Hansard

Pensioners' Benefits

Volume 412: debated on Wednesday 29 October 2003

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Mr. Willetts

To ask the Secretary of State for Work and Pensions what estimate he has made of public expenditure on the (a) winter fuel allowance, (b) free television licence and (c) Christmas bonus for pensioners in (i) 1997–98, (ii) 2002–03, (iii) 2010, (iv) 2020, (v) 2030, (vi) 2040, (vii) 2050 and (viii) for other years for which estimates have been made. [134472]

Notes:

  • 1. All figures expressed in £ million, 2003–04 prices and rounded to the nearest million.
  • 2. Projections are those underlying the Budget 2003 Economic and Fiscal Strategy Report, Annex A.
  • 3. Expenditure is for Great Britain, except free TV licences for the over 75s which is for the United Kingdom.
  • 4. The winter fuel payments expenditure includes expenditure on the 80+ annual payment announced in Budget 2003.
  • 5. Current government policy on uprating of benefits is assumed throughout.

    • Mr. Willetts

    To ask the Secretary of State for Work and Pensions what estimate he has made of public expenditure on public sector pensions as a percentage of gross domestic product in (a) 1997–98, (b) 2002–03, (c) 2010, (d) 2020, (e) 2030, (f) 2040, (g) 2050 and (h) for other years for which estimates have been made. [134477]

    Ruth Kelly

    I have been asked to reply.Public expenditure on public sector pensions is measured as contributions by Government employers to funded schemes plus pension payments and other outgoings, net of employee contributions and other receipts, in the case of unfunded schemes. The Treasury has no operational need to aggregate expenditure across all public sector pension schemes.Public expenditure in the four major unfunded pension schemes (NHS, Teachers, Armed Forces and Principal Civil Service Pension Scheme) accounted for 1.00 per cent. of GDP in 1997–98 and provision was

    Table 1: The gross cost of uprating the basic State Pension by 1.5 per cent. above inflation from April 2004
    £ billion
    2005–062006–072007–082008–092009–102010–11
    All pensioners0.91.31.92.63.34.0
    Pensioners aged 65 and over0.71.01.41.82.32.8
    Pensioners aged 70 and above0.60.91.21.72.12.5
    Pensioners aged 75 and above0.40.60.81.11.41.7
    Pensioners aged 80 and over0.20.40.50.70.81.0
    Table 2: The gross cost of uprating the basic State Pension by 1.5 per cent. above inflation from April 2004
    £ billion
    2005–062006–072007–082008–092009–102010–11
    All pensioners0.71.01.41.82.32.8
    Pensioners aged 65 and over0.50.71.01.31.62.0
    Pensioners aged 70 and over0.40.60.81.11.41.7
    Pensioners aged 75 and over0.30.40.50.70.91.1
    Pensioners aged 80 and over0.20.20.30.40.50.6

    Notes:

  • 1. All costs are rounded to the nearest £100 million and are in 2003–04 price terms.
  • 2. Gross costs are calculated by the Government Actuary's Department and are consistent with Budget 2003 assumptions.
  • 3. The net costs are calculated using the DWP Policy Simulation Model for 2005–06. The net cost represents the cost after allowing for any offsetting savings in income-related benefits.
  • 4. It is assumed that the start of the Savings Credit is increased to the value of the earnings linked basic State Pension.

    • Gregory Barker

    To ask the Secretary of State for Work and Pensions pursuant to his answer of 15 July 2003, Official Report, column 252W, on the state pension, what allowance was made for the non take-up of means-tested benefits in each of the six years in question. [132891]

    Mr. Browne

    The net costs of earnings uprating are calculated using the Department's Policy Simulation Model. The model takes account of the take-up of benefits and its results are consistent with the made in 2002–03 for net expenditure equivalent to 1.03 per cent. of GDP. Final figures for 2002–03 will only be available when resource accounts are published.To help inform the illustrative long-term fiscal projections, estimates are being made of likely future expenditure on public service unfunded pensions under a variety of scenarios. We will consider how far it would be meaningful to disaggregate these projections into different components given the critical dependence of estimates on the assumptions made.