§ Mr. Peake
I beg to move, in page 20, line 38, at the end, to insert:and temporary employment shall not be deemed to be inconsistent with retirement.This Amendment and the next Amendment on the Paper should be considered together, as both affect the same point. While we do not disagree with the principle that retirement should be a condition of the pension, we do want, to make sure, if we can that people shall 678 not be discouraged from taking a hand, let us say, at harvest time by the conditions of the Clause. We therefore wish to provide that temporary employment shall not be deemed to be inconsistent with retirement. The second Amendment proposes to leave out subsection (5) of the Clause which provides that where earnings of a beneficiary have exceeded 20s. weekly, the rate of his pension shall be reduced by 1s. for each complete 1s. of the excess. These Amendments are designed to enable people who have, in fact, retired, to lend a hand when their services are required, whether it be for harvest, or for some other purely temporary purpose, and yet to continue to draw their retirement pension.
§ 10.45 p.m.
§ Major Digby (Dorset, Western)
Hon. Members who were on the Standing Committee will remember that this was a question on which we had considerable discussion. I believe it is an important point. No hon. Members on this side of the House would, I am sure, disagree with the proposition that it is important that as many men as possible should, instead of retiring at 65, go on working until 70. But there are many who are no longer able to work after 65, and who will wish to go into retirement but who, nevertheless, might be able to undertake temporary or part time work of one kind or another. It is very important that they should be willing to undertake it. Particularly is this the case at times when there is a seasonal shortage of workers, such as at harvest time. I, therefore, submit to the House that these men should be given every encouragement to do such work. In reply to an Amendment I moved in Committee, the Parliamentary Secretary himself admitted the validity of these arguments. He said:If employment was inconsiderable, if the intention of retirement was there, if a person only went to do a job for a short time, so as to give someone else a necessary hand, it would be grossly unfair if he were penalised."—[OFFICIAL REPORT, Standing Committee A, 12th March, 1946.]That, I am sure, is a proposition with which few of us would disagree, but the fact remains that, as the Clause stands, there is little incentive for a retired person to go on working. In the first place, if he were to work for three or four weeks running, or for a considerable period at harvest time, it is by no means clear how it would affect his posi- 679 tion as a retired person. Would there be any question of losing his status as a retired person? I hope the Minister, or the Parliamentary Secretary, will give us an assurance on this point.
In the second place, with regard to actual earnings, anything he earns over £1 a week will be deducted—for every shilling over £1, a shilling will be deducted, from his retirement benefit. In other words, it will not be worth his while to work for anything between £1 and, say, £3 a week. If he is to work at harvest time and is to be of any use at all, he certainly will be earning more than £1 a week. So I do feel that there is a strong case for the Minister's looking at this matter again.
There is one other point that I wish to mention, with regard to the averaging out of earnings. We had some remarks from the Parliamentary Secretary upstairs on this, but I am still not clear about it. I would like to hear what the exact position is. I understand that over a period of a week or two, the earnings would be averaged out so that if he earned 30s. one week and 10s. the next, it would be averaged out to £1 for each of the two weeks. That is very satisfactory; but we would like to see that process go a little further. This kind of seasonal employment goes on for more than two or three weeks, and there may be many men who will do nothing at all, many retired persons who will have no work at all, for many months in the year, and who, when it comes to harvest time, may wish to work for three or four weeks on end. If the position is to be that they lose their entire retirement benefit for that period, they will not be encouraged to work. Our purpose in moving this Amendment is to meet these cases, and I hope the Minister will give it every consideration.
§ Mr. C. Williams
I would like to say a few words in support of my hon. and gallant Friend on this matter. I will not go further as regards the question of harvesting but let me take the type of case which might happen in the offices, say, of one of the trade unions in my constituency. Suppose the trade union secretary breaks down for a few weeks, and his father takes on the job. It would naturally be a matter of concern to me, if that father had a pension, that his pension should not be just cut off by the Government. 680 The same might happen, for instance, in the case of the harvesting of potatoes in my constituency. I think all these things should be obvious to the Government, and at this time of night I need not try to illustrate them any further. I have to remember what the right hon. Gentleman the Leader of the House said about this earlier. He said, " We must really do our duty in these matters ". I have a lot of fishing people in my Division, and they are seriously concerned. If an elderly man takes a job at fishing for a week or two, at a time of the year when there are a lot of fish about, such as herring, is he to be penalised as a pensioner? That is an obvious illustration of the case for the acceptance of this Amendment.
