National Insurance Contributions (Hansard, 31 March 1999)

§ Mr. Timms

I can confirm that from 1 April responsibility for National Insurance contributions (NICs) operations and policy will pass from my right hon. Friend the Secretary of State for Social Security to the Board of the Inland Revenue and the Chancellor of the Exchequer respectively. A new Executive Office of the Inland Revenue to be called the National Insurance Contributions Office (NICO) will be formed from those Contributions Agency (CA) units based in Newcastle, amounting to about 4,500 staff in all. Some 3,500 CA staff working in field offices in locations around Great Britain will be integrated into Inland Revenue regions.

This change is important in two ways. It marks a step towards more modern and effective Government and also towards improved service to the public. Our aims for this transfer are to reduce burdens on business; give better customer service; strengthen compliance; and over time promote greater alignment of the rules for income tax and National Insurance.

For instance from 6 April, through the New Enterprise Support Initiative based in the Inland Revenue, new employers will have access to a telephone helpline which will provide help and guidance on both NICs and tax. Other early benefits of the transfer include a new route for appeals against contributions decisions to the Tax Commissioners alongside tax appeals.

As a result of the transfer of responsibility for NICs policy to Treasury Ministers correspondence and parliamentary questions on NICs policy issues should in future be addressed to them. Parliamentary questions on NICs operational issues will also be for reply by Treasury Ministers. The Board of Inland Revenue will be responsible for NICs operations and, where appropriate, replies to correspondence on operational issues will be provided by Inland Revenue officials.

The Inland Revenue and Treasury Ministers will respond to correspondence and parliamentary questions on NICs in just the same way as they deal with their other responsibilities.

The Social Security Benefits Agency will continue to be responsible for contributory benefits and State Retirement Pension matters as now. Social Security Ministers retain responsibility for policy on the contributory principle and policy on non-State pensions.

The respective responsibilities of the two Department and their working relationship are set out in a Memorandum of Understanding between the Principal Accounting Officers. The Memorandum reflects share commitment to modern Government and improved public service across a wide range of complex arrangements. Copies have been placed in the Libraries and it is also available at the Internet sites of the DSS and the Inland Revenue.