Mr Major’s Written Parliamentary Answer on National Insurance – 12 May 1987

Below is the text of Mr Major’s written Parliamentary Answer on National Insurance on 12th May 1987.

Mr. Austin Mitchell Asked the Secretary of State for Social Services, further to his reply dated 13 March, Official Report, column 330, concerning the cost of a reduction in the employee’s contribution to national insurance, whether he will provide an estimate for the cost in 1987-88 together with an estimate of the effect on the revenue by extending the proposed scheme to the earnings of the self-employed in classes 2 and 4, and of removing the upper limit on such contributions.

Mr. Major I assume that the first part of the hon. Member’s question refers to a cut of five percentage points in the standard rate of employers’ national insurance contributions. This, together with the lower rates paid in respect of the lower paid falling in proportion, would reduce the full year yield of employers’ contributions by £8.3 billion in 1987-88.

A cut of five percentage points in the rate of class 4 national insurance contributions. to 1.3 per cent. would reduce the full-year yield of class 4 contributions by £320 million in 1987-88. Removing the upper profits limit for class 4 national insurance contributions (currently £15,340) would increase the full-year yield of class 4 contributions by £240 million in 1987-88.