximately, half of self-employed people who are not building up rights to a second-tier pension, the group concluded that it seemed reasonable to assume that a significant minority of self-employed people do not build up any pension entitlement in a given year.
Under the pension credit provisions, second-tier pension provision in the form of the state second
pension will attract a savings credit. However, according to the Pension Provision Group, the effect of that will
''not only widen the gap between state pension rights earned in self-employment and those earned as an employee, but also the minimum underpin will be substantially higher for retired employees than for those retiring with histories of self-employment''.
The group suggests that a small proportion of self-employed people will be able to fund their retirement by selling business assets or through other savings. For many, however, that option will simply not be feasible, and the result will be an increased risk of poverty in old age.
I believe that the provisions of new clause 4 will allow us to monitor that. It may serve as a useful signal as to whether pension credit is being effective for the self-employed.
I congratulate my hon. Friend the Member for Hertsmere on initiating an excellent debate and my hon. Friends the Members for South-West Bedfordshire (Andrew Selous) and for Newark (Patrick Mercer) on their contributions. The hon. Member for Northavon (Mr. Webb), the Liberal Democrat spokesman, contributed to an interesting exchange.
I should declare an interest, in that my wife works part-time in a self-employed capacity.
I shall take as my starting point the interchange between the hon. Member for Northavon and my hon. Friend the Member for Hertsmere, because it seemed to go to the heart of an increasingly complicated and important debate. The question is how do we compare chalk and cheese; that is, the individual self-employed person's national insurance rate, which now stands at 7 per cent., and the rate paid by the employee, who contributes a little more, at 10 per cent., but whose employer also makes a large contribution.
In thinking about why we need to study the matter carefully, as suggested in the new clause, by producing figures regularly, I believe that we can look at the question in a slightly different way. Every year, the incentives increase for companies to shed employees and replace them with self-employed full-time or part-time consultants. Indeed, that is what happened to my wife. She now works for only two days a week; she is self-employed, and replaces a full-time former employee. For the sake of any feminists sitting on the Government Benches, she is replacing a man. [Interruption.] I heard the Minister's sedentary interruption; I shall not comment on it. [Interruption.] I feel provoked, Mr. Atkinson, but I shall merely observe that my wife sells far more business each month than the full-time chap that she has replaced.
A slightly different way of looking at the comparison is this. The incentives to replace full-time employees in that way are increasing. Every time the employers' national insurance contribution rate rises, it increases the incentive not to employ people and to find self-employed people instead. Every time a fresh piece of labour legislation is introduced that provides
extra rights for workers, another disincentive is created. Every time—
I understand that entirely.
As two of my hon. Friends have already remarked, the net result is that a growing proportion of people are self-employed. The catch is this. Where does it leave the self-employed if the Government continue, through a range of measures that I will not list again, trying the Committee's patience, to provide incentives for employers to ensure that the proportion of self-employed people in the total work force goes up each year, while self-employed individuals find that they are making almost the same contributions—7 per cent. compared with 10 per cent.—and providing more than two thirds of the contribution of their employee counterparts? Where does that leave those people, who will not be part of the great new pensions future that is allegedly unfolding before us in the Bill? It will leave us with a two-tier economy.
The statistics quoted by my hon. Friend the Member for South-West Bedfordshire a moment ago were chilling. They showed that some 40 per cent. of self-employed people had made no contribution, but the saddest statistic was that 10 per cent. had tried, but had now stopped making contributions. That is why the new clause is necessary. We must have a system to monitor what is going on in the self-employed sector. The Government say that their measures are designed to provide better pension prospects, but if that sector, which is growing fastest in the market, is left out of the picture, the provisions will be unfair in the long run.
Good afternoon, Mr. Atkinson.
I want to take this matter at a leisurely pace because I think that, in moving the amendment, the hon. Member for Hertsmere intended to probe the issues surrounding the self-employed, rather than the issue of reporting to Parliament in a specific way. He tried to work us up into a frenzy by suggesting that the state system of contributions ignores the contribution of the self-employed to the economy and treats them in a shabby way. Let us get the basics right first before we move on to discuss the wider issues about the self-employed, because the picture that has been painted falls a long way short of the truth.
At present, the self-employed pay class 2 and class 4 contributions. Even allowing for the fact that the self-employed do not currently build up rights in SERPS or the state second pension, they are—there is no way around it—in effect, subsidised by other employees, who pay class 1 national insurance contributions at a rate of 10 per cent. for the employee and 11.9 per cent. for the employer at current rates. That ensures that the self-employed receive broadly the same benefits. The hon. Member for Northavon made that point without prompting.
The principal exceptions are SERPS, the state second pension and contributory jobseeker's allowance. Despite paying much less than national insurance contributions, it is estimated that the
subsidy amounted to £2.5 billion in 2001–02 alone. In moving the amendment, the hon. Member for Hertsmere was not initiating a general discussion. He made it absolutely clear that the Conservative party had a particular policy. I am not ridiculing him for making that statement, but he made a clear announcement on policy that has significant implications for the public purse, but he has not indicated whether his reform would preserve, extend or remove the subsidy. He gives no idea of how contributions would be made. Even allowing for what he said about a year-on increase and the levels of class 2 and class 4 contributions, the truth is that a huge subsidy would be involved in those contributions to the state. The hon. Gentleman has given no indication of how he would intend to pay for the effects of the amendment.
