§ 3.45 p.m.
§ BARONESS PHILLIPSMy Lords, with the leave of the House I should like to repeat a Statement on occupational pensions now being made by my right honourable friend the Minister of State for the Department of Health and Social Security. The Statement is as follows:
"The House will remember that increasing public concern about people with substantial occupational pensions who claim unemployment benefit although they may have left the active employment field led my right honourable friend, the then Minister of Pensions and National Insurance, to refer this question to the National Insurance Advisory Committee. The Committee concluded that there was a serious misuse of the National Insurance scheme and made recommendations to deal with it. Preliminary draft regulations broadly along the lines they recommended were accordingly referred to them last year and we have been considering their full and careful report, for which we are much indebted.
"With one Member dissenting, the Committee supported the preliminary draft regulations but recommended substantial easements to take account of the many representations they received. We intend to carry the easements a good deal further in order to give more help to those who have to retire early or have smaller pensions. We propose not to apply the new restrictions to occupational pensioners who are under 60; to apply the condition of further work only where the occupational pension amounts to £25 or more a week; and to taper the payment of unemployment benefit only where the pension amounts to more 833 than £15 a week. The condition of further work is, broadly speaking, that the occupational pensioner shall have had 26 weeks employment, after he left his pensioned job, during the 12 months before his claim to benefit.
"The Government's modifications to the original draft regulations should ensure that the regulations will not bear unreasonably on younger occupational pensioners and those with smaller pensions. A married man whose pension amounts to £15 a week will still be eligible for full benefit, giving him up to about £30 a week for six months, and £23 a week for a further six months if he remains unemployed. Adoption of age 60 will give an additional 'breathing space' to those who are made redundant before age 60 or who, like policemen and members of the armed forces, normally retire below that age; it will also effectively remove women from the scope of the proposals. Thus the majority of those who retire on occupational pensions before the State retirement age will not be affected by the limitations which the Government are proposing.
"The draft regulations, accompanied by the Committee's report, will be laid before Parliament for their approval shortly after the Christmas adjournment."
§ LORD DRUMALBYNMy Lords, may I thank the noble Baroness for having repeated that Statement to the House. All who have been involved in this problem will know of its difficulties. This is perhaps illustrated by the fact that the matter was referred to the National Insurance Advisory Committee as long ago as February, 1966 (I think I am right in saying), and the Committee actually reported in February, 1968. I understand that these draft regulations are to be laid before Parliament so that we shall have an opportunity then to debate them; but may I now ask one or two questions?
First, is the noble Baroness aware that there will be general satisfaction that the Government have very considerably eased the incidence of these regulations as compared with the recommendations of the Advisory Committee—for example, by raising the maximum amount which the 834 occupational pensioner will be allowed to retain without abatement to £15, instead of £5 as suggested by the Committee, and by putting the threshold age at 60 as against 55 as advised by the Committee? I would also ask whether the noble Baroness is in a position to give us any idea of the number of pensioners who will be affected. The Report says that on July 25, 1966, there were 24,000 occupational pensioners potentially affected, of whom 16,000 were drawing pensions at the time. What proportion of these does she estimate will be affected by this Order?
Secondly, may I ask whether any difference will be made between those who have been compulsorily retired and those who retire entirely of their own free will? Thirdly, will the definition of "occupational pension" include, as was recommended by the Advisory Committee, the notional value of lump sums paid on retirement as well as the actual annual or monthly payments? I wonder whether the noble Baroness could answer those questions, since it would enable us to examine the Order more carefully when it comes along.
§ LORD WADEMy Lords, I should like to join in thanking the noble Baroness for repeating this Statement. We shall of course have to study the draft regulations. I agree that sympathetic consideration ought to be given to those who are made redundant before reaching the age of 60, and in the Statement there is, rightly, a reference to policemen and members of the Armed Forces. May I ask a question about those who attain the age of 60 (I do not seek a lengthy explanation), as the position is not quite clear to me? If someone has reached age 60 and is compelled by the terms of his employment to retire, but wishes to go on working for, say, another five years; if he is genuinely anxious to find other employment but is unable to do so, what exactly are the circumstances that will apply in such a case?
§ BARONESS PHILLIPSMy Lords, I should like to thank the noble Lords for their questions. If I may, I will reply first to the noble Lord, Lord Wade. As is apparent from the contents of the Statement, I cannot give a specific reply, because although the age may be 60, the effect of the proposals must depend 835 on the amount of the occupational pension. Regarding those who are compulsorily retired, as compared with those who retire voluntarily, I speak subject to correction but I do not think that they are to be treated differently. It is held that an occupational pension is really a continuation of a payment made by the employer; in a sense it is a continuation of a form of earnings, if one cares to put it that way. It is also considered that whether one is compulsorily retired or not, one would have to recognise that this was going to happen.
The question of the lump sum payments is somewhat complicated and will be included in the regulations. I am not in a position to give the noble Lord the exact outline of how this will operate, though I could possibly let him have some information before the actual regulations are laid. As regards figures, as the noble Lord says, in 1966 there were 24,000 occupational pensioners, of whom 37 per cent. had pensions of between £10 and £20 a week, and 16 per cent. of £20 and over. It is not possible to say how many had pensions of £25 a week and over.
§ LORD DRUMALBYNMy Lords, am I right in thinking that the Government have abandoned the possibility of defining more carefully those over the age of 60 who are genuinely in the employment field, and have been forced to adopt this rather indiscriminate form of distinction between those who retire at 60 and those who retire at 65? May I put one other question to the noble Baroness? When the Order comes to be drafted will she see that it incorporates some machinery that will enable this threshold figure of £15 to be altered automatically in line with the cost of living.
§ BARONESS PHILLIPSMy Lords, I take the second point made by the noble Lord. I shall certainly have discussions on this matter with my right honourable friend. The question of availability, as I am sure the noble Lord will appreciate, in view of his own distinguished career, is not easy to determine. Anybody applying for benefit would, naturally, state that he was available. The regulations will apply as laid down and will relate to anybody coming within the qualifying period of time and the sums of money involved.