§ Mr. RedwoodTo ask the Secretary of State for Social Security what would be the cost in(a) 1989–90 and (b) a full year of (i) raising the national insurance threshold from £43 a week to £75 a week and (ii) charging national insurance at 7 per cent. on incomes between £100 and £125 a week.
§ Mr. Peter LloydThe information is as follows:
Cost in terms of changed yields of National Insurance contributions £ million 1989–90 (receipts)
£
1989–90 (full year)
£
(i) Raising the National Insurance threshold to £75 a week1 +190 +220 (ii) Charging national insurance at 7 per cent. on earnings between £100 and £125 a week2 -350 -400 1 The higher lower earnings limit increases the band of earnings in respect of which people in contracted-out employments pay contributions at the higher not-contracted out rate. Raising that limit to £75 a week increases the overall yield of class 1 contributions. 2 The estimate assumes that earnings between £75 a week and £100 a week attract class 1 contributions at 5 per cent. and earnings between £100 and £125 attract class 1 contributions at 7 per cent.