Social Security (Contributions) Amendment (No. 3) Regulations 1983 (Hansard, 29 March 1983)

§ Lord Trefgarne
My Lords, I beg to move that the draft Social Security (Contributions) Amendment 1495 (No. 3) Regulations 1983, which were laid before your Lordships on 25th February, be approved. These regulations will remove the greater part of an unnecessary irritation which present provisions cause the so-called "opted out" women—those married women and widows who retain the right to pay national insurance contributions at the reduced rate.
At present, if an employer wrongly deducts full-rate contributions for them, these women are not able to say that they would like to give up their right to pay the lower rate and let these contributions stand, so counting towards their contributory benefit rights. Payment of the lower rate contribution gives no benefit rights, apart from industrial injuries cover and, from April this year, inclusion in the statutory sick pay scheme. So a woman who has wrongly paid at the full rate can only be offered her money back by my department and, if she wants, give up her right to pay the lower rate only from the start of the next tax year.
It will be apparent that this is something of a nonsense of a provision. In essence, we have to force money back on women who actively wanted it to remain in the National Insurance Fund and begin to build up benefit rights for them. Nor, under existing provisions, are we able to allow these women to give up their right to pay the lower rate—revoking their election, as it is called—in the middle of a tax year. They have to wait till the start of the next one.
What these regulations aim to do is to put the situation right. Any woman who has wrongly paid full-rate contributions at the not-contracted-out rate will be able to let them stand, so revoking her election retrospectively and enabling the contributions to count towards her benefit. And because it is only fair to let these women make their decision in the light of a reasoned calculation about their benefit expectations, we shall give them until the end of December in the year following the end of the tax year in which the contributions were paid to make their decision.
Your Lordships will see that there are certain exceptions in the new regulations. Most of these are to stop administrative complications. For example, if a woman has already obtained a refund of contributions or has subsequently paid a contribution at the reduced rate, it would obviously not be right to let her full-rate contributions stand. But the most important exception, to which I would draw your Lordships' attention, concerns women who have a period in contracted-out employment. They will be excluded from the retrospective provisions, and for a very good reason. If they were allowed to revoke their election retrospectively, their doing so would impose a liability, however small, on their employers in respect of the guaranteed minimum pension that is the counterpart for people who are contracted-out of the additional component in the state scheme. Even if the employer accepted this obligation willingly, there is no way that it would be imposed within subordinate legislation. The simple fact is that no subordinate legislation of this kind can create a retrospective liability.
The remaining major provision of these new regulations is to enable women with the right to pay reduced rate contributions to give up that right during a tax year and start to pay at the full rate from the date 1496 of their choice. Again, this is a sensible concession which will enable us to meet the wishes of the women concerned, instead of insisting that any change of status must be made from the start of a new tax year.
As I said at the beginning, these changes are wholly beneficial. They go as far as they can in helping opted out women to choose what contributions they want to pay and when, and mark a real step forward in our efforts to meet contributors' wishes. They will also, incidentally, enable a modest staff saving to be made in my department. I cannot believe, therefore, that these changes will be other than welcome, and I commend them to your Lordships. I beg to move.

§ Baroness Jeger
My Lords, I welcome, as I am sure we all do, what the noble Lord the Minister has said. I am sure the Minister will be glad to hear that I do not propose to go into any of the details. The whole question of the insurance situation of married women and widows is a very large problem and it is not to be dealt with in regulations which are coming before us tonight. I know that many women's organisations and I hope many members of Her Majesty's Government are giving great thought to the fundamental problems involved in the insurance position of married women and widows. We welcome these small improvements tonight and hope that your Lordships will agree to them.

§ Lord Banks
My Lords, all that I want to do is to thank the noble Lord for his very clear explanation of the contents of this order and to welcome the removal of "an irritation", as he said, which has been caused to married women and widows.

§ Lord Kilmarnock
My Lords, we on this Bench would also like to thank the noble Lord the Minister for his explanation. I would also like to pay him a compliment. I found his explanation a great deal clearer and easier to understand than the Explanatory Note which accompanies the draft order. I hope that he will perhaps make his communication skills available to his department in their communication with the general public at large. He mentioned a staff saving in his department. I hope he will be able to give me an undertaking that the staff saving will not be made in that section of the department which is concerned with producing readable leaflets for the department's clients.

§ Lord Trefgarne
My Lords, I am grateful—indeed, flattered—by the reception of the order that I have moved tonight. I will certainly see whether I can give the assurance for which the noble Lord has asked. I am not quite certain of our plans with regard to that particular department and, therefore, for me to give a categoric assurance now might be unwise. However, I shall with pleasure look into the matter.