HL Deb 29 January 1986 vol 470 cc669-71

2.49 p.m.

Lord Winstanley

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

The Question was as follows:

To ask Her Majesty's Government what would be the cost to public funds of reducing the statutory retirement age for men to 63 if it is assumed that consequential vacancies are filled by persons presently in receipt of unemployment or other benefit.

Baroness Hooper

My Lords, the cost of so reducing the pensionable age for men would be about £400 million for a full year at 1983–84 benefit rates. It is, however, extremely unlikely—as recent French experience shows—that all those retiring would be replaced by someone currently receiving unemployment or other benefit, so the actual cost of making such a change would be considerably higher.

Lord Winstanley

My Lords, while I thank the noble Baroness for that informative, if not wholly welcome, Answer, may I ask her whether she will persuade her advisers to do their sums again and to bear in mind, in so doing, the fact that if we are all to have more leisure as a result of new technology, which surely will be welcome, it is better for the nation that that extra leisure should come at the end of the working life, when people have acquired the maturity and experience to make profitable and fulfilling use of it, rather than that we should have compulsory leisure at school-leaving age, which does not lead to fulfilment but leads to resentment and frustration?

Baroness Hooper

My Lords, the Government are well aware of this particular consideration but, as I have said, the actual cost of bringing down the retirement age as suggested would in fact be much higher. A more likely estimate of cost is about £900 million at the 1983–84 benefit rate, which assumes a two-thirds replacement. But it could be about £1,500 million if no vacancies were filled. I think the Government would welcome any suggestions that might meet the costs involved.

Lord Renton

My Lords, is not a very high proportion of the total population now in retirement and, therefore, partly supported by the working population; and if the recommendation of the noble Lord, Lord Winstanley, were to be accepted, would not an even higher proportion of the population thereby have to be supported?

Baroness Hooper

My Lords, I think that the answer to that is, yes. In fact, on current figures we understand that something like half the male population between the ages of 60 and 65 are currently out of employment.

Baroness Jeger

My Lords, as the Government's White Paper of December suggested that the Government were trying to move towards a decade of retirement, can the Minister tell us what would be the age for the beginning and the age for the end of the decade; or is that not leakable?

Baroness Hooper

My Lords, I think that a full explanation has been given of the Government's intention in this respect. My right honourable friend the Secretary of State for Social Services put forward in last June's Green Paper on the reform of social security the idea of a decade of retirement whereby individuals could choose when they wished to retire between the ages of 60 and 70. Views were then invited on how the problem of costs might be overcome. Unfortunately, because no such views were sufficiently helpful it was not possible to take this forward in the recent White Paper.

Lord Simon of Glaisdale

My Lords, has the noble Baroness any figures to show what the net cost might be if the retirement age or pensionable age for women were raised to 63 at the same time?

Baroness Hooper

Yes, my Lords. The estimated cost of equalising pension age at 63 for men and women is available. It depends on the assumptions one makes about how many job vacancies and jobs created would be filled. If one takes the optimistic view that all the vacancies would be filled, it has been estimated that there would be a saving to public funds of some £200 million. However, unfortunately a more realistic estimate is a cost of some £600 million, on the assumption that only two-thirds of vacancies would be filled.

Baroness Phillips

My Lords, bearing in mind the supplementary question asked by the noble Lord opposite, is it not a fact (if it is, will the Minister confirm it?) that those at pensionable age now have paid towards their pensions before they retired and are certainly not a burden on the working population?

Baroness Hooper

My Lords, yes; the noble Baroness is correct in saying that. I referred earlier to the French experience when, in 1983, the pensionable age was reduced to 60 overall. It has been found that because the contributing period was less they are running into real difficulties in meeting the demands, and some consideration is being given to putting back the age to 67 or indeed to 69.

Lord Glenamara

My Lords, does not the noble Baroness agree that it is becoming increasingly obvious that no significant reduction can be made in the present tragic level of unemployment because of the growth in technology except by sharing out the work that has to be done much more equitably than at present, and that one means of doing that must be to have a shorter working life? Will not the Government look at that if only as a longer-term objective?

Baroness Hooper

Yes, my Lords. The Government would like to do a great deal in this respect, but whichever path we pursue the costs cannot be ignored.

Lord Winstanley

My Lords, with regard to the point raised by the noble and learned Lord, Lord Simon of Glaisdale, is the noble Baroness aware that many women's organisations and, I believe, the Equal Opportunities Commission are of the opinion that women would support the raising of the statutory retirement age for women as a hesitant, small step towards the elimination of this piece of sex discrimination, which adds to the the discrimination that already exists as a result of the fact that women on average live about eight years longer than men?

Baroness Hooper

My Lords, I am aware of this point of view and of the facts quoted by the noble Lord. The Government are considering all aspects of this matter and would like to do a great deal, but no immediate action is foreseen.