The honest answer to the question is that because there is not enough information in the amendment, we do not know, but that might be so.
Let us take the example of someone with two jobs paying £75 a week, who does not currently pay national insurance. If the two sums were added together to make £150 and national insurance were levied on that basis, that person would then have to pay national insurance. Such people might turn out not to need the qualifying year, because they would already have 35 qualifying years. As the hon. Gentleman says, a set of people could be worse off if the amendment were interpreted to mean what we assume that it means. It may merely mean opting in for a credit, which would be a free entitlement and would therefore constitute pure gain, but in that case there would be a different unfairness. We would have people who did a single job at £150 a week who had to pay NI and somebody else who had two jobs paying £75 a week who did not have to pay NI but got a free year of national insurance. My hon. Friend highlights an important point, and I am grateful to him.
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We believe the amendment is both unnecessary from a legislative point of view, because we have crediting powers elsewhere, and sets a precedent which concerns us. The amendment is not clear either. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) has tabled a motion to agree with the amendment, indicating that he disagrees with the Government’s view on this amendment. In a number of respects the amendment is flawed, and were he to be successful in a vote on its staying in the Bill, there would be no further parliamentary opportunity to correct it. This is the only amendment on which we disagree with the Lords, so that would be the end of the process. He would therefore have ensured that a defective clause became part of the law of the land and I am sure he would not want that to happen.
Let me give some examples of the flawed drafting. The amendment refers to the “lower earnings level”, but in fact there is no such thing. There is the lower
earnings limit, which is what we imagine Baroness Hollis meant, but the amendment is unclear and we could not have in primary legislation a reference to a threshold that does not exist.
Secondly, the lower earnings limit, if that is what is meant, is normally expressed in weekly terms and has to be multiplied by 52 to be expressed in annual terms, so we would have to make sure that there was consistency. The amendment refers to a year, but it is unclear whether it is a calendar year or a financial year; we presume it is the latter. There are a whole raft of reasons why the amendment is flawed. I am sure that the hon. Gentleman would not want to put a flawed provision on the statute book, but that is exactly what voting against the Government would do.
We do not know for certain how the proposal would work, although we have a clue. If it is about crediting—about giving somebody a qualifying year without their having to pay for it—then we think that crediting ideas would fit better in section 22 of the Social Security Contributions and Benefits Act 1992 rather than as part of this Bill. Extensive regulation-making powers are available to us to modify the crediting system, if that is what is intended, so we do not think that such a proposal would be necessary from a legislative point of view.
If, however, we are talking about combining wages and aggregating and then levying national insurance, that would bring in a different set of unfairnesses. That applies particularly to the example of a person with a single job at £150 who has to pay NI and someone who has two jobs at £75 who does not have to pay that but who could be credited. That creates different anomalies which we obviously want to avoid.
On the issue of the evidence base, we have looked at people who have multiple jobs. Clearly, someone can have multiple jobs and one of them might pay above £109 a week, so the fact that someone has multiple jobs does not of itself exclude them from national insurance. Each job has to pay below £109. Of course, some people do not go above £109 even when their multiple jobs are put together—someone who does two lots of babysitting, perhaps, or a couple of cleaning jobs—so presumably they would not qualify. We are therefore talking about a very specific group of people with multiple jobs which together take them over £109, but neither of which is over £109 on its own.
We also would not want to include in our figures those who have children, those who are doing multiple small jobs because they are carers, or those on universal credit, because they would all be credited in. There are quite a few people with two or more small jobs, but Members can easily see that it is a big leap to the assertion that there is a big problem. Furthermore, as I have indicated, the fact that in any given year a person is in that situation may have no effect on their eventual state pension, because it depends on how long they are in that situation. We therefore need more evidence before we rush to policy conclusions.
We take seriously and respect these issues, so let me explain how we propose to build up an evidence base. First, we need to look further at the characteristics of people in such situations—who they are and how long they might have that kind of working pattern. Secondly, we commit to updating and revisiting our 50,000 figure to make sure it is the latest available. In that context,
before moving on I want to say a few words about the issue of zero-hours contracts, as I have a feeling that might come up in our debate.
It is said that zero-hours contracts are a growing part of the labour market; the recent official figures substantially increased the estimated number of people with zero-hours contracts. There is some suggestion that the number of zero-hours contracts certainly has not risen as quickly as the figures might suggest, and that because of the discussion of this issue in the media, people are more aware that that is the kind of arrangement they have; the Office for National Statistics has urged caution in assuming that there has been this big surge in zero-hours contracts. However, I am pleased to be able to tell the House that the ONS is undertaking employer research into the use of zero-hours contracts, which should, I believe, be published next month and provide us with some robust evidence on the scale and use of that form of contract.
Although zero-hours contracts are a feature of the modern labour market, they are not what we are talking about in this debate. To be clear, we are talking about people having two or more mini-jobs which together take them above the £109 threshold. They might be zero-hours contracts, but there is no reason to assume that a zero-hours contract is a mini-job, that it results in someone earning less than £109, or that people who have zero-hours contracts have multiple jobs. Those are all dirty great leaps to an assumption that we are not entitled to make on the basis of the data.
For example, I understand that the average person with a zero-hours contract could typically work 15 to 20 hours a week or so. The zero is just what is guaranteed, but the typical outcome is very often a week of work that pays someone enough to have to pay national insurance. Again, related to that is the fact that qualifying years for national insurance are based on the situation over a whole year, so even if someone is on a weekly zero-hours contract and does not work every week—they work zero hours some weeks—they could still build up a full qualifying year, because in the weeks they work they might pay significant amounts of national insurance. Therefore, again, simply saying there are lots of zero-hours contracts does not prove that it is an issue. The fact that someone is on a zero-hours contract does not mean they have multiple jobs. The fact that people are on zero-hours contracts and sometimes work zero hours does not of itself stop people getting qualifying years. I imagine the debate may move in the direction of saying, “Oh, there’s all these zero-hours contracts. It’s a scandal and therefore we need this amendment,” and there are about 17 logical flaws in that reasoning.