§ Mr. Austin Mitchell
To ask the Secretary of State for Social Security (1) what is his estimate of the cost to the national insurance fund in the current financial year of restoring the earnings-related supplement on the basis which applied before the Social Security (No. 2) Act 1980 for unemployed people only; what would be the saving in tax and other benefits; and how many males and females would benefit;
(2) what is the current reduced rate of national insurance contribution for (a) married women and (b) widows; how many are still paying contributions at this rate, and what is the forecast for 1990–91; how many would otherwise be paying at the rate of nil per cent., five per cent. and seven per cent.; and what is the estimated cost to the national insurance fund in the current financial year;
(3) whether he will bring up to date for the current financial year the information given in his answer of 10 December 1986, Official Report, column 204, to the hon. Member for Great Grimsby, concerning the distribution of incomes and national insurance contributions, adding (a) the saving on the abolition of the reduced rate contribution and (b) the numbers contracted-in and contracted-out together with their contributions;
(4) whether he will publish in the Official Report a table showing the estimated income of the national insurance fund from national insurance contributions in the current financial year, the income which would accrue if the upper earnings limit on all contributions is removed and the income which would be lost if (i) the contribution rate for single persons is reduced to 5.5 per cent., (ii) the rate for married persons is dropped to 4 per cent., (iii) £3,000 is deducted from earned income for contribution purposes, rising to £6,000 for a contributor with a non-earning spouse and (iv) the reductions in (i) to (iii) are in operation at the same time;
whether he will publish in the Official Report a table showing for those contracted-in and for those contracted-out, the national insurance contributions rates, including the class 2 and class 4 contributions and the reduced rate, in 1989–90 together with (i) the total number in each category, their sex and their maritial status and (ii) the aggregate contributions in each category and the earnings to which they relate;
(6) whether he will publish in the Official Report a table showing for those below and those above pensionable age the estimated number of earned incomes subject to employers' national insurance contributions in steps of £1,000 between £15,000 and £25,000 and in £5,000 steps thereafter, showing single persons and one-earner and two-earner married couples together with the amount collected;
(7) whether he will publish in the Official Report a table showing the number of male and female contributors expected to pay national insurance contributions (a) in 884W the current financial year, and (b) in 1978–79, broken down into each class and at each rate together with the numbers contracted in and contracted out; and if he will add his forecast of the amount paid or due in each case at current and 1989–90 prices.
§ Mr. Flynn
To ask the Secretary of State for Social Security how the figures for the expected yield of national insurance contributions in the current year, as stated in the oral answer of 3 July to the hon. Member for Ealing, North (Mr. Greenway),Official Report, column 11, and in the written answer of the same date to the hon. Member for Rhondda (Mr. Rogers), Official Report, column 40, were calculated, what the actual yield is expected to be; and whether he will publish in the Official Report a table accounting for the difference between the expected yield and the estimate of £27,887 million given in the Government Actuary's report on the 1988 Uprating Order (Cm. 537).
§ Mrs. Gillian Shephard
[holding answer 17 July]: The estimates of the expected net yield of national insurance contributions, as stated in the reply given by my hon. Friend the then Parliamentary Under-Secretary of State to my hon. Friend the Member for Ealing, North (Mr. Greenway) on 3 July at column 11, and the estimates of national insurance fund contributions as stated in the reply given by my right hon. Friend the Minister for Social Security and the Disabled to the hon. Member for Rhondda (Mr. Rogers) on 3 July at column 40 were calculated by the Government Actuary and are consistent. The figures differ because the estimated total net yield of national insurance contributions at column 11 includes the National Health Service allocation, which is paid out of contributions and meets part for the cost of the National Health Service. The NHS allocation is not paid into the national insurance fund. The total amount of money collected by contributions is equal to the sum of the national insurance fund's contribution income which are given at column 40 and the National Health Service allocation. Both estimates were consistent with Budget estimates of national insurance contributions.
A full reconciliation of the estimates published in the Government Actuary's report on the 1988 Uprating and Rerating Orders (Cm. 537) and the estimates published on the 3 July 1989 in the Official Report is contained in the table.
The recently announced extra growth in the numbers of personal pensions means that the Budget estimates of the net yield of contributions in the final line of the table and the net income of the national insurance fund from contributions, but not the estimates of the NHS allocation, might be about £2 billion less than previously estimated. Fuller details of these, and other, estimate changes that will have occurred since the Budget will be published in the autumn statement.885W
Estimated net yield from National Insurance contributions and contributions income of the National Insurance fund Great Britain 1989–90 £ million Source of estimate Estimated net income from contributions of the National Insurance fund Estimated National Health Service allocation Estimated net yield from contributions Government Actuary's Report on the Uprating and Rerating Orders estimates excluding State Scheme premiums (Cm. 537) 27,887 4,084 31,973 Government Actuary's Report estimates including State Scheme premiums (Cm. 537)1 28,137 4,084 32,223 Government Actuary's Report estimates restated to nearest £100 million (Cm. 537) 28,100 4,100 32,200 Changes caused by faster earnings growth compared to Cm. 5372 +500 +100 +600 Other estimating changes +400 — +400 Effect of Budget Proposals3 -800 -200 -1,000 Budget Estimates4 28,200 4,000 32,300
All estimates are net of Statutory Sick Pay and Statutory Maternity Pay and include, except where stated otherwise, State scheme premiums. (All Budget estimates are rounded to the nearest £100 million: figures do not add up to totals due to rounding.)
1 State scheme premiums were estimated to be £250 million in 1989–90 in the Government Actuary's Report (Cm. 537). State scheme premiums are included in estimated net yield of contributions and in the estimates of the National Insurance Fund's income from contributions. The Fund's estimated income form contributions was given as £28.1 billion on this basis in the answer to the honourable member at Official Report, 12 July at Column 504.
2 The Government Actuary in preparing his report on the Uprating and Rerating orders was instructed to assume that average earnings would rise by 7.5 per cent. between 1988–89 and 1989–90. The estimates reflect more up to date estimates of earnings growth in 1989–90 which were used when the Budget estimates were framed. Estimate given in Official Report, July 3 at Column 40.
3 Estimates were published in the Financial Memorandum to the House of Lords Print of the Social Security Bill. The full cost of the Budget changes on the National Insurance Fund given at Official Report, July 3 at Column 40 was calculated as £800 million foregone contributions income arising from the Budget changes to primary Class I contributions and £200 million extra expenditure arising from the abolition of the retirement pension earnings rule.
4 The estimate of net contributions collected in 1989–90 was given as "more than £32 billion" in the Official Report, 3 July 1989 Column 11 and the estimate of the National Insurance Fund's income from contributions (£28,200 million) was given in Official Report, 3 July 1989 at Column 40. These estimates are on a Great Britain basis: estimates in the Financial Statement and Budget Report were on a United Kingdom basis.