§ Baroness Turner of Camden asked Her Majesty's Government:
§ What savings have accrued to the National Insurance Fund in the current financial year as a result of changes in statutory sick pay and the removal of industrial injury benefits.
§ The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)My Lords, the Social Security Act 1990 rationalised the scope of the National Insurance Fund by transferring the costs of certain non-contributory benefits to general taxation. The savings to the fund in 1990–91 from these changes are estimated as £956 million in respect of statutory sick pay, and £574 million in respect of industrial injuries benefits.
§ Baroness Turner of CamdenMy Lords, I thank the noble Lord for his reply. I assume from what he has told me that the National Insurance Fund is likely to be in surplus. If that is so, has that taken into account the fact that according to one estimate unemployment figures are likely to be in excess of 1.75 million and, according to other estimates, 2.5 million? Will the fund be in surplus next year in view of the large amount being paid to individuals to opt out of SERPS and into private personal pensions?
§ Lord HenleyMy Lords, it is estimated that the fund will be in surplus by about 41 per cent. this year as opposed to 16.7 per cent. (which is the recommended minimum suggested by the Government Actuary) and by 33 per cent. next year.
The noble Baroness asked whether increasing unemployment might have some effect on the fund. Any increases in unemployment may cause increased outgoings from the fund. However, I remind the noble Baroness that the biggest cost to the fund is retirement pensions. That is about three quarters of the fund's outgoings, whereas unemployment benefit accounts for a mere 5 per cent. or less.