HC Deb 07 March 1996 vol 273 cc439-40
4. Mr. Sheerman

To ask the Chancellor of the Exchequer what discussion he has had with the Inland Revenue regarding employer national insurance contributions in the construction industry. [17619]

Mr. Jack

Discussions have taken place between the Inland Revenue Contributions Agency and representatives of the construction industry on matters affecting tax and national insurance contributions—and particularly the status of subcontractors in the industry.

Mr. Sheerman

Is it not sometimes a good thing to have old-fashioned virtues, such as paying employer national insurance contributions, because of their benefit to the economy—some estimate the figure at £2 billion a year—and also what they mean for the welfare of our people in future years in terms of who shares the burden? Old-fashioned values are not out of place in the modern Labour party.

Mr. Jack

I thank the hon. Gentleman for his comments, as I know that he takes a particular interest in the needs of those in both the contracting and subcontracting industries. I am aware of what underlies his question; there is sometimes a problem in the contracting industry about identifying who are the genuine subcontractors. The Inland Revenue is working hard on that problem. A new guide has recently been published by the Revenue and the Contributions Agency to assist employers in that task.

Proposals in the Finance Bill will precurse the introduction in 1998 of an identifier card that will be of particular value to contractors in helping them to identify genuine subcontractors. They will also ensure that the wishes of the hon. Gentleman and myself are fulfilled, and the proper taxation and national insurance deductions are made.

Mr. Duncan Smith

Does my hon. Friend agree that one of the greatest causes of job insecurity is the total level of unemployment that exists in so many nations across Europe? Does he agree that the structural reforms of the supply side carried out in the 1980s by my right hon. and hon. Friends have created a lower level of unemployment in the United Kingdom, which is acceptable, without causing inflation? Is that not due solely to Conservative policies?

Mr. Jack

My hon. Friend makes a telling and fine point about the benefits of our supply side reforms. That is why, unlike so many other European nations, unemployment in this country continues to fall.