This is an example of a Conservative Member currying favour and saying that he is doing something for the self-employed. If that is what the Conservatives want to do, why did they not do it during all their reforms of employment law and national insurance? They had nearly 20 years to do something about it.
Some 2 million people pay only class 2 self-employed contributions. Some 50 per cent. of self-employed aged over 20 contribute to some form of non-state pension, but that masks the fact that the proportion of full-time employees who contribute to forms of non-state pension is 69 per cent. With part-time employees, the figure is 38 per cent., so the figure for the self-employed is higher than that for part-time employees, but significantly lower than the contribution for full-time employees.
The hon. Member for South-West Bedfordshire said that 1.4 million people were left out, but they are people who have made deficient basic state pension contributions. However, they qualify for the minimum income guarantee. They are not excluded in the purist sense intended by the hon. Gentleman, but he makes a fair point, because we need to develop a strategy for the years to come.
During last week's debate, I referred to monitoring. It is inconceivable that we would not want to monitor and publish information on the impact of pension credit on recipients. I have offered to discuss with the Committee the reporting arrangements that we shall put in place, but I cannot provide the required information for the new clause. We shall be able to publish information about the number of people receiving different elements of pension credit but, as with MIG, it will not be possible to determine how many have been self-employed at some time during their working life.
Pension provision for the self-employed has been the subject of a complex debate for some time, and the hon. Member for Hertsmere emphasised some of the comments and policy attitudes of a range of organisations and individuals. Some have said that people who have been self-employed will be disadvantaged in relation to pension credit entitlement, especially in comparison with those who were employed all their lives, because SERPS and the
state second pension will count for the purpose of the savings credit. It has been suggested that the self-employed should be included in the state second pension.
The Government attach importance to pensioners having a decent secure income on retirement. The state second pension and pension credit are crucial steps towards achieving that end. Indeed, the state second pension will for the first time cover 40 million low-paid workers, 2 million carers who do not build up contributions and 2 million people with disabilities who have intermittent work records. They are the types of employees left out of the original compromise on SERPS. All pension programmes are a compromise, and the SERPS compromise left out a large number of people of low earning and low capacity for earning. Although it was a wonderful scheme for those who could earn, it exacerbated the problem at the bottom. The purpose of redesigning the state second pension is to design out that flaw in SERPS, so it is important that the state second pension is a success.
Of course, large numbers of self-employed save for their retirement with personal pensions, often by investing in their own businesses. The hon. Gentleman is right in saying that the traditional image of the self-employed person has changed dramatically. The changes started in the late '70s and continued through the '80s and '90s. The change in the structure of labour market relationships has led to a change in the type of person who is self-employed. It is no longer just a question of a family working in a corner shop, or a small business such as a garage. The group is far more complex and diverse. The lower end of the income range of the group is also very diverse.
There is no such thing as a typical self-employed person. The category contains people who are semi-skilled, skilled, who have intermittent work records, who work with an employer, in the construction industry, at term time or on a seasonal basis. There are huge variations in the degree of access to the employment market for people who are generally called self-employed. It is not easy to create a contributory system that all self-employed people can or would wish to enter into.
By explaining how things are getting more and more complicated, the Minister is making a strong case for the new clause, which is basically about providing fixed information. To take him back to his original point, he challenged us to produce a policy on the measure. However, he is merely illustrating one more area in which the Bill is failing a whole section of society in encouraging people to save, and so on. Self-employed people will, as he has observed, enjoy MIG, but they will not become part of the new self-help culture that the Minister claims that the Bill espouses.
I did not challenge the hon. Gentleman to produce a policy. I believe that I congratulated him on his policy announcement. I wanted him to tell the Committee what would happen to the £2.5 billion subsidy. Would he continue it, extend it or remove it—where is the financial framework to meet the requirements of this newly announced policy? There is silence on that, of course.
I have been trying to establish that there is some common ground here on the nature of the self-employed—the complex issues that I was talking about before the intervention of the hon. Member for Canterbury. The subsets of the main group of self-employed people have not been properly catered for in terms of pension policy. However, they are notoriously difficult to identify, target and engage in Government initiatives. Some want to participate and some do not. That is particularly true in terms of any financial implication in relation to themselves.
Some people in academia and politics say every self-employed person must be advised to enter the state second pension. When one asks how one goes about that, what the cost to the individual and to the state would be and how it would impact on all the other people making a contribution, there is a strange silence. There is silence for two reasons. It is a question not just of the complexity but of the politics of the matter. None of them wants to tell the truth—that there may be a financial implication for the self-employed as well. If there are no policy changes in this area there may be a financial implication for the funding structure. Nobody has yet got a policy to deal with that.