There is a further point. Take the question of shops. Take the case of a small tailor, for example, where the business is carried on by two persons who have living with them their elderly father who has a pension. This man may help a little at different times in the shop. It is only temporary work, and not for any great length of time. Surely we have the right to see that his pension is safeguarded. This is one of the occasions when we might appeal to right hon. and hon. Members on the opposite side of the House to take the same point of view as we take. This is a case in which a man is too old to work regularly. We do not wish him to go on the labour market, but we do wish to see that he is not denied the opportunity of having that interest in life—an interest which often prolongs life—which comes from a little work now and then. I see, Mr. Speaker, that one of my more sympathetic friends on the opposite side is nodding his head. Many people who have had to deal with these old people, know what happens to a man who is pensioned off and is afraid to take on any other job for fear of losing his pension. I do not expect the right hon. Gentleman opposite to do anything but sneer and jeer at this Amendment, but I know that some of his hon. Friends will support us.
§ Mr. Basil Nield (City of Chester)
I hope the House will support the view which I take, that of all the provisions in this great Bill for national insurance, one of the most important is that in Clause 20, referring to retirement pensions. All right hon. and hon. Members, I imagine, in all parts of the House, have had to deal with tragic cases of old people, who are 681 past regular employment. Now that we are putting on the Statute Book this provision for the care of our people, I think we should make as good a job of it as possible. Subsection (2) of Clause 20 is directed towards permitting a person who is entitled to retire with pension to earn other money at casual employment. In order to make it plain that those who reach pensionable age, will not have their pension reduced if they undertake some temporary employment, I urge that this Amendment should be accepted. As my right hon. and hon. Friends on this side of the House have pointed out. we can envisage the sort of case in which a man of, say, 70 or over desires to supplement his pension at certain times of the year. It is right that his pension rights should not be jeopardised by this laudable desire, and to make it plain in Subsection (2), there should be inserted the specific words:Temporary employment shall not be deemed to be inconsistent with retirement.There is also the other point about Subsection (5) in regard to the spreading over of earnings so as not to disentitle a man to pension. In other words, if for one week an elderly person earns more than £1— maybe £2 or £3—let it be spread over the period when he does not work so that his retirement pension is not reduced. I commend this proposal to the House as a contribution towards the improvement of this Clause; I hope the right hon. Gentleman will regard it as a sensible and constructive suggestion.
§ Mr. Molson (The High Peak)
I hope we shall hear something upon this subject from the Parliamentary Secretary. In Committee he gave an explanation in answer to my hon. and gallant Friend the Member for Western Dorset (Major Digby) which he afterwards found to be incorrect. On that occasion the hon. Gentleman at once desired to " come clean." He asked leave to make a statement and said he would not like to mislead the Committee. One recalls an earlier incident, and one is glad to see the growth in grace on the part of the Parliamentary Secretary. Having slipped on one occasion when he did not make quite a clean breast of it, but he was on the next occasion very frank with the Committee and rectified the mistake he had made as to the meaning of this Clause. That was in regard to the earnings of these pensioners. Obviously, 682 the question of what does constitute retirement, is going to be one of the most difficult administrative problems the Government will have to deal with. It really is of very great importance to all the people who claim to have retired to know how much work they may do without forfeiting their rights to be regarded as retired. I did expect to find an Amendment put down by the Government before the Report stage which would have made this provision plainer than it is, because I think it obvious from what the Parliamentary Secretary said that he had understood the wording of the Bill in a certain way, but afterwards he found he was wrong. Obviously on the first occasion he thought that the Bill represented what he had in mind as desirable, and I did, therefore, think that before the Report stage there would have been an Amendment to make the position clear.
There is another matter in reference to this question of retirement on which I would like an explanation. I should have thought that these retired people would be treated in exactly the same way as the widows. I should have thought that, in equity, both ought to be treated in the same way. But while the right hon. Gentleman has put down an Amendment to Clause 17 to raise the maximum a widow may earn from 20s. to 30s., no similar Amendment has been put down with regard to retired people. I would like to ask one or other of the Ministers to explain why, while the Government have invited the House tonight to alter the maximum earnings in the case of widows, a similar alteration has not been made in the case of a retired person. I can hardly suppose it was the part of my hon. Friends on this side of the House to put down such an Amendment, and I should not like to think the Government only raise these matters when they want to trump our aces.
§ 11.0 p.m.
