National Insurance Contributions (Hansard, 25 July 1986)

§ Mr. Austin Mitchell
asked the Secretary of State for Social Services whether he will publish in the Official Report his latest estimate of the numbers of males and females paying various classes of national insurance contributions, the numbers paid in 1979, the estimated amount collected from employers and employees by way of contributions in the current financial year and the estimated amount by which the contributions would be increased if the rate of unemployment were to be reduced to 3 per cent.

§ Mr. Major
The number of people paying national insurance contributions in each class in 1979–80 and an estimate of those paying contributions in 1986–87 is given in the table. It is estimated that in 1986–87 £11.51 billion will be collected from employees, and £12.92 billion from employers by way of class 1 national insurance contributions, and that if the unemployment rate were to fall to 3 per cent., the National Insurance Fund would receive an extra £2.6 billion a year from contributions at current contribution rates.

Class 1 primary contribution rates 1986–87

Not contracted-out Contracted-out

Standard Rate per cent. Reduced Rate* per cent. Standard rate

On first £38–00 per cent. On earnings over £38–00 per cent. Reduced Rate* per cent.

Contributions payable on:-

700W

Number of people paying national insurance contributions (thousands)

United Kingdom

Class 1 Class 2 Class 3

1979–80

Males ¹ 14,777 ^{3 4} 1,299 66

Females ^{1 2} 9,647 ^{3 4}77 24

Estimates for 1986–87

Males 11,300 ⁴ 1,800 80

Females 7,500 ⁴ 200 40

¹ Includes people who paid a mixture of Class 1 and Class 2 and/ or Class 3 contributions.

² Includes women who paid reduced rate contributions.

³ Includes people who paid a mixture of Class 2 and Class 3 contributions.

⁴ Includes people paying Class 4 contributions. Precise information about the number of Class 4 contributors is not available, however it is estimated that in 1979–80 between 1 million and 11/4 million people were liable to pay Class 4 contributions, and in 1986–87 between 11/4 and 11/2 million were liable to pay Class 4.

§ Mr. Austin Mitchell
asked the Secretary of State for Social Services whether he will publish in the Official Report a table showing the estimated number of reduced rate class 1 contributions for women, broken down by type if appropriate; how the figures compare with 1979 and the forecast for 1988; how the rates of contribution compares with the standard rate; what is his estimate of the number of contributors who would be worse off if the reduced rates were replaced by a standard rate of 5 per cent. on earnings in excess of £2,000 for a single person and £5,000 for a married couple; what would be the loss to the Exchequer; and whether he will add a table showing the number of incomes affected by range of income and the yield from contributions now and from the proposed change.

§ Mr. Major
The information requested by the hon. Member in the first three parts of his question is presented in the table.
I will write to the hon. Member about the remaining points in his question.

Number of women paying reduced rate contributions (millions)

United Kingdom

Number

*1979–80 3.5

†1986–87 1.8

†1988–89 1.4

* Includes women who paid reduced rate reate contributions at some time during the year: optants earning less than the lower earnings limit are excluded.

† The average number of women who paid reduced rate contributions during the year: optants earning less than the lower earnings limit are included.

701W

Not contracted-out Contracted-out

Standard rate

Standard Rate per cent. Reduced Rate_* per cent. On first £38–00 per cent. On earnings over £38–00 per cent. Reduced Rate_*per cent.

All earnings if they reach £38.00 5.00 3.85 5.00 2.85 3.85

But do not exceed £59.99

All earnings if they reach £60.00 7.00 3.85 7.00 4.85 3.85

But do not exceed £94.99

All earnings if they reach £95.00 9.00 3.85 9.00 6.85 3.83

But do not exceed £285.00

Earnings exceeding £285.00 †9.00 †3.85 9.00 †6.85 †3.85

* The primary reduced rate remains the same for all the earnings brackets; it is the secondary rates which vary depending on the bracket.

† Per cent. of £285.00.

† Per cent. up to £285.00.

§ Mr. Austin Mitchell
asked the Secretary of State for Social Services (1) whether he will publish in the Official Report a table showing (a) the estimated loss of revenue from the reduced rate national insurance contributions for (i) working wives and (ii) widows in the current financial year, (b) the estimated number of contributors in each range of annual earnings and the resultant loss and (c) the estimated number with a total income, including the husband's income, of more than (1) £10,000, (2) £15,000 and (3) £20,000 a year;
(2) whether he will publish in the Official Report a table showing (a) the number of nationally insured males and females working in manufacturing and non-manufacturing, (b) the number of females in each case paying reduced rate contributions, (c) the upper and lower limit of contributions, (d) the latest figure in each case for average earnings and (e) the latest figure in each case for the median, upper quartile and lower quartile earnings.

1984 1985 1986

Supplementary Benefit Contributory Benefit Supplementary Benefit Contributory Benefit Supplementary Benefit Contributory Benefit

Finsbury Park Integrated Local Office 130 52 149.5 51.5 157 53

Highgate Integrated Local Office 136.5 71 146 715 156 63

Hoxton Integrated Local Office 92 52 97 48 108 41

Class 1 primary contribution rates 1986–87
	Not contracted-out	Contracted-out
	Standard Rate per cent.	Reduced Rate* per cent.	Standard rate
			On first £38–00 per cent.	On earnings over £38–00 per cent.	Reduced Rate* per cent.
Contributions payable on:-

Number of people paying national insurance contributions (thousands)
United Kingdom
	Class 1	Class 2	Class 3
1979–80
Males	¹ 14,777	^{3 4} 1,299	66
Females	^{1 2} 9,647	^{3 4}77	24
Estimates for 1986–87
Males	11,300	⁴ 1,800	80
Females	7,500	⁴ 200	40
¹ Includes people who paid a mixture of Class 1 and Class 2 and/ or Class 3 contributions.
² Includes women who paid reduced rate contributions.
³ Includes people who paid a mixture of Class 2 and Class 3 contributions.
⁴ Includes people paying Class 4 contributions. Precise information about the number of Class 4 contributors is not available, however it is estimated that in 1979–80 between 1 million and 11/4 million people were liable to pay Class 4 contributions, and in 1986–87 between 11/4 and 11/2 million were liable to pay Class 4.

Number of women paying reduced rate contributions (millions)
United Kingdom
	Number
*1979–80	3.5
†1986–87	1.8
†1988–89	1.4
* Includes women who paid reduced rate reate contributions at some time during the year: optants earning less than the lower earnings limit are excluded.
† The average number of women who paid reduced rate contributions during the year: optants earning less than the lower earnings limit are included.

	1984	1985	1986
	Supplementary Benefit	Contributory Benefit	Supplementary Benefit	Contributory Benefit	Supplementary Benefit	Contributory Benefit
Finsbury Park Integrated Local Office	130	52	149.5	51.5	157	53
Highgate Integrated Local Office	136.5	71	146	715	156	63
Hoxton Integrated Local Office	92	52	97	48	108	41