HC Deb 11 January 1977 vol 923 c1231
1. Mr. Townsend

asked the Secretary of State for Social Services, what assessment he has made of the extent to which the earnings rule acts as a disincentive to work.

The Minister for Social Security (Mr. Stanley Orme)

A survey is currently being carried out into the reasons for retirement, and its findings, which are expected this year, will provide information on the effect of the earnings rule. However, it does not seem likely in view of the present level of earnings which a retirement pensioner can have before his pension is affected, and of the present unemployment situation, that the rule has much disincentive effect.

Mr. Townsend

Is the Minister aware of the large number of verbal and written complaints that I have received from my constituents about this miserable form of taxation? What plans has he, first, to reduce and, finally, to eliminate this taxation, which discriminates against elderly people and discourages them from making a sensible contribution towards the community?

Mr. Orme

The hon. Gentleman will be aware that since the raising of the earnings rule a great number of people have now been taken out of its effect. In consequence, in July 1976, under the present earnings rule limit of £35 a week, 3,600 people had their pensions extinguished and 2,000 had them reduced. That is a considerable reduction.