HC Deb 13 June 1995 vol 261 cc494-5W
Mr. Malcolm Bruce

To ask the Secretary of State for Social Security what is his estimate of the additional annual revenue which would have been raised in 1995–96 if the upper earnings limit for employee national insurance contributions have been indexed to wages rather than prices. [28194]

Mr. Arbuthnot

The upper earnings limit for national insurance contributions is statutorily linked to the rate of the basic retirement pension and has been set at £440 for 1995–96. If the increase in the upper earnings limit for 1995–96 over 1994–95 has been based on the general increase in earnings instead of prices in the year ending September 1994, the limit is likely to have been rounded to £445. The additional revenue which would have been raised by such an increase is estimated as £48 million in the first year.Source: Government Actuary's Department. Note: The reply assumes that the lower earnings limit continue to be based on the increase in prices, thus broadening the contributions base.

Mr. Malcolm Bruce

To ask the Secretary of State for Social Security what is his estimate of the(a) likely cost and (b) maximum cost of exempting employers for a period of one year from paying national insurance contributions for employees directly employed after having been unemployed for one year or more. [28316]

Mr. Arbuthnot

The estimated cost could be as much as £200 million per annum. Allowing for less than full take-up of the exemption, the cost is likely to be in the region of £150 million.

These estimates do not allow for any possible changes in behaviour.

Mr. Malcolm Bruce

To ask the Secretary of State for Social Security what is his estimate of the employment effect of reducing employers' national insurance contributions by(a) 1 per cent., (b) 2 per cent. and (c) 3 per cent. [28314]

Mr. Arbuthnot

Any reduction in employers' national insurance contributions would cut employers' non-wage costs and could be expected to provide an increase in employment opportunities. However, it is not possible to assess the differential effect of a range of contribution reductions.