Living Wage: National Insurance Contributions

HM Treasury written question – answered on 25th November 2015.

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Photo of Lord Warner Lord Warner Non-affiliated

To ask Her Majesty’s Government what estimate they have made of the additional national insurance contributions that will be made in the first year of the introduction of the National Living Wage; and what assessment they have made of whether that source of revenue could be used to fund the extra cost of publicly-funded social care.

Photo of Lord O'Neill of Gatley Lord O'Neill of Gatley The Commercial Secretary to the Treasury

As set out in Table B.3 in of their July 2015 Economic and Fiscal Outlook, the Office for Budgetary Responsibility estimate that, by 2020-21, the National Living Wage will increase income tax and NICs receipts by around £0.1bn. They assume that, by 2020-21, the overall impact of the policy on the public finances is to reduce public sector net borrowing by £0.2bn.

The Chancellor will set out full plans for public expenditure at the Spending Review on 25th November.

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