Retirement Arrangements (Hansard, 21 January 1982)

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

§ The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Elton)
My Lords, the Government White Paper Growing Older made clear that we regard the introduction of arrangements for more flexible retirement as an attractive long-term aim. It also made it clear that cost and other difficulties rule out any early changes in this direction. A straightforward reduction of the retirement age of men from 65 to 60 would, for instance, cost £2,500 million net under present circumstances. It would cost considerably more, even, than that under conditions of full employment. Less radical schemes could be less expensive, but, for the reasons I have referred to, no specific consultations with private industry are at present in hand.

§ Lord Gainford
My Lords, I thank my noble friend for that reply. Arising from his Answer, may I ask him whether there would be any possible danger to the employment of young people if veteran citizens who are of good health were encouraged to work as long as possible beyond retiring age with a view to final retirement on improved pension?

§ Lord Elton
My Lords, I am not quite sure what is a veteran and what is a vintage citizen in terms of the question. Of course, it is open to people to work beyond the age of retirement. Retirement from full-time work is, however, one of the conditions for receipt of retirement pension. The National Insurance Act 1946 included provision that a person should automatically be regarded as retired five years after the minimum pension age. This was introduced because some people, for example, farmers and some shop keepers, or indeed anyone who was able to, preferred to work as long as they could, as the noble Lord would like to happen. In that case, they would never receive the pension to which they had contributed if it became payable only when they stopped work. The Government therefore consider that this deeming of retirement at the age of 70 is fair and reasonable and have no proposal to change it.

Lord Winstanley
My Lords, does the noble Lord the Minister accept that front a medical point of view 690 retirement should not be a sudden short sharp shock in the form of a transition from total activity one day to total idleness the next; that it is very much better if retirement is a more gradual and phased process? If the noble Lord accepts that, would he also accept that there are a number of administrative changes which would not be costly which the Government could make to assist firms to introduce work-sharing schemes and other ways of making retirement a more gradual and phrased process?

§ Lord Elton
My Lords, I hear what the noble Lord says with great interest, the more so as I approach the time myself. As regards the possibility of phasing out one's employment, this is very much a matter for individual employers and employees. The present scheme does allow flexibility in the ages of retirement for individuals, and they can choose that time for themselves.

§ Lord Leatherland
My Lords, would the Minister consider whether it would be helpful if a substantial increase were granted in the amount of the pension, thus encouraging more people to retire instead of continuing to work and keep other people out of jobs after the normal retirement age?

§ Lord Elton
My Lords, there is a limit to what one can do with existing resources. To tempt people to retire by an overall increase in retirement pension would be about the most expensive solution to our problems we could find, and, if that were to be done, it would not be a solution at all.

§ Lord Davies of Leek
My Lords, does the noble Lord realise what the nation would lose if we tried to get mathematical formulae for people to retire at certain times? When I look at the serried ranks opposite, with so much talent over the retirement age, it is an asset to the nation.

§ Lord Elton
My Lords, I was trying to distinguish between the tones of the laughter in front and behind. I will not enter into a geriatric contribution. I will only say that the noble Lord's point is well taken.

§ Lord Wells-Pestell
My Lords, may I ask the Minister whether he is in a position to tell the House how many men and women over the age of 65 are in fact still working?

§ Lord Elton
My Lords, because neither the retirement conditions nor the earnings rule apply to pensioners who are working more than five years after minimum retirement age, information on this is not collected. It is estimated, however that there are about 100,000 people who are currently deferring retirement and are earning entitlement to increments to their pension for their eventual retirement. Most of them are within a year or two of minimum pension age. What they will do when they reach either minimum pension age or a point five years beyond it, it is not possible to predict.

§ Lord Hylton
My Lords, could the Government say whether they are satisfied with the working of the 691 present scheme intended to encourage men to retire at 64 rather than 65, and do they think this scheme should be extended to an even earlier age?

§ Lord Elton
My Lords, the Government are never satisfied with anything less than perfection. I would not wish to enter a judgment on what the noble Lord has asked me. I will write to him.

§ Lord Banks
My Lords, could the noble Lord say whether it is still the intention of the Government to abolish the earnings rule, and, if so, can he give any indication of when that might occur?

§ Lord Elton
My Lords, the Government's position on the earnings rule has not changed. It is a desirable thing to do. It cannot be done until the resources are available.

§ Baroness Gaitskell
My Lords, in supporting the noble Lord, Lord Gainford, on his Question, is the Minister aware that it was his own party which set up the Anglo-German Foundation, which was looking into the problems of the industrial society, and that there is a vast detailed literature on all the things we can do to meet these problems? Although the Prime Minister, Mrs. Thatcher, is always urging us to look at Germany and what they are doing, we do not follow suit. They go in for everything—shared working, early retirement. It is there on the Embankment—

§ Lord Elton
My Lords, I am not certain what the noble Baroness's question is, but, if she is asking about awareness of the literature, the department is constantly looking at information from all over the world, not only Germany.