§ Mr. Radiceasked the Secretary of State for Social Services what rate of national insurance contributions employers and employees should pay from 6th April 1978 where an employer who had applied to contract out had not received his contracting out certificate by then.
§ Mr. OrmeI recently referred draft regulations to the Occupational Pensions Board allowing contracted-out rate contributions to be paid provisionally in certain circumstances pending receipt of a contracting-out certificate. I have now received the board's report, and the necessary provisions will be made and laid in the form of a commencement order within about a fortnight, together with the board's report.
The effect of the order will be that, where an application to contract-out is sent to the board by 23rd March, 1978 and the employer asks for the contracting-out certificate to take effect from 6th April, 1978 but has not received a certificate by the latter date, the contracted-out rate of contribution should be paid provisionally from that date. Details of the new provisions, including the length of time for which the lower contribution can continue to be paid, will be set out in the order and will, I understand, be described in a memorandum which the board intends to issue to pension practitioners as soon as possible. They will also be described in a departmental leaflet (NP 37) which will become available during January.
The regulations as referred to the board proposed a deadline of 14th March with power to extend this to a 109W later date. The board says in its report, however, that it is anxious to reduce to a minimum the uncertainty which already surrounds the timetable leading up to 6th April 1978, and therefore recommends a firm and unalterable deadline. It suggests making it 23rd March 1978. The slightly later date would help more employers and would effectively set the deadline at the beginning of the Easter holiday period. I readily accept this recommendation. It will mean that there can be no question of any further extension of the deadline and I earnestly hope that employers and their pension advisers will strive to get their applications in well before that date.
As employers intending to contract out are required to give three months' notice of their intention to the employees concerned, to their recognised independent trade unions and to certain other people, the deadline means that, where employers and employees want to pay the lower, contracted-out, rate of contributions from 6th April 1978, the notice of intention, if it has not yet been given, should be given at the very latest in the week before Christmas of this year.