HC Deb 01 March 1993 vol 220 cc46-7W
Mr. Nigel Griffiths

To ask the Secretary of State for Social Security what would be the effect on Treasury revenue in 1993–94 and in a full year of raising the upper earnings limit for national insurance in line with average earnings rather than prices; and how many employees would pay extra national insurance as a result.

Miss Widdecombe

If the upper earnings limit for national insurance was raised in line with average earnings to £425 per week from April 1993, the additional revenue both in 1993–94 and in a full year would be about £50 million. Some 3 million employees would pay up to 45p per week extra in contributions.

Mr. Nigel Griffiths

To ask the Secretary of State for Social Security what would be the effect on Treasury revenue in 1993–94 and in a full year of(a) abolishing the 2 per cent. national insurance contribution, (b) raising the lower earnings limit to the level of the personal tax allowance and (c) both (a) and (b) combined.

Miss Widdecombe

The information requested is in the table. The reduction in the full year cost at(b) reflects the savings in respect of personal pensions rebates and incentives paid after 1993–94. For the purposes of this calculation the personal tax allowance has been increased by the latest Treasury assumption of 2.6 per cent. over the 1992–93 level.

Cost(-)/Yield(+) 1993–94 (£billion)
In year Full year
(a) Abolishing the two per cent. national insurance contribution -0.9 -1.0
(b)Raising the lower earnings limit to the level of the personal tax allowance -0.5 -0.4
(a) Part (a) and (b) combined -1.6 -1.6

Note: Figures in (c) have been rounded and are therefore not the sum of the figures in (a) and (b).

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