HC Deb 02 December 1981 vol 14 c258

The Chancellor of the Exchequer announced earlier today that the Government propose to:—

  1. (1) reduce the rate of Treasury Supplement from 14.5 per cent. to 13 per cent. This will achieve savings in the Consolidated Fund of £261 million in the year 1982–83.
  2. (2) increase the National Health Service allocation from contributions, to provide additional revenue of £104 million in the year 1982–83.
  3. (3) raise the lower and upper earnings limits for national insurance liability to take account of inflation.
  4. (4) increase contributions both to take account of these changes and to cover increased demands on the National Insurance Fund.

I shall tomorrow present a Bill which provides for these changes. It will also provide for the increase of .35 per cent. in the employment protection allocation to keep the redundancy fund within the borrowing limit recently agreed by the House to be added to the employee's national insurance contribution.

The Government Actuary's Report

The effect of these changes, and the assumptions which underlie their, are set out in the report of the Government Actuary—Cmnd. 8443—which will be laid before the House at the same time as the Bill is presented. The assumptions on which the Government Actuary has worked in preparing his calculations are as follows:

  1. i that the number of unemployed people, excluding school leavers, will average 2,600,000 in 1981–2 and 2,900,000 in 1982–3; and that, in addition, the number of unemployed school leavers and adult students or people whose employment has temporarily stopped will average 220,000 in 1981–2 and 225,000 in 1982–3;
  2. ii that average earnings in the tax year 1981–2 will be 11.3 per cent. higher than in the tax year 1980–81 and the average in the tax year 1982–3 7.5 per cent higher than in 1981–2.
  3. iii that there will be a benefit uprating of 10 per cent. in November 1982 in line with the expected movement of prices plus, in the case of long-term benefits, a further 2 per cent. to make good the expected shortfall in the November 1981 uprating."