HC Deb 25 November 1999 vol 339 cc193-4W
Mrs. Lawrence

To ask the Chancellor of the Exchequer if he has completed his review of National Insurance contributions for 2000–01. [100398]

Dawn Primarolo

I have completed the annual review under section 141 of the Social Security Administration Act 1992. In addition to the reforms to the National Insurance contributions announced by my right hon. Friend the Chancellor of the Exchequer in his March 1999 Budget, I propose the following changes to take effect from 6 April 2000.

Employers and Employees In line with the Social Security Contributions and Benefits Act 1992, the Lower Earnings Limit for Class 1 contributions is to be raised to £67 a week. It is set at the level of the basic retirement pension rate for a single person from April 2000, rounded down to the nearest pound.

Class 3 (Voluntary) Contributions The rate of Class 3 contributions will be increased by 10p to £6.55 a week.

Treasury Grant Although benefit expenditure from the National Insurance Fund will broadly match income, I need to ensure that the Fund can maintain a prudent working balance throughout the coming year. In accordance with section 2(2) of the Social Security Act 1993, I propose to do so by prescribing that the maximum Treasury Grant which may be made available to the Fund in 2000–01 shall not exceed 2 per cent. of the estimated benefit expenditure from the Fund for that year.

I shall be laying a draft re-rating Order before Parliament together with a report by the Government Actuary describing the effects of these re-rating proposals and previously announced reforms on the National Insurance Fund.

The following table sets out the rates and thresholds for National Insurance contributions proposed for 2000–01.

National insurance contributions proposed April 2000 re-rating
Item 2000–01
Lower Earnings Limit £67
Upper Earnings Limit £535
Primary Threshold £76
Secondary Threshold £84
Employee's contributions 10% of £76.01 to £535
Employee's Contracted-out Rebate 1.6%
Married Women Reduced Rate 3.85%
Employer's Contribution Rates 12.2%
Employers Contracted-out Rebate 3.0% COSR
0.6% COMP
Class 2 Self employed Contribution £2.00
Small Earnings Exception £3,825
Class 3 (voluntary) Contribution £6.55
Class 4 Contributions—Upper Profits Limit £27,820
Class 4 Contributions—Lower Profits Limit £4,385
Class 4—Contribution Rate 7.0%

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