§ 1. Mr. Gwilym Robertsasked the Secretary of State for Social Services if he is aware that many workers laid off by industrial disputes or other causes work two or three days a week but have to pay the full National Insurance contribution for that week; and if he will take steps to introduce proportional contributions for cases in which only proportions of the normal working week are worked.
§ The Minister of State, Department of Health and Social Security (Mr. David Ennals)It would be impracticable to vary the present flat-rate contributions according to the proportion of the week worked; but under our proposals for a new scheme of national superannuation and social insurance the contributions of employees will move with their earnings.
§ Mr. RobertsDoes my hon. Friend accept that as benefits are paid on a proportional basis it would be equally just if contributions were paid proportionately? Because of the increased use of machinery, would not the added burden on administration be minimal?
§ Mr. EnnalsThis applies to the new scheme when it is introduced. To introduce it now, at a time when we are using National Insurance cards and 762 stamps, would mean having four or five times as many stamps, and would add tremendously to the problems of administration both of the Post Office and of employers.
§ 2. Mr. Gwilym Robertsasked the Secretary of State for Social Services what are the latest figures available for the percentage of gross salary a man earning £10, £20, £40, £100, and £1,000 a week pays in National Insurance contributions; and whether he will take steps to introduce a non-contributory National Insurance scheme.
§ Mr. EnnalsThe figures are: 7.33 per cent., 5.54 per cent., 2.91 per cent., 1.16 per cent. and 0.116 per cent. respectively if paying graduated contributions; if contracted-out from the graduated pension scheme, 8.04 per cent., 4.25 per cent., 2.25 per cent., 0.9 per cent. and 0.09 per cent. respectively. These percentages exclude the contribution to the National Health Service. As regards the second part of the Question, the answer is "No, Sir".
§ Mr. RobertsDoes my hon. Friend accept that those figures prove without doubt that the present contributory scheme puts a heavy burden on the lower-paid worker? Does not my hon. Friend believe that as we are considering a social security system which is designed to last for 20 years or more, that system should be based on a non-contributory basis?
§ Mr. EnnalsThere are two parts to that question. First, the flat-rate system imposes a proportionately heavier burden upon lower-paid workers. This is one of the main reasons why we are introducing a new earnings related system. Secondly, when my hon. Friend suggests that we should base National Insurance on a non-contributory, and therefore presumably on a taxation system, I must say "No". This would add, at the present rate, 6s. 9d. on the standard rate of Income Tax, and I do not think that it is a proposal which the Chancellor of the Exchequer would welcome at the present time.
§ Sir G. NabarroIn order to present a proper balance to the House on this matter, would not it be appropriate to quote the figures after taxation, as direct taxation runs up today to 18s. 3d. in the £ 763 on top marginal rates, which is both extortionate and exorbitant?
§ Mr. EnnalsIf the hon. Gentleman wants to put down a Question on that he is at liberty to do so.