§ Mr. J. Griffiths
This is a matter of considerable importance, and one to which I have had to give, from the beginning, very considerable attention and real consideration. We are introducing a new method of paying old age pensions. We now describe them as " retirement pensions " and I appreciate that what is the retirement age is of great importance. First of all, the person who is qualified under the Bill and who reaches retirement 683 age will indicate to us that he proposes to retire from regular employment. In normal cases the man reaches pensionable age while still following his regular employment, and he indicates that when he attains the age of 65 he retires. If he does not retire, under the provisions in the Bill he will earn for every half year he works, and pays 25 contributions, an increment to his pension of is. for himself and 1s. for his wife. The pension is payable on retirement and payment is made at the appropriate rate, the standard being 26s. and 42s. with the increments I have already described.
When the pensioner retires between the ages of 65 and 70 we provide an earnings rule. I gave a good deal of consideration to this, for it is a very important problem. My attention was called to this and it had to be considered in relation to the old people with every desire to be fair to them, but it also has trade union repercussions. It has been known, I understand, for the old age pension of 10s. to be used on occasion by unscrupulous people as a lever to reduce wages.
So there is a pension of 26s. on condition of retirement. First of all, I was anxious to see that the pension is not exploited by any employer. Secondly, I was equally desirous of seeing that retirement did not mean that the pensioner was completely cut off from any kind of work at all. There are lots of odd jobs that old people like to do and will give an opportunity to earn something extra. Now how much? I fixed 20s. for a man and 20s. for his wife, so they can earn £2 in addition to the 42s. As has been indicated in the Amendment which I moved earlier, and which the House has accepted, I have increased the earnings rule from 20s. to 30s. in the case of a widowed mother or a widow. I considered whether to increase it for aged people to 30s. each or £3 for the two. Eventually, after full consideration, I came to the conclusion that it would be wrong to do that. I think 20s. is a fair amount to allow. If it gets beyond that, it raises rather difficult questions of pensionable age.
§ Mr. Molson
Before the right hon. Gentleman leaves that point, why? What is the logic of having 30s. for widows and 20s. for aged people?
§ Mr. Griffiths
Because the only earnings which can possibly enter into it are her own earnings in the case of a widow, but in the case of aged people it is 20s. for each. That is a material point. Moreover, we have to remember that the widow is under retirement age, is not on a pension. We are imposing a retirement condition on the payment of pensions, and surely, retirement must be expressed in some way and in some amount of earnings which are permissible and beyond which the pension would be affected. Indeed, the right hon. Gentleman the Member for North Leeds (Mr. Peake) has moved an Amendment to add certain, words at the end of the Clause, and they are:and temporary employment shall not be deemed to be inconsistent with retirement.One or two hon. Members indicated what they mean by "Temporary employment."I am not disposed at this stage to add these words, if at all. Temporary employment can, in many circumstances, mean regular employment. What is the meaning of the word "temporary"? Since I have been a Minister I have learned that there are temporary civil servants who work full time, the only difference being that they are not established I remember some years ago that we received 14 days' notice to terminate our contract, after which we were regarded as temporary workers; but we worked full time.
The distinction which the Bill seeks to draw at the point of a man's retirement is not between temporary and permanent employment but between employment followed as the man's livelihood and employment which is supplementary. We include in Clause 20 these words in Subsection (2, a, ii):notwithstanding that he is engaged or intends to engage in a gainful occupation, if he is engaged or intends to engage therein only occasionally or to an inconsiderable extent or otherwise in circumstances not inconsistent with retirement.It will fall to the tribunal, and eventually to the Commissioner, to define those words. If we were to put in words like "temporary employment"They might come to be defined as " regular employment." Someone with a regular job might come along and claim that it was temporary employment and that he was entitled to pension, as he was doing it in his retirement. The Commissioner might 685 hold that that man was in temporary employment. There is that possibility.
§ Mr. C. Williams
Will the Minister give some sort of idea whether, in the case of short, seasonal work of periods of three or four weeks, it is the intention of the Government to allow a person to take temporary employment of that kind, provided that he does not use the opportunity to undercut other people?
§ Mr. Griffiths
That is part of the very serious problem involved in this matter. Hon. Members are suggesting that persons who are retired and are in receipt of pension ought to be permitted, without loss of pension, to take, for a definite period, what is actually full employment. Is it not clearly right that if a person feels, at 60 or 65, that he can and ought to go on working, at harvesting or other work for a month or six weeks, he ought to be paid the appropriate trade union rate? Then he would not be in retirement and should come off pension and on to wages till the job is finished. Then he should come back on to pension. I am sure that that is the right way to do it. I have tried to be fair and reasonable and I think we have been so in the Subsection to which I referred. I have given consideration to the Amendment, and I am afraid that I shall have to ask the House not to accept.
