Social security expenditure in the 1990s

Abstract

Social security is the largest compnent of public expenditure and perhaps the most difficult to plan and predict. A change of government at the next election would certainly lead to an increase in expenditure but there are also increases in the pipe‐line arising from the policies of the Conservative Government. Beyond this, expenditure will depend on demographic change, most of which will result in increases in expenditure. The most important determinant of expenditure during the 1990s will be the state of the economy, in particular the level of unemployment. Among other factors that may influence expenditure will be decisions of European institutions and the equalization of the pension age. It is estimated that social security expenditure will increase by £8.3 billion over the decade before any further policy changes and assuming unemployment at 5%.