Earnings (Hansard, 21 November 1955)

§ 2. Mr. Holt
asked the Minister of Pensions and National Insurance if he will introduce legislation to amend Section 4, subsection 6, of the National Insurance Act, 1951, to enable a pensioner to earn a total of £104 in a year without suffering any reduction in pension benefit.

§ 18. Lord Balniel
asked the Minister of Pensions and National Insurance whether, in their review of the earnings rule and the present earnings limit as it applies to widows, he will request the National Insurance Advisory Committee also to consider the rule and the earnings limit as it applies to retirement pensioners.

§ 65. Mr. Gower
asked the Minister of Pensions and National Insurance if he will now arrange consultations with the nationalised industries, the Trades Union Congress, the Federation of British Industries, and other appropriate bodies, in regard to the earnings permitted for old-age pensioners without diminution of their pensions.

§ Mr. Peake
I have now referred to the National Insurance Advisory Committee 1020 the question whether adjustments in the present earnings limits for retirement pensions as well as widow's and adult dependants' benefits—including connected Questions such as the method and period of calculation of earnings—are called for. The procedure of the Committee is designed to ensure, and does ensure, adequate opportunity for the various viewpoints, including those of the trade unions and the employers, to be fully represented and to be considered by the Committee. I am glad to think that the Question by my hon. Friend the Member for Barry (Mr. Gower) recognises the importance and, indeed, the necessity for this before conclusions can be responsibly reached.

§ Mr. Holt
While welcoming this sound move on the part of the Minister, may I ask him if he is aware that there are many pensionable people doing useful work teaching at evening classes, often earnings fees of a little over £2 a week but which do not total £104 a year, who are having their pensions cut, and that this is no encouragement?

§ Mr. Peake
That and, of course, all other points will be considered by the National Insurance Advisory Committee. I would remind the House that on this question of the earnings rule and its present limits the Trades Union Congress was definite—

§ Mr. Ellis Smith
How long ago?

§ Mr. Peake
Less than a year ago. The Report of the Phillips Committee in December last year and the British Employers' Federation took the same view. Therefore, I think it would be wise to take the opinion of the National Insurance Advisory Committee on this matter before proceeding any further.

§ Mr. Chetwynd
Are the views of this Committee binding upon the Minister, and can he say how long he expects it to take, because the delay is getting beyond a joke?

§ Mr. Peake
As hon. Members know, the Advisory Committee is at present preparing its report upon the important reference regarding widows' benefits. As soon as it has concluded that matter, it proposes to give priority to the question of the earnings rule. That is a much less complicated question than the issue of 1021 widows' benefits, and the Committee should be able to report upon it far more speedily.

§ Mr. Gower
Can my right hon. Friend say, in the words of my hon. Friend the Member for Kidderminster (Mr. Nabarro), that these objections to the introduction of an increase are quite unrealistic, and cannot something be done pending the findings of this Committee to afford a modest increase in the permitted earnings of these pensioners?

§ Mr. Peake
I do not think that would be practicable, because the Trades Union Congress was quite definite, not only that there should be an earnings rule, but that the present limit of 40s. ought to stand.

§ Mr. Bowles
How often does the Advisory Committee meet, or is it one of those committees which is so overworked that it can deal with only one subject every six months?

§ Mr. Peake
The Advisory Committee is taking a very important part in the non-statutory review of the National Insurance Scheme. Its great value is that it consists not of experts but of ordinary citizens who have other jobs to do. It has given me a number of extremely valuable reports already, particularly the one dealing with maternity benefits. I am sure that we gain immensely by referring these questions to a body of that sort.

§ 9 and 10. Mr. E. Johnson
asked the Minister of Pensions and National Insurance (1) how many people in the Manchester area have postponed retirement on reaching pensionable age between the date on which the National Insurance Act, 1946, came into force and the latest convenient date;
(2) how many people in the Manchester area were receiving retirement pensions on the last convenient date; and how many of these had reductions made from their pension on account of earning more than £2 per week.

§ 13. Miss Burton
asked the Minister of Pensions and National Insurance how many people in the Coventry area were receiving retirement pensions on the last convenient date; and how many of these had reductions made from their pension on account of earning more than £2 per week.

§ Mr. Peake
Information regarding particular localities is not available, but the broad national picture is that there are some 5½ million insured persons over pension age. About 400,000 of them are now receiving increased pensions by reason of deferred retirement after 1948. A further 600,000 are currently earning the right to future increased pensions. Some 500,000 have not yet completed the minimum ten years in insurance to qualify for pension. Of the 4½ million pensioners, about 3½ million are receiving pensions which are not subject to any earnings rule. Of the remaining million under age 70 (65 for women) some 50,000, though they have retired, are doing sufficient work for their pension to be reduced on account of earnings.

§ Mr. Johnson
Does not my right hon. Friend think there is something to be said for abolishing both the earnings rule and the provisions about increments? Does he not agree that if people who have retired but would like to continue doing some part-time work were able to keep a little more of what they earned, it would make a very valuable contribution to the problem of filling the 7,793 vacancies now notified to the Ministry of Labour in Manchester?

§ Mr. Peake
No, Sir. I hope my hon. Friend will not ally himself with reactionary Liberalism in advocating the abolition of the retirement principle which progressive Tories and Socialists accepted ten or twelve years ago.

§ Miss Burton
Would the right hon. Gentleman agree that the 50,000 pensioners who are suffering some reduction from their pensions because of the earnings rule are in a position worse than that of a Cabinet Minister who, if he were to retire—I believe I am right in saying—could have a pension—[HON. MEMBERS: "No."] I was about to specify before the Minister shook his head the case of the Prime Minister, or a Chancellor, who are able to do that—[HON. MEMBERS: "No."] They would be able to earn—[HON. MEMBERS: "No."] I meant the Lord Chancellor. If those two gentlemen were to retire, they would be able to receive pensions and do another job, without suffering any deficit in the pensions, so why should the 50,000 old-age pensioners unduly suffer?

§ Mr. Peake
By general consent, we adopted the retirement principle in pensions about ten or twelve years ago. Of those 50,000 who are having their pensions reduced or extinguished by virtue of the earnings rule, about two-thirds are having the pension altogether extinguished, because they undertake a full week's work for a full week's pay. As for the remainder, I have now announced that I have referred this question to the National Insurance Advisory Committee, and any hon. Member who has views upon it will be able to give evidence before the Committee, if he so pleases.