The government has announced that it is to transfer responsibility for the collection of National Insurance contributions from the Department of Social Security to the Treasury.
The move is a result of merging the Contributions Agency and the Inland Revenue into a single collections agency. Policy on the payment of benefits from the National Insurance fund will remain with the DSS.
Social Security Secretary Alistair Darling said the move was a technical measure to ‘improve the administration of government and lift burdens on business’. His Tory shadow Iain Duncan Smith objected to the merger while the Revenue was having problems in coping with self-assessment, and the agency was unable to solve its difficulties with its NIRS 2 computer systems.
Smith also claimed the move would increase rather than reduce business costs and alleged it was the first stage towards abolishing the contributory principle of NI and changing the pension from a universal right to a tax-funded and means-tested benefit payment.
Darling denied this and said that, when a member of the deregulation task force under the previous government, the current shadow chancellor Francis Maude had supported the merger, saying: ‘Apart from saving public money, this would eliminate the burden of double accountability and interference for employers.’
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