HL Deb 11 March 1981 vol 418 cc376-8WA
Lord Harris of High Cross

asked Her Majesty's Government:

To set out, for each of the five years 1976 to 1980, (a) the price index by reference to which Civil Service pensions have been increased, and to recalculate the index to show the effect of allowing for changes in (b) customs and excise taxes, and (c) the terms of trade between export and import prices.

The Minister of State, Treasury (Lord Cockfield)

Before 1979, public service pensions were increased on 1st December by the year-on-year increase in the retail price index to the preceding June. From 1979 public service pensions have been increased in line with the earnings-related additional components of State retirement pensions, which are increased by the percentage estimated by the Secretary of State as necessary to restore their value in relation to the general level of prices to that obtaining at the previous increase. In practice forecast movements in the RPI have been used. Since only 11 complete months elapsed between the 1978 and 1979 increases, that in 1979 amounted to 11/12ths of the up-rating in the additional components. The actual increases in public service pensions were as follows:

1st December 1976 13.8 per cent.
1st December 1977 17.7 per cent.
1st December 1978 7.4 per cent.
12th November 1979 16.0 per cent.
24th November 1980 16.5 per cent.

It is possible to remove the impact of Customs and Excise taxes, assuming that these were correctly forecast in 1979 and 1980 and that the prices would fully reflect the difference in taxation. The increases would then have been as follows:

1st December 1976 12.7 per cent.

1st December 1977 17.3 per cent.
1st December 1987 8.1 per cent.
12th November 1979 13.4 per cent.
24th November 1980 16.2 per cent.

It is not possible to remove the effects of movements in the terms or trade from the RPI, since separate information is not available for the import content of each of the RPI categories.

House adjourned at thirteen minutes past nine o'clock.