§ Mr. R. A. Butler
I have not spoken on this Amendment so far. It seemed to me the Minister was weakening, in that he said he could not consider this at this stage. May we take that as implying that when this Bill goes to another place the Government will not be deaf to the entreaties on this matter? The sort of case I have in mind is that of the retired agricultural worker who may be needed for part-time work in the harvest, or in some job of that sort. If he said that is covered by Subsection (2, a, ii) I should feel we were satisfied. I am not quite clear from his answer whether that sort of case— which is why we moved the Amendment —is met. We have a real justification for moving this Amendment, because in the Committee stage the Parliamentary Secretary said:If employment was inconsiderable, if the intention of retirement was there, if a person only went to do a job for a short time so as to give someone else a necessary hand, it would be grossly unfair if he were penalised.686 In a second statement—which is why we have put down an Amendment to omit Subsection (5)—the Parliamentary Secretary said something different:… so far as persons who go back to work for a normal week and a normal wage are concerned, they would in fact lose their pension for that reason. The Regulations provide for an average of earnings, so that whether there are fluctuating earnings of, say, ten shillings one week, thirty shillings the next, and fifteen shillings the next, they are averaged to arrive at 20s. If a person went back to regular work and earned 10 for three weeks, he would lose his pension for those three weeks."—[OFFICIAL REPORT, Standing Committee A; 12th March, 1946: c. 209, 213.)It seemed to us that those two statements were somewhat inconsistent, because the first one says that if a person only went to do a job for a week so as to give someone a necessary hand, it would be grossly unfair if he were penalised. What worried us was that, in the first statement, the Parliamentary Secretary seemed to have conceded our case, but in the second statement, he seemed to take a more rigorous view. We now have a statement from the Minister that Subsection (2, a, ii) of this Clause in fact meets the case. In view of his explanation I am not satisfied myself that it would meet the case of a retired man who wanted to do agricultural work. As we all know, agriculture is so much in need of labour at the moment; the situation is really desperate. For the next few years ahead it may well be the case that a man who has retired, or who does only a little hedging or ditching, might go back for a short period.
This is precisely the sort of practical point to which we must pay some attention during the Report stage. I have attempted to brief myself as fully as possible. Hitherto today we have not had any opportunity to give our attention to details. I must draw the attention of the House to the apparent inconsistencies in the statements of the Parliamentary Secretary during the Committee stage. I say " apparent," because in his second statement he did do his best, I think, to defend the position. If we are to accept the second position as true we are, therefore, disappointed over his first statement, and disappointed that this Clause, as drafted, will not meet our case. I do not think the Government have met the point put forward by my right hon. Friend the Member for North Leeds (Mr. Peake). If they are unable to meet that point tonight 687 the only way we on his side of the House could get any satisfaction would be if the Government would say they would use the resources of another place to alter the Bill in this respect, and that the Minister would think a little more about it. Without that I am afraid we should not be satisfied.
§ 11.15 p.m.
§ Captain Marsden (Chertsey)
I appreciate the great attention which the Minister has given to this point. Not being on the Committee, it is one of the points in which I have been very interested, particularly as I have been approached by so many men in my constituency who are approaching 65 or are over 65 years of age. The sum of 2os. is not very much. I fear the difficulties the Minister will have are practical difficulties. There are different types of retired men. The hon. Gentleman the Member for Torquay (Mr. C. Williams) referred to fishing. Down in Surrey there is a large number of men who are over 65 who do casual work. A large number do gardening. Every job they take will be temporary employment, but cumulatively those jobs amount to permanent employment. If they earn as much as 10s. in a day, in two days they earn £1, and are not free to earn any more without the fear of losing pension. Does the right hon. Gentleman propose that these men should lay off on the other days of the week, able and fit men anxious and willing to work? There are numerous golf clubs in Surrey. The Minister will probably know better than I, but I think there are about 40 golf clubs in Surrey. They are all short of caddies. The minimum rate for one round in Surrey for caddies—I emphasise that this is the minimum—is 7s. 6d. Therefore, at the weekend we have the caddie masters imploring these men to turn up, and most of the men will go away with £1 in their pockets at the end of the day. The caddie masters implore them to turn up on Sundays, too, saying that there is no harm in it; but they are afraid that if they do that they will lose their old age pensions. These are some of the practical difficulties that will arise if the right hon. Gentleman restricts the amount which may be earned without loss of pension to £1. I strongly advise him to alter the sum to 30s.. which would be reasonable.
