§ Mr. MackinlayTo ask the Chancellor of the Exchequer what factors underlie the projected rise in the cost of cyclical social security between 1996–97 and 2001–02 as set out in table 4.6 of general government expenditure of the "Financial Statement and Budget Report 1997–98"; and if he will make a statement. [15686]
§ Mr. Waldegrave[holding answer 13 February 1997]Table 4.6 of the 1997–98 "Financial Statement and Budget Report" shows projections for cyclical social security which are consistent with the Government's expectations for the public finances in the medium term. As such, it goes beyond the period covered by the last public expenditure survey for which a detailed analysis of expenditure was carried out.
Table 5.3 shows that, between 1996–97 and 1999–2000, cyclical social security is expected to rise by roughly £400 million due to four factors. Uprating benefits for the effects of inflation adds £1 billion. Higher case loads and higher average amounts of benefit paid to those under 60 years old claiming income support, particularly the sick and disabled, adds a further £1.2 billion. Although these claimants are not required to seek work, they fall within the definition of cyclical social security. Policy changes announced in the Budget and reducing unemployment over the period will save £1.9 billion in total, largely offsetting the increases.
Projections for 2000–01 and 2001–02, shown in table 4.6, were not part of the public expenditure survey and were based on simple broad assumptions. Whilst they illustrate the Government's expectations in the medium term, they lack the precision of projections for earlier years. To reflect this, the projections in table 4.6 are rounded to the nearest £1 billion.