§ Mr. CorbynTo ask the Secretary of State for Social Security (1) what is his Department's estimate of the additional cost to the Exchequer in each year from 1980 of linking the state pension to average earnings; and if he will extend this estimate to each year up until 2000–01;
(2) what would the state old age pension for 1994–95 be, in cash terms, if the link with earnings had been maintained since 1980.
§ Mr. HagueIt is estimated that the weekly rate of category A retirement pension would be £75.10 from April 1994 if it had been increased in line with average earnings since 1980.
The estimated additional cash cost for the years 1980–81 to 1994–95 is shown in the table. An equivalent estimate for the years 1995–96 to 2000–01 is not available in the form requested, and depends on the assumed rate of increase of prices and earnings. However, a comparison between the cost of earnings uprating of benefits and that of prices uprating of benefits from 1990–91 to 2050–51 can be made by referring tables 13 and 14 of the "National Insurance Fund Long Term Financial Estimates—Report of the Government Actuary on the Second Quinquennial Review under Section 137 of the Social Security Act 1975" published in July 1990 as HoC 582.
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Additional cost of uprating state Retirement Pension in line with average earnings1 Financial year Cash cost £ million 1980–81 66 1981–82 294 1982–83 396 1983–84 465 1984–85 920 1985–86 1,084 1986–87 1,762 1987–88 2,711 1988–89 3,506 1989–90 4,510 1990–91 5,437 1991–92 5,712 1992–93 6,985 1993–94 7,751 1994–95 7,916 1Source Government Actuary's Department.