§ Lords Amendment: No. 1 in page 2, line 36, leave out "5(9)" and insert 4((10) 35.
§ The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)I beg to move, That this House doth agree with the Lords in the said amendment.
I apologise to the House that there is a rather bulky group of amendments before the House. It was because of the printing difficulties that I took special steps to inform the hon. Member for Rotherham (Mr. O'Malley) before the weekend, as he has just been good 174 enough to say, of the nature of the amendments. I can assure the House that the vast bulk of them are technical. Many arise from discussions which have taken place in the House and in another place.
Mr. Deputy SpeakerOrder. I should have said that we may conveniently discuss at the same time the following Lords Amendments:
§ No. 6, in clause 3, page 6, line 18, leave out from "and" to end of line 25 and insert:
- "(i) those earnings are such that (disregarding their amount) he would be liable for Class I contributions in respect of them if he were not so treated in respect of the employment, and
- (ii) no Class 4 contribution is payable in respect of the earnings by virtue of regulations under section 5(9) of this Act."
§ No. 9, in Clause 5, page 7, line 43, leave out "and (9)" and insert "to (10)".
§
No. 11, in page 9, line 26, leave out subsection (9) and insert—
(9) Provision may be made by regulations so that where—
- (a) an earner, in respect of any one or more employments of his, is treated by regulations under section 1(8)(b) of this Act as being self-employed; and
- (b) in any year he has earnings from any such employment (one or more) which fall within section 3(4)(b) (i), but is not liable for a higher weekly rate of Class 2 contributions by virtue of regulations under that subsection; and
- (c) the total of those earnings exceeds £1,150,
he is to be liable, in respect of those earnings, to pay a class 4 contribution of an amount equal to 5 per cent. of so much of the total as exceeds £1,150 and does not exceed £2,500.
(10) It shall be for the Secretary of State and not the Inland Revenue to recover Class 4 contributions payable by virtue of regulations under subsection (9) above and generally to be responsible for the relevant administration; and regulations may in relation to contributions so payable—
- (a) apply any of the provisions of Schedule 1 to this Act (except a provision conferring power to make regulations); and
- (b) make any such provision as may be made by regulations under that Schedule, except paragraph 5."
§ No. 14, in Clause 7, page 11, leave out lines 19 and 20 and insert—
§ "(5A) An order under this section, if it contains an amendment altering either of the figures specified in section 5(2), shall make the same alteration of the corresponding figure specified in section 5(9)".
175
§
No. 15, in Clause 8, page 12, line 20, at end—
(IA) An order under subsection (1) above shall, if it contains an amendment altering the percentage rate for Class 4 contributions specified in section 5(2), make the same alteration of the percentage rate specified in section 5(9)".
§ No. 69, in Clause 80, page 108, line 40, leave out "or (8)" and insert "(9) or (10)" and No. 116, in Schedule 2, page 140, line 15, leave out "or (9)" and insert "(9) or (10)".
§ Mr. Edmund Dell (Birkenhead)On a point of order, Mr. Deputy Speaker. Is the grouping of amendments available?
§ Mr. O'MalleyWe are in an intolerable position. First we have 104 pages of amendments which the House is expected to consider during a period of far less than 24 hours. Secondly, for the generality of hon. Members there is no information of the groupings of those amendments, which is an entirely unsatisfactory position.
I do not know what the Chair can do about it, but I believe that the whole custom and practice of the House is that such information on groupings should be available. In any case, these are not normal circumstances. It is not every day that on a Bill of this kind and complexity we get this very large number, this torrent, of amendments from another place and are then asked to discuss them with that kind of notice. Can these proceedings continue if Members are not to know until it is announced by the Under-Secretary that amendments are to be grouped in this way?
I see the value of grouping amendments. It is sensible, but my right hon. Friend the Member for Birkenhead (Mr. Dell) has no information on the groupings, and I do not see how the House can properly carry on its business in this way.
