§ 3. Mr. PaiceTo ask the Secretary of State for Social Security what would be the cost to business if employers' national insurance contributions were levied at 5 per cent. on all employees with earnings below the national insurance threshold.
§ The Parliamentary Under-Secretary of State for Social Security (Mr. Michael Jack)On the limited information available, I estimate the cost to employers at around £200 million a year in national insurance contributions. In addition, employers would have to bear substantial administrative costs from the extra record keeping involved.
§ Mr. PaiceMay I first, say that it is a great pleasure for me to be able to welcome my hon. Friend to his new ministerial position, which brings him to the Government Front Bench—[HoN. MEMBERS: "Hear, hearl I count him as one of my most long-standing friends in this place. It is a great stroke of personal good fortune that I am able to congratulate him.
Is my hon. Friend aware that the burden of the £200 million to which he referred would fall especially heavily on businesses such as those that are run by horticultural growers and packers in my constituency, who rely on part-time and casual workers for their labour force? If the proposed Labour party tax on employers were to be implemented, it would mean that those businesses would lose their competitiveness and their work force, with the result that unemployment would increase even further.
§ Mr. JackI thank my hon. Friend for his generous and warm words of welcome to me at the Government Dispatch Box. I shall take up the more general point that arises from his comments and not respond directly to his question on agriculture. The proposal to amend national insurance contributions on the basis of the lower earnings limit would be a positive disincentive to the creation of part-time employment that is valued by so many, especially by women who want to return to the labour market.
§ Mr. SkinnerWhen will the Minister deal with the question that was raised by the Audit Commission and others about employers of various descriptions taking as much as £400 million out of the pockets of employees in tax and national insurance contributions and not handing them over to the tax authorities and Government Departments? When will the Government take steps to ensure that proper auditing takes place and that the money that is paid over by employees goes to the right accounts and not into employers' pockets?
§ Mr. JackThe hon. Gentleman raises an extremely important issue. Efforts are being made to strengthen auditing procedures by the fraud investigation section of the Department. More inspectors are being employed, and I am certain that they will address themselves to the matters that the hon. Gentleman has drawn to my attention.