§ Mr. George
asked the Secretary of State for Social Services (1) what would be the gain in revenue if the ceiling on national insurance contributions were lifted to twice average earnings;
(2) what would be the gain in revenue if national insurance contributions were increased by ½ per cent. if (a) the present ceiling on contributions is continued and (b) the ceiling were abolished.
§ Mr. Orme
On the earnings and unemployment assumptions given in the Government Actuary's Report on the Social Security (Contributions Re-Rating) Order 1975 and taking the lower of the alternative assumptions in that report for earnings increases after July 1976, it is estimated that the gain in contribution revenue, before allowing for the associated increase in Exchequer supplement to the National Insurance Fund, would be about £280 million a year if the ceiling for Class 1 contributions were £130 instead of £95, and a corresponding adjustment were made to the Class 4 ceiling. If the joint Class 1 contribution in 1976–77 were 15 per cent. of earnings instead of 14.5 per cent., and the Class 4 contribution were 8.5 per cent. instead of 8 per cent., it is estimated that the gain 345W in contribution revenue, excluding the effect on Exchequer supplement to the National Insurance Fund, would be £275 million with the present ceiling or £775 million if, additionally, there were no ceiling.