§ Mr. Frank FieldTo ask the Secretary of State for Social Security if he will estimate the cost of raising the basic state retirement pension to a level at which income support and housing benefit would cease to be payable to pensioners; and by how much the standard rate of income tax would have to be raised to raise the same sum.
§ Mr. Hague[pursuant to his reply, 21 June 1993, column 61]: The information was incorrect and incomplete due to a transcription error. The correct information is as follows:
The additional cost of increasing the basic retirement pension to the higher pensioner rate of income support would be £3.4 billion. This represents a full year extra cost in 1993–94 net of savings made by the consequent reduction in spending on income-related benefits.
The basic rate of income tax would have to be increased by 3 pence to raise this amount.
It is not possible to estimate a level of retirement pension at which all pensioners cease to be eligible for housing benefit as entitlement depends on the level of rent paid, and rents vary widely. As an illustration of the cost involved we estimate that it would cost £11.2 billion net in 1993–94 to' increase retirement pensions to a level where income support and housing benefit entitlement would cease for pensioners paying the average local authority weekly rent paid by pensioners in receipt of housing benefit—£26.64 in May 1991, the latest available figures.
The basic rate of income tax would have to be increased by 8p to raise this amount.
Note: The estimated amounts of increases in the basic rate of income tax have been rounded to the next whole penny.
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