HC Deb 21 May 1996 vol 278 cc83-4
3. Mrs. Clwyd

To ask the Secretary of State for Social Security what representations he has received on the reduction in reduced earnings allowance. [28805]

The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans)

A number.

Mrs. Clwyd

What would the Minister say to those disabled constituents of mine—many of them ex-miners—who were suddenly faced with a drop in income of £30 a week? How are they expected to cope with that sort of drop? It is yet another vindictive attack by the Government on the poor and the disabled.

Mr. Evans

I am afraid that the hon. Lady has misunderstood. The reduced earnings allowance is intended to compensate for reduced earnings. If a person is over pensionable age and not earning, it is unreasonable for them to go on receiving that allowance. Parliament decided as long ago as 1988 that, when people stopped earning after retirement age, the proper benefit was retirement allowance, which is tax free and non-contributory. Under the regulations and developing case law, some people managed to retain the reduced earnings allowance although they were over retirement age and had stopped earning, while many others did not. That was unfair and unreasonable and the Government have amended by regulation to correct that position.

Mrs. Peacock

I am sure that we all appreciate what my hon. Friend has said. We also appreciate that any change in anyone's income and life style is always a trauma. Can he confirm that the allowance was always meant to be for reduced earnings and was, therefore, available while people were of working age? When the rules were changed in 1988, some people managed to continue drawing that money after pension age and others did not, which in itself has set up differences between households.

Mr. Evans

I entirely agree with my hon. Friend.

Mr. Tom Clarke

Will the Minister answer the central thrust of the question asked by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd)? We have been told by such organisations as the Disablement Income Group that 20,000 old disabled people are losing an average of £30 a week without any notice. Does he accept that that is completely unacceptable? How will he answer the ex-miners in my hon. Friend's constituency, mine and elsewhere, who are suffering from pneumoconiosis, and the ex-building workers who are suffering from asbestosis, who are claiming that their incomes have been drastically reduced? Are not the Government showing once again—as they did on the Community Care Direct Payments Bill—that they could not care less for the problems of older disabled people?

Mr. Evans

The change was announced last November. It has been Government policy since 1988. It was accidental and arbitrary that some people managed to take advantage of the rules. It was possible for people who retired the day before their retirement birthday to go on receiving reduced earnings allowance even if they never did another day's work in their lives. The interesting question for the hon. Gentleman is whether, at a cost of £25 million a year, he is pledging to restore the change.

Mr. Ian Bruce

Is it not clear from its attacks on the Government that the Labour party wants to give the impression that it would restore the social security spending changes while telling the country that it, too, would cut social security spending? Is that not yet another case of saying two opposing things at the same time?

Mr. Evans

My hon. Friend is right on all points.