HC Deb 22 November 1956 vol 560 c1914
18 and 19. Mr. McKay

asked the Chancellor of the Exchequer (1) the yearly cost to the Exchequer of the non-contributory pension schemes separately, for civil servants, teachers, and local government servants, including all grades;

(2) the cost to the Exchequer of the contributory pension schemes for civil servants, teachers, and local government servants, firstly by means of direct payments and secondly due to the contributions to such schemes being tax-free; and to what extent these losses and costs are an addition to the loss of revenue of £95 millions stated on 1st November, 1956.

Mr. H. Brooke

Since the Answer is long and involves a number of figures, I will circulate it in the OFFICIAL REPORT.

Following is the Answer: The Civil Service basic pension scheme is non-contributory, and except in so far as wages and salaries reflect the non-contributory nature of the scheme, the cost falls on the Exchequer. The widows' and dependents' scheme is contributory, half the cost being met by the officer and the other half falling on the Exchequer. The total net cost to the Exchequer in 1956–57 of all pensions, pension increase, non-recurrent grants, injury awards, etc., is estimated at £41.6 million after taking account of the contributions under the widows' and dependents' scheme. The officer's contributions to the widows' and dependents' scheme do not attract tax relief. The teachers' and local government officers' pension schemes are contributory, employee and employing authority making equal periodical contributions. For teachers in England and Wales it is estimated that in 1956–57 expenditure from the Exchequer will amount to approximately £30 million. It is difficult to estimate a corresponding figure for local government pensions schemes, because different local services attract widely differing Exchequer grants. However, it is estimated that in 1954–55 the local authorities in England and Wales made contributions of about £35 million in respect of pensions under both funded and unfunded schemes (including also police and fire services). Nearly all this expenditure is met from the rate funds, and for 1954–55 a little over 40 per cent. of the total rate fund income for England and Wales was derived from Government grants. The relief from tax given in respect of contributions to these pension schemes was included in the figures given in my replies on 1st November last.