This Order reduces the rate of secondary Class 1 contributions, specified in section 9(2) of the Social Security Contributions and Benefits Act 1992 (“the Act”), from 11.9 per cent to 11.8 per cent. It increases from £3,955 to £4,025 the amount of earnings below which an earner may be excepted from liability for Class 2 contributions, specified in section 11(4) of the Act. It also amends the amount of a Class 3 contribution specified in section 13(1) of the Act from £6.75 to £6.85 (Articles 2 to 4).

The Order amends, from £4,535 to £4,615 and from £29,900 to £30,420 respectively, the lower and upper limits of profits or gains specified in sections 15(3) and 18(1) of the Act, between which Class 4 contributions are payable (Article 5).

Articles 2 to 5 of the Order also make provision for Northern Ireland corresponding to that in the preceding two paragraphs (the section numbers are the same in the Social Security Contributions and Benefits (Northern Ireland) Act 1992).

The Order provides for section 2(2) of the Social Security Act 1993 to have effect for the tax year 2002–03. It also provides that the amount of any money that may be provided by Parliament to be paid into the National Insurance Fund in that year shall not exceed in aggregate 2 per cent. of the estimated benefit expenditure for the financial year ending 31st March 2003 (Article 6). The Order also makes corresponding provision for Northern Ireland (Article 4(3) of the Social Security (Northern Ireland) Order 1993 being the provision brought into effect) (Article 7).

In accordance with sections 142(1) and 144(1) of the Social Security Administration Act 1992, a copy of the report by the Government Actuary (Cm. 5383) giving his opinion on the likely effect on the National Insurance Fund of the making of the Order in so far as it amends sections 9(2), 11(4), 13(1), 15(3) and 18(1) of the Act, was laid before Parliament with the draft of this Order.

This Order does not impose any new costs on business.