§ Mr. FlynnTo ask the Secretary of State for Social Security what national insurance contribution rate would be required in 2003–04 if the basic retirement pension and linked benefits were increased to the same proportion of average earnings as in 1980, with corresponding increases in the lower and upper earnings limits. [31595]
394W
§ Mr. Denham[holding answer 26 February 1998]: Information for 2003–04 is not available and could be provided only at disproportionate cost. However, if in 2001–02 the basic retirement pension and linked benefits were increased to the same proportion of average earnings as in 1980, with corresponding increases in the lower and upper earnings limits, the main Class 1 contribution rates required for employees and employers would be 13.8 per cent. and 12.4 per cent. respectively. This estimate assumes that each contribution rate would be set so that on full-time average earnings the employee and the employer would pay the same amount of additional contributions.
Source:Government Actuary's Department.
§ Mr. FlynnTo ask the Secretary of State for Social Security what is the expected cost of(a) the basic retirement pension and (b) linked benefits in (1) 1998–99, (2) 1999–2000 and (3) 2000–01, assuming upratings in April 1999 and 2000 in line with (i) prices and (ii) average earnings; and in each case what rate of Class 1 national insurance contributions this would imply in each of those years. [31596]
§ Mr. Denham[holding answer 26 February 1998]: The figures for the basic Retirement Pension (RP) expenditure and National Insurance Contribution (NIC) rates in 1998–99 can be found in the "Report by the Government Actuary on the drafts of the Social Security Benefits Up-rating Order 1998 and the Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order 1998".
If RP and the linked benefits were to continue to be uprated by prices, we would not envisage any change to the current national insurance rates in 1999–2000 or 2000–01. To offset the extra cost of uprating basic RP and the linked benefits by earnings in April 1999 and April 2000, we estimate that Class 1 NIC rates would stay constant in 1999–2000 and would need to be raised by 0.1 per cent. for employers and 0.2 per cent. for employees in 2000–01.
Uprating by prices £million 1999–00 2000–01 Expenditure on basic retirement pension 32,160 33,160 Expenditure on linked benefits 6,350 6,510
Uprating by average earnings £ million 1999–00 2000–01 Expenditure on basic retirement pension 32,380 34,020 Expenditure on linked benefits 6,390 6,680