HL Deb 19 December 1974 vol 355 cc1327-32

1.54 p.m.

Lord WELLS-PESTELL rose to move, That the Draft Social Security (Contributions and Married Women and Widows) Miscellaneous Amendment Regulations 1974, laid before the House on 16th December, be approved. The noble Lord said: My Lords, I will take this matter as briefly as I can, but there are certain things which I must explain in some detail. The Regulations further amend and add to two principal sets of Regulations, the Social Security (Contributions) Regulations 1973 and the Social Security (Contributions) (Married Women and Widows Special Provisions) Regulations 1973. The greater part of these Regulations are necessary as a consequence of the passing of the Social Security Amendment Act 1974. When these Regulations have become law the consolidation of the Contributions Regulations to operate from April 1975 will be completed and submitted to Parliament as soon as possible, so that everyone concerned can have the complete Regulations in their hands as a single document well before the Appointed Day on 6th April.

The main provisions are that the proposed Regulations prescribe the banded tables for use by employers generally and the special tables required for members of the Forces and for mariners. They also make provisions for share fishermen and employment on the Continental Shelf. They amend the provisions of the Married Women's Regulations regarding the conditions for being a "qualifying widow" and substitute certain new provisions limiting any Class I liability of newly widowed women. The Regulations also make a number of technical and drafting amendments to the principal Regulations.

The banded tables, as your Lordships will see, take up the greater part of the Regulations. They continue the service available under the present graduated scheme of providing employers with a simple alternative method of calculating contributions where they do not have sophisticated calculating machines. The tables are based upon the rates set out in the Social Security Amendment Act 1974 and the special provisions relating to members of the Forces and mariners set out in the Social Security (Contributions) Amendment (No. 2) Regulations 1974, which received the approval of both Houses and came into operation on 9th December. The tables go in bands to avoid a plethora of rates. The relevant contributions are thus calculated at the midpoint of each band in accordance with previous practice, except obviously for the lower and upper limits, where the calculations have to be exact.

I just want to say a word about share fishermen. Share fishermen are, broadly, people employed in the fishing industry who are remunerated in whole or in part by a share of the profits or gross earnings of the fishing boat. The relevant provisions in these Regulations result from lengthy discussions with the organisations representing share fishermen, and I would like to point out that they have welcomed the Government's proposals. They enable existing benefit rights to be maintained, in return for a special contribution which is being arranged for this group only in recognition of their very special reserved rights under the existing scheme. The provisions themselves are straightforward, and we are in close touch with the relevant organisations about the way in which the provisions will work in detail.

The Regulations continue the special provisions needed for workers on the Continental Shelf, and these special provisions have been in existence for some time. They provide that employment in any area which may from time to time be designated by Order in Council under the Continental Shelf Act 1964 as part of the Continental Shelf will be treated for contribution purposes as though the designated area was in Great Britain. Subsequent benefit Regulations will ensure that the appropriate benefits will be available as a result of the payment of contributions by the people concerned.

I want now to deal with married women and widows. These Regulations amend the provision in the Married Women's Regulations concerning widows and, in particular, the contribution liability of new widows. Since those Regulations were made, further study suggests that the Regulations would have been difficult for widows to understand and for employers and the Department to operate. As far as possible, we have tried to simplify matters and to avoid changes of the rate of liability for employed women during the course of a tax year.

Perhaps I could just try to explain that. It means that when a woman becomes widowed she can, for the rest of that financial year and the next financial year, decide whether she is going to pay full contributions or opt out and just pay the 2 per cent. It means, in other words, that she will have, if her husband dies halfway through the year, something like 18 months in which to make up her mind.

We consider, also, that it is reasonable to require widows who go out to work for employers to pay earnings-related contributions at the reduced rate of 2 per cent., even when they are receiving widows' benefit (which is, of course, not subject to the earnings rule). That means that they will pay nothing on earnings under £11; above that rate they will pay from 22p at £11 a week up to £1.38 at the top of the scale. As your Lordships will remember, the top of the scale is £69 per week. A widow who has opted to pay the reduced rate while married will, as now, have no change of liability on widowhood. A woman paying the full rate previously will get a reduction immediately on widowhood, ranging from 40p a week at the lowest level of liability to £2.41 a week on earnings of £69. If the husband's death occurs before 1st October, as I said, she will have something like 18 months in which to make up her mind as to whether she is going to opt out or not.

A few widows may find it advisable to pay Class 1 contributions at the standard rate while employed, or Class 2 if they are self-employed. Full liability can, for instance, be advantageous for widows who have pensions at rates significantly below the standard rates, and who want to ensure that if sick or unemployed they will qualify for full benefit and earnings-related supplements. So we are making provision for widows, if they wish, to pay contributions on the same basis as other single women.

Finally, a very small number of widows may have difficulty in establishing that they are entitled to a widow's pension—for instance, a widow may claim that her late husband had paid more contributions than have been recorded, or that he died as a result of an industrial injury which was not reported at the time. Until she knows what her pension will be, the widow will not be able to make an ordinary contribution choice. So we are extending the "appropriate period" in such a case until the end of the year in which her claim is settled. I think your Lordships will agree that that is a fair thing to do.

In this explanation I have referred to the women concerned as "widows". But in fact the concessions I have described apply for the appropriate period even if the widow re-marries. She will still have a long period in which to decide whether she is going to opt out or not. Throughout that period, whether she pays contributions or not, she will have contributions credited to her account for retirement purposes under the separate benefit Regulations. My Lords, I beg to move that these Regulations be approved.

Moved, That the Draft Social Security (Contributions and Married Women and Widows) Miscellaneous Amendment Regulations 1974, laid before the House on 16th December, be approved.—(Lord Wells-Peslell.)

House adjourned during pleasure.

House resumed by the Lord Chancellor

2.5 p.m.

Lord SANDYS

My Lords, in speaking in reply, I should first like to say that we welcome the benefits set out. We naturally acknowledge the necessity for additional contributions, and we further acknowledge the concessions made for widows recently widowed. There is an important point of principle here that I wish to draw to the attention of the Government Chief Whip, because we feel very worried about the speed with which these Regulations have been brought before this House. Your Lordships will be aware that these were set down on the Order Paper on Monday of this week. While acknowledging, in the season of good will, that this is a necessity and that it will benefit a large number of people, it is a fact that your Lordships have been subjected to very considerable speed in the Government's programme in the field of social security. We accepted the Social Security Amendment Bill with not very good grace when it was literally railroaded through at speed.

Baroness LLEWELYN-DAVIES of HASTOE

My Lords, may I interrupt the noble Lord before he goes any further? As he knows, the business of the House is always arranged through consultation with all parts of the House. The Opposition knew that we were going to do this, and they fully understood our difficulties. My noble friend could give a long explanation as to exactly why we need these provisions, but I do not want to ask him to do that at this point unless the noble Lord wishes. In fact, the programme is agreed. We agreed the previous Bill and I think we really ought to leave it at that.

Lord SANDYS

My Lords, while accepting what the noble Baroness says, and fully acknowledging the point that there is a necessity for speed in order to benefit certain categories—and I would never suggest that this House would wish to hold up those matters which another place had accepted—nevertheless we wish that the Government would acknowledge the fact that considerable pressure has been placed on this House, and accept the fact that these Regulations have had to be examined at considerable speed when they are of a detailed nature. In passing, I should like to acknowledge what the noble Lord, Lord Wells-Pestell, has said in explanation, and thank him for the way in which he set it out before your Lordships. I have made my point.