§ Mr. Pritt (Hammersmith, North)
I would appeal to hon. and right hon. 688 Gentlemen who moved this Amendment to withdraw it, for this reason. I understand the object for which they are moving it, and the anxieties which they feel, but I think that if they leave the matter alone, it will achieve substantially their objective. Looking at it as a lawyer, I feel that the words in Subsection (2, a, ii) would quite clearly, on any reasonable ruling, exempt agricultural labourers who did a substantial amount of harvest work or any similar work, to an inconsiderable extent; whereas if the proposed words are put in we shall not only make the Clause much too wide in some respects for its general purpose, but may give it an odd reflex action, by making it work worse in other respects. It is a difficult piece of drafting. I think it has been done rather well. It will probably be conducive to reasonable instructions by the tribunals who have to deal with it. It will be neither too wide nor too narrow. Were it altered it might lead to wrong rulings. I think it is best left alone.
What the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) said about the two statements of the Parliamentary Secretary, which seemed to be a little inconsistent, brings me to this sort of difficulty that I have often mentioned in the House in the past. The Parliamentary Secretary or any Minister who is not a lawyer, generally has to tell the House or the Committee, as the case may be, what instructions civil servants have advised him to give. But the instructions that will prevail in the end are the instructions given by the tribunal that has to adjudicate. I have often defended civil servants in this House in the past, so, perhaps, I may be forgiven on this occasion for saying that the only point on which civil servants are wrong 75 per cent. of the time is that of their view of the meaning of words that they recommend. They are not necessarily wrong, but the courts may disagree with them, and the courts have the last word. I think that these are about the best words for the job which the right hon. Gentleman wants to do
§ Mr. Molson
Since the hon. and learned Member, with his great legal knowledge, has been explaining this, would he explain what effect Subsection (5) will have upon the earnings?
§ Mr. Pritt
Quite frankly, I would rather not. I have devoted myself to one topic, 689 to which I have given some attention. I cannot see that the Subsection to which the hon. Member for The High Peak (Mr. Molson) has referred has any effect on what I have been saying. If I am being asked for gratuitous legal advice, I will not give it.
§ Lieut.-Commander Joynson-Hicks
By a remarkable series of coincidences, it frequently happens in this House that I have the honour to follow the hon. and learned Member for North Hammersmith (Mr. Pritt). It is a happy occasion when a mere solicitor is so fortunate as to be handed such an excellent brief by such a learned hon. Member. He has very largely answered the question which caused me to refrain from rising to speak before the right hon. Gentleman dealt with the arguments which had been put forward by my hon. Friends on this side of the House. I was expecting the right hon. Gentleman to say that the first Amendment we are discussing was unnecessary, because the wording of Subsection (2, a, ii), in so far as it means anything, meant temporary employment. But the right hon. Gentleman did not avail himself of that argument. In fact, as I understood him, he went so far as to indicate that those, words specifically excluded temporary employment. Whether they do or not, as the hon. and learned Member for North Hammersmith has said, it will be for the tribunal to decide. If the tribunal has to decide the interpretation of the words already in the Clause, it is a comparatively small matter for the tribunal to overcome the difficulty to which the Minister referred, of defining what is temporary employment. It would be far easier for the tribunal to say what was temporary employment than to say whether a person is intending to engage in a gainful occupation or is engaged in a gainful occupation. For instance, a man may intend to engage in a gainful occupation permanently. On the other hand, he may be persuaded, against his original intention, to continue in temporary employment he has obtained. Where do we stand then? If it is temporary employment to begin with, he is debarred from gaining the benefit, but if his temporary employment continues week after week he apparently comes within the Clause. It would be of added benefit to the Minister, not only to clarify his Clause, but in order to carry out his intention, if he were to 690 accept the words contained in this Amendment.
