§ Mr. Banksasked the Secretary of State for Social Services (1) if he will set out the proportion of the 8 per cent, earnings contribution paid by self-employed people applicable to the benefits derived;
(2) if he will set out the proportion of the 5 per cent, earnings contribution payable by self-employed people from 1st April next applicable to the benefits derived.
§ Mr. OrmeNo specific benefit entitlement derives from the earnings-related class 4 contributions, payable by some self-employed people, which were introduced by the Social Security Act 1973. The contributory benefits for which self-employed people can qualify depend on the flat-rate class 2 contributions for which they have a general liability. The class 4 contribution was introduced to ensure that the self-employed as a whole paid a fairer share of benefit costs. Had the class 2 contribution been increased massively instead, an excessive burden would have been placed on those with low earnings. The reason for the reduction from 8 per cent, to 5 per cent, in the rate of the class 4 contribution was explained in my answer to my hon. Friend the Member for Ipswich (Mr. Weetch) on 1st December 1977.—[Vol. 940, c.299–306.]