§ Mr. CorbynTo ask the Secretary of State for Social Security what increase could be paid to recipients of a state pension if it had been consistently uprated in line with earnings since 1980; and what would be the gross cost of this in the current financial year and the cost net of taxation and losses of other benefit entitlement. [159]
§ Mr. HealdIf the basic state retirement pension had been increased in line with average earnings since 1980, the standard rate of basic pension would be increased by £19.10 a week. The gross cost of such an increase is estimated at £8.8 billion in 1996–97. After taking account of the effect on income-related benefits and taxation, the net cost is estimated at £5.5 billion.
Sources:
1. Estimates of gross costs provided by Government Actuary Department.
2. Net costs estimated using standard offset ratios from the Policy Simulation Model 1996–97, which is based upon data from the family expenditure surveys 1991, 1992 and 1993.
3. Estimates of changes to income tax revenue provided by the Inland Revenue, using a provisional projection of FES 1994–95 data to 1996–97.
4. Average earnings index, all employees, taken from the new earnings survey for each year.
Notes:
1. All estimates are in 1996–97 prices, rounded to the nearest £100 million.
2. This reply refers to increases in basic retirement pension only.