Then again, there is the question of what is " an inconsiderable extent." Suppose a man has a permanent employment for one day a week; is that temporary? If so, he is debarred. But it cannot be temporary because it is permanent, though limited. Is it limited so as to be inconsiderable? That is a matter for the tribunal. Surely it is easier for the tribunal to say whether or not employment is temporary? While on that point I wish to refer to a type of case which has already been partially referred to. It appertains particularly in my own locality. There is the case of the jobbing gardener who has retired. He may have been an agriculturist, he may have been a regular gardener. He now has knowledge and experience, but not the physical ability to enable him to take up a permanent job. Therefore, he goes out for half a day every now and then. He is a tremendous asset to the neighbourhood; he is doing a really constructive and useful job of work, growing vegetables and so on, and yet, if he is paid more than 20s. a week—and he is worth that—he suffers for it. In that respect I would remind the right hon. Gentleman that this is by no means the first time we have been involved from this side of the House—it is not a party question —with other Governments. We have tried, on exactly the same point, to obtain amelioration for the old age pensioner who was similarly discriminated against and similarly affected adversely by the existing provisions. I remember the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson), when he was at the Exchequer, saying that nothing could be done about it, and I am sure he would bear me out if he were here. The reduction of the old age pension must continue if the man earned above the present limit of earnings because of the administrative difficulties.
Now, however, the right hon. Gentleman is setting up an entirely new organisation, and he can start from the beginning. He is undertaking some of the most complicated administrative machinery to carry out a most widespread net of immense complexity affecting half the population of the country, and this is a trivial incident for him to put right. I know he agrees that it is a fair thing 691 and one which appeals to his heart as well as to his conscience.
There is just one other point I want to make arising from what the Minister has said. He referred to the exploitation of old age pensioners and to cases he knew where they had suffered in the wages they had been paid because their old age pension had been taken into account. But may I put this point of view to him? If he enforces the provisions of this Bill too rigidly he will preclude these elderly people from gaining beneficial employment at all, because when a person retires at the age of 65, particularly in the agricultural industries with which I am most familiar, it is generally because he is partially incapacitated, very often from rheumatism or some disease of that sort. He is not worth economically to the farmer, his employer, a full rate of wage because he cannot do a full day's work, and, therefore, it is only upon the basis that he is paid a partial rate for a partial job that the farmer can employ him. Therefore, if the right hon. Gentleman is to enforce for that man a full rate for a partial job he is going to put him out of employment altogether. We do not want that; it is not good for the man or for the industry, and, therefore, I ask the Minister to reconsider these two points and to see whether, as my right hon. Friend has suggested, it cannot be arranged in another place to meet the points of the arguments which have been put forward
Sir J. Mellon
I had some difficulty in following the argument of the hon. and learned Member for North Hammersmith (Mr. Pritt) that the insertion of these words would narrow the effect of Subsection (2, a). The words "Temporary employment " have been criticised as being too indefinite, but it seems to me that they are quite as definite as the words " occasionally or to an inconsiderable extent " which appear in the Bill. The only reason I have heard the Minister give for objecting to a man receiving a pension while he is in full employment is the fear that the receipt of the pension may be used to depress wages. If that happened, of course, it is admittedly quite wrong. We all regard that as wrong, because a man is worthy of his hire and he should receive as much as he is worth. By the same token, surely, we should argue that the pension 692 should not be reduced because a man is earning more than a certain amount. If he has a contractual right to his pension, it is reasonable that he should get his full pension in addition to any wages he could earn. It is one of the few deplorable remaining features in this Bill that a man should be discouraged from earning as much as he can because his pension may be reduced in consequence.
§ Amendment negatived.
§ 11.30 p.m.
§ Major Legge-Bourke (Isle of Ely)
I beg to move in page 21, line 26, at the end, to insert:(6) Subject to the provisions of this Act—I move this Amendment because I think it is well that the House should know exactly what Clause 20 does. I used some fairly strong words to the right hon. Gentleman in Committee on this subject. I told him I considered that the old people who went on working after reaching pensionable age were being victimised. The right hon. Gentleman disagreed with me. So I made further investigations into this matter, and in my humble way attempted the task of an actuary, or at any rate attempted to work out some figures to find exactly what we were asking, if we passed Clause 20 as it stood, from these people who went on working after reaching the pensionable age. A great deal of this argument hangs on paragraph 18 on page 24 of the Government Actuary's Report. In that paragraph we find that the Government Actuary's figures have been worked out on the basis that at the pensionable age 693 40 per cent. of the population will retire, that 30 per cent. will retire during the next five years, and that the other 30 per cent. will go on until the maximum age, which is 70, in the case of men, and 65, in the case of women, and will then retire.
Provided that in the case of the employed person the employer's contribution shall be paid at the normal rate, and provided also that this subsection shall apply only within the period of five years beginning with the appointed day.
