HC Deb 11 November 1982 vol 31 cc244-5W
Mr. Allan Roberts

asked the Chancellor of the Exchequer what representations he has received about the case for abolishing the national insurance surcharge.

Sir Geoffrey Howe

I had received a number of representations before I announced, on 8 November, that I propose to reduce the rate of national insurance surcharge for 1983–84 by 1 per cent. to 1½ per cent. In addition, the equivalent of a ½ per cent. reduction for 1982–83 will be given by reductions in employers' payments of national insurance surcharge and national insurance contributions for January, February and March next year.

Mr. Murphy

asked the Chancellor of the Exchequer what recent representations he has received regarding the abolition of the employers' national insurance surcharge; and if he will make a statement.

Mr. Brittan

My right hon. and learned Friend has received a number of recent representations. As he announced on 8 November, he proposes to reduce the rate of national insurance surcharge for 1983–84 by 1 per cent. to 1½ per cent. In addition, the equivalent of a ½ per cent. reduction for 1982–83 will be given by reductions in employers' payments of national insurance surcharge and national insurance contributions for January, February and March next year.

Mr. Marlow

asked the Chancellor of the Exchequer what has been the gross value to industry in a full year of the reduction in interest rates and the reduction in the national insurance surcharge.

Mr. Ridley

Bank base rates have fallen by seven percentage points since their peak in October 1981. All other things being equal, each one percentage point reduction has been estimated to benefit company finances by some £250 million to £300 million in a full year. So far as NIS is concerned, as a result of the reduction announced in the last Budget, and the special reduction announced on 8 November, private sector employers will benefit by some £1 billion in 1982–83. And in 1983–84, the total benefit to private sector employers resulting from the reduction since 1981–82 in the rate of NIS—from 3½ per cent. to 1½ per cent.—will be about £l½ billion.