§ 6.28 p.m.
§ Lord WELLS-PESTELL rose to move, That the draft Social Security (Contributions) (Consequential Amendments) Regulations 1975, laid before the House on 8th August, be approved. The noble Lord said: My Lords, the Social Security Pensions Act, which received Royal Assent this summer, implements the Government's plans to relate the rates of National Insurance retirement pensions and some other major benefits to earnings on which contributions have been paid. It also enables employees to be contracted-out of full social security contributions and benefits where comparable benefits are provided by an occupational pension scheme. The Pensions Act amends the Social Security Act 1975, which since April this year has been the principal legislation on National Insurance contributions and benefits.1223
§ As a consequence of amending the Social Security Act 1975, it is also necessary to make corresponding changes to the Social Security (Contributions) Regulations 1975 which were made under power contained in that Act. These new Regulations which we have before us make the necessary amendments and additions needed to adapt the contributions provisions for the new arrangements that are due to start in April 1978. We arc giving employers and others concerned plenty of notice of the changes, which we have deliberately kept to the minimum necessary.
§ The Regulations also make changes to that part of the contributions regulations which sets out the arrangements—commonly known as the "married woman's option"—under which married women and widow beneficiaries are at present able to elect to pay contributions at a reduced rate when in employment and to pay no contributions when self-employed. The Pensions Act ends the right to make such elections but requires special provision to be made by regulations for those women who already have that right.
§ Your Lordships will recall that when we considered the Social Security Pensions Bill on Report on 16th July last I referred to a reply given on the previous day in another place by my right honourable friend the Secretary of State for Social Services. In that reply she explained how these regulatory powers would be used. These Regulations now give detailed effect to the policy decisions which she then announced. The broad effect is that a woman who has reduced liability in the year before the main provisions of the new scheme come into force—that is, in the 1977–78 tax year—will continue to have reduced liability so long as she remains either a married woman or a widow beneficiary and does not revoke her election or have a break in her employment of two or more tax years. If she revokes her election, is divorced or has a break in her employment covering two complete tax years, she will lose her right to have reduced liability. If she ceases to be a widow beneficiary—other than by getting marrie—dshe will lose her right to reduced liability from the beginning of the tax 1224 year following that in which she lost the benefit, unless by that time she has again become a widow beneficiary.
§ Your Lordships will have noticed that a substantial part of the Regulations is taken up by schedules containing tables of contributions. These are the contributions which would apply from April 1978, when the contributions provisions of the Pensions Act come into force, on the basis of the contribution rates and levels specified in that Act. The tables will not, in fact, come into effect because those levels will be revised before 1978. But they have been included to illustrate the basis on which contributions will then be levied, for employers and others to whom such information is important. The Regulations may therefore be seen as falling into three distinct compartments. First, they make amendments to the contribution arrangements which result from the decision to enable contributions to be paid at a lower rate where employees are contracted out. Secondly, they make changes consequent on the decision to phase out the married woman's option. Thirdly, they contain schedules which establish the form and layout of tables of contributions as they will apply from April 1978. Apart from this, the Regulations contain only minor and consequential amendments.
§ I should mention that there are three misprints in the draft Regulations, which will be corrected when they are reprinted but which I wish to draw attention to now. The first is on page 13 where, in the first line of Regulation 98(5)(c), the word "that" should be "the". The second is on page 17 where, in column 1 of the tables, is "£62.50". The first time it appears it should be £62. The third is on page 59 where, in column 3 of item 1 of Schedule F, the words "of persons" need to be inserted after "Exception". I apologise for these mistakes, which will be remedied when the reprint takes place. I beg to move.
§ Moved, That the draft Social Security (Contributions) (Consequential Amendments) Regulations 1975, laid before the House on 8th August, be approved.—(Lord Wells-Pestell.)
§ 6.36 p.m.
§ Lord ABERDARE
My Lords, I am grateful to the noble Lord for having explained this quite bulky document of 1225 Regulations. As he said, they are consequential Regulations as a result of the Social Security Pensions Act 1975 and in that regard, although we had certain disagreements at the time of the passing of that Bill, I have no comment to make on that now. I welcome the fact that since this Bill became an Act the date of starting is now April 1978 for certain. We had discussions about that, and many of those interested in the pensions industry took the view that to bring it in in April 1977 would be far too quick, and therefore April 1978 seems to us a much more satisfactory date.
I am grateful to the noble Lord, too, for having explained the Regulations which put into effect the married woman's option in respect of those married women who will be enjoying the option when the Act comes into effect. So far as I know, these are quite satisfactory and I am grateful to him. I wish also to congratulate him—though there were, he said, three misprints—in that whoever produced and checked the 40 pages of contributions tables in the document must have had a mammoth task, and if there is only one misprint in the whole of those tables that is quite satisfactory.
§ Lord BANKS
My Lords, I too wish to thank the noble Lord, Lord Wells-Pestell, for the way in which he explained the Regulations with his customary lucidity. Unlike other matters we have been discussing in this House today, I think they are entirely non-controversial. I was puzzled when I looked at the table, Schedule B, and saw that it began with £11.50 and ended with £81, when we know that next month the basic rate goes up to £l3.30, and presumably the top rate will be seven times that. But the noble Lord explained that point, my puzzlement has been dispelled and I am happy to support the adoption of these Regulations.
§ Lord WELLS-PESTELL
My Lords, with the leave of the House, may I say how grateful I am to the noble Lord, Lord Aberdare, and the noble Lord, Lord Banks, for their comments and observations? I do not say lightly—I mean what I say—that we are grateful for the help that both noble Lords gave us when we were discussing this matter and I hope that this is a satisfactory conclusion. I had expected the noble Lord, Lord 1226 Aberdare, to return to the question of the married woman's option, and I may say that we should have understood the situation from his point of view.