HC Deb 19 March 1979 vol 964 cc1243-63

Lords amendment: No. 2, after clause 3, in page 3, line 26, at end insert— A.—(1) In section 30 of the principal Act (supplementary provisions about retirement pensions) the following subsection is inserted at the end—

(2) In section 167 of the principal Act (Parliamentary control of orders and regulations)—
  1. (a) in subsection (1) the following paragraph is inserted after paragraph (b)—
    • ' (c) no order shall be made under section 30(6),'; and
  2. (b) in subsection (3) after the words ' section 17(3)' there is inserted ' 30(6),'.
(3) In Part II of Schedule 15 to the principal Act (regulations not requiring prior submission to National Advisory Committee) the following paragraph is inserted after paragraph 17— ' 17A. Regulations contained in a statutory instrument which states that it contains only provisions in consequence of an order under section 30(6) of this Act.'. (4) Section 30 of the principal Act shall cease to have effect on 5th April 1984 and all references to that section in that Act or in any other enactment shall then likewise cease to have effect.

Read a second time.

The Minister for Social Security (Mr. Stanley Orme)

I beg to move, as an amendment to the Lords amendment, leave out subsection (4).

The new clause A, in terms of subsections (1), (2) and (3), was a Government amendment introduced in another place. It flowed from an undertaking given by my hon. Friend on Report in this House.

The new clause enables the Secretary of State to make orders subject to the affirmative resolution of both Houses reducing the period of five years over pension age during which a person has to retire if he is to qualify for a retirement pension and during which the earning rule applies to pensioners. That would allow us to phase out the earnings rule as a step towards abolishing it completely.

In introducing the new clause the Government took the power to make changes. The question of using that power would need to be considered in the light of the economic situation at the time, in relation to many other claims on public expenditure and the Government's priorities.

Subsection (4) of the new clause was introduced by the Opposition in another place. It provides that section 30 of the principal Act shall cease to have effect on 5 April 1984. The effect of the subsection is to abolish the rule by 1984. I emphasise that the Government are committed to abolishing the earnings rule when resources allow. That is the nub of the matter. My right hon. Friend laid before Parliament last October the report on the earnings rule. That estimated that the cost of abolition, in present terms, would be between £64 million and £124 million. It would depend on how many people could be expected to claim their pensions immediately after the earnings rule was abolished. The right hon. Member for Wanstead and Woodford (Mr. Jenkin) is indicating that he knows that. If he waits a moment, I shall quote something that he said in a previous debate.

Many hon. Members will recall that on Report the right hon. Member for Wan-stead and Woodford did not accept those estimates. But even he was prepared to accept that some significant expenditure was involved. He said: If it were to cost £25 million, or £30 million, to abolish the earnings rule, I do not believe that it would be justified in the present state of the nation's finances. We have always approached such matters with responsibility. I cannot prove that it will not cost that amount…When we can afford it we should phase that rule out."—[Official Report, 23 January 1979; Vol. 961, c.c. 326–327.] The right hon. Gentleman has a duty to explain to the House how he came to advise his noble Friends in another place to vote in the manner in which they did on that issue.

Mr. J. W. Rooker (Birmingham, Perry Barr)

Will my right hon. Friend ask the right hon. Member for Wanstead and Woodford (Mr. Jenkin) how he is prepared to bind the Parliament after the next—that is the effect of subsection (4)—to increase public expenditure and to use another place to do so? Does another place have the right, in the first place, to pass the amendment, which is a charge on public funds?

Mr. Orme

The other place has used a very dubious method to interfere in taxation—which is a matter for this House and not for another place. There was a constitutional crisis over the right of the other place. I thought that it had been settled. The Finance Bill does not go there but, by a dubious means of inserting the date 1984, that rule has, somehow or other, been overcome. My hon. Friend is absolutely right to raise that question. The right hon. Gentleman's noble Friends have not shown the same sense of responsibility, but they have convinced themselves that it would cost little, if anything, to abolish the rule and have decided on the date of April 1984. I shall leave it to the right hon. Member for Wanstead and Woodford to tell the House whether he decides upon the social priorities of the Opposition or whether he has delegated that task to his noble Friends in another place.

Either way, the Government's position is clear. We regard it as totally irresponsible and unacceptable for the Opposition in another place to commit the Government—whichever Government may be in power in 1984—to find tens of millions of pounds—I estimate that it may be well over £100 million—without regard to the resources that might be available or the other priorities that the Government might have.

At least this Government have got their priorities right. We have increased pensions by about 20 per cent. in real terms, after allowing for price rises. We have linked pensions to the movement of earnings or prices, whichever is the greater; we have introduced an ambitious new pensions scheme; and we have introduced child benefits and a range of new benefits for the disabled. That is the record of the Government.

Further improvements could be made in these and other areas if resources were available. If we had the money, I should want to give priority to allowing the long-term unemployed to qualify for supplementary benefit at the long-term rate. We could do more within the social security system for families with children, for the disabled and for pensioners who do not have the opportunity to work. Sums of £64 million or £124 million would be better spent on them than on abolishing the earnings rule now.

Little of the money gained from abolishing the earnings rule would go to existing pensioners; we estimate that it would be only about £2 million. The rest would largely go in pensions to people who have not retired and would be paid on top of their full-time earnings. Expenditure in this area does not have the priority to which we must address ourselves.

In any event, the decision on expenditure of this level and questions of social priority must be for this House and not for another place. I think that it was Lloyd George who said: A fully equipped Duke costs more than a Dreadnought. Things do not seem to have changed in the other place.

