HL Deb 15 December 1994 vol 559 cc135-6WA
Earl Russell

asked Her Majesty's Government:

How the estimates of savings in the Explanatory and Financial Memorandum of the Jobseekers Bill were arrived at.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)

The information for the measures relating to Jobseeker's Allowance is in the table. Estimates do not take account of tax or behavioural effects.

Policy measure Benefit expenditure effect in 1996–97 £ million Benefit expenditure effect in 1997–98 £ million
Contributory entitlement six months -70 -180
No adult dependency increases in contributory benefit -10 -20
Unified rates of benefit: effect on 18.24 year old claimants -20 -30
Treatment of income from occupational and personal pensions -10 -10
Waiting days in income-based JSA -40 -40
Anti-fraud measures Benefit sanctions -10 -10
Treatment of earnings: changes in disregards and in partners' hours rule +20 +20
Net effect -140 -270

In addition, on the same underlying assumptions and without accounting for behavioural effects, the measures relating to the Back To Work Bonus bring an estimated increase in benefit expenditure of around £20 million in 1996–97 and around £50 million in 1997–98. However, as observed in the Memorandum, the introduction of the Back To Work Bonus is likely to be broadly cost-neutral when behavioural effects are taken into account. The measures relating to the National Insurance contribution rebate are expected to reduce employers' National Insurance costs by about £45 million in each of 1996–97 and 1997–98.

Notes relating to the table:

  1. 1. Assumes 2.4 million unemployed; 500,000 Unemployment Benefit cases; inflow into claimant unemployment of 3.8 million.
  2. 2. All estimates rounded to nearest £10 million.
  3. 3. Figures may not sum due to rounding.
  4. 4. Estimates in cash prices.
  5. 5. Benefit sanction estimates arc net of hardship payments.
  6. 6. Estimates are net of any effects in other benefits.
  7. 7. Based on 1993 Annual Statistical Enquiry, 1993 and 1994 Unemployment Benefit Statistics, 1993–94 Adjudication Officer statistics and the Policy Simulation Model using 1990/91/92 family expenditure data.
  8. 8. The estimated effects relating to Adult Dependency Increases unified rates assume contributory entitlement lasts six months.