To ask the Chancellor of the Exchequer what his estimate is of the (a) level of revenue which would be foregone were national insurance contributions classes 1 and 4 to be abolished and (b) level to which the basic rate of income tax would need to be raised to recoup such revenue. (141945)

The estimate of the total amount of class 1 (employee and employer) and class 4 (self-employed) NICs revenue that would be foregone is £95 billion for 2007-08. Individuals would have to pay basic rate income tax of 33 per cent. for 2007-08 to recoup the £40 billion of employee and self-employed NICs foregone. This estimate does not allow for any behavioural effects.