UNEMPLOYMENT: WORKING HOURS AND PENSION AGE (Hansard, 16 March 1972)

§ LORD SHINWELL
My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.

§ THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)
My Lords, the Government believe that their measures to stimulate the economy and to contain inflation are the best means of dealing with current unemployment and we would not advise a reduction in the minimum pensionable age or in working hours as likely to be effective for this purpose. We do not, therefore, propose to initiate discussion with the C.B.I. and the T.U.C. on these subjects.

§ LORD SHINWELL
My Lords, would not the noble Lord agree that a high rate of unemployment is inevitable for a considerable time to come? Would it not be desirable—owing to the ineffectiveness of the Government's proposals and the doubts as to whether they are 516 likely to be effective in the future—to break through with something in the nature of an innovation? At any rate would it not be desirable to enter into discussions with C.B.I. and the Trades Union Congress General Council on a subject of this character?

§ LORD DRUMALBYN
My Lords, my difficulty is to know exactly what the noble Lord, Lord Shinwell, has in mind when he asks us to "advise a reduction" in the pensionable age. I assume that he means that employers should be encouraged to retire their employees, or should themselves encourage employees to retire, at 60. I am sure he realises that this would entail some reduction in occupational pensions, particularly where they are funded, or an increase in the cost of goods and services. If that is what he means, I do not think that this would be desirable. Nor do I think that a reduction in working hours would necessarily lead to increased employment.

§ LORD SHINWELL
But, my Lords, is it not obvious to the noble Lord and to the Government that automation, rationalisation and the decision of many industrial firms of stature to impose redundancies of a voluminous character create unemployment, because the firms are unable to absorb the labour supply; and that we must adopt some measure of this character to absorb the unemployed? Why does the noble Lord say that he cannot understand the meaning of my Question? All I am asking is for a reduction in the existing hours of labour to something like 35 or 30. Is he aware that that course is now being adopted in the United States and in some other countries? Surely, too, it is desirable to reduce the pensionable age?

§ LORD DRUMALBYN
My Lords, the difficulty is that although the normal hours of work have been reduced to a considerable extent over the last 25 years, the actual hours worked have remained more or less the same.

§ LORD ORR-EWING
My Lords, does my noble friend recall that the Labour Government, of which the noble Lord, Lord Shinwell, was such a distinguished member in 1951, suggested that the retirement age should be raised to 67? In the last twenty years surely it has been 517 proved tha older people can make a very worthwhile contribution to the economy of our country and that older Members of both Houses can make very worthwhile contributions long after the age of 60?

§ LORD SHACKLETON
My Lords, may I ask the noble Lord whether he would take a long view of my noble friend's Question? This is not a question of arguing about who did what in 1951; it is a question of future progress. Is he aware that undoubtedly there will need to be reductions in working hours and that immense problems arise, particularly on pensions? And is he aware that all my noble friend is asking is that the noble Lord should start considering, and if necessary discussing, future progress?

§ LORD DRUMALBYN
My Lords, questions of reductions in hours are essentially matters for negotiation between employers and employees. All I am saying is that in the past the trend has been that where negotiations for a reduction in normal hours have taken place a reduction in the average total hours worked has not resulted. Therefore, in view of the massive steps that have been taken, we think that the better course is to see how these measures develop, and we believe that they will be successful in reducing unemployment.

§ BARONESS SUMMERSKILL
My Lords, may I ask the noble Lord whether the time has not arrived when, on health grounds, the number of hours and the pensionable age should be reduced for men engaged on heavy manual work?

§ LORD DRUMALBYN
My Lords, again I think this is a question of negotiation between the two parties. I am sorry that I did not reply to my noble friend Lord Orr-Ewing but the noble Lord, Lord Shackleton, got up first. But it is true that there was a recommendation, which I think was made by a Committee set up by the Party opposite but during the period of a Conservative Government, and it was to increase the retirement age to 67. I think I should add that retirement ages vary considerably in different countries, but they generally run to about 65. Where there is a lower retirement age than 65 it is quite common to have a lower pension, 518 and I doubt whether this would be acceptable. Perhaps I should add also that the reduction of the pensionable age to 60 would cost around £700 million.

§ LORD SHINWELL
My Lords, may I ask the noble Lord whether he would agree that if the Government's proposals to reduce inflation and the like seem to be ineffective in the foreseeable future—say within the next couple of years of high unemployment—the Government would consider the proposals contained in my Question?

§ LORD DRUMALBYN
My Lords, I do not think one can ever close one's mind altogether to proposals of this kind, but I think they would require quite a considerable change in attitude on several sides.

§ LORD RAGLAN
My Lords, is it not the case, despite what my noble friend Lord Shinwell suggests, that if we compulsorily retire people earlier all we are doing is increasing the number of unemployed but calling them by another name?

§ LORD DRUMALBYN
My Lords, to a large extent this is true, and I think that one has to bear in mind that about one-sixth of the total of unemployed at the present time are over 60.

§ LORD BESWICK
My Lords, would not the noble Lord agree that at the time of the recommendation referred to by the noble Lord, Lord Orr-Ewing, the level of compulsory unemployment was considerably lower than it is to-day?

§ LORD DRUMALBYN
Yes, my Lords; that was exactly why the recommendation was made, because we wanted to get more people in work. But it is very difficult to have a varying age for retirement from work. Once it is lowered it tends to stay at the lower level.

§ BARONESS SEEAR
My Lords, could we not ask the Government again to consider that very point? Surely what is required at the moment is the option of retirement at the age of 60. If everybody retired at 60, as the noble Lord said, it would cost a very large sum of money. But for retirement to be available at the age of 60, while a large number of people would not avail themselves 519 of it, could be of very considerable advantage, at a very much lower price than noble Lords have quoted. May we ask the Government to consider reviewing the position from that point of view?

§ LORD DRUMALBYN
My Lords, as the noble Baroness will be aware, this is the sort of question which has often been looked at within what was the Ministry of Pensions and National Insurance, and I am quite certain that it will be borne in mind.

§ LORD SEGAL
My Lords, is not this yet another instance of gross discrimination as between the sexes? Why should men continue to suffer the disability of a later pensionable age compared with that of women?

§ BARONESS SUMMERSKILL
Hear, hear!

§ BARONESS WOOTTON OF ABINGER
My Lords, would not the Minister agree that there may be something to be said for my noble friend's suggestion in the short run? In the long run it would be a counsel of despair, because if we permanently reduce the labout force, we are permanently shutting the door on a rising standard of living. I am sure that my noble friend desires that there should be a rise in that respect.

§ LORD DRUMALBYN
My Lords, I entirely agree with the noble Baroness.