Mr. Patrick Jenkin (Wanstead and Woodford)

The Minister waxed indignant about what happened in another place, but he seems to have forgotten the origin of the matter. On Report in this House, we moved an amendment to make clear that the Government were entitled to phase out the earnings rule by order. We made clear that it was our intention that that should be done within the course of a full Parliament.

The Government undertook that if we withdrew our amendment they would introduce their own amendment in another place. We therefore withdrew our amendment, but the Government moved an amendment in another place but it provided no time limit for the phasing-out process. With the full approval of my right hon. and hon. Friends, my noble Friend Lord Cullen of Ashbourne moved an amendment to put in a time limit.

Mr. Orme

May I clarify one important point? My hon. Friend the Under-Secretary gave an undertaking to move an amendment without a time limit and the right hon. Gentleman said that if my hon. Friend did that we would feel that we had amply achieved our purpose this evening and that when the Bill comes back from another place it will contain an acceptable clause which we shall greatly welcome ".—[Official Report, 23 January 1979; Vol. 961, c. 337.] No mention was made of a time limit in our proposal.

Mr. Jenkin

The Minister would not have needed the foresight of a Hebrew prophet to recognise that if the clause came back merely providing the phasing-out power without a time limit, we would not regard it as acceptable.

Mr. Rooker

The Opposition changed their minds.

Mr. Jenkin

There is no question of changing one's mind. I am precluded by the rules of the House from quoting the speech of Lord Houghton, but he complained bitterly that some hon. Members seemed to regard the legislative process as finished when a Bill left this House.

Mr. Rooker

That is the case with Finance Bills.

Mr. Jenkin

I shall come to finance in a moment. But this is not a money Bill. This is not a money clause. There is no rule of either House that precludes the other place from doing what it did. It is all very well, but the hon. Member for Birmingham, Perry Barr (Mr. Rooker) cannot invent the rules as he goes along.

10.30 p.m.

Subject to what I shall say in a moment about the Minister's speech, I think that the issue is very simple. All parties profess to be agreed that the earnings rule for retirement pensioners, whatever may have been its justification 30 years ago, is now out of tune with today's attitudes towards the elderly. All parties are agreed that this disincentive to pensioners to work on if they wish must go. All parties are committed to getting rid of the rule as soon as resources allow.

This position has not been achieved without a great deal of pushing and shoving by this House. It is Parliament that, step by step, has forced this Government to retreat, first by raising the earnings limit from £20 a week to £35 and then £40, and now to its present level of £45.

Mr. Rooker


Mr. Jenkin

Indeed. We forced that through as well. We have also forced the Government now to make provision for phasing out the rule altogether by stages.

The first three subsections of Lords amendment No. 2 were introduced by the Government in another place to honour the commitment that they gave here on 23 January. The sole issue left is whether after so many years of pushing and shoving, after getting the Government to join us—originally they did not share the view that the earnings rule must go—we should place a time limit on the phasing-out process for whch they have legislated.

Subsection (4) was the amendment moved by my noble Friend Lord Cullen in another place. It obliges the Government of the day to get rid of the rule by 5 April 1984. The right hon. Gentleman said that that would involve heavy cost and that the Government could not afford it. That was also said in another place.

However, Lord Wells-Pestell, speaking for the Government, gave a second reason. He said: If one does away with the earnings rule, one has to do away with the retirement condition. This means a significant structural alteration of the Acts with major consequential amendments, because we should be changing the basic nature of the pension. Yet he said a little later: We do not want to preserve the earnings rule for the sake of preserving it; there is no difference on any side in your Lordships' House about getting rid of the earnings rule."—[Official Report, House of Lords, 6 March 1979; Vol. 399, c. 21.] If indeed it is the Government's commitment to get rid of the earnings rule, why on earth is the noble Lord holding out as an objection to doing it the fact that it will involve ending the retirement rule as well? If the Labour Party's commitment means anything, if the phasing-out amendment before us means anything, of course it means that when the earnings rule goes the retirement condition will have to go with it.

Therefore, what the noble Lord said, and much of the burden of the right hon. Gentleman's speech a few minutes ago, leaves one in grave doubt as to whether the Labour Party really is committed to ending the earnings rule. If it is, why make such a fuss about ending the retirement condition? That is all the more reason why this House should now impose upon the Government a firm time limit for ending the rule, which is what subsection (4) does. We do not believe that five years is an unreasonable period.

Mrs. Barbara Castle (Blackburn)

As the right hon. Gentleman has challenged the Government's motives in this matter, and as I had some responsibility a short while ago, may I put this to him? If he is denying that the Government are concerned about priorities in expenditure, can he tell us what would be a Conservative Government's priorities, and what expenditure they would cut to make room for the cost of ending the earnings rule?

Mr. Jenkin

That demonstrates the unwisdom of giving way. I was just about to come to the right hon. Lady's question. The question of cost has remained at the centre of this argument from the moment that the House first began to push an unwilling Labour Government into lifting the limit and moving towards ending the rule. That has been at the core of the argument.

The Government have argued—the right hon. Gentleman gave us the figures—that the cost would be between £64 million and £124 million a year. Frankly, we place very little faith in that estimate. We are justified in placing very little faith in it, because, every time the Government have produced figures, within months they have been forced to admit that the figures they put forward were wrong. That has happened not once, but twice. Each time the Government have brought before the House a carefully reasoned document attempting to put a cost on the phasing out of the earnings rule, they have first had to admit that the figures in a previous document were wrong.