§ Mr. DeanThe grouping of amendments is not a matter for me but for you, Mr. Deputy Speaker, but I understood that the grouping proposed would probably be for the convenience of the House 176 in that it corresponds with broad subjects. However, if the hon. Member for Rotherham wishes to take them in another way, if he feels that that would be more convenient, I shall have no objection.
§ Mr. O'MalleyI understand the value of grouping amendments, but if we go on as we are we could be here until eight o'clock tomorrow morning. If the Government continue with this attitude, we probably will be. We cannot consider such a huge number of amendments of this complexity if we do not know how they are being grouped. I agree with the grouping of amendments but the generality of hon. Members really ought to have a list of the groupings before we proceed further. I hope that we can have protection from the Chair in this matter.
§ Mr. George Cunningham (Islington, South-West)Further to that point of order, Mr. Deputy Speaker. I understand that some hon. Members have been given copies of the groupings. If that is so, I presume that they have come from the authorities of the House rather than from the Government. Why have not all hon. Members been given copies, as is done when amendments are considered in Committee and on Report?
Mr. Deputy SpeakerI think there is some misunderstanding. Grouping is generally done at the suggestion of the Minister in charge of the Bill and the Chair puts the suggested groupings to the House. The House can refuse them if it likes. There is nothing unusual in what is happening tonight and it is not the case that there is a general issue, so to speak, of what is proposed by the Under-Secretary of State that the Chair should put to the House. There has not been such in this case.
§ Mr. O'MalleyFurther to that point of order, Mr. Deputy Speaker. It is clear, in view of what you have said, that our current argument is not with the Government at all. Of course the Government have a suggestion, and I understand that it is a sensible suggestion, about grouping. Surely the complaint of the House at the moment is with the authorities of the House which have not made copies of the groupings available to hon. Members. I do not see how we can carry on our business in this way.
Mr. Deputy SpeakerProposed grouping never is made available in the manner suggested by the hon. Gentleman, and the House can refuse to accept it when it is proposed from the Chair.
§ Mr. DellFurther to that point of order, Mr. Deputy Speaker. It must be apparent to you that the House is in some difficulty in deciding whether the grouping is sensible or not or whether to accept it or not if we do not know what it is. We might, in refusing to accept it, be refusing a perfectly sensible suggestion. The only reason I raised the matter with you in the first place is that it seems sensible, no matter what our tradition suggests, that we should have copies of the grouping which the Government suggest as appropriate to Lords amendments. Perhaps we can deal with the matter by suggesting that the appropriate authorities take this simple point into consideration for the future.
Mr. Deputy SpeakerI am sure that it will be heard by the right ears that such a suggestion has been made in the House, but at the moment it does not seem to have much effect and therefore we must go on with the business.
§ Mr. O'MalleyI am pleased to leave the matter there, Mr. Deputy Speaker, in the knowledge that the Chair has listened to the general representations and the implications for future business.
I want to ask the Under-Secretary of State a specific question on Lords Amendment No. 6, which I understand is being considered with Lords Amendment No. 1. I understand that its effect is to give the Department power to collect a higher flat rate Class 2 contribution from employed earners who are reclassified as self-employed and might, because of that, avoid liability on the higher ranges of their earnings. Apparently, it is the Government's view that this could be a useful power, which would, however, be restricted to cases where the self-employment only arose by reason of its being artificially classified under the regulations in Clause 1(8)(b).
Clause 1(8)(b) merely says that regulations may provide
for a person in employment of any prescribed description to be treated, for the purposes of this Act, as falling within one or 178 other of the categories of earner defined in subsection (7) above, notwithstanding that he would not fall within that category apart from the regulations.
§ In Clause 1(8)(b) a power is given to deem "employed persons" as self-employed persons. I wonder whether the Minister can explain how this power could be used. I do not fully understand the implications of the powers which the Government are seeking.
§ Mr. DeanI will gladly explain to the hon. Gentleman and the House the reason behind these technical amendments. To deal with the general point arising from all these amendments—the substantive one is No. 11—the object is to secure that any "special" Class 4 contribution collected under Clause 5(9) is separately calculated and collected from any "normal" Class 4 contribution under Clause 5(1) to (8).
