§ Mr. FlynnTo ask the Secretary of State for Social Security what is the estimated saving in each year up to 2030–31 resulting from the phasing out of entitlement to earnings-related invalidity pension, gross and net of additional spending on invalidity allowance.
§ Mr. Scott[holding answer 16 January 1990]: The available information on gross savings from ending the accrual of new rights to invalidity benefit additional pension is given in the table. The estimates are based on long-term projections of expenditure on additional pension which are subject to considerable margins of error; the savings estimates beyond 2000–01 are 484W particularly uncertain. Since annual figures would therefore imply a spurious precision, the estimates are given at five-year intervals. Projections beyond 2025–26 are not available.
Effect on expenditure Gross change in additional pension expenditure at constant 1989–90 prices £ million (saving) 1991–92 nil 1992–93 10 1993–94 30 1995–96 120 2000–01 475 2005–06 800 2010–11 1,025 2015–16 1,225 2020–21 1,525 2025–26 1,825 These are gross savings in additional pension expenditure before offsetting adjustments to invalidity allowance and income-related benefits. I shall write to the hon. Member enclosing estimates isolating the effect of invalidity allowance when these are available.
§ Mr. Alfred MorrisTo ask the Secretary of State for Social Security what is his estimate of the expenditure on the additional component to invalidity pension that would be incurred in each of the next 20 years(a) under pre-1986 legislation, (b) under current legislation and (c) under the proposals in "The Way Ahead"; and if he will make a statement.
§ Mr. Scott(a) Information on additional pension expenditure under pre-1986 legislation is not available and could be provided only at disproportionate cost.
(b) and (c) Projections of expenditure under current legislation and under the proposals in "The Way Ahead" (Cm. 917) are as follows. These estimates are subject to considerable margins of uncertainty, particularly in the longer term. Since the precision implied by annual estimates would therefore be spurious, the long-term projections are given at five-year intervals.
Projected expenditure on invalidity benefit additional pension at constant 1989–90 prices £ million (b) current legislation (a) Cm. 917 proposals 1990–91 565 565 1991–92 690 690 1992–93 820 810 1993–94 950 920 1995–96 1,225 1,100 2000–01 1,850 1,375 2005–06 2,125 1,325 2010–11 2,225 1,200 2015–16 2,350 1,125 The figures illustrating the effect of the proposals in "The Way Ahead" show the gross effect on expenditure. The net effect on social security spending will be less because of offsetting changes in invalidity allowance and income-related benefits.
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§ Mr. Alfred MorrisTo ask the Secretary of State for Social Security what is his estimate of the reduction in national insurance contributions consequent on the proposed abolition of additional component to invalidity pension; and if he will make a statement.
§ Mr. ScottThe level of contributions depends on the overall demands on the national insurance fund. The expenditure implications of the proposed change in invalidity benefit will be taken into account in determining future levels of contributions.