§ Mr. Dewar
To ask the Secretary of State for Social Security, pursuant to his answer of 5 April,Official Report, column 1224, on what basis he estimates that the amendment to the Pensions Bill [Lords] which would base the calculation of entitlement to benefits under the state earnings-related pension scheme on the best 44 years of earnings would cost £2.5 billion per year by the middle of the 21st century. 
§ Mr. Arbuthnot
The estimate assumed that a best 44 years rule would apply in a manner similar to the original best 20 years rule. In particular, it was assumed that the selection of the best 44 years would include earnings factors derived from contracted-out as well as not contracted-out earnings, so that the proposal would cover all class 1 contributors.
The estimate took account of the extent to which the average surplus earnings factor increases as a result of removing the lowest earnings factors from the calculation for new awards for 2023–24 and later years once contributors can have more than 44 years of contributions from 1978–79 onwards.