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National Insurance

Volume 407: debated on Wednesday 18 June 2003

The text on this page has been created from Hansard archive content, it may contain typographical errors.

In my written statement on the suspension of National Insurance Contributions deficiency notices of 16 May, I informed the House of the action I had taken to ensure that no-one missed out. I took action to:

protect the position of those who choose to make voluntary contributions by suspending the six year rule;
ensure that the six year rule will run from the beginning of this financial year so that people affected have the same amount of time to make contributions as they would have had if they had been informed earlier;
freeze the contribution rate at the rate that would have applied at the time, so no one has to pay more than they would have to at to the time;
ensure that people receive a consolidated deficiency notice to enable them to make an informed decision.
I also informed the House that I had asked the Inland Revenue to carry out a full enquiry into the circumstances surrounding the suspension of National Insurance Contributions deficiency notices in 1998 and of subsequent events.I have today received and am now publishing the recommendations of this inquiry and I am pleased to be able to inform the House that the Board of Inland Revenue have accepted all of these recommendations.

In the course of the inquiry, the Inland Revenue have confirmed that no Minister was consulted or informed of the decision to suspend deficiency notices at the time it was taken in 1998.

A detailed trawl of former DSS files has however found that, during 2000 and 2001, Ministers at the then DSS saw internal DSS submissions that, in the wider context of NIRS2 recovery, made reference to the fact that deficiency notices had been suspended, but that they could begin again in the last quarter of 2000–01. In the same period, a submission on NIRS2 was sent to me which referred to the use of deficiency notices, but did not inform me that they had been suspended. Thereafter, in March 2001, the Minister of State at the then DSS was informed that the issue of deficiency notices would be resumed shortly.

The Inland Revenue will publish details shortly of how it plans to issue deficiency notices in respect of the years since 1996–97. These notices will tell people if they have any missing contributions in those years, and what they can do to fill the gaps in their contribution record if they choose to do so.

I will continue to keep the House fully informed of any further information on this matter.