Earnings Rule (Hansard, 2 May 1966)

§ 1. Mr. Frank Allaun
asked the Minister of Pensions and National Insurance, what would be the cost to her Department of raising the maximum income before the earnings rule for retirement pensioners comes into force to £10 a week; and if, in order to end the present discouragement to pensioners continuing at work where they would otherwise wish to do so, she will consider raising the present limit.

§ The Minister of Pensions and National Insurance (Miss Margaret Herbison)
I am afraid that it is not possible to make a realistic estimate of the cost of raising the earnings limit to £10 a week. As to the second part of his Question, my hon. Friend will be aware that I have referred this matter to the National Insurance Advisory Committee.

§ Mr. Allaun
Has any estimate been made of what the country would gain from the production which at present is being lost in this way? Does not my right hon. Friend think that this offset would be far bigger than the cost of the proposal?

§ Miss Herbison
One just does not know how things would turn out at the present time. We have 240,000 men between the ages of 65 and 70 who are in full-time work and not drawing pension, and one does not know what their decision would be if the earnings limit were raised extensively. But there is the greatest desire under the National Plan and, I think, by the whole of the Government, that we should get as many people working as possible. I think that we have to wait until we get the Report from the National Insurance Advisory Committee.

§ 11. Mr. Dean
asked the Minister of Pensions and National Insurance when she will receive the Report of the National Insurance Advisory Committee about the earnings rule.

§ Miss Herbison
The Committee has announced that it is open to receive representations on this subject until 16th May. I cannot forecast the length of time the Committee will need to complete its inquiries and prepare its Report.

§ Mr. Dean
Can the Minister give an assurance that the Advisory Committee realises the urgency of this? Does she recollect that it is over two years since the earnings limit was changed and that since that time earnings have risen by over £2 10s.? Surely it is, therefore, urgent that there should be further help for those who want to earn part-time?

§ Miss Herbison
I am quite certain that the Committee is fully seized of the urgency of this matter and that it will be examining it urgently because of that. I draw the hon. Gentleman's attention to the Committee's remit. We want the Committee to examine various aspects, not just the level at which the earnings rule will begin to operate. We want the Committee to examine, for example, what deductions thereafter should be made and whether any changes should be made in that respect. Then there is the question of the way in which earnings are calculated. We have had many questions about that. Then there is the problem of workers who work for part of the year and do not work for the other part of the year. The Committee has a great deal to study, but I am sure that it will do it urgently.

§ Mr. Speaker
Order. The Minister's answers are getting a bit long.

§ Mr. Manuel
In connection with the earnings rule and in particular in its application to old age pensioners, will my right hon. Friend indicate whether her Department has had any discussions with the Treasury as to the advisability of raising the earnings rule to start at seven-twentieths instead of at nine-twentieths. I have received a delegation in my constituency on this matter. I think that such a change would be of immediate benefit whilst we wait for the outcome of the major review.

§ Miss Herbison
This is a matter for the Treasury and not a matter for this Ministry.