State Pension Reform

Chris Leslie Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

In answer to my hon. Friend’s first question, the NHS as an employer already pays the reduced rate of national insurance from its own resources; it will have an increased rate of national insurance. Obviously the Exchequer will have an increased revenue. It will be a matter for the Chancellor of the day to decide what to do with that increased revenue, but the NHS as an employer will pay more national insurance—that is a fact.

In answer to my hon. Friend’s question about small firms in her constituency, very few small firms run contracted-out defined-benefit pensions, so the only people paying increased national insurance will be those who are contracted out who run these special final salary schemes. We have allowed those schemes to adjust their rules to offset the cost if that is how they choose to proceed, but most small firms will not be affected.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Crucial to these proposals is the notion that parents who take time off work to bring up children—stay-at-home mums—will register for national insurance pension credit in order to get their cumulative 35-year tally of contributions. However, surely the Government are not saying that the only way to get these credits is to apply for child benefit, because from 7 January not everybody has been eligible for child benefit payments. That would be ridiculously complex and confusing, would it not?

[Steve Webb]

There are two groups of people. First, those who are currently receiving child benefit that will cease because of the changes for people with higher-earning spouses will continue to get credits under this system—they are in the child benefit system with a zero award. For people who have their first child under the new regime, we already put information in what is called the bounty pack—which new mothers get—to encourage them to claim child benefit, not least because even if their spouse is a high earner at the moment, that might not always be so, so they should always claim child benefit anyway, to ensure they get their credits.