The Under-Secretary of State will recall that not two years ago he stood at the Dispatch Box and described the right hon. Lady's earlier calculations as hilarious. Indeed, in the light of what we now know about the cost of ending the earnings rule, they were hilarious. They were absolute nonsense.

Mrs. Castle

What are yours?

Mr. Jenkin

I shall come to ours. If the right hon. Lady will contain herself for a little, she will be able to join us in having a five-year phasing out of the earnings rule.

The fact is that the Government have debated this matter on a number of occasions. They have always relied on the Government Actuary's estimates, and that very distinguished gentleman has been presented to us as justification for the infallibility of the figures. But the Government Actuary's calculations are only as good as the assumptions on which they are based. I am grateful to have the assent of all three Ministers on the Treasury Bench.

The assumptions on which they are based are nothing to do with the Government Actuary; they are the Government's assumptions. They may be estimates or assumptions that they have given to the Actuary for the purpose of the calculations. However, what is incontrovertible is that each time we have been given concrete evidence of the behaviour of people when the earnings limit has been raised it has been shown that the assumptions on which the previous calculations were made were wrong. That is why we have no faith whatsoever that the Government have got it right the third time.

For example, the assumption on which the Government have hitherto based their calculations was that if people could have both the pension and their earnings, 100 per cent. of pensioners would take the pension as well as earnings. We now know that that is absolutely wrong. On the basis of an OPCS survey, we know that 40 per cent. of pensioners would prefer to defer taking the pension in order to build up a higher entitlement when they eventually retire. That had a dramatic effect on the figures. Indeed, that showed that the Government's earlier figures were entirely wrong.

But it does not stop there. The Government are still clinging to a number of what must be utter fallacies. For instance, they argue that the earnings limit imposes no actual limit on what people earn. They argue, in effect, that a 100 per cent. marginal rate of taxation offers no disincentive. But if the earnings rule disappears and there is no earnings limit, is it seriously suggested that not one pensioner will earn £1 more? That is not in the figures at all. I am not surprised that the Under-Secretary of State, looking somewhat startled, should ask his right hon. Friend"Is that what we have done? "

Mr. Deakins

I was saying to my right hon. Friend that the right hon. Member for Wanstead and Woodford (Mr. Jenkin) was forgetting that there are 1½ million people unemployed and that it would be most unlikely that a pensioner already working and earning £45 a week would, just like that, be able to improve his earnings to £60, £70 or £80 a week.

Mr. Jenkin

The Government are saying that not one pensioner would do that. In their latest calculations in the White Paper there is not a single saving—not £1—for the idea that pensioners will earn more when the limit is removed. That is the first fallacy.

The second fallacy is that by ending the disincentive—as it certainly is—many people will cut their earnings. That is what they say. Do the Government really believe that with the present pressure on people's household budgets, and with the effect of inflation, the minute the earnings limit is removed a lot of people will actually cut their earnings because they are also receiving their pension? Thirdly, the Government are arguing that nobody who has already retired will return to work—nobody at all—once the earnings rule has gone. Fourthly, the Government are arguing that nobody who has decided to retire, and is coming up for retirement, would change his mind and work on.

Now there are four fundamental fallacies of which the Government have taken no account. No doubt they were included in the assumptions on which the Government asked the Actuary to base his calculations. With respect, we regard those assumptions as utterly unreal and entirely contrary to common sense. Indeed, it is possible to argue convincingly that if consideration is taken of all four of those probabilities—and they are probabilities—the cost of abolishing the earnings rule could actually be reduced to nothing.

What is clear beyond peradventure is that by making these assumptions, bizarre as they are, once again the Government are seriously exaggerating the cost of abolishing the rule. It is not £124 million. It is not even £64 million. I doubt if it is £44 million. It is much more likely to be somewhere in the range of nothing to £40 million.

Given the universal view that times have changed and that it is wrong to discourage elderly people from continuing to work; given the long, hard struggle that the House has had to force the Government to raise the limit to the present figure; given that the Government have now agreed on a phasing-out process over time; and given the lingering doubts that we must have whether the Government really are committed to getting rid of the rule at all, I believe that it is the duty of the House now to lay down a firm time limit. Only one reason might reasonably be proffered for not doing that and that is that by this time next year it will not be the Labour Government who are in office but a Conservative Government.

The Tory Party is committed to getting rid of the earnings rule over the period of a Parliament. Therefore, it might be asked, why do we need to legislate now for a time limit? The answer that I give would be that if we legislate now it would require another Bill to halt the process of phasing out. I believe that it is the wish of hon. Members in all parts of the House that the earnings rule should end. Rejecting the Government's amendment is the right way to do it.

Mrs. Castle

Before the right hon. Gentleman sits down, will he now answer the question that he said he would answer—

Mr. Deputy Speaker (Mr. Oscar Mur-ton)

Order. I understand that the right hon. Gentleman has resumed his seat.

Mr. Rooker

The right hon. Member for Wanstead and Woodford (Mr. Jenkin) has not answered the questions that were put to him. I want to change the legislative process, of course, but I do not want to change the rules in the middle of the game, which is what appears to have happened. The Lords have indeed put a charge on public expenditure by passing this amendment. Whatever the argument about cost, what the right hon. Member for Wanstead and Woodford says is bizarre and is beyond the realms of possibility. Whether the cost is £40 million, £60 million or £120 million, it will be a charge on public expenditure five years hence.