- (a)any employed person who has attained pensionable age may elect that he will not if he continues in regular employment receive any such increment to which he may otherwise become entitled under subsection (4) of this section and if he so elects he shall thereafter pay no contributions in any period during which he is engaged in regular employment after reaching pensionable age; and
- (b) Any self-employed person may elect under the circumstances contained in this subsection not to receive the increments to which he would otherwise be entitled under subsection (4) of this section and if he so elects his weekly contribution shall be at the rate of three shillings and tenpence per week:
It is important that we should try to consider how many people are going to be so affected when this Bill comes into operation, and by somewhat tedious calculations from Tables A and B in the Government Actuary's Report, it can be calculated that of the 869,000 men between the ages of 67 and 72 this year, 45,796 are likely to die this year. Of the 869,000, only 30 per cent. are expected to work until the age of 70, and that figure is 260,700 men. In other words, we have 260,700 men who, as the Government Actuary has assumed in making his calculations, will go on working until they reach the age of 70. I think it is important that we should realise how these people are going to contribute and should know how much the Government Actuary is relying on to be brought in by the people who die.
I realise that this argument can apply before pensionable age as well as afterwards; but there is one big difference, in my opinion, and that is, that anyone who goes on working after pensionable age is doing so in answer really to a national call. There is a great shortage of labour at this time, and we want a great many old people to go on working. I think the right hon. Gentleman does not intend that they should go on for ever, and he said in Committee that it was his intention, if possible, to allow people to retire earlier than 65 in the case of men, and 60 in the case of women. He actually said that when speaking on the matter of unmarried women. Hon. Members will notice that, in framing this Amendment, I have limited it to five years because I believe it is for this initial period when the Bill first comes into operation as an Act that this need is greatest. The figures which I have given to the House are difficult to comprehend at short notice, but I would like to say that, from all the calculations I can find, using the Government actuarial figures, in the case of the men who today are 65, by the time those who live are 70, the total amount which will have been contributed into the Fund, by their own contributions only, will be something in the neighbourhood of £69 million. The amount which the Government are 694 actuarially trying to rely upon in order to float this Fund, coming in as contributions which will never receive any benefit in return, works out at something like £4,600 a week. That seems to me to be a very staggering figure. My argument— and this is why I put the Amendment in the form in which it stands—is that I do not consider that it is fair that we should ask old people, who are answering a national call to go on working a little bit longer than they perhaps intended to do, to contribute to the scheme. If they have a sufficient number of contributions in the old scheme and they die, they have received absolutely nothing, nor can their dependants make a claim. There is absolutely nothing for them for any of the contributions which they pay, and these people have answered a national call. As I have shown, the figure which has been used in the Government Actuary's original calculation seems to be fantastic with regard to this type of person. I am prepared to admit that up to the pensionable age everyone in this scheme has to take the rough with the smooth. The argument can actually be applied to those who have not reached pensionable age, but after that I believe we should give people who answer this call some privilege for their response to the call. Therefore, what I have suggested is that the Minister should give these people who go on working after pensionable age the option either of accepting his terms under Subsection (4) of Clause 20, or, alternatively, of not demanding the increment they would receive under Subsection (4) if they live, and in reward for not claiming the increment, that these people should not be required to pay contributions after reaching pensionable age if they go on working.
I am not going to bore the House with any more figures, because it is extremely difficult at so late a stage for the right hon. Gentleman to take them in at one fell swoop. I would just say that concerning the contributions, I have done my best to work out some figures actuarially, and so far as I can see, what would be required to cover sickness to be expected between the pensionable age and retirement would be covered by the employer's contribution. For that reason, I suggest that in the case of the employed persons who go on working, their contribution should be dispensed with and no further contribution should be called for. 695 In the case of the self-employed, there we have to make up for the employer's contribution, and that is why I have put down 3s. 10d., and now that the right hon. Gentleman is bringing the self-employed up to benefits identical with those of the employed, we can get a comparison of the proportion of the self-employed contribution which reduces that of the employer in the case of the employed person. I do hope that if the Minister can completely " debunk " my argument he will do so. It he can produce an argument which will refute mine, I shall be delighted. But, as it stands, I am very concerned because these old people who go on working will get no benefit at all if they die before they reach the age of 70, or 65 in the case of women.
