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National Insurance Contributions

Volume 983: debated on Thursday 1 May 1980

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asked the Secretary of State for Social Services what levels of employers' and employees' national insurance contributions he esti- would be required to balance the national insurance fund, assuming current levels of benefits, at unemployment levels of 12 months duration, of (a) 1,750,000, (b) 2,000,000, (c) 2,250,000, (d) 2,500,000, and (e) 3,000,000.

In his report on the draft of the Social Security (Contributions, Re-rating) Order 1979 (Cmnd. 7771), the Government Actuary estimated that a change of 100,000 in the average level of unemployment in 1980–81 would alter the surplus of the national insurance fund by about £175 million. Thus, with an average level of unemployment, excluding school leavers, in 1980–81, of 1,750,000 (that is 150,000 higher than assumed in Cmnd. 7771), the surplus would be reduced by about £260 million. This would be equivalent to increasing the employers and employees' contribution rate taken together by about ¼ per cent. Calculations could be made on a pro-rata basis for higher assumed levels of unemployment but the results would inevitably be subject to an increasingly significant margin of error.