asked the Minister for the Civil Service what has been the cost to the taxpayer of making Civil Service pensions inflation-proof under the terms of the Pensions Increase Act 1971 for each of the years 1972, 1973 and 1974; and what would be the cost for the current year assuming an inflation rate of no more than 25 per cent.
For figures relating to the 1972, 1973 and 1974 reviews I would refer the hon. Member to the reply I gave the hon. Member for Blaby (Mr. Lawson) on 23rd April—[Vol. 890, c. 321–322.] In that reply I also said that the percentage increases to be given from 1st December 1975 will not be known until the end of July. However, assuming a 25 per cent. increase from 1st December, the annual cost of Civil Service pensions would rise by some £40 million. The cost to the taxpayer is less than these figures suggest since pensions are taxed as earned income.