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The Paymaster General (Dawn Primarolo): I have completed the annual review under section 141 of the Social Security Administration Act 1992. I propose the following changes to take effect from 6 April 2003. These rates and limits will also apply to Northern Ireland National Insurance Contributions.
Employers and Employees In line with the Social Security Contributions and Benefits Act 1992, the Lower Earnings Limit for primary Class 1 contributions is to be raised to £77 a week. It is set at the level of the basic Retirement Pension for a single person from April 2003 and rounded down to the nearest pound.
The Primary and Secondary Thresholds for Class 1 contributions will continue to be aligned with the weekly amount of the income tax personal allowance, which will be frozen from April 2003. The Primary and Secondary Thresholds will therefore remain at £89 a week. This means that no tax or Class 1 contributions will actually be paid on earnings below this level.
Self-employed people with earnings below the annual Small Earnings Exception can apply to be exempted from paying Class 2 contributions. This limit will be raised by £70 to £4,095 in line with inflation.
The annual lower profits limit for liability to Class 4 contributions will remain at £4,615 a year (in line with the income tax personal allowance). The Upper Profits Limit will increase by £520 to £30,940, to maintain the link with employees' earnings liable to Class 1 contributions.
Share fishermen The special rate of Class 2 contributions for share fishermen, which allows them to build entitlement to contributory Jobseekers Allowance in addition to the other contributory benefits available to the self-employed, will remain at £2.65 a week.
The special rate of Class 2 contributions for volunteer development workers, which entitles them to the full range of contributory benefits, will be increased by 10 pence to £3.85 in line with the statutory formula of 5 per cent of the primary Class 1 Lower Earnings Limit.
Treasury Grant I need to ensure that the Fund can maintain a prudent working balance throughout the coming year. In accordance with section 2 (2) of the Social Security Act 1993, I propose to do so by prescribing that the maximum Treasury Grant which may be made available to the Fund in 200304 shall not exceed 2 per cent of the estimated benefit expenditure for that year. Similar provision will be made in respect of the Northern Ireland National Insurance Fund.
I shall be laying a draft re-rating order before Parliament in due course. This will accompany a report by the Government Actuary to myself and my right hon. Friend the Secretary of State for Work and Pensions which we shall jointly present to Parliament.
27 Nov 2002 : Column 27WS
|National Insurance Contributions, Proposed re-rating, April 2003 Item||200304|
|Lower Earnings Limit, primary Class1||£77|
|Upper Earnings Limit, primary Class 1||£595|
|Employees' primary Class 1 rate||11 per cent from £89.01 to £595 plus 1 per cent above £595|
|Employees' contracted-out rebate||1.6 per cent|
|Married women's reduced rate||4.85 per cent from £89.01 to £595 plus 1 per cent above £595|
|Employers' secondary Class 1 rate||12.8 per cent on earnings above £89|
|Employers' contracted-out rebate, Salary-related schemes||3.5 per cent|
|Employers' contracted-out rebate, money-purchase schemes||1 per cent|
|Class 2 rate||£2|
|Class 2 Small Earnings Exception||£4,095|
|Special Class 2 rate for share fishermen||£2.65|
|Special Class 2 rate for volunteer development workers||£3.85|
|Class 3 rate||£6.95|
|Class 4 rate||8 per cent from £4,615 to £30,940 plus 1 per cent above £30,940|
|Class 4 Lower Profits Limit||£4,615|
|Class 4 Upper Profits Limit||£30,940|
27 Nov 2002 : Column 28WS
The Paymaster General (Dawn Primarolo): Subject to Parliamentary approval of the necessary Supplementary Estimate, the Inland Revenue Departmental Expenditure Limit will be increased by £77,954,000 from £2,524,032,000 to £2,601,986,000 and the administration costs limit will be increased by £78,102,000 from £2,566,610,000 to £2,644,712,000. The net administration costs limit is reduced by £218,000 from -£6,347,000 to -£6,565,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
|Change||New DEL||Of which: Voted||Non- Voted||Change||New DEL||Of which: Voted||Non- Voted|
The change in the capital element of the DEL arises from the draw down of capital EYF and non-discretionary EYF, totalling £37,631,000 as set out in the Public expenditure Outturn White Paper (CM5574). It also includes the draw down of £900,000 from the Capital Modernisation Fund.
The Financial Secretary to the Treasury (Ruth Kelly): Subject to Parliamentary approval of the necessary Supplementary Estimate, the Office for National Statistics Resource Departmental Expenditure Limit (DEL) will be increased by £771,000 from £127,465,000 to £128,236,000 and the administration costs limit will be increased by £771,000 from £126,666,000 to £127,437,000. The Office for National Statistics Capital DEL will decrease by £1,003,000 from £23,066,000 to £22,063,000. The impact on resources and capital are as set out in the following table:
|Resources (£)||Capital (£)|
|Change||New DEL||Of which: voted||Non-voted||Change||New DEL||Of which: voted||Non-voted|
The net increase in the resource element of the DEL is due to two factors. Firstly, there is an increase in Resource DEL due to the draw down of £1,021,000 in respect of Resource DEL end year flexibility arrangements. This is partially offset by a transfer of £250,000 in total to other Government Departments in relation to work to develop the Neighbourhood Statistics programme. The transfers comprise £97,000 to the Department for Education and Skills, £127,000 to the Department of Health and £26,000 to the Lord Chancellor's Department.
The reduction in the capital element of the DEL arises from a transfer of capital costs of some £1,003,000 in total to other government departments in relation to work to develop the Neighbourhood Statistics programme. The transfers comprise £1,000,000 to the Department for Work and Pensions and £3,000 to the. Department of Health.
27 Nov 2002 : Column 29WS
20022003 Winter Supplementary Estimate. The effect this will have is to increase the NIO's DEL by £60,000,000 from £1,151,862,000 to £1,211,862,000 and the administration costs limit will be increased by
27 Nov 2002 : Column 30WS
£10,000,000 from £144,716,000 to £154,716,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
|Change||New DEL||Of which: Voted||Non- Voted||Change||New DEL||Of which: voted||Non-voted|
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