§ Mr. FlynnTo ask the Secretary of State for Social Security, (1) pursuant to her answer of 26 February 1998, Official Report, column 345, on Treasury grant to the National Insurance Fund, for what reason the full amounts of the Treasury grants will not be needed in (a) 1999–98 and (b) 1998–99; [33268]
(2) what were the total sums (a) allocated and (b) spent on the Treasury Supplement and the Treasury Grant in each of the past 20 years. [33267]
§ Mr. DenhamInformation on the amounts of Treasury Supplement and Treasury Grant is set out in the table.
89W
Treasury Supplement and Treasury Grant: Amounts allocated and paid into the National Insurance Fund 1977–78 to 1996–97. £million Year Amount allocated Amount paid 1977–78 1,537 1,537 1978–79 1,976 1,976 1979–80 2,343 2,343 1980–81 2,848 2,848 1981–82 2,433 2,433 1982–83 2,591 2,591 1983–84 2,807 2,807
Treasury Supplement and Treasury Grant: Amounts allocated and paid into the National Insurance Fund 1977–78 to 1996–97 £ million Year Amount allocated Amount paid 1984–85 2,597 2,597 1985–86 2,163 2,163 1986–87 2,412 2,412 1987–88 2,135 2,135 1988–89 1,653 1,653 1989–901 0 0 1990–911 0 0 1991–92 1 0 0 1992–93 1 0 0 1993–94 27,589 47,589 1994–95 36,384 46,280 1995–96 34,096 43,575 1996–97 32,505 41,900 1 The Treasury Supplement was abolished in 1988–89; the Treasury Grant was introduced from 1993–94. 2 Maximum amount of Treasury Grant made available for 1993–94 under section 2(1) of the Social Security Act 1993. 3Maximum amounts of Treasury Grant available for those years as prescribed by Orders made under section 2(2) of the Social Security Act 1993. The amounts were based on estimates of benefit expenditure from the National Insurance Fund in those years contained in the Government Actuary's reports on the draft Social Security Benefits Up-rating Orders and draft Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Orders for those years. 4Amounts of Treasury Grant Voted in Supply Estimates and paid into the National Insurance Fund. Until the Treasury Supplement was abolished in 1988–89, it was calculated and paid into the National Insurance Fund as a fixed percentage of the Fund's expected annual income from National Insurance contributions. The Treasury Grant was introduced from 1993–94 as a more flexible means of enabling adjustments to be made to the level at which the Fund stands so that, after meeting its expenditure commitments on benefits and other payments, the Fund has a reasonable working balance at the end of each financial year. The advice of the Government Actuary is that the planned level of this balance should not be less than one-sixth (16.7 per cent.) of the Fund's annual benefit expenditure.
The amounts of Treasury Grant Voted in the main Supply Estimates and paid into the Fund each year are those estimated by the Government Actuary in his report on the drafts of the annual Social Security benefits up-rating and Contributions (re-rating and National Insurance Fund payments) Orders. But the maximum level of Grant which can be made available to the Fund each year is prudently prescribed, by Order, at a higher amount. The maximum Grant is set so that, if in that year the Fund's income from contributions is lower than expected or its expenditure on benefits is higher than forecast, additional amounts of Grant may be paid into the Fund subject to Parliament approving the necessary Supplementary Estimate. This might arise when, for example, the level of unemployment is markedly higher than expected.
In line with estimates made by the Government Actuary in January 19971, the total amount of Treasury Grant Voted and paid into the National Insurance Fund for 1997–98 is £940 million. The maximum level of Grant available for 1997–98 is £1,713 million'. The Government Actuary's latest estimates' indicate that the balance in the 90W Fund at 31 March 1998 will be equivalent to 19.2 per cent. of annual benefit expenditure; hence there is no need for any further Grant to be paid into the Fund in 1997–98. These estimates also indicate that without any Grant in 1998–99, the balance in the Fund at 31 March 1999 is likely be equivalent to 17.4 per cent. of annual benefit expenditure. Nevertheless, we have prudently prescribed' that a Grant of up to 2 per cent. of annual benefit expenditure (£896 million) can, if necessary, be made available to the Fund in 1998–99.
Notes:
1Report by the Government Actuary on the drafts of the Social Security Benefits Up-rating Order 1997 and the Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order 1997 (Cm 3547).
2 Social Security (Contributions) (Up-rating and National Insurance Fund Payments) Order 1997.
3Report by the Government Actuary on the drafts of the Social Security Benefits Up-rating Order 1998 and the Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order 1998 (Cm 3860).
4Social Security (Contributions) (Up-rating and National Insurance Fund Payments) Order 1998.