§ 8. Mr. Cryerasked the Chancellor of the Exchequer what representations he has received regarding the recent national insurance surcharges which be announced on Monday 24 November.
§ Sir Geoffrey HoweI have received representations from three bodies and a larger number from individuals and businesses about the effects on employers of the changes in national insurance contributions.
§ Mr. CryerIs it not true that the representations have been concerned, in common with representations from Labour Benches, with the enormous loss of jobs caused by the insurance charges? Does not the speech of the Chief Secretary, in which he said that the Government should be more flexible about public borrowing and money targets to combat the grave recession, mean that the Chief Secretary at least recognises that the Government's monetary and borrowing targets are a combination of disastrous catastrophe for the manufacturing sector?
§ Sir Geoffrey HoweIf the hon. Gentleman believes that, he will believe anything. My right hon. Friend is devoted, as are the Government, to the reduction of the undue burden of public sector borrowing and the achievement of monetary control. The increases in national insurance surcharges as part of the national insurance contribution changes are a necessary part of putting the public sector in balance in the next financial year to ensure the achievement of conditions that will work to the benefit of British industry.
§ Mr. Hal MillerDoes my right hon. and learned Friend understand the resentment in industry at the fact that the public sector borrowing requirement is being brought under control at the expense of private industry by increasing levies on it? What consideration was given to the capacity of industry to pay additional national insurance charges?
§ Sir Geoffrey HoweVery close attention was given to that. It is for that reason that the measures that I have announced to restore balance to the nation's accounts next year are directed first, at the revenue from the North Sea 1059 and, secondly, at raising additional revenue from the employees' side of the national insurance account. The changes for employers are the consequence of inflation and inflation alone. However, they represent a reduction in the real burden. The increase on that side is about 8.3 per cent. while the increase on the employees' side is about 27 per cent. I am sure that my hon. Friend will remember that these changes have enabled me to announce substantial reductions in the burden of the stock relief arrangements.
§ Mr. ShoreI understand that the Chancellor is raising the national insurance surcharge by £1,000 million. That is roughly the global sum. What is his prime objective in raising this additional and unwelcome sum? Does he think that it will help to diminish or to increase unemployment next year?
§ Sir Geoffrey HoweThe right hon. Gentleman would do well to remember that the national insurance surcharge was the invention of the Government of whom he was a member. He would do well to remember also that the additional income being raised by the changes that I made on 24 November is coming, as I have emphasised, not only from the surcharge but from national insurance contributions on which the surcharge is imposed. The burden beyond inflation there imposed will be on employees. The reason for making the changes is to ensure that the borrowing requirement is moving towards balance so that there is some prospect of interest rates coming down rather than going up. That is a matter of prime concern to industry.