HC Deb 04 December 1973 vol 865 cc1061-3
1. Mr. Strang

asked the Secretary of State for Social Services if, before the next review of the level of the earnings rule for retirement pensioners, he will institute an inquiry into the working of the rule.

The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)

My right hon. Friend has no proposals to institute such an inquiry.

Mr. Strang

Is the hon. Gentleman aware that, under the regulations, a single woman who has paid full contributions for over 40 years, who wishes to carry on working part-time and earns £10 a week, does not have her pension docked but has it reduced altogether? Since this is a serious injustice, will he consider reviewing the regulation? Many Members on both sides of the House feel that there is good ground for ironing out the anomalies and for a general relaxation of the earnings limit.

Mr. Dean

I understand the hon. Gentleman's point. He will recollect that the earnings rule was improved not very long ago, by no less an amount than £2 per week, but with scarce resources we have the dilemma of how much should be provided to improve the earnings rule and how much should be made available to the old, to the very sick and to widows who are unable to get a job.

Mr. Fortescue

Has my hon. Friend any estimate of how many pensioners work for cash either in ignorance or in defiance of the rule? Does he accept that the practice is increasing rather than diminishing? Will he now give serious consideration to abolishing the earnings rule altogether?

Mr. Dean

I know how strongly my hon. Friend feels about this matter, but to abolish the rule would add about £130 million to the cost of pensions. We must ask ourselves whether, if we had that amount of money, we would use it in this way or whether we would allocate it to the very old, the chronically sick and those who are unable to work to supplement their pension.

Mr. John Silkin

Does the figure of £130 million—I believe that it should be £135 million—include the amount of tax that the Government would get back by virtue of old people working?

Mr. Dean

That figure is the actual cost. I accept that there would be some additional tax and that the net figure would be slightly smaller. But we have to answer this dilemma : if that amount of money were available, how much would be allocated to those who fortunately are able to work to supplement their pension, and how much would be allocated to those whose need is greater because they are not able to supplement their pension?

18. Mrs. Kellett-Bowman

asked the Secretary of State for Social Services whether he will consider incorporating a review of the earnings rule within the annual review of pensions.

Mr. Dean

The earnings rule is considered each year when social security benefits are reviewed.

Mrs. Kellett-Bowman

While thanking my hon. Friend for that reply, may I get something a little more positive out of him? I accept what he said earlier about the need for priorities, but as we are now approaching an era of full employment—subject, of course, to industrial peace—will he accept that on both social and economic grounds it is extremely important to persuade people to work beyond retirement age, and that eventually any change would be self-financing by tax?

Mr. Dean

I assure my hon. Friend that we will certainly bear in mind her powerful advocacy for this cause when we are considering the very large number of very good claims on resources.

Mr. Bidwell

Will the hon. Gentleman accept that support for increasing the basic national State retirement pension is not merely confined to these benches and is to be found throughout a considerable area of the country? Does he agree that there will have to be a much more substantial increase at the next annual review, having regard to the tremendous rise in food costs since the earlier awards were made?

Mr. Dean

I hope that that will be possible. One of the interesting comparisons between the present Government and the last one is that we have managed to do a better uprating each year since we have been in office, whereas the Labour Party started with a fairly good increase but its record badly tailed off.