We held consultations on the possibility of including self-employed people in the second state pension in the 1998 Green Paper ''Partnerships in Pensions''. No clear way emerged from those consultations, but as with all new benefits, we are prepared to review the scheme and the question of whether to include the self-employed. Self-employed people who have no second pension can still gain from the guarantee credit. They will have less income taken into account in the income assessment.
We are committed to monitoring and evaluating the situation. We are committed to considering, at a later date, the issues around the self-employed. However, when it finally comes to making them those decisions will be hard. We shall then see whether or not the hon. Member for Hertsmere and his colleagues are still with the Government, or whether it is a bit of an airy-fairy thing for them, a nod and a wink to the self-employed, saying, ''We want to do something for you,'' but when it comes to the mechanics and they add up the costs, they will not be prepared to tell them what their contribution is likely to be. That is why, although he supported the hon. Gentleman, the hon. Member for Northavon made clear that there was a cost to it. He did not offer his unconditional support; he fudged around it because he wants us to offer him a free lunch on the new clause. I am not prepared to give him a free lunch.
Let us debate what we need to do for the self-employed. The Government are committed to the self-employed, and we need to look at how we can enhance pension provision for them. However, our decisions will have to be made in the context of what I said in my opening remarks.
I know that I am not going to convince the hon. Member for Hertsmere. I shall wait to see whether he withdraws new clause 4 or puts it to a vote, but the
Committee can rest assured that the Government are committed to the self-employed and we want to do what we can in relation to those policies. In saying that, I am being absolutely honest with Opposition Members about where we are in the debate. I have no doubt that the hon. Gentleman will want to return to the matter on the Floor of the House.
We have had an interesting and useful debate. I am grateful for the contributions made by my hon. Friends, and for the comments of the hon. Member for Northavon.
I congratulate the Minister on his response, not least on his ingenuity. He made heroic efforts to construe the debate as a policy announcement. It was a nice try, but I assure him that when we have a policy on the subject he will know about it. He was helpful—[Interruption.] Before he intervenes, I would gently remind him of what he said earlier. He said that the pension provision group that I cited was set up by the Government. It is rather rich that Ministers, when reminded of what their groups have said, should accuse the Opposition of making up policy.
I cannot let the hon. Gentleman get away with that. It is one thing to set up a group, and one can accept or reject its recommendations because it is independent, and it is an ongoing debate, but the hon. Gentleman, absolutely and clearly—I shall take Hansard out to lunch if necessary—supported the recommendations. I congratulate him on the first spending commitment given by the Opposition in this Parliament. I am sure that the self-employed intend to ensure that they stick to it.
I quoted at length the words of the Association of British Insurers on the question of what the Government have done. That would be a unique way of making policy, but I assure the Minister that the purpose of the amendment, as I tried to make clear—[Interruption.] It is an interesting way of answering a question to refuse to say anything about it and then to accuse the Opposition of having the temerity of asking questions.
I hate to see the hon. Member for Hertsmere so embarrassed. It was not my intention in congratulating him to cut short his career. We all know that we may from time to time declare things that we have not discussed with our leaders. We have all done it. The hon. Gentleman has two options. He can resign, or, between now and the Bill going before the House, he can clarify the matter—the latter would be easier than my having to buy Hansard a meal. There is no doubt that the hon. Gentleman gave a commitment. However much he wriggles, or looks at me with those big eyes, he gave a commitment.
The words in Hansard will speak for themselves. I give the Minister an undertaking, however, that if he finds the words that he claims are there, I will happily treat him to an extra lunch for his
birthday, particularly as he is in such an expansive mood.
The new clause raises the issue of pension provision for the self-employed to discover how they will fare under the Government's proposals for the state pension credit. It refers to preparing and setting a report before Parliament, but that would not cost a great deal, and no other expenditure is envisaged. It is, however, fair to ask what the implications of the proposals are and what has been said about them.
The right hon. Gentleman had a second line of attack, beyond accusing me of making a policy commitment that I did not make. I apprehended his attempt, which was great fun, and nice while it lasted. His other line, however, was to ask what the Conservatives had done for the self-employed, but I should gently remind him of what his colleagues have done for them. When the Conservatives left office, national insurance contributions for the self-employed were much lower than they are today. As a result of this Government's 1998 announcement, which took effect in 2000, the rate on profits for the self-employed increased, and the upper and lower profit limits were extended. As a result, someone who earned £30,000 a year—
Indeed, but we must briefly examine contributions to see that the Government jacked them up by £300 in a single year.
We asked the Minister about the position of the self-employed under the state pension credit, and his response took matters a little beyond what we knew at the beginning of the debate. This is an important question, and I, too, shall read Hansard carefully—to see whether the Minister offered the self-employed anything other than bogus debating points.
Like employed people, the self-employed will face whacking increases in their national insurance contributions this year, on top of whacking increases in previous years. In the new clause, we ask how they will fare under the state pension credit. We will read the Minister's remarks carefully and reflect on the issue. However, for today's purposes, and to make progress, I beg to ask leave to withdraw the motion.
Motion, and clause, by leave withdrawn.