§ Mr. FlynnTo ask the Secretary of State for Social Security what would be the effect on the contribution income of the national insurance fund for 1989–90 if average earnings rose between 1988–89 and 1989–90 by 10 per cent. instead of the 71/4 per cent. in the Government Actuary's report on the 1988 Uprating Order (Cm. 537).
§ Mr. Peter LloydThe Government Actuary's report on the 1988 Uprating Order estimated that contribution income to the National Insurance Fund in 1989–90 would be £28.1 billion. If it had then been assumed that earnings would increase in 1989–90 by 10 per cent. then the national insurance fund's estimated income from contributions would have been £28.7 billion.
This report was prepared before the changes to national insurance contributions announced in the Budget. Taking these changes into account the national insurance fund's estimated income would have been £28.5 billion in 1989–90 assuming a 10 per cent. increase in earnings. The increased take-up of personal pensions will reduce this estimated income by about £2 billion.