§ Mr. Kirkwoodasked the Secretary of State for Social Services what would be the value of the retirement pension in each year from November 1978 to November 1984 if it had been fully uprated in line with prices or earnings whichever was the higher; and what would be the extra net cost to public expenditure of raising the retirement pension to this level.
§ Mr. WhitneyTaking the retail prices index and the new series index of average earnings for the whole economy (seasonally adjusted), and increasing the standard rate of retirement pension for a single person by the higher of the increases in these two indices each November the cumulative results would be as follows:
377W
November £ 1978 19.50 1979 23.20 1980 27.35
November £ 1981 30.65 1982 33.20 1983 35.60 Figures for 1984 are not yet available.
These figures are hypothetical. It is not possible to make an accurate estimate of the level at which the retirement pension would have stood in November 1983 if uprating in line with the better of the increases in prices or earnings had been maintained. The need to make assumptions about forecasts, the treatment of forecasting errors and public expenditure constraints would render such an estimate meaningless.
The estimated cost of increasing the November 1983 pension rate from £34.05 to £35.60 would be £670 million in a full year. This cost includes pro-rata increases in the married couple pension rate but excludes any savings on supplementary pension and housing benefit. The cumulative cost of increasing the pension in the way described since 1978 would, of course, be much greater.