I propose to take Questions Nos. 11 and 38 together.
The pay-related social insurance contribution rates applying to employees and employers generally are 7.75 per cent and 12.2 per cent, respectively. This includes a health contribution of 1.25 per cent and an employment and training levy of 1 per cent which are normally levied on the employee. The latest date for which data on average industrial earnings are available is June 1991 when average earnings were £237 per week, or just over £12,300 per annum. On this basis, the annual contribution made by an employee on the average earnings is £935 while his employer contributes an additional £1,500.
These contributions are by no means excessive by international standards. Among our EC partners, employee contribution rates are as high as 18 per cent in Germany and employer contributions rates are as much as 50 per cent in Italy, for example.
I have no plans to reduce the level of social insurance contribution rates generally. A reduction in the contribution rate of even one percentage point would cost in the region of £80 million, which would have to be made good by the Exchequer through increased taxation.
The scheme to exempt employers from employees' PRSI which was recently announced by the Government will not impose costs on the Exchequer. Under this scheme employers who take on additional full-time employees in the period from 19 October 1992 to 19 March 1993 will not be liable for an employer's contribution in respect of those employees for a period of two years from April 1993. To the extent to which additional employment is created, PRSI income will be increased. In addition, as the workers will be drawn from the live register there will be a saving in unemployment payments. There will, therefore, be a double benefit to the Exchequer. The question of a reduction in social welfare benefits to finance this scheme does not, therefore, arise.
Employees taken on under the scheme will be insured for the full range of benefits, even though no employer's contribution will be paid.