ON Thursday, January 31, Parliament debated the Government's National Insurance Bill, which will set the earnings limits for paying National Insurance contributions. Sounds like a dry bureaucratic issue but actually this is a key decision on whether the Government is serious about tackling poverty and inequality in today's Britain.

The National Insurance system was a central plank of the Attlee Labour Government's welfare state. It established the system whereby National Insurance contributions are paid from individual earnings into the National Insurance fund to pay for retirement pensions, unemployment, sickness and other benefits. It offered us all a basic level of security whatever life threw at us.

In the 1970s, to protect the rich, an upper limit was placed on the contributions paid by high earners, the upper earnings limit. As a result those on average earnings today pay about 8.6 per cent of their earnings in NI contributions but those earning £100,000 pay only 3.9 per cent.

I wanted to use the debate in Parliament on the Government's National Insurance Bill to highlight the unfairness of the earnings limit and to gain support for reform of this system. I tabled a series of amendments to the bill, abolishing the upper earnings limit so that high earners would pay the same share as everybody else. This would not only be fairer, it would also raise £8.8bn for the National Insurance Fund.

This money could be used to increase child benefit by £14 a week, lifting 400,000 children out of poverty. It could be used to make all personal care for the elderly free, increase the basic state pension or restore the link between pensions and earnings that Labour has been promising for over a decade.

Regrettably, the amendments have been rejected for debate so the Government has lost a critical opportunity to address very practically the inequality which disfigures our society.

Abolishing the NI upper earnings limit which protects the wealthiest in our society could have been a small but significant step in redressing this inequality. However, in Parliament we did not even get the chance to discuss this proposal. Welcome to Gordon Brown's Britain 2008.