NATIONAL INSURANCE (EARNINGS) REGULATIONS 1963 (Hansard, 1 April 1963)

THE MINISTER OF STATE, COMMONWEALTH RELATIONS OFFICE (THE DUKE OF DEVONSHIRE)
My Lords, the purpose of these draft regulations is to increase the amount which can be earned without adjustment of benefit by retirement pensioners, widow pensioners and widowed mothers under the National Insurance scheme. The regulations do not, of course, affect the rates of benefit, although these are to be increased from May 27 under legislation debated in this House on February 26 which is now the National Insurance Act, 1963. Nor do the regulations affect the principles on which the earnings rules are based. Such rules follow from the fundamental concept of the National Insurance scheme, namely, that benefits are designed to come into operation in the absence of earnings.
The regulations would be made under a power given by Section 2 of the National Insurance Act, 1956, which permits no more than alterations of the scale of benefit adjustments on account of earnings. This is the third time on which this power has been exercised. The changes now proposed are simply designed to adjust the level of earnings at which benefit begins to be reduced to take account of the proportionate increases in the general level of earnings since the previous change.
The limits at present in force—under similar regulations made in 1960—are 70s. a week for retirement pensioners and widow pensioners and 100s. a week for widowed mothers. The Ministry of Labour's half-yearly figures of average weekly earnings of manual workers show that over 355 the relevant period earnings have increased for men by a little over 20 per cent. and for women by 17 per cent. Applying those increases to the present earnings limits, the increase in men's earnings would justify an increase of about 14s. 6d. in the limit of 70s. and the increase in women's earnings would support an increase of about 17s. 6d. in the limit of 100s. These amounts have been rounded up to the nearest 5s., and the result gives the new limits of 85s. for pensioners and of 120s. for widowed mothers which the draft regulations contain. In each case the regulations continue to provide that for the first 20s. of earnings above the limit the deduction from benefit is 6d. for each shilling of the excess; thereafter the deduction is 1s. for each 1s. of additional earnings.
It is proposed that these regulations should come into force on May 27, 1963, which as I have explained is the date of operation of the increases in pensions and widowed mother's allowance recently enacted in the National Insurance Act, 1963. Thus for these beneficiaries the improvement in the rates of benefit and the change in the earnings rule will start at the same time. For widowed mothers the change will also coincide with another important alteration, because under Section 2 of the 1963 Act, 26s. of the widowed mother's personal allowance will in future be exempt from the earnings rule. This provides a further measure of special help for the widowed mother, who is already able to receive the allowances paid for her children whatever her earnings may be. These regulations have been considered and approved by the National Insurance Advisory Committee, which advises the Minister on these matters.

§ BARONESS SUMMERSKILL
My Lords, in thanking the noble Duke for his statement, may I ask him, in view of the fact that there is great demand for the services of women, many of them widowed mothers, who can do part-time work and domestic work of all kinds in hospitals and institutions—in fact, the demand is overwhelming—why the earnings rule has not been abolished?

THE DUKE OF DEVONSHIRE
My Lords, I think the best way that I can answer the noble Lady is to say that to abolish the earnings rule completely would be entirely contrary to the Act. All we can do under the Act is to adjust the scales. To go into any question of abolishing the earnings rule is a far wider question which is quite outside the scope of these regulations. It would cut completely at the roots of the principle of the Act.

§ BARONESS SUMMERSKILL
But, my Lords, is this not an all-important subject to a pathetic body of individuals in this country? What does the noble Duke mean when he says that it cuts at the roots of the Act? Is he not aware that the principle was based on unemployment, and, when the Act was introduced, there was a fear that there might be widespread unemployment, even among these women? Of course, that has not been the experience and the reverse is the fact. There is a demand for the employment of these women. Therefore, what the noble Duke says just now has no relation to the fact, and I would ask him to have a look at this again.

THE DUKE OF DEVONSHIRE
My Lords, I will certainly pass on the noble Lady's views to my right honourable friend, but I must repeat what I said. Under the Act, only alterations to scales can be made. The principle of the earnings rule cannot be altered. That is the legislative fact. I close by saying that I am every bit as aware as the noble Lady of the principle at stake.