HC Deb 03 July 1989 vol 156 cc11-2
11. Mr. Harry Greenway

To ask the Secretary of State for Social Security how much he expects to collect in national insurance contributions during the current year; what the expected figure will be next year; what the figures for each of the last two years were in real terms; and if he will make a statement.

Mr. Lloyd

The yield from national insurance contributions is expected to be more than £32 billion in the current year and more than £33 billion in 1990–91. In the past two years, contributions yielded £31..1 billion and £32.3 billion in real terms.

Mr. Greenway

Will my hon. Friend confirm that those figures represent 16 per cent. of Government revenue and that NICs as an acronym for national insurance contributions are not aptly named? Will the Department be pressing the Chancellor to remit national insurance contributions from more low-paid people as happened this year?

Mr. Lloyd

My hon. Friend rightly said that the yield from national insurance contributions represents 16 per cent. of Government receipts, compared with income tax which represents 23 per cent. Naturally, the DSS— particularly my right hon. Friend the Secretary of State —makes representations to and has discussions with the Chancellor and the Treasury about how much such revenue should be applied. I am sure that my hon. Friend took special pleasure from the reductions that were made in NICs for the lower paid in the last Budget.

Mr. Flynn

The huge anticipated increase in national insurance yields is sufficient to give, from October, an increase of £3 per week for a single pensioner and £5 per week for a pensioner couple. Does the Minister agree that anyone other than the Government plundering the national insurance fund would end up in court on a charge of fraud? Do the Government intend to continue to attempt not to pay the Treasury supplement which has been paid for three quarters of a century? Is the Minister aware that if the supplement were paid at the same rate as in 1979, a single pensioner would now be receiving an additional £11.50 per week and a pensioner couple an additional £18 per week? When will the Government stop using the national insurance fund to steal from pensioners? Directors enjoying an annual increase of 27 per cent. are steaming ahead in the first-class carriage while pensioners are in a detached, third-class carriage moving rapidly backwards.

Mr. Lloyd

If any stealing was done, it was when the last Labour Government imposed the 3.5 per cent. surcharge on industry. That was a huge burden on business, but we have got rid of it. There will be no short-changing of pensioners. They will receive the full increase, according to inflation, to which they are entitled this autumn. In addition, the poorest pensioners—those on income support, those over 75, and those over 60 who are disabled —will receive an extra increase in October. That shows not merely that pensioners receive their full entitlement from the fund but that we look after those who are least well off.

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