(2) what estimate her Department has made of the (a) annual and (b) cumulative (i) gross and (ii) net cost to the public purse of uprating the basic state pension in line with earnings from 2010-11;
(3) what estimate her Department has made of the additional annual (a) gross and (b) net cost to the public purse of uprating the basic state pension in line with earnings from 2010-11 up to the latest future date for which information is available.
Baseline projections of expenditure on pensioner benefits used for these costings assume that the basic state pension is increased by earnings from 2012. Prior to 2012, projections assume that the basic state pension is uprated by the greater of RPI or 2.5 per cent.
If the basic state pension were to be uprated by earnings in April 2010, the weekly value of the basic state pension to pensioners would be lower than the value from uprating it by 2.5 per cent which will apply from April 2010.
£ billion (2009-10 price terms) Gross Net of income related benefits Annual Cumulative Annual Cumulative 2010-11 -0.4 -0.4 -0.3 -0.3 2011-12 -1.0 -1.4 -0.8 -1.1 2012-13 -1.1 -2.5 -0.8 -2.0 2013-14 -1.1 -3.5 -0.9 -2.8 2014-15 -1.1 -4.6 -0.9 -3.7 2015-16 -1.1 -5.7 -0.9 -4.6 Notes: 1. Estimates given are net to baseline, they do not include the gross additional basic state pension spend from implementing the 2007 Pensions Act reforms to the basic state pension from April 2010. 2. During the next Parliament, we will re-link the uprating of the basic state pension to average earnings. Our objective, subject to affordability and the fiscal position, is to do this in 2012, but in any event by the end of the next Parliament at the latest. We will make a statement on the precise date at the beginning of the next Parliament. 3. In the financial years up to and including 2015-16 Treasury Economic assumptions consistent with Table C1 of the Budget Report 2010 have been used in the above modelling. 4. The costs and savings estimates provided are based on future projections of earnings and price inflation—which are inherently uncertain and subject to change particularly in light of the current economic uncertainty. 5. Estimates are in 2009/10 prices, have been rounded to the nearest £100 million and include UK and Overseas claimants. Source: DWP calculations