§ Major Digby
I think that nobody can have read the Report of the Government Actuary without having been struck by the way in which the old people in this country are going to increase. In fact, in 30 years' time, we shall have double the number, roughly, that we have today. For this reason, everything should be done to encourage the older people to go on working longer than they would otherwise do. If they do not, our labour force will be correspondingly smaller. Therefore, we must ensure that, when people elect to go working between 65 and 70, and do not exercise their right to retire, they should have every advantage in so doing. So far as I have been able to work out the figures, there is little or no incentive from the economic point of view for a man to work when he has passed 65 years of age. The total amount he will get will not be greater than that of the man of the same age who retires at 65 and lives to the same age. On the other hand, there are many people who die between 65 and 70, so that many men who go on working between those years will die without receiving their retirement pension at all. In fact, the rate at which the mortality rate goes up between 65 and 70 is very striking. In the case of a man of 62 the expectation of death during the following year, according to the Government Actuary's Report, Table A, is.0260. In the case of men of 67 we find that the expectation of death is as follows: for " all men ".0414 whereas for " married men "It is somewhat less—.0376. I think hon. Members may be surprised at these figures. In any event, 696 I feel that we should take all the steps we can to make sure that those who go on working from 65 to 70 should be given every possible inducement, and that is the purpose of this Clause.
It may be said there may not be many who will wish to avail themselves of the advantages offered by this Amendment, that there will not be many who will wish to forgo the increment they would get at 70, but there must be quite a lot of people who go on working after 65 who may be a little pessimistic about living until 70. There are certain to be many people who, by that time, have got tired of paying these high contribution rates; particularly is that likely to be so in the case of self-employed persons. Therefore, I submit to the House that there is a very real case for this Amendment, which will give an additional advantage, an additional choice, to those who answer the call, as my right hon. Friend has said, to go on working when they would otherwise wish to retire in order to try and do something for the country.
§ 11.45 p.m.
§ Mr. J. Griffiths
The hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) and the hon. and gallant Member for West Dorset (Major Digby) raised this matter on the Committee stage, and we had a very long discussion. I am sure they will appreciate that this is a matter better suited for full consideration in Committee than it is at this hour of the night and at this stage of the Bill
I appreciate the point they put forward, and I have done my best to try and understand it. We say in this Bill, when a man has reached the age of 65: " Make your choice. If you retire you get this pension; if you do not retire, but go on working, you do not get a pension but you earn an increment."It is quite true that, whilst he goes on working, he is adding an increment to the pension he gets when he retires; if he dies before he takes his pension he has lost the pension he would have got at 65. There it is, and what the hon. Member says is, " Give the person a pension at 65."That is, to go on working after 65 freezes his pension at the 26s. and adds no increment to it but exempts him from contributions.
§ Major Legge-Bourke
I think the right hon. Gentleman has got that wrong. We do not ask that he should receive 26s. 697 After he eventually retires he receives 26s., but not until he retires.
§ Mr. Griffiths
Very well, he does not receive that pension, he goes on working and he does not get the increment but is exempt from contribution. The hon. and gallant Gentleman raised that point a long time ago, and we argued whether we should or not. In any scheme of this kind I am afraid we cannot start giving options. I should like the hon. Gentleman to consider, in view of the fact that contributions now stand to be exempt from Income Tax, whether he would look at these figures all over again. If he looks at these figures now he will find the increment is a very much better advantage than when he raised it before. I cannot accept this, whatever may be the actuarial considerations, if it introduces a principle of option. The man has now the option to retire at 65, or to go on and get the increment. That is plain and straightforward, and I do not think there will be any complications.
§ Mr. R. A. Butler
I want to thank the Minister for giving so much attention to this point to which my hon. Friends have devoted much thought. If in a future incarnation they should desire to become Government actuaries, I feel sure that the right hon. Gentleman will know where to look for such officials. Those of us who have been taking a prominent part in the proceedings on this Bill have had a great deal of correspondence from persons in the country, asking us to give a right of option, that is to say, to contract out of the scheme in one way or another. I think the right hon. Gentleman is perfectly right, that attractive as contracting-out schemes are, it is very difficult to concede them in an all-in in- 698 surance scheme. But the right hon. Gentleman must not underestimate the importance that many persons in the country attach to that option. I simply want to say to them, as they will be following these Debates, and to the House, that we are not able, unfortunately, to encourage the contracting-out system in a Bill like this because, if you do encourage it, it is not fair to all the other contributors. This is a small refinement of the contracting-out system which my hon. Friends have themselves invented after working out the matter with considerable assiduity. I wish the Minister had seen his way to accept it but, as he cannot do so, I thank him for the care and attention with which he has followed all the actuarial calculations, so accurately worked out by my hon. Friends.
§ Amendment negatived.
§ Further consideration of the Bill adjourned.— [Mr. Whiteley.]
§ Bill, as amended (in the Standing Committee and on recommittal), to be further considered upon Monday next.