HC Deb 10 April 1987 vol 114 cc498-501W
Mr. Austin Mitchell

asked the Secretary of State for Social Services whether he will publish in the Official Report a table showing for 1987–88 his estimate of the number of male and female employees expected to pay contributions at the 5 per cent., 7 per cent. and 9 per cent. rates, together with the forecast amount of the employers' and the employees' contributions at each rate; and if he will divide the figures between those contracted in and those contracted out.

Mr. Major

The information is as follows:

Estimated average number of contributors 1987–88 Great Britain
Class 1 standard rate per cent. Men thousand Women thousand Total thousand
Contracted out 5 100 100
7 100 200 300
9 6,200 2,500 8,700
Not contracted out 5 300 1,300 1,600
7 400 1,300 1,700
9 4,400 1,300 5,700

Estimated full year contributions yields payable in 1987–88 Great Britain
Men Women Total
Class 1 standard rate per cent. Primary £ million Secondary £ million Primary £ million Secondary £ million Primary £ million Secondary £ million Total £ million
Contracted out 5
7 50 50 50 50 100
9 5,100 5,500 1,550 1,450 6,650 6,950 13,600
Not contracted out 5 50 50 150 150 200 200 400
7 150 150 350 350 500 500 1,000
9 3,900 4,900 1,000 1,100 4,900 6,000 10,900

Notes:

(1) In one or two entries the apparent nil yield from contributions is caused by rounding.

(2) The secondary contributions paid at 9 per cent. includes secondary contributions paid at 10.45 per cent.

(3) All estimates are based on the assumptions used in the Report by the Government Actuary on the drafts of the Social Security Benefits Up-rating (No. 2) Order 1986 and the Social Security (Contributions Re-rating) (No. 2) Order 1986 (Cm. 24).

Mr. Austin Mitchell

asked the Secretary of State for Social Services, pursuant to his reply dated 25 March, Official Report, column 197, concerning reduced rate national insurance contributions, if he will provide figures for the gross and net contributions taking into account the figures supplied on the same date in reply to a question asking for an update of table 40.13 of "Social Security Statistics 1985," 25 March, Official Report, column 198.

Mr. Major

It is estimated that the abolition of the reduced rate paid by married women and widows would increase gross national insurance contribution revenue by £250 million during 1987–88. This would be offset by £50 million contracted out rebate on employees' contributions for those who are members of contracted-out superannuation schemes. The other information requested is as follows:

Estimated average number of contributors paying the reduced rate for Married Women, 1987–88 Great Britain.
Thousands
Contracted Out 400
Not Contracted Out 700

Estimated full year contributions yields payable in respect of those paying the reduced rate for Married Women. Great Britain £ million 1987–88
Primary Secondary
Contracted Out 100 200
Not Contracted Out 100 200
Total 200 400

All estimates are based on the assumptions used in the Report by the Government Actuary on the drafts of the Social Security Benefits Up-rating (No 2) Order 1986 and the Social Security (Contributions Re-rating) (No 2) Order 1986 (Cm 24).

Mr. Austin Mitchell

asked the Secretary of State for Social Services if he will bring up to date for the year 1987–88 the information given in his answer of 10 December, Official Report, column 204, to the hon. Member for Great Grimsby concerning the distribution of incomes and national insurance contributions, adding (a) the saving on the abolition of the reduced rate contribution, and (b) the numbers contracted-in and contracted out together with their contributions.

Mr. Major

[pursuant to his reply, 25 March 1987, c.195–96]: The information on the distribution of incomes is as follows:

Estimated number of total earned incomes received by persons aged less than 65 by range of income: 1987–88 (Thousands). (United Kingdom).
Range of Total Earned Income (Lower Limit) Single Persons Married Couples with-out wife's Earned Income Married Couples with wife's Earned Income
£3,000 767 67 51
£4,000 794 106 51
£5,000 981 165 57
£6,000 841 187 65
£7,000 794 210 101
£8,000 642 289 137
£9,000 521 301 203
£10,000 746 698 559
£12,000 453 760 1,009
£15,000 251 488 1,358
£20,000 130 315 1,121
Total 6,919 3,588 4,711

Note: The sum of the components does not necessarily equal the totals because of rounding.

It is estimated that during 1987–88 £14.1 billion will be due from employers and £12.5 billion will be due from employees in respect of Class 1 National Insurance contributions, taking account of the lower contribution rates for those in contracted-out employment. If the upper earnings limit were abolished for employees' Class 1 National Insurance contributions in 1987–88, but retained for the contracted-out rebate, then the full year contributions yield would rise by £0.9 billion.

Assuming that during 1987–88 single persons paid 5 per cent. of earnings above £2,000 and married couples paid 4 per cent. of earnings over £5,000 and that other changes to the contributions system were as described in the hon. Member's earlier questions, then the gross yield from employees' contributions would be £5.3 billion. It is not possible to estimate the effect of the contracted-out rebate in these calculations and this figure therefore compares with an estimated notional gross yield during 1987–88 for primary Class 1 contributions under the existing rates structure of £14.1 billion.

I refer the hon. Member to my replies to him on 25 March 1987 at columns 197–98 for the information on the saving resulting from the abolition of the reduced rate contribution for certain married women and the numbers of contributors who are contracted in and out, and their contributions. Information on the number of married women optants who are in contracted-out and not contracted employments, and their contributions, is presented in my other reply to him today.

All estimates are based on the assumptions used in the Report by the Government Actuary on the drafts of the Social Security Benefits Uprating (No. 2) Order 1986 and the Social Security (Contributions, Re-rating) (No. 2) Order 1986 (Cm 24).

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