§ 3 p.m.
§ Viscount MASSEREENE and FERRARDMy Lords, I beg leave to ask 1339 the second Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government why a self-employed old age pensioner earning more than £2,750 per annum is not entitled to pension.
§ Lord CULLEN of ASHBOURNEMy Lords, for the first five years after pension age (which is 65 for men and 60 for women) entitlement to a retirement pension is conditional upon retirement from regular employment. However, retirement does not mean that all work must be given up. The normal test of retirement is that a person's intended earnings must not exceed the level which causes reduction of pension under the earnings rule. The current level, after making allowances for certain expenses related to work, is £52 a week, that is just over £2,700 per annum. A person, employed or self-employed, with earnings of £2,750 after allowances for the expenses to which I have referred, could not therefore normally be treated as retired. At age 70 (65 for a woman) a person is treated as retired irrespective of the level of his earnings. However, if my noble friend has an individual case in mind and will let me have details. I will gladly arrange for the matter to be looked at.
§ Viscount MASSEREENE and FERRARDMy Lords, I thank my noble friend for that Answer, but would he not agree that it is illogical that a man of 65 whose income may be £50,000 a year or over, derived from dividends and rents, is entitled to draw his pension but a man who is earning, say, £2,750 a year and presumably thereby adding to the wealth of the nation (or so we hope) is not able to do so? That seems to be most unfair. The latter may have been paying his National Insurance stamps since 1948, when I believe the scheme started, and it seems nonsensical that he should not be able to claim his pension, whereas a man with £50,000 a year can do so. It is not logical.
§ Lord CULLEN of ASHBOURNEMy Lords, the noble Viscount is asking us to go back to the situation as it was before 1948, and the question of investment earnings is really quite different from the 1340 point that we are discussing. The whole basis of the present arrangement is that the pension is payable for somebody who has retired from regular work, although he is of course able to do part-time work and still get his pension. After the age of 70 there is no restriction and he gets his pension whatever he is earning.
§ Lord BANKSMy Lords, will the noble Lord confirm that it is the intention of the Government to phase out the earnings rule during the lifetime of this Parliament?
§ Lord CULLEN of ASHBOURNEMy Lords, I fully agree that in the manifesto we committed ourselves to do just that and it is certainly our wish that we should do so. There is no doubt however that in the present state of the economy this does not have the highest priority and we have not yet been able to make a start, and I am afraid I am unable to tell the noble Lord when we are likely to do so.
§ Lord KALDORMy Lords, until that happens, would not the noble Lord wish to have the decision examined as to whether the restriction with regard to earned income at the age of 65 for women and 70 for men should apply equally to those who derive their income from investments?
§ Lord CULLEN of ASHBOURNEMy Lords, I think that is a point which has been considered on and off ever since the Act became law in 1948.
Viscount ST. DAVIDSMy Lords, will the noble Lord consider this point: Pensioners who have pension books are able to use them for a whole number of other purposes, such as free bus travel, concessionary travel on railways, concessionary travel to exhibitions, concessionary prices for admission to exhibitions, and so on, whereas a person who has no pension book is in great difficulty in proving to the various authorities that he is entitled to these further concessions? Will he consider whether such persons might be issued with some form of document as of right so as to make it easier for them to obtain these concessions?
§ Lord CULLEN of ASHBOURNEMy Lords, I will certainly pass on that suggestion to my right honourable friend.
§ Lord RAGLANMy Lords, in the manifesto of the noble Lord's party there is a commitment to phase out the earnings rule, but the noble Lord was showing some reluctance and suggesting that perhaps this might not happen after all. Does he not think that there is sufficient all-party agreement to phase this out and that the money really must be found? Would he not agree that no private firm would be able to take money from people on the promise of a pension without coming forward with that pension at the time of life when the donor of the subscription expects it? Does he not think that really there must be a moral commitment here? I know it is difficult to get money out of the Treasury at all times but surely a moral commitment should be a sufficient force to prise the money out of the Treasury.
§ Lord CULLEN of ASHBOURNEMy Lords, we are morally committed but at the moment I cannot say whether the resources will be available. I quite agree that all parties are entirely in favour of abolishing the earnings rule as soon as we can, and we feel exactly the same about this matter.
§ Lord RAGLANMy Lords, the money has never been available. This has been going on for years and the Government of the day have always said that the money is not available. Will the present Government commit themselves to phasing out this immoral rule before the life of this Parliament is finished?
§ Lord CULLEN of ASHBOURNEMy Lords, the noble Lord is putting me under a good deal of pressure. It is true that we have already committed ourselves but I am saying that at the moment we are not financially able to carry out the commitment.
§ Lord WELLS-PESTELLMy Lords, may I ask whether the point of this particular case that we are talking about, as I understand the Question, relates to a self-employed person who presumably is continuing in work and who is in a slightly different position to the person who retires at 65?
§ Lord CULLEN of ASHBOURNEMy Lords, there is some difference and of course the self-employed person is able to 1342 deduct a considerable amount more in expenses than an employed person. Otherwise, I am afraid that the main situation is the same. It is a matter of degree.