HL Deb 06 March 1992 vol 536 cc1157-60

2.37 p.m.

Lord Henley rose to move, That the draft regulations laid before the House on 12th February be approved [13th Report from the Joint Committee].

The noble Lord said: My Lords, the regulations deal with the special contributions for share fishermen.

As I am sure all noble Lords will know, they are normally regarded as self-employed for national insurance purposes, but in recognition of the hazardous and sporadic nature of their employment, share fishermen are able to receive unemployment benefit and industrial injuries benefits, unlike other self-employed people.

For share fishermen the normal self-employed national insurance contribution of £5.35 a week is enhanced on advice from the Government Actuary's Department according to the general cost of providing unemployment benefit.

The effect of the draft regulations is that the maximum cost to a share fisherman in 1991–93 for his unemployment benefit cover will be 52 times the weekly addition of £1.65, that is £85.80. The weekly rate of unemployment benefit will be £43.10. The share fisherman who receives unemployment benefit will therefore be able to recoup his extra contributions in less than two weeks. The chances are that he will receive more in benefit than he pays in extra contributions, particularly when some 13,000 share fishermen made an average of over 2,500 claims for unemployment benefit in 1991.

Given what I have said, I am confident that the House will see the need for this adjustment and recognise that, despite the increase in the rate, the share fishermen's contribution still remains a valuable feature of the scheme. I beg to move.

Moved, That the draft regulations laid before the House on 12th February be approved [13th Report from the Joint Committee].—(Lord Henley.)

Earl Russell

My Lords, I am grateful to the Minister for introducing the regulations and for explaining them so lucidly. They are increases which are quite significantly above the rate of inflation. The Minister explained that the contributions were enhanced according to the general cost of unemployment benefit. Is my noble kinsman telling me that the share fishermen are paying for rising unemployment nationally or in their own industry, or in what particular context? I am not sure that that is an altogether satisfactory arrangement. It makes it in order to ask what share fishermen will receive in return for those contributions.

Unemployment benefit is related to a period of unemployment. The period is normally defined by weeks. Share fishermen have a tie-up period—eight days during which they do not fish. It very often happens that that tie-up period is divided between two weeks so that they receive unemployment benefit for neither of those weeks. That is a matter of anxiety to my honourable friend Mr. Kirkwood and a great many people in Scotland. I hope the Minister can tell us that some change is in prospect.

Lord Boyd-Carpenter

My Lords, I too shall be grateful if my noble friend can tell us when the contribution was last increased and whether the increase proposed under the order is not substantially more than can be attributed to any change in the index of retail prices. As I understood what he said, it did not relate to changes in the value of money or changes in the value of the payment, but related to the costs of unemployment benefit.

The noble Earl, Lord Russell, asked how that was assessed; whether it is based on the number of people unemployed and whether the contribution is being increased because there are more unemployed. What is the justification for what appears to be a substantial increase in the contribution? My mathematics are never very good but I shall be grateful if my noble friend will tell us what is the percentage increase in raising the figure from £6.20 to £7.

Lord Carter

My Lords, my questions have already been asked by the noble Earl and the noble Lord, Lord Boyd-Carpenter. I therefore await the Minister's answers with interest.

Lord Henley

My Lords, I accept that the increases are above inflation. As I said when moving the amendments, we increased the special extra amount for share fishermen in line with estimates produced by the Government Actuary as to what he expects the costs of unemployment benefit to be in the coming year. That is not the cost of unemployment benefit paid purely to share fishermen; it is the cost nationally. Because share fishermen are more likely to have more than two weeks on unemployment benefit in a year, they are receiving a good deal. That is unlike all other self-employed people, who are not entitled to any unemployment benefit and simply pay the flat rate of Class 2 contributions. On this occasion the special scheme for share fishermen is increased in line with the Government Actuary's estimate. It has nothing to do with the level of RPI or whatever.

Turning to the question of the new tie-up rules, as mentioned by my noble kinsman, we have entered a period of different European tie-up rules. Rather than the eight-day tie-up of each calendar month, fishing vessels caught by the rules must remain in port for a total of 135 days in the 11-month period from 1st February to 31st December 1992. Whatever else may be said about that rule, I am sure that the greater flexibility which it allows will be widely welcomed by the industry.

Fears have been expressed that the eight-day tie-up rule will force fishermen to go out during periods of bad weather. It has also been felt that the value of community and family life, in areas where Sunday is traditionally observed, may be undermined as fishermen may feel constrained to use the remaining 22 or 23 days of each month to the full extent. Such fears should not arise under the new rule.

At this stage there is no reason to think that the change in the tie-up rules will necessarily affect the number of unemployment benefit claims from share fishermen. Nor is there any reason to assume that there will be any change in the proportion of claims which are disallowed. It remains the case that share fishermen can claim income support or family credit, depending on their average hours of work. A share fisherman who averages 16 or more hours of work a week from 7th April and has responsibility for one or more children may be entitled to family credit. On the other hand, if his average hours of work are less than 16 a week, he may be entitled to income support.

Lord Boyd-Carpenter

My Lords, before my noble friend sits down, can he say whether there is any other national insurance contribution which is based on a calculation of the cost of the specific benefit to the specific class of person? Can he also answer my question, which he obviously did not take on board, regarding what is the percentage increase and when was the last increase?

Lord Henley

My Lords, my noble friend will understand that the national insurance scheme is entirely self-contained. Therefore, when my right honourable friend considers increases in contribution rates he must consider how much will go out every year. That, I accept, is somewhat different from the rest of the national insurance scheme, in that my right honourable friend has to look specifically at the cost of unemployment benefit as a whole and then increase the Class 2 contributions that share fishermen pay.

Share fishermen are in a special position, in that they are entitled to unemployment benefit despite the fact that they are self-employed. My noble friend also asked in what previous years the rate was increased. I understand that it was increased in 1987–88 and in 1988–89.

Lord Boyd-Carpenter

My Lords, what about the percentage?

Lord Henley

My Lords, I cannot give my noble friend the precise percentage at the moment. If he would like me to write to him about the percentage increase, I shall. However, I would say again that we reckon that share fishermen are receiving a good deal. They are paying an extra £80 or so a year and need only two weeks of unemployment benefit to recoup their extra costs.

Lord Boyd-Carpenter

My Lords, I do not see what is the difficulty in giving the percentage. What is 80p as a percentage of £6.20?

Lord Henley

My Lords, my noble friend asks what is the difficulty. I do not happen to have a pocket calculator on me and I cannot give him the precise figure.

Lord Carter

My Lords, I believe it is 12½ per cent.

Lord Boyd-Carpenter

My Lords, my noble friend has a great staff of officials in the Box, at least some of whom must be competent in elementary mathematics.

Lord Henley

My Lords, I am advised that the figure is 13 per cent.

Earl Russell

My Lords, perhaps my noble kinsman will send me a copy of any letter that he sends to the noble Lord, Lord Boyd-Carpenter. I too am concerned about the basis of the calculation.

Lord Henley

My Lords, it is not necessary for me to write to my noble friend since I have answered his specific point.

On Question, Motion agreed to.