§ Mr. Austin Mitchell
asked the Chancellor of the Exchequer if he will bring up to date for 1987–88 the information in the reply dated 25 July 1986, Official Report, column 698, concerning reduced rate contributions together with the estimated cost to the Exchequer; and if he will publish his subsequent letter in the Official Report.
§ Mr. Major
[pursuant to the reply, 25 March 1987, c. 214–15]: I have been asked to reply.
It is expected that during 1987–88 an average of 1.6 million women in the United Kingdom will be eligible to pay class 1 national insurance contributions at the reduced rate for married women and widows. This estimate includes those optants who are expected to earn less than the class 1 lower earnings limit, and who are not expected to pay any contributions.
It is estimated that in 1987–88 the full year cost of the reduced contribution rate, in terms of lower contributions revenue, will be £200 million. It is not possible to estimate reliably the associated saving in benefit expenditure.
The remaining information is as follows:563W
Class 1 primary contribution rates 1987–88 Not contracted-out Contracted-out Standard rate Standard Rate
On first £39.00
On earnings over £39.00
Contributions payable on: All earnings if they reach £39.00 but do not exceed £64.99 5.00 3.85 5.00 2.85 3.85 All earnings if they reach £65.00 but do not exceed £99.99 7.00 3.85 7.00 4.85 3.85 All earnings if they reach £100.00 but do not exceed £295.00 9.00 3.85 9.00 6.85 3.85 Earnings exceeding £295.00 9.00 of £295.00 3.85 of £295.00 9.00 6.85 up to £295.00 3.85 of £295.00 1 The primary reduced rate remains the same for all the earnings brackets; it is the secondary rates which vary depending on the bracket.
A copy of my hon. Friend's letter to the hon. Member has been placed in the Library.