HC Deb 13 June 2003 vol 406 cc390-2W
Mr. Willetts

To ask the Secretary of State for Work and Pensions if he will estimate the cost of the pension credit in(a) 2004, (b) 2010, (c) 2020, (d) 2030, (e) 2040 and (f) 2050 under the three alternative scenarios in the document entitled The Pension Credit: Long-term projections if the incomes that pensioners bring to account in income-assessed benefits rise in line with prices, rather than average earnings whilst all other assumptions used in the scenario are unchanged. [114554]

Lynne Jones

To ask the Secretary of State for Work and Pensions what assumptions have been made concerning the growth in pensioners incomes from non-state sources in the estimates of future expenditure on pension credit shown in figure A3.1 of the Pensions Green Paper; what the estimated expenditure would be if this growth were(a) half the level assumed; and (b) three-quarters the level assumed. [116256]

Maria Eagle

The latest projections of the full cost of Pension Credit (guarantee credit and savings credit) to 2050 are published on page 148, Annex 3 of the Pensions Green Paper 'Simplicity, security and choice: working and saving for retirement' (cm 5677). Based on a number of assumptions about the future, as set out in Annex 3, this shows that Pension Credit expenditure could rise to around 1.45 per cent of GDP by 2050.

One of the assumptions used was that on average, income brought to account in the Pension Credit would increase in line with average earnings.

The Pensioners' Incomes Series 2000/1, based on Family Resources Survey and Family Expenditure Survey data, shows that average pensioner incomes between 1979 and 1996–97 rose by 64 per cent. in real terms, compared to average earnings growth in the whole economy of 36 per cent. in real terms. More recent growth estimates are subject to uncertainty, but the growth in average pensioner incomes between 1994–95 and 2000–01 was around 17 per cent. in real terms, higher than average earnings (up 9 per cent. over the same period).

Projections of future Pension Credit spending based on a number of alternative assumptions, and in different years, are not available centrally and could only be obtained at disproportionate cost. However as an indication, under an assumption that pensioner incomes increased by prices to 2050, the cost of Pension Credit could be around 2 percentage points of GDP higher than the published costs. As explained, given the evidence of past pensioner income growth, the likelihood that those eligible for Pension Credit in the future will have higher state retirement pension income than previous cohorts, and the growth of non-pension income, such as income from housing or earnings, this assumption is likely to be unrealistic.

The long-term cost of Pension Credit will also depend greatly on the decisions made by future governments in annual uprating statements. This Government is committed to increase the guarantee in line with average earnings for the remainder of this Parliament; ensuring that all pensioners share in rising national prosperity. Following the introduction of the Pension Credit, the Government will be spending an additional £9.2 billion on pensioners in 2004–05 as a result of measures introduced since 1997.

Mr. Dhanda

To ask the Secretary of State for Work and Pensions what steps he is taking to minimise delays in the payment of pension credit to pensioners when it is introduced; and what steps he will take to promote the availability of emergency pension credit payments for pensioners whose payments are delayed. [115292]

Maria Eagle

[holding answer 22 May 2003]We have adopted a take on approach for Pension Credit which allows a controlled and measured build up of applications enabling us to ensure that we have appropriate levels of staff to deal with them and avoid unnecessary delays in issuing payment. Around 1.8 million people who currently receive the Minimum Income Guarantee will be transferred automatically to Pension Credit ready for payments to be made from October 2003. We will also ensure that all pensioner households have the information they need to decide whether to apply and all who apply before October 2004, if entitled, will receive payment as though they had claimed at the very start, or to the first day they could have qualified if this is later.

Mr. Hurst

To ask the Secretary of State for Work and Pensions what steps he has taken to ensure that letters to potential claimants for the pension credit are free of ambiguity. [115400]

Maria Eagle

The direct mail packs to pensioner households about Pension Credit have been subject to a rigorous process of quality assurance, including consultation with external organisations, customer research and testing. The clarity of the mail packs was approved with the Plain English Campaign Crystal Mark. Findings during the current period of advance applications will be taken into account before the main Pension Credit take-on begins in October.

Mr. Webb

To ask the Secretary of State for Work and Pensions if he will make it his policy to write to pensioners not receiving the minimum income guarantee with information on the pension credit, in priority order of those most likely to make a valid claim. [115480]

Maria Eagle

The Pension Service has begun to write to pensioner households to explain pension credit and to invite applications. The order in which households are contacted has been designed to produce a controlled and measured build up of applications, evenly distributed throughout the UK. By June 2004, all pensioner households will have been contacted. The Department will, during the period when advance applications for pension credit can be made, continue to evaluate the effectiveness of the marketing campaign and make any refinements needed to ensure that pensioners take up their entitlement. All those who apply before October 2004, if they are entitled, will receive payment as though they had claimed at the very start, or to the first day they could have qualified if this is later.

Norman Lamb

To ask the Secretary of State for Work and Pensions when he received the Treasury documents relating to the five economic tests and the 18 background studies; what discussions he has held with ministerial colleagues on the tests since receipt of the documents; when he expects to complete his analysis of the documents; and what representations(a) he and (b) departmental officials will make to other Departments before a decision is reached on the economic tests. [115379]

Malcolm Wicks

The Treasury's 18 supporting studies on EMU were sent to Cabinet Ministers on 16 May. The Prime Minister and the Chancellor are holding meetings with Cabinet Ministers. There was an initial discussion at Cabinet on 22 May. There will be a special Cabinet meeting on 5 June. My right hon. friend the Chancellor of the Exchequer will make a statement to the House of Commons on 9 June.