§ Mr. Austin Mitchellasked the Secretary of State for Social Services what is the estimated cost of a reduction of one percentage point in the employee's and the employer's national insurance contribution in 1987–88; and if he will publish in the Official Report a table showing for each year since 1957 the rate of contribution in each case as a percentage of average earnings, together with the standard rate of income tax on earned income.
§ Mr. Major[pursuant to his reply, 25 March 1987, c. 197]: The information in the second part of the question is as follows:
31W
National Insurance contributions expressed as a Percentage of Average Earnings of Males paid Adult Rates whose pay was unaffected by absence Employee's Contributions Employer's Contributions4 Standard Rate oj Income Tax (per cent.) 1957–581 2.40 20.0 42.50 1958–59 3.10 2.60 42.50 1959–60 3.10 2.60 38.75 1960–61 3.00 2.50 38.75 1961–622 4.50 4.00 38.75 1962–63 4.40 3.80 38.75 1963–64 5.10 4.50 38.75 1964–65 4.90 4.40 38.75 1965–66 5.10 4.90 41.25 1966–67 4.90 8.20 41.25 1967–68 5.10 10.50 41.25 1968–69 5.50 12.40 41.25 1969–70 5.30 13.60 41.25 1970–71 5.50 13.50 41.25 1971–72 5.50 10.10 38.75 1972–73 5.80 9.30 38.75 1973–74 5.90 6.50 30.00 1974–75 5.90 7.40 33.00 1975–763 5.50 8.50 35.00 1976–77 5.75 8.75 35.00 1977–78 5.75 8.75 34.00 1978–79 6.50 10.00 33.00 1979–80 6.50 10.00 30.00 1980–81 6.75 10.20 30.00 1981–82 7.75 10.20 30.00 1982–83 8.75 10.20 30.00 1983–84 9.00 10.45 30.00 1984–85 9.00 10.45 30.00 1985–86 9.00 10.45 30.00 1986–87 9.00 10.45 29.00 1987–88 9.00 10.45 27.00 1 National insurance contributions were collected only on a flat rate basis up to April 1961. The jjercentages given up to then are based on flat rate contributions for men aged more than 18. 2 Between April 1961 and April 1975 graduated contributions based on earnings were paid in addition to flat rate contributions. The percentages for this period are based on the aggregate of flat rate contributions for men aged over IS and graduated contributions for those not contracted-out of the graduated pension scheme. 3 The standard not contracted-out rates of national insurance contributions for employees and employers are used as a basis for each year since 1975–76. 4 The national insurance surcharge is not included in the employer's contribution. This was payable by most employers from April 1977 up to 1984. The surcharge was levied on employees' gross earnings on the same basis as employers' NICs. It was abolished, except for local authorities and some related employers, with effect from 1 October 1984. For local authorities the date of abolition was 6 April 1985. The rates were as follows:
Rate per cent. From: 6 April 1977 2.0 2 October 1978 3.5 2 August 1982 2.0 6 April 1983 1.5 1 August 1983 1.0 1 October 1984 0.0