Who in their wisdom now can actually say what the state of the nation and the priorities will be in five years' time. This point was considered in the House of Lords. It would not be so bad if on 6 March all the Tory Lords had voted for the Tory amendment. But the one person in the other place who is supposed to know what is going on, a former Minister of Pensions, Lord Boyd-Carpenter, voted against the Tory amendment. On his experience, and bearing in mind the problems that with a five-year period one could not see what would happen, the noble Lord did not think that it was wise to pass such an amendment. Therefore, notwithstanding the view that those un-elected people in the other place can place a charge on public expenditure by leaping over a Parliament, which is what has been done here, even one of their own former senior Ministers does not agree with them.

10.45 p.m.

There is another matter with which the right hon. Gentleman did not deal. He tried cleverly to smear the Government on their record on pensions. He tried to give the impression that the Tories will abolish the earnings rule to the benefit of all pensioners, but with a phasing out of the rule over five years not one existing pensioner would gain. The earnings rule ceases to apply to a pensioner after five years, anyway.

If the right hon. Gentleman had said tonight that the Tory Party was prepared to accept the spirit and content of section 125 of the Social Security Act 1975, by which pensions are raised in line with increases in prices or earnings, whichever is the higher, it would have shown a change of attitude to pensioners by the Tory Party. Instead, they seek to charge us on this narrow issue and to use the unelected Chamber to do so.

The right hon. Member must produce more substantial arguments than he has so far used in order to win the support of myself or my hon. Friends. Given the Government's pensions record, we shall not be charged with being anti-pensioner if tonight we go into the Government Lobby. We know the despicable and hypocritical attitude of the Opposition on this issue.

The Opposition have used the unelected Chamber to overcome the Parliament Act. They have chosen a phasing-out period of five years, which would affect not the next Parliament but the one after that. It is most unusual for a Parliament to last the full five-year term. The average since the last war has been about three years and 10 or 11 months, which means that the phasing out would expire in the Parliament after next.

Why did the Tories go for a five-year period? Did they just pull the figure out of a hat? Why did they not choose three years, or seven years? What is more convenient about five? Did they, as I suspect, choose five years to get round the Parliament Act? Will the right hon. Member for Wanstead and Woodford clarify a future Tory Government's priorities on public expenditure? Where would they get the £40 million? They cannot say that they will regenerate the economy so that everyone will be paying more tax. One of the planks of their policy is that everyone will be paying less tax.

Mr. Robert Kilroy-Silk (Ormskirk)

Perhaps I can help my hon. Friend by suggesting where the Tories might get that £40 million. My hon. Friend will recollect that when we debated the £10 Christmas bonus the Opposition Front Bench spokesman suggested that we should means-test the bonus. There cannot be a more mean and hypocritical attitude from the Opposition than was depicted on that occasion.

Mr. Rooker

Yes, and the hon. Member for Walsall, North (Mr. Hodgson), who promised that night that the Tories would means-test the Christmas bonus, has not been on the Opposition Front Bench since.

Mr. Robin Hodgson (Walsall, North)

At no time did I say that we as a party recommended the means-testing of Christmas bonuses.

Mr. Kilroy-Silk

Yes, he did.

Mr. Rooker

It is clear—we have raised the point since, and I have corresponded with the right hon. Member for Wanstead and Woodford—that the Opposition proposed from that Front Bench to means-test the Christmas bonus. What is more, they proposed to divide the annual pension by 53 instead of 52, pay the pensioners the smaller rate for 52 weeks and pay them the bonus out of the balance—out of their own pensions. That was the proposal, and the Tories will not deny that charge tonight.

Will the right hon. Gentleman tell us where the £40 million will come from? If he can tell us that, we are involved in a serious political debate. If he cannot, we might as well have the Division now and get the thing over as soon as possible.

Mrs. Audrey Wise (Coventry, South-West)

I had thought that in 1973 and until February 1974 there was a Conservative Government, but perhaps I was wrong, because I cannot reconcile the Tories' present stance on the earnings rule with the facts as they stood until the present Government came to power.

When this Government came to power, the earnings rule limit stood at £9 per week, and it really bit in the budgets of many people. It was an important issue. The earnings rule limit now stands at £45. Moreover, it is not static; it is indexed. It seems to me extraordinary that the Tories should at this stage exhibit such passion on the issue. Where were they when their Government had an earnings limit of £9? That is what I want to know, and they have not told us.

If this proposal will cost nothing, as has been claimed by the Opposition, it must follow in logic that no one will gain in benefit from it. If it costs £40 million, or £100 million, according to whose estimate one takes, why should we decide to devote that amount to this particular cause?

Mr. Patrick Jenkin rose

Mrs. Wise

No, you did not give way to my right hon. Friend the Member for Blackburn (Mrs Castle). [HON. MEMBERS:"Yes, he did."] My right hon. Friend the Member for Blackburn issued a challenge which you did not meet, and I issued a challenge to your deputy yesterday, which—

Mr. Deputy Speaker

Order. In her enthusiasm, the hon. Lady is involving the Chair.

Mrs. Wise

I am sorry, Mr. Deputy Speaker. I return to the question that I put. Why should we decide to spend the money on this purpose when there are so many things on which money is urgently needed for pensioners? Why should we choose to spend the money on the very thing that widens the gap between able-bodied pensioners who have jobs which they can continue and those who are old, frail and without jobs which they can continue? That is the effect of the Opposition's proposal tonight, which comes to us from the House of Lords. It is an unreasonable proposal. I do not want to widen the difference in treatment given to those who are able-bodied and have lighter work as compared with that given to those who are frailer and whose work is heavier. That is my objection to giving this idea priority.

