HC Deb 16 July 1962 vol 663 cc8-11
11. Mr. Hayman

asked the Minister of Pensions and National Insurance if he will now increase the amount that may be earned, without deduction from pension, by retirement and widow pensioners.

Mrs. Thatcher

No, Sir.

Mr. Hayman

May I ask the hon. Lady to inform her next chief that the cost of living has risen by 9.5 per cent. since the amounts were last altered and to request him to bring the allowance up to date and, as far as widows are concerned, to abolish them altogether? [Laughter.]

Mr. Thorpe

Not even the Prime Minister could do that.

Mrs. Thatcher

The present Government have increased the earnings limit by 30s. for retirement pensioners and 40s. for widowed mothers. There is a Question later on the Order Paper relating to the earnings scale and the cost of living.

12. Mr. Wainwright

asked the Minister of Pensions and National Insurance if he will estimate the cost to the National Insurance Fund of the abolition of the earnings rule as applied to retirement pensioners.

Mrs. Thatcher

About £100 million a year immediately.

Mr. Wainwright

Does the hon. Lady realise that this takes a tremendous amount of money from retired persons? Does the hon. Lady not think that consideration must be given to increasing the amount allowed under the earnings rule so that not so much is taken from these people and they can keep what they earn?

Mrs. Thatcher

I will consider later in conjunction with others what the hon. Member has said, but I could not possibly undertake to put forward on my own account any proposal for the complete abolition of the retirement rule. That would be a most unwise step to take. It would prevent many people from earning increments on their basic pensions and, at a time when we have an increasing number of old folk, would result in reducing the age of retirement and the age at which a person would draw a pension.

Mr. Nabarro

Is my hon. Friend aware that Professor Cairncross in a Minority Report to the Phillips Committee advocated exactly what the hon. Member for Dearne Valley (Mr. Wainwright) has asked, namely, the total abolition of the earnings rule on economic grounds? Is she aware that, as a reward for his perspicacity, Professor Cairncross now holds the position of principal economic adviser to the Treasury? Would my hon. Friend undertake to consult Professor Cairncross again about this important matter of the abolition of the earnings rule?

Mrs. Thatcher

I think that my hon. Friend is mistaken about the Department which this afternoon is answering Questions. My main worry is that the hon. Mamber for Dearne Valley (Mr. Wainwright), who asked the initial Question might become the economic adviser to the Treasury.

16. Mr. Ross

asked the Minister of Pensions and National Insurance what change would require to be made in the earnings rule scale to make up for the depreciation in the value of the £ sterling since March 1960.

Mrs. Thatcher

I assume that what the hon. Member has in mind is the figure for the real value of earnings which can be obtained without any reduction in pension resulting. On this assumption the figures are 6s. 8d. in respect of retirement and widow's pension, and 9s. 6d. for widowed mother's allowance.

Mr. Ross

When will the Government do something about it?

Mrs. Thatcher

If the Government were to take the hon. Member's yardstick, which is the Index of Retail Prices, the earnings limit at the moment for retirement pensioners would be only 57s. against 70s., and for widowed mothers 86s. against 100s.

Mr. Ross

That is quite unreal. The Government made a promise in March, 1960, when they raised the limit, but by erosion as a result of the cost of living these people are now 6s. 8d. and 9s. 6d. worse off. When will the Government make up these amounts and keep their promise?

Mrs. Thatcher

By the hon. Member's own yardstick they are very much better off than they would have been under a Labour Government.