HC Deb 12 November 1974 vol 881 cc232-3
15. Mr. Jessel

asked the Secretary of State for Social Services what proposals she has for national insurance contributions for self-employed persons.

Mr. O'Malley

I would refer the hon. Member to what I said during the debate on the Second Reading of the Social Security Amendment Bill on 6th November.—[ Vol. 880, c. 1111–26]

Mr. Jessel

Why have the Government singled out self-employed people as such to pay much higher contributions than anyone else? Would it not be much fairer to relate the contribution solely to the capacity to pay, without reference to the category of employment? Is it the policy of the Government to drive independent people, such as small shopkeepers, out of existence and to try to persuade everyone to work for large-scale organisations?

Mr. O'Malley

I will tell the hon. Gentleman whom we have singled out. We have singled out for help the self-employed with the lowest incomes. We have not put up their contributions. But the Tory Party, which traditionally clobbers and does not understand the interests of the lower-paid, could not be expected to accept that.

Secondly, the reasons underlying the present structure of self-employed contributions, both class 2 and class 4, were fully discussed during the proceedings on the Social Security Act 1973, which is a Tory structure which we are implementing, and the ratio of contributions between the self-employed on the one hand and employed earners on the other hand is kept roughly in the same proportion as the hon. Gentleman's Government had in 1973.

Sir G. Howe

Will not the Minister accept responsibility for the changes that he is making to the disadvantage of the self-employed? Does he not acknowledge that for self-employed people earning £30 a week or more it is his Government, and his Government alone, who are raising contributions from 5 per cent. to 8 per cent., a wholly unjustifiable discrimination against the self-employed?

Mr. O'Malley

The right hon. and learned Gentleman refused to answer my question on Second Reading when I asked him whether the Conservative Party would have put up the class 2 contributions by a further 29p, which would have been wholly disadvantageous to the lower paid among the self-employed. If the right hon. and learned Gentleman suggests that we should bring the percentage we propose down, he has to tell me where we should find the extra £25 million. Should it come from the lower paid among the self-employed, does he want to put an additional burden on class 1 employees or does he propose that we should load an additional contribution on employers? The right hon. and learned Gentleman must put his options forward before he criticises our proposals, which give help to those who have the smallest incomes.