§ Mrs. Beckettasked the Secretary of State for Social Services what are the total public expenditure savings from the abolition of maternity grant.
§ Mr. NewtonAnnual expenditure on maternity grant is currently estimated at £18.5 million. As the hon. Lady is aware, however, the proposal to abolish this provision is associated with other proposals to introduce maternity payments for low-income families at a significantly higher level than the present universal grant, and extending beyond those who might currently qualify for a supplementary benefit single payment for maternity needs. It is not yet possible to make a firm estimate of the overall effect on public expenditure.
§ Mrs. Beckettasked the Secretary of State for Social Services (1) what are the public expenditure savings from the loss of entitlement to maternity allowance;
(2) what are the total savings to public expenditure from the changes in maternity benefits.
§ Mr. NewtonAs regards maternity grant and the proposed maternity payments, I refer the hon. Lady to my other answer to her today.
As regards our proposals for weekly maternity benefits, the effects on public expenditure are shown by the items marked with an asterisk in the following table giving the overall effect on the public sector borrowing requirement, which is estimated to be a net reduction of £13 million in 1987–88 and £23 million in 1988–89.
167W
1987–88 1988–89 £ million £ million PSBR reductions Reduced expenditure on maternity allowance *124 *158 Reduced expenditure on maternity pay *70 *80 Savings on administration *4 *4 Saving on maternity pay (see note) *1 *1 Additional tax and national insurance contributions 15 20 214 263 PSBR increases
1987–88 1988–89 £ million £ million Reimbursement of statutory maternity pay (flat-rate element) to employers 112 137 Reimbursement of statutory maternity pay (earnings-related element) to employers 70 80 Increased sickness benefit and supplementary benefit *19 *23 201 240 Note:
Maternity pay is at present reduced by the standard rate of maternity allowance. These savings arise because of the proposed rate of the flat-rate element of the new statutory maternity pay is higher than the existing maternity allowance.
Within these figures, the net reduction in public expenditure attributable to women failing to qualify for benefit which they would have received under existing provisions — almost entirely those who had given up work before their pregnancies began—is estimated to be £29 million in 1988–89, the first year of the scheme not subject to transitional provision. At the same time, there will be additional expenditure on maternity allowance, or extra revenue forgone in reimbursement of statutory maternity pay, of some £11 million to women who would not have qualified under existing provisions.