For example, if the same person had £2,000 of earnings from "deemed" self-employment, and also £2,000 of profits and gains from genuine self-employment, the amendment would secure that two separate contributions of, in Bill terms, 5 per cent. of the difference between £2,000 and £1,150 were collected—not a single contribution on aggregate earnings of £4,000. Although the latter course would be right in strict logic, the legal and administrative problems in making provision for the association of two entirely different kinds of earnings, and two entirely different systems of collection, would be quite out of scale given that such cases will in practice never, or very seldom, arise. Provision is however, made under Clause 6(1) to secure that if separate Class 4 contributions are collected under Clauses 5(1) etc. and 5(9), the total liability for a year will not exceed the normal maximum—i.e., again in Bill terms, 5 per cent. of the difference between £2,500 and £1,150.
That, therefore, is the general effect of the amendments.
§ Amendment No. 6 is a technical drafting amendment. I have explained the purpose behind it in my earlier remarks. A drafting amendment to Clause 3(4)(b) was in any event necessary because of the amendment to Clause 5 to tie up with the fact that the new Clause 5(9) no longer refers to deemed "profits or gains".
179§ In making this change, the draftsman has taken the opportunity to clarify Clause 3(4)(b) (ii), which establishes the principle that a person should not pay twice over—by a higher flat-rate Class 2 contribution and a special Class 4 contribution under Clause 5(9)—by reason of being reclassified as self-employed. The original version excluded earnings on which there is liability for any Class 4 contribution, but "genuine" Class 4 contributions—under Clause 5(1) to 5(8)—are in any event excluded by the condition in Clause 3(4)(a), namely that the possibility of a higher flat-rate contribution is restricted to cases where the self-employment only arises by reason of its being artificially classified as such by the Regulations under Clause 1(8)(b).
§ I hope that I have given the hon. Member the explanation he sought and that I have also convinced him that this is a highly technical amendment.
§ Question put and agreed to.
§
Lords Amendments: No. 2 in page 3, line 40, leave out from "liable" to end of line and insert:
to pay Class 1 or Class 2 contributions".
Mr. Deputy SpeakerWith this we can also discuss Lords Amendment No. 3, in page 3, line 43, leave out from beginning to end of line 45 and insert:
(b) be entitled to pay Class 3 contributions, unless he fulfils such conditions; or(c) be entitled to pay Class I or Class 2 contributions other than those which he is liable to pay. except so far as he is permitted by regulation to pay them,".
§ Mr. O'MalleyI should like them clarified a little more. I understand that these amendments enable suitable provision to be made, for example, for an overseas employer with a few employees in this country, and that it is the intention that such an employer would not be made liable for contributions under Class 1 (10) (a) since there would be no effective way of enforcing such a liability in many such cases. On the other hand, some such employers might wish to pay secondary contributions, and apparently it is the in- 180 tention to permit this by provision in Clause 1 (10) (c). If such employees—and their number plainly will be small—pay secondary contributions, what will be their entitlement? Will it be considered that their employer had paid the primary Class 1 contribution? If not, how will their contribution record be judged?
§ 10.45 p.m.
§ Mr. DeanIt will depend on which is their main contribution record during the contribution year in question. In certain cases there will be a mixture of various types of contribution from either the employer or the employee. But the entitlement will depend on the class of contribution which the employer and the employee make.
§ Mr. O'MalleyI understand the hon. Gentleman's difficulty in replying to it, but I should be grateful if he would consider the question which I asked. I should be grateful if he would look at, and perhaps give further information later on, the hypothetical case of an employee making secondary contributions with an employer overseas who does not exercise his right, although there is no liability to make contributions.
§ Mr. DeanI shall gladly look at that specific point and communicate with the hon. Gentleman in due course.
§ Question put and agreed to.
§ Subsequent Lords amendments agreed to.