HC Deb 06 December 1976 vol 922 cc64-5W
Dr. McDonald

asked the Chancellor of the Exchequer what the net revenue from the national insurance surcharge will be, bearing in mind that such payments can be set against corporation tax.

Mr. Robert Sheldon

I will let my hon. Friend have a reply as soon as possible.

Dr. McDonald

asked the Chancellor of the Exchequer what the cost to local authorities will be of the national insurance surcharge, and how it will be financed.

Mr. Robert Sheldon

The yield of the national insurance surcharge from local authorities is estimated to be £140 million in 1977–78. The increased cost will count as relevant expenditure for rate support grant purposes and will be financed in the normal way from Government grant, rate income, fees and charges.

Dr. McDonald

asked the Chancellor of the Exchequer how much unemployment he estimates is likely to be caused by the national insurance surcharge; and what the estimated cost of such unemployment is likely to be in terms of redundancy pay and unemployment benefit.

Mr. Robert Sheldon

The forecast of the unemployment effects of the introduction of the national Insurance surcharge shows an increase in unemployment of 10,000 by the end of the first year after the introduction of the tax. The additional expenditure in unemployment benefit and supplementary benefit would be very small in 1977–78. It is not possible to say what calls there would be on the Redundancy Fund, since these would depend on such additional factors as the length of service of the workers involved. This increase in public expenditure has been taken into account in estimating the net revenue yield of the surcharge.