Why not give more priority to reducing the cost of transport for the aged? There is a proposal for half fares. I should like to see free transport for them on a national scale. That should be one priority. Another is free prescriptions as of right for invalidity pensioners. That would cost only £1 million, and I want that to be done before this phasing out is given a time scale.

I should be glad to see the Opposition deciding in favour of the most depressed and deprived people in our society, but they are missing whenever that is the issue. This proposal would benefit people earning more than £45 a week who want to draw their pensions as well. I do not regard that as top priority. I should say that since the earnings limit became £45 and indexed-linked, I have not had one complaint from a pensioner in my constituency, and I am pretty sure that the same applies to my hon. Friends. I take as my yardstick the demands which come to me from pensioners, and that demand has not come to me since the level was lifted.

I am therefore prepared to agree with my right hon. and hon. Friends on this issue, and I shall keep after them to implement the other prorities which we hold.

Mrs. Lynda Chalker (Wallasey)

Much of the debate seems to have been on the question whether we should abolish the earnings rule. All parties in the House have agreed that we are in favour of abolishing the rule. The amendments sent to us from another place, and the Government amendment, relate to the date on which the rule should be abolished, should a date be set.

Those who have been concerned with these matters over the past four or five years know that every year that the issue has been raised there has been a push to have the rule lifted and for Governments to make a commitment. We know from Government surveys that that is what pensioners want. They believe that they have the right to contribute to society and to continue working. They also believe that they are subject to an anomalous rule. As the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said, it operates only between 65 and 70 years for a man and 60 and 65 years for a woman. It it were a sensible rule, there would not be a cut-off date.

My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) and many others have said in previous debates that we should concentrate our minds on setting a target date. That is what their Lordships have asked us to do and that is what the Government seek to persuade the House to reject. I urge my right hon. and hon. Friends to reject the Government's amendment and to accept the original amendment that was passed in another place as the rightful way of dealing with an anomaly that has long angered our senior citizens and for which no party in the House has a case any longer.

Mr. Orme

With the leave of the House, Mr. Deputy Speaker, I should like to reply.

The debate is not about abolishing the earnings rule; it is about public expenditure priorities.

I am astounded to hear the right hon. Member for Wanstead and Woodford (Mr. (Jenkin), a previous Chief Secretary to the Treasury, glibly committing forward public expenditure without first even considering other priorities. My hon. Friend the Member for Coventry, South-West (Mrs. Wise) stated some of her priorities. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) stated his priorities. The Government make no excuses. We want to see the rule abolished at an appropriate time. We do not believe that this is the appropriate time.

If we started to phase out the rule we would have to start next year. We would have to start with £16 million to £20 million, which my right hon. and hon. Friends could expend on many high priorities—for example, the long-term unemployed, the disabled, the sick and the blind. I know that my hon. Friend the Member for Tottenham (Mr. Atkinson) would like to see more money being spent to help the blind. Those are some of the priorities that we must consider.

The right hon. Gentleman asks us to believe that if pensioners were offered the chance of taking a full pension or continuing in work at least half of them would opt to continue working and not take the pension, in the knowledge that they would receive a higher percentage later. That is not the real world in which we live. I believe that people would opt for retirement. We are talking about £64 million to £124 million. That is the Government Actuary's estimate. We cannot say how many pensioners would take the pension and how many would continue to work. If we take a mean figure, we are talking about £80 million to £100 million.

11.0 p.m.

The estimated cost of abolishing the rule takes account of the fact that pensioners may earn more. The sum of £28 million in additional taxes and contributions is included in the costs of £124 million and £64 million which are net figures. We took into account the figures indicated by the right hon. Gentleman. We made a substantial move in the direction of phasing-out the earnings rule. By our indexing the rule now at £45 a week, I do not think that people can complain that that is acting against pensioners who are fortunate enough to be able to continue work after retirement age. If we are not careful, we shall change the whole meaning of the retirement principle.

Coming to the basic point, the right hon. Gentleman did not answer the question. Why was he prepared to accept, without stating a date, that we could at some future date lay an order? My information is that the Opposition were advised by the right hon. Member for Wanstead and Woodford to vote on the clause. That has been said officially on behalf of the Opposition, who are playing politics with pensioners because they think that this will mean a few more votes. It is up to my hon. Friends to explain to people the Government's record and what

we have done in raising the earnings rule from £9 to £45 per week.

There is an important principle here. The Lords have seen fit to interfere in what is basically a monetary and taxation matter. My hon. Friends will not forget that this is another example of the Lords, with their built-in majority, asserting what they consider to be their privilege. We must take that fully into account.

I have no hesitation in asking my right hon. and hon. Friends to reject this clause, which has been imposed by another place, and to return to the original proposition that was agreed across the Floor by the Opposition and the Government. I hope that we may now move to a vote.

Question put, That the amendment to the proposed amendment be made:—

The House divided: Ayes 276, Noes 272.

