HC Deb 23 March 1979 vol 964 c773W
Sir Anthony Meyer

asked the Chancellor of the Exchequer what would be the cost to the national insurance fund of abolishing employees' contributions; and by how much the standard rates of income tax would have to be increased in order to raise an equivalent sum.

Mr. Robert Sheldon

It is estimated that employees' national insurance contributions for the tax year 1978–79—including the portion attributable to the National Health Service—will amount to some £3,720 million. In addition, contributions from the self-employed are estimated to amount to some £220 million To raise these sums, the basic rate of income tax would have had to be raised by 9.3 and 0.5 percentage points respectively. These estimates take no account of the increased cost of benefits that would be payable if the contributory principle for entitlement to national insurance benefits were abandoned.