§ Mr. Nicholas Brown
To ask the Chancellor of the Exchequer what is the estimated full-year revenue effect in 1992–93 and 1993–94 of(a) abolishing the upper earnings limit for employee's national insurance contributions, (b) allowing personal allowances against such contributions and (c) both (a) and (b).
§ Mr. Dorrell
The estimated effects in a full year are shown in the table. For (b) and (c) it has been assumed that the levels of earnings used to calculate National Insurance contributions are gross earnings less the personal allowance. For the 1993–94 calculations, personal allowances have been increased by the autumn statement assumption of 3.25 per cent. over 1992–93 levels. No account has been taken of possible behavioural changes which might result from the measures.
Cost(—)/Yield(+) 1992–93 £ million 1993–94 £ million (a) Abolishing the upper earnings limit for employees national insurance contributions 2,700 2,900 (b) Allowing personal allowances against employees' national insurance contributions –5,100 –5,300 (c) Part b with upper earnings limit for employee's national insurance contribution abolished –3,500 –3,500