Division No. 99] AYES [11.4 p.m.
Abse, Leo Cox, Thomas (Tooting) Gould, Bryan
Allaun, Frank Craigen, Jim (Maryhill) Gourlay, Harry
Anderson, Donald Crawshaw, Richard Grant, George (Morpeth)
Archer, Rt Hon Peter Cronin, John Grant, John (Islington C)
Armstrong, Ernest Crowther, Stan (Rotherham) Grocott, Bruce
Ashley, Jack Cryer, Bob Hamilton, James (Bothwell)
Ashton, Joe Cunningham, G. (Islington S) Hamilton, W. W. (Central Fife)
Atkins, Ronald (Preston N) Cunningham, Dr J. (Whiten) Hardy, Peter
Atkinson, Norman (H'gey, Tott'ham) Dalyell, Tarn Harrison, Rt Hon Walter
Bagier, Gordon A. T. Davidson, Arthur Hart, Rt Hon Judith
Barnett, Guy (Greenwich) Davies, Bryan (Enfield N) Hattersley, Rt Hon Roy
Barnett, Rt Hon Joel (Heywood) Davies, Rt Hon Denzll Hayman, Mrs Helene
Bean, R. E. Davies, Ifor (Gower) Heffer, Eric S.
Benn, Rt Hon Anthony Wedgwood Davis, Clinton (Hackney C) Home Robertson, John
Bennett, Andrew (Stockport N) Deakins, Eric Hooley, Frank
Bidwell, Sydney Dean, Joseph (Leeds West) Horam, John
Bishop, Rt Hon Edward de Freitas, Rt Hon Sir Geoffrey Howell, Rt Hon Denis (B'ham, Sm H)
Blenkinsop, Arthur Dell, Rt Hon Edmund Hoyle, Doug (Nelson)
Boardman, H. Dempsey, James Huckfield, Les
Booth, Rt Hon Albert Dewar, Donald Hughes, Rt Hon C. (Anglesey)
Boothroyd, Miss Betty Doig, Peter Hughes, Robert (Aberdeen N)
Bottomley, Rt Hon Arthur Dormand, J. D. Hughes, Roy (Newport)
Boyden, James (Bish Auck) Douglas-Mann, Bruce Hunter, Adam
Bradley, Tom Duffy, A.E.P. Irving, Rt Hon S. (Dartford)
Bray, Dr Jeremy Dunnett, Jack Jackson, Colin (Brighouse)
Brown, Hugh D. (Provan) Dunwoody, Mrs Gwyneth Jackson, Miss Margaret (Lincoln)
Brown, Robert C. (Newcastle W) Eadie, Alex Janner, Greville
Brown, Ronald (Hackney S) Edge, Geoff Jay, Rt Hon Douglas
Buchan, Norman Ellis, John (Brigg & Scun) Jeger, Mrs Lena
Buchanan, Richard Ellis, Tom (Wrexham) Jenkins, Hugh (Putney)
Butler, Mrs Joyce (Wood Green) English, Michael John, Brynmor
Callaghan, Rt Hon J. (Cardiff SE) Ennals, Rt Hon David Johnson, James (Hull West)
Callaghan, Jim (Middleton & P) Evans, Fred (Caerphilly) Johnson, Waller (Derby S)
Campbell, Ian Evans, loan (Aberdare) Jones, Alee (Rhondda)
Canavan, Dennis Evans, John (Newton) Jones, Barry (East Flint)
Cant, R. B. Ewing, Harry (Stirling) Jones, Dan (Burnley)
Carmichael, Nell Fernyhough, Rt Hon E. Judd, Frank
Carter, Ray Flannery, Martin Kaufman, Rt Hon Gerald
Carter-Jones, Lewis Fletcher, Ted (Darlington) Kelley, Richard
Cartwright, John Foot, Rt Hon Michael Kerr, Russell
Castle, Rt Hon Barbara Ford, Ben Kilroy-Silk, Robert
Clemitson, Ivor Forrester, John Kinnock, Nell
Cocks, Rt Hon Michael (Bristol S) Fowler, Gerald (The Wrekin) Lambie, David
Cohen, Stanley Fraser, John (Lambeth, N'w'd) Lamborn, Harry
Coleman, Donald Freeson, Rt Hon Reginald Lamond, James
Colquhoun. Ms Maureen Garrett, John (Norwich S) Latham, Arthur (Paddington)
Concannon, Rt Hon John Garrett, W. E. (Wallsend) Lestor, Miss Joan (Eton & Slough)
Conlan, Bernard George, Bruce Lever, Rt Hon Harold
Cook, Robin F. (Edin C) Gilbert, Rt Hon Dr John Lewis, Ron (Carlisle)
Corbett, Robin Ginsburg, David Litterick, Tom
Cowans, Harry Golding, John Lofthouse, Geoffrey
Loyden, Eddie Ovenden, John Stott, Roger
Luard, Evan Park, George Strang, Gavin
Lyon, Alexander (York) Parker, John Strauss, Rt Hon G. R.
Lyons, Edward (Bradford W) Parry, Robert Summerskill, Hon Dr Shirley
Mabon, Rt Hon Or J. Dickson Pavitt, Laurie Taylor, Mrs Ann (Bolton W)
McCartney, Hugh Pendry, Tom Thomas, Jeffrey (Abertillery)
McElhone, Frank Perry, Ernest Thomas, Mike (Newcastle E)
McKay, Allen (Penistone) Price, C. (Lewisham W) Thomas, Ron (Bristol NW)
MacKenzie, Rt Hon Gregor Price, William (Rugby) Thorne, Stan (Preston South)
Maclennan, Robert Radice, Giles Tierney, Sydney
McMillan, Tom (Glasgow C) Rees, Rt Hon Merlyn (Leeds S) Tilley, John
