HC Deb 18 January 1988 vol 145 cc241-2W
Mr. Nicholas Brown

To ask the Secretary of State for Social Security what is the estimated full-year revenue effect in 1988–89 and 1989–90 of(a) abolishing the upper earnings limit for employees' national insurance contributions, (b) allowing personal allowances against such contributions and (c) (a) and (b) together.

Mr. Peter Lloyd

The estimated full year revenue effects are as follows:

1988–89 £billion 1989–90 £billion
(a) +1.50 +1.65
(b) -4.85 -5.15
(c) -3.35 -3.50

These estimates assume that—

  1. (i) The lower and upper earnings limits are retained for the purpose of assessing contracted-out contributions so that contracted-out rebates are unaffected.
  2. (ii) Employers' secondary contributions are not subject to personal allowance.
  3. (iii) Personal allowances are not transferable, and consist of the single person's allowance (in 1988–89 £2,605) except for married men who are all assumed to be entitled to married man's allowance (in 1988–89 £4,065).
  4. (iv) Lower rates of contribution (5 per cent. and 7 per cent. compared with the standard NIC rate of 9 per cent.) are retained for the lower paid earning in excess of personal allowances.