§ Mr. MilburnTo ask the Secretary of State for Social Security (1) what estimate he has made of the value of employees' national insurance contributions illegally retained by employers each year;
209W(2) how many successful prosecutions have taken place of employers who have illegally retained employees' national insurance contributions in each year since 1977–78; and what have been the sums of money involved (a) in each region and (b) nationally;
(3) what plans he has to commission research into the extent of employers illegally retaining employees' national insurance contributions.
§ Mr. HagueThe administration of national insurance is a matter for Miss Ann Chant, the chief executive of the Contributions Agency. She will write to the hon. Member and a copy will be placed in the Library.
Letter from George Bertram to Mr. Alan Milburn, undated:
As Chief Executive of the Contributions Agency, Miss Ann Chant is responsible for answering questions about relevant operational matters. However, in her absence I, as Deputy Chief Executive have been asked to reply to the points raised in your recent Parliamentary Questions about employees' National Insurance Contributions being retained illegally by employers. Because of the nature of the questions I have combined the responses.
At this stage, the Agency has no plans to commission research into the extent of employers' failure to pay over employees' contributions. However, such failures do come to light when the Agency's inspectors make survey visits. These visits are aimed at identifying employers not complying with National Insurance law and also providing advice and guidance to those employers requiring assistance. One of the Secretary of State's High Level Targets for the Agency is that in the 1993–94 year 121,000 such surveys should be made. This equates to approximately 10 per cent. of the employers in the country representing a considerable investment in effective monitoring and enforcement of employers' liabilities. Similar targets set for 1991–92 and 1992–93 were met and exceeded by the Agency.
Another means by which the Agency identifies the non-payment of contributions is based upon employees querying details shown on their National Insurance records. At the end of each tax year returns of payments made by employers are processed and employees' contributions are recorded on their individual National Insurance records. Following this, deficient records are identified and where appropriate, action taken to inform the people concerned. Steps are taken to obtain payment from employers, or an explanation as to why there has apparently been non-compliance. Where necessary civil proceedings or criminal prosecutions are instituted to recover any arrears.
Information is not available about the number of employers who are not currently meeting their liability timeously, nor of the monetary value of employees' contributions affected by such action.
In the tables attached as an annex I have provided details of the number of cases authorised for both civil and criminal proceedings against employers from November 1977 to March 1993 (the latest date for which figures are available). I must emphasise however, that these figures include proceedings that were authorised for a wide variety of reasons (for instance, failure to keep proper records, underpayments arising from incorrect assessment of NI liability) and do not relate soley to failure to pay over employees' contributions. Similarly, the monetary values relate to the total sums of NICs involved, and not just the employee's share of the contributions due.
I regret that I am unable to give you the specific information that you requested but I hope that the information that I have provided will prove helpful.
The annex has been placed in the Library.