§ 44. Mr. Aitkenasked the Minister for the Civil Service what will be the cost 714W to the taxpayer of maintaining inflation-proof pensions for retired civil servants during 1975–76 and 1976–77; and if he will make a statement.
§ Mr. Charles R. MorrisThe total cumulative cost of inflation-proofing Civil Service pensions is estimated at £72 million for 1975–76. This raises the total gross cost of these pensions in the current year to £;259 million. Estimates are not available for 1976–77.
This expenditure does not represent the cost to the taxpayer since it takes no account of the effective contributions made by civil servants to their pension benefits. Male civil servants pay a direct contribution for widows' and dependants' pensions, and, as I explained in my reply to the hon. Member for Mid-Sussex (Mr. Renton) on 1st December 1975—[Vol. 901, c. 355]—Civil Service pay rates specifically take account of the employee's share of the cost of pensions which is paid by those doing comparable work outside the Service. As a result, the net cost of Civil Service pensions to the taxpayer is about 31 per cent. of the currently estimated salary bill of some £;2,500 million for 1975–76.