HC Deb 30 November 2000 vol 357 cc853-4W
Mr. Field

To ask the Secretary of State for Social Security if he will give the reasons for the difference between the expected level of basic state pension given in the consultation paper on the Pension Credit (Cm 4900) and the expected level of basic state pension given in his answer to the right hon. Member for Birkenhead on 27 November 2000,Official Report, column 433W. [141139]

Mr. Rooker

I refer my right hon. Friend to page 19 of Chapter 4 of the Pension Credit consultation document (Cm 4900), which clearly states that all pension and benefit rates are illustrative.

Mr. Matthew Taylor

To ask the Secretary of State for Social Security, pursuant to Cm 4917, if he will update his answer on the costs of changes to pensions to the hon. Member for Northavon (Mr. Webb) of 3 July 2000,Official Report, column 15W; and if he will make a statement. [138339]

Mr. Webb

To ask the Secretary of State for Social Security if he will estimate the cost to the Exchequer, net of savings in means-tested benefits and of additional income tax revenue, of an increase of £5 per week in the basic state pension together with the introduction of age additions of £5 per week at age 75 and £10 per week at age 80 years if such a policy were to be implemented in April 2001 and was in addition to the increases already announced for that date. [139073]

Mr. Rooker

Revised estimates indicate that the gross costs of the spending proposals set out by the hon. Member for Northavon (Mr. Webb) are £0.1 billion lower in 2001–02, 2002–03, 2004–05 and 2005–06 than estimated in my written answer of 3 July 2000,Official Report, column 15W. The estimate for 2003–04 is unchanged. If the consequential effects on Incapacity Benefit assumed in my answer of 3 July are excluded, the estimated gross cost is reduced further by £0.4 billion in 2001–02 and 2002–03, by £0.5 billion in 2003–04 and by £0.4 billion in 2004–05 and 2005–06. The effect of offsetting income-related benefits is to reduce costs by another £1.1 billion each year. Excluding tax effects as well reduces costs by £0.3 billion on top of that in the three years for which estimates are available.

Mr. Field

To ask the Secretary of State for Social Security if he will estimate the additional cost in each of the next five years, (1) net of means tested benefits and taxation, of an increase in the single person's basic state retirement pension in April 2001 by(a) £5 for 75 to 79-year-olds and (b) £10 for 80-year-olds and above; [140950]

(2) net of taxation and reduced expenditure on means tested benefits, of an increase in the basic state pension of (a) £5 for 70 to 79-year-olds and (b) £10 for those aged 80 years and over. [141140]

Mr. Rooker

The information is in the table.

The cost of a flat rate addition to the basic state pension of £5 for those aged 75–79 and £10 for those aged 80 and above
Gross cost (£ billion) Net cost(IRB and tax savings) Net cost (IRB only)
2001–02 1.9 1.1 1.2
2002–03 2 1.2 1.3
2003–04 2.1 1.3
2004–05 2.1 1.4
2005–06 2.2 1.4

Notes:

1. Figures are rounded to the nearest £0.1 billion.

2. Gross costs of pension increase estimated by the Government Actuary's Department.

3. Income tax revenue estimated by the Inland Revenue, and income-related benefits savings, are estimated using the Policy Simulation Model.

4. Estimates of income tax revenue are not available beyond 2002–03.

5. Costs are given in cash terms.

6. Legislation and computer systems would not allow for the implementation of this.

7. Figures are illustrative.

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