§ Mr. MaclennanTo ask the Secretary of State for Social Security what would be the(a) cost in real terms and (b) resulting increase in pensions, of raising pensions to the level they would have reached if the link between pensions and the rise in earnings had never been broken. [110415]
§ Mr. RookerIf the link uprating the basic State pension by the higher of earnings or prices had not been broken the rate for a single pensioner would be £97.45 per week from April 2000. The gross cost of increasing the basic retirement pension to this level in 2000–01 would be £17.2 billion. The net cost would be £13.5 billion.
Notes:
1. The Retail Prices Index (all items) and the Average Earnings Index Whole Economy (Non Seasonally Adjusted) have been used as published by the Office for National Statistics.
2. From April 1994 the basic rate of Retirement Pension has been increased by 50p to reflect VAT on fuel.
3. Figures have been rounded to the nearest 5 pence at each uprating.
4. Costs are rounded to the nearest £100 million.
5. Costs include benefits whose rates are linked by statute to the rate of basic Retirement Pension (RP).
6. The figure of £97.45 per week refers to the full Category A rate; other rates of basic RP have been assumed to increase pro-rata.
7. Gross costs are estimated by the Government Actuary's Department. Net costs have been estimated using the Policy Simulation Model.