My Lords, the main function of this amendment is to offer brief respite to the noble Baroness, Lady Kramer, and my noble friend. However, the amendment is on a serious matter and I want to take this opportunity to raise it and see if I can elicit a response from the Government. It could be argued that it is on more of a Second Reading point, but it occurred to me only subsequent to Second Reading, and the amendment fits here.
I also accept that it is a probing amendment and far from perfect. In practice, I would have to rewrite extensive legislation to achieve what I want, which would probably fall foul of the rules on financial privilege anyway. However, I am still raising a point that is important, although I do not intend to detain the Committee overlong.
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What I propose has nothing to do with what the Minister identified as my “overly pessimistic” comments on the legislation. I still hold to my view that this is what I would describe as “performative legislation”. Nevertheless, what we have here are two worthy causes: helping our veterans to obtain employment and encouraging regional development. However, that is not the issue being raised in this amendment, which is the use of the National Insurance Fund for these purposes. There is another debate to be had as to whether the money could be used in more effective ways, rather than having a national insurance rebate, but I am not addressing that; this is simply on the issue of where the money comes from.
I believe in the National Insurance Fund as part of a comprehensive system of national insurance. My question for the Minister is whether he and the Government believe in the National Insurance Fund. I could, but I am not going to provide a complete history of the National Insurance Fund—it is one of the great achievements of the 1945 Labour Government—but it is interesting to note that we still have national insurance
alongside a National Health Service. Many of the creations of the 1945 Labour Government are long gone—the National Coal Board, for example—and national assistance has morphed to different names and different structures. But the name “national insurance” survives.
Cynics may feel that it is just that the Treasury finds it convenient to have a tax which, for historical reasons, does not really count as a tax in quite the same way as income tax, most notably. It is true that, in practice, most people regard national insurance contributions as just another tax, but it is accounted for separately and distinctly in the national accounts. History is important here: to go back to the national insurance scheme as established on 5 July 1948 to provide unemployment benefit, sickness benefit, retirement pensions and other benefits, in cases where individuals meet the contribution and qualifying conditions, benefits due under the scheme are paid from the National Insurance Fund. There is also a relatively limited contribution towards the costs of the NHS.
In each year from 1948 to 1989, the National Insurance Fund, as well as contributions, received a Treasury supplement, which averaged about 18% of the contribution income. I am trying to limit the history lesson, but for various reasons the need for the supplement fell away, or at least it came and went depending on short-term conditions, and it was replaced by a Treasury grant under the Social Security Act 1993. But essentially the point here is that there is provision in the legislation for money from the Consolidated Fund to be paid into the National Insurance Fund. It is that particular provision that I use here to address this point.
That is enough history. The point is that the purpose of the National Insurance Fund is to pay national insurance benefits, which people are entitled to as of right, in return for the contributions that they have paid or been credited with. It is not an all-purpose fund or source of funds to cover the Government’s bright ideas, however worthy the cause and however certain it is that the objectives will be achieved.
To return to my question, do the Government believe in the National Insurance Fund? If so, is the cost of these rebates an appropriate use of its resources? I could use inflammatory language, but I prefer a simple statement of fact. It is not the job of the National Insurance Fund to encourage free ports or to ease veterans into employment, however worthy these objectives. If the Government are dead set on using national insurance rebates for these purposes, the fund should be reimbursed for these costs from the Consolidated Fund. In this case, the amounts involved are trivial, but it is an important point of principle given the real differences between these sources of income.
I would like some perspective from the Government as to whether they want to adopt this sort of principle for funding this expenditure. I very much hope the Minister will engage with the question; it is not an attack on the policy—though I could do that—but about the use of the National Insurance Fund.