HL Deb 06 November 1973 vol 346 cc234-6

2.40 p.m.

LORD BALLANTRAE

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

The Question was as follows:

To ask Her Majesty's Government what is being done to remove the anomaly whereby an old age pensioner between the ages of 65 and 70 has his pension "broken" to a lesser sum than his entitlement if he earns more than £9.50 per week.

THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE)

My Lords, the Government do not accept that the earnings rule as applied to retirement pensions is an anomaly. The rule supports the principle that below the ages of 70 for a man, and 65 for a woman, retirement pensions are paid only on retirement from regular work. Abolition of the earnings rule would cost about £135 million a year.

LORD BALLANTRAE

My Lords, while thanking the noble Lord for that Answer, may I ask whether he would not concede that it bears very hardly on, say, a retired journalist with special knowledge who acquires a little money by writing occasional articles, or on many other pensioners of either sex who prefer to go out into the world to do something constructive and to earn a little money rather than stay at home and twiddle their thumbs?

LORD ABERDARE

My Lords, I am indeed well aware of the arguments in favour of relaxing this rule. In fact we had some full debates on this matter during the passage of the Social Security Bill. All I can say is that we look at the matter from year to year during the Annual Review and we raised the figure from £7.50 to £9.50 in 1971.

BARONESS WOOTTON OF ABINGER

My Lords, may I ask the noble Lord whether he has not considered that if persons of this age were allowed to earn as much as they can they might contribute more than £135 million a year to the national gross product?

LORD ABERDARE

My Lords, the factor of expenditure on the National Insurance Fund has to be taken into account.

BARONESS PHILLIPS

My Lords, may I ask whether there is any truth in the comment foreshadowed in one of the Sunday papers that the Government are considering abolishing the earnings rule?

LORD ABERDARE

My Lords, we consider all these matters every year at the annual uprating exercise.

BARONESS GAITSKELL

My Lords, are we not in our pensions arrangements at the bol torn of the league vis-à-vis the European Community?

LORD ABERDARE

My Lords, it is difficult to make comparisons of this sort unless we take into account all the other benefits, such as the free National Health Service which is not enjoyed in other European countries.

LORD LLOYD OF KILGERRAN

My Lords, in view of the fact that average industrial earnings are now said to be about £40 a week, may I ask the noble Lord whether it would not be more consistent with the position of the Government in the European Common Market that this figure of £9.50 should be increased to approximately one half that of average industrial earnings?

LORD ABERDARE

The point of the matter is really that whatever we do to relax this rule costs a great deal of money, and there are many priorities for extra money. This question has to be considered in that context.

BARONESS PHILLIPS

My Lords, would the noble Lord present to the Government the real dilemma now of a labour shortage which, if the earnings rule could be lifted, would be alleviated, particularly in London?

LORD ABERDARE

My Lords, I understand the point, and take it.

BARONESS SEEAR

My Lords, may I ask the noble Lord, if he will not remove the earnings rule, to look again at the proposal to enable people to aggregate their earnings over the year, and instead of having £9.50 per week having a figure which is something short of £500 per year which people could earn? This would not cost a great deal more but would be a great boon to many pensioners who would have this additional money. It would also be a great boon to many industries who would be able to employ these people in times of shortage. As noble Lords know, labour has become very short, and a supply list would be of the greatest help. Would the Minister consider the matter?

LORD ABERDARE

Yes, I will. We have explained the matter in correspondence and have been into it very thoroughly.