Madden, Max Richardson, Miss Jo Tinn, James
Magee, Bryan Roberts, Albert (Normanton) Tomlinson, John
Mahon, Simon Roberts, Gwilym (Cannock) Tomney, Frank
Mallalieu, J.P.W. Robertson, George (Hamilton) Torney, Tom
Marks, Kenneth Robinson, Geoffrey Urwin, T. W.
Marshall, Dr Edmund (Goole) Roderick, Caerwyn Wainwright, Edwin (Dearne V)
Marshall, Jim (Leicester S) Rodgers, George (Chorley) Walker, Harold (Doncaster)
Mason, Rt Hon Roy Rodgers, Rt Hon William (Stockton) Walker, Terry (Kingswood)
Maynard, Miss Joan Rooker, J. W. Ward, Michael
Meacher, Michael Roper, John Watkins, David
Mellish, Rt Hon Robert Ross, Rt Hon W. (Kilmarnock) Weetch, Ken
Mikardo, Ian Rowlands, Ted Weitzman, David
Millan, Rt Hon Bruce Sandelson, Neville Wellbeloved, James
Miller, Dr M. S. (E Kilbride) Sedgemore, Brian White, Frank R. (Bury)
Mitchell, Austin (Grimsby) Selby, Harry White, James (Pollok)
Mitchell, R. C. (Soton, lichen) Sever, John Whitehead, Phillip
Molloy, William Shaw, Arnold (llford South) Whitlock, William
Moonman, Eric Sheldon, Rt Hon Robert Willey, Rt Hon Frederick
Morris, Rt Hon Charles R. Shore, Rt Hon Peter Williams, Rt Hon Alan (Swansea W)
Morris, Rt Hon J. (Aberavon) Short, Mrs Ren&ée (Wolv NE) Williams, Alan Lee (Hornch'ch)
Morton, George Silkin, Rt Hon John (Deptford) Williams, Rt Hon Shirley (Hertford)
Moyle, Rt Hon Roland Silkin, Rt Hon S. C. (Dulwich) Williams, Sir Thomas (Warrington)
Mulley, Rt Hon Frederick Silverman, Julius Wilson, Rt Hon Sir Harold (Huyton)
Murray, Rt Hon Ronald King Skinner, Dennis Wilson, William (Coventry SE)
Newens, Stanley Smith, Rt Hon John (N Lanarkshire) Wise, Mrs Audrey
Noble, Mike Snape, Peter Woodall, Alec
Oakes, Gordon Spearing, Nigel Wrigglesworth, Ian
Ogden, Eric Spriggs, Leslie Young, David (Bolton E)
O'Halloran, Michael Stallard, A. W. TELLERS FOR THE AYES:
Orbach, Maurice Stewart, Rt Hon M. (Fulham) Mr. Ted Graham and
Orme, Rt Hon Stanley Stoddart, David Mr. Alf Bates
Adley. Robert Clark, Alan (Plymouth, Sutton) Gilmour, Sir John (East Fife)
Aitken, Jonathan Clark, William (Croydon S) Glyn, Dr Alan
Alison, Michael Clarke, Kenneth (Rushcliffe) Godber, Rt Hon Joseph
Arnold, Tom Clegg, Walter Goodhart, Philip
Atkins, Rt Hon H. (Spelthorne) Cockcroft, John Goodhew, Victor
Atkinson, David (B'mouth, East) Cooke, Robert (Bristol W) Goodlad, Alastair
Awdry, Daniel Cope, John Gorst, John
Bain, Mrs Margaret Cormack, Patrick Gow, Ian (Eastbourne)
Baker, Kenneth Costain, A. P. Gower, Sir Raymond (Barry)
Banks, Robert Crawford, Douglas Grant, Anthony (Harrow C)
Bell, Ronald Crouch, David Gray, Hamish
Bendall, Vivian Crowder, F. P. Griffiths, Eldon
Bennett, Dr Reginald (Fareham) Dean, Paul (N Somerset) Grist, Ian
Benyon, W. Dodsworth, Geoffrey Hall-Davis, A.G.F.
Berry, Hon Anthony Douglas-Hamilton, Lord James Hamilton, Archibald (Epsom & Ewell)
Biffen, John Drayson, Burnaby Hamilton, Michael (Salisbury)
Biggs-Davison, John du Cann, Rt Hon Edward Hampson, Dr Keith
Blaker, Peter Dunlop, John Hannam, John
Body, Richard Durant, Tony Harrison, Col Sir Harwood (Eye)
Boscawen, Hon Robert Dykes, Hugh Harvie Anderson, Rt Hon Miss
Bottomley, Peter Edwards, Nicholas (Pembroke) Haselhurst, Alan
Bowden, A. (Brighton, Kemptown) Elliott, Sir William Havers, Rt Hon Sir Michael
Boyson, Dr Rhodes (Brent) Emery, Peter Hawkins, Paul
Braine, Sir Bernard Eyre, Reginald Hayhoe, Barney
Brittan, Leon Fairbairn, Nicholas Henderson. Douglas
Brocklebank-Fowler, C. Fairgrieve, Russell Heseltlne, Michael
Brooke, Hon Peter Farr, John Hicks, Robert
Brotherton, Michael Finsberg, Geoffrey Higgins, Terence L.
Brown, Sir Edward (Bath) Fisher, Sir Nigel Hodgson, Robin
Bruce-Gardyne, John Fletcher, Alex (Edinburgh N) Holland, Philip
Bryan, Sir Paul Fletcher-Cooke, Charles Hordern, Peter
Buchanan-Smith, Alick Fookes, Miss Janet Howe, Rt Hon Sir Geoffrey
