HC Deb 25 July 1997 vol 298 cc777-8W
Mr. Flynn

To ask the Secretary of State for Social Security what would be the lower and upper national insurance contributions limits if they had been increased in line with average earnings since 1980; and what would be the current effect on the annual yield from contributions if(a) the lower limit, (b) the upper limit and (c) both limits were increased to those levels. [10571]

Mr. Denham

The lower and upper earnings limits for class 1 national insurance contributions and the lower and upper profits limits for class 4 national insurance contributions are linked to the level of the basic retirement pension. If the basic retirement pension had been uprated since 1980 in line with the higher of earnings or prices the weekly lower and upper earnings limits for 1997–98 would be £86 and £645 respectively and the annual lower and upper profits limits would be £9,653 and £33,540 respectively. The estimated full year effects of limits set at these levels for 1997–98 are shown in the tables.

Estimated full year effects of weekly lower and upper earnings

limits for class 1 national insurance contributions set at £86 and

£645 respectively in 1997–98
Change in annual yield, £ million
Weekly lower earnings limit—£86 Weekly upper earnings limit—£45 Weekly lower earnings limit and weekly upper earnings limit—£645
Class 1 employees
Gross -1,880 +1,970 +90
Rebate -235 +190 -50
Net -1,645 +1,785 +140
Class 1 employers
Gross -140 0 -135
Rebate -480 +350 -130
Net +340 -350 -5
Class 1 total
Gross -2,015 +1,970 -45
Rebate -715 +535 -180
Net -1,300 +1,435 +135

Figures are rounded to the nearest £5 million; totals may not sum due to rounding.

Estimated full year effects of annual lower and upper profits limits

for class 4 national insurance contributions set at £9,653 and

£33,540 respectively in 1997–98
Change in annual yield, £ million
Annual lower profits limit—£9,653 Annual upper profits limit—£33,540 Annual lower profits limit and annual upper profits limit— £33,540
Class 4 -250 +165 -80

Notes

1. Figures are rounded to the nearest £5 million; totals may not sum due to rounding.

Source:

Government Actuary's Department.