Buck, Antony Fowler, Norman (Sutton C'f'd) Howell, David (Guildford)
Budgen, Nick Fox, Marcus Howell, Ralph (North Norfolk)
Bulmer, Esmond Fraser, Rt Hon H. (Stafford & St) Hunt, David (Wirral)
Burden, F. A. Fry, Peter Hunt, John (Ravensbourne)
Butler, Adam (Bosworth) Galbraith, Hon T.G.D. Hurd, Douglas
Carlisle, Mark Gardiner, George (Reigate) Hutchison, Michael Clark
Chalker, Mrs Lynda Gardner, Edward (S Fylde) James, David
Churchill, W. S. Gilmour, Rt Hon Sir Ian (Chesham) Jenkin, Rt Hon P. (Wanst'd&W'df'd)
Jessel, Toby Morgan-Giles, Rear-Admiral Silvester, Fred
Johnson Smith, G. (E Grinstead) Morris, Michael (Northampton S) Sims, Roger
Jones, Arthur (Daventry) Morrison, Hon Charles (Devizes) Sinclair, Sir George
Jopling, Michael Morrison, Hon Peter (Chester) Skeet, T.H.H.
Joseph, Rt Hon Sir Keith Mudd, David Smith, Dudley (Warwick)
Kaberry, Sir Donald Neave, Airey Smith, Timothy John (Ashfield)
Kershaw, Anthony Nelson, Anthony Speed, Keith
Kilfedder, James Neubert, Michael Spence, John
Kimball, Marcus Newton, Tony Spicer, Jim (W Dorset)
King, Evelyn (South Dorset) Normanton, Tom Spicer, Michael (S Worcester)
King, Tom (Bridgwater) Nott, John Stainton, Keith
Kitson, Sir Timothy Onslow, Cranley Stanbrook, Ivor
Knight, Mrs Jill Oppenheim, Mrs Sally Stanley, John
Knox, David Page, John (Harrow West) Steel, Rt Hon David
Lamont, Norman Page, Rt Hon R. Graham (Crosby) Steen, Anthony (Wavertree)
Langford-Holt, Sir John Page, Richard (Workington) Stewart, Rt Hon Donald
Latham, Michael (Melton) Pardoe, John Stewart, Ian (Hitchin)
Lawrence, Ivan Parkinson, Cecil Stokes, John
Lawson, Nigel Pattie, Geoffrey Stradling Thomas, J.
Lester, Jim (Beeston) Penhallgon, David Tapsell, Peter
Lewis, Kenneth (Rutland) Percival, Ian Taylor, R. (Croydon NW)
Lloyd, Ian Peyton, Rt Hon John Tebbit, Norman
Loveridge, John Pink, R. Bonner Temple-Morris, Peter
Luce, Richard Prentice, Rt Hon Reg Thatcher, Rt Hon Margaret
McAdden, Sir Stephen Price, David (Eastleigh) Thomas, Rt Hon P. (Hendon S)
MacCormick, lain Prior, Rt Hon James Thompson, George
Macfarlane, Neil Pym, Rt Hon Francis Townsend, Cyril D.
MacGregor, John Raison, Timothy Trotter, Neville
MacKay, Andrew (Stechford) Rathbone, Tim van Straubenzee, W. R.
Macmillan, Rt Hon M. (Farnham) Rees, Peter (Dover & Deal) Vaughan, Dr Gerard
McNair-Wilson, M. (Newbury) Rees-Davies, W. R. Viggers, Peter
McNair-Wilson, P. (New Forest) Reid, George Waddington, David
Madel, David Renton, Rt Hon Sir D. (Hunts) Wakeham, John
Marshall, Michael (Arundel) Renton, Tim (Mid-Sussex) Walker, Rt Hon P. (Worcester)
Marten, Nell Rhodes James, R. Walker-Smith, Rt Hon Sir Derek
Mates, Michael Rhys Williams, Sir Brandon Wall, Patrick
Mather, Carol Rifkind, Malcolm Walters, Dennis
Maude, Angus Rippon, Rt Hon Geoffrey Watt, Hamish
Mawby, Ray Roberts, Michael (Cardiff NW) Weatherill, Bernard
Maxwell-Hyslop, Robin Roberts, Wyn (Conway) Wells, John
Mayhew, Patrick Rossi, Hugh (Hornsey) Welsh, Andrew
Meyer, Sir Anthony Rost, Peter (SE Derbyshire) Whitelaw, Rt Hon William
Miller, Hal (Bromsgrove) Royle, Sir Anthony Whitney, Raymond
Mills, Peter Sainsbury, Tim Wiggin, Jerry
Miscampbell, Norman St. John-Stevas, Norman Wilson, Gordon (Dundee E)
Mitchell, David (Basingstoke) Scott, Nicholas Winterton, Nicholas
Moate, Roger Scott-Hopkins, James Wood, Rt Hon Richard
Monro, Hector Shaw, Giles (Pudsey) Younger, Hon George
Montgomery, Fergus Shaw, Michael (Scarborough)
Moore, John (Croydon C) Shelton, William (Streatham) TELLERS FOR THE NOES:
More, Jasper (Ludlow) Shepherd, Colin Sir George Young and
Morgan, Geraint Shersby, Michael Mr. Spencer Le Marchant.

Question accordingly agreed to.

Lords amendment No. 2, as amended, agreed to.

Lords amendments Nos. 3 to 5 agreed to [Special Entry.]

Lords amendments Nos. 6 to 9 agreed to.

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