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Part of Orders of the Day — Social Security Bill – in the House of Commons at 8:56 pm on 20th May 1986.

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Photo of Mr Roy Galley Mr Roy Galley , Halifax 8:56 pm, 20th May 1986

It was with surprise that I heard the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) say that he did not enjoy every moment of the Committee. Surely even in the early hours of the morning it was an experience of unalloyed enjoyment. Although there was a great divide of opinion on many matters, it was a remarkably good-tempered Committee. I pay tribute to the flexibility and skill of my hon. Friends the Minister and the Under-Secretary in the way that they handled the Committee, and to the competence displayed on both sides of the Committee during the debate.

Reform of social security was much needed and will be welcomed. The Bill makes many significant changes and I predict that a distantly future Left-wing Government, be it Labour or alliance, will retain many of its features. The net income assessment system and the common criteria between benefits are two of the significant improvements that will result. The more simple and coherent income support scheme will probably also endure and other measures will successfully curtail a number of discrepancies in the system.

I have three points to make, and it would be helpful if my hon. Friend the Minister would indicate a little of his thinking on these issues on which we touched in Committee. The first is that of the age of retirement. Most people wish for and are prepared to seek greater flexibility in retirement. When he introduced his Green Paper, my right hon. Friend the Secretary of State put forward the concept of a decade of retirement. That is a strategic objective, and there is little flesh on the bones of that idea. It is a matter of regret that we did not progress it further in Committee.

There is growing pressure for equalisation in the treatment of men and women, and it is only a matter of time before that issue becomes the subject of the legal process. Pressure for change will come from both men and women. Conflicting choices will mean that a considerable margin of flexibility will be the only solution. A common retirement age higher than 60 would not be a politically feasible option. For this reason, the central recommendation of the report by the Select Committee on Social Services on the age of retirement would be a non-starter.

The costs of reducing the male retirement age would be considerable. Whatever cost calculations one makes will depend on assumptions about job replacement. To take the best estimates available, at 1982 levels, the net cost of early retirement—assuming two thirds of men retiring between 60 and 65 being replaced in employment by younger people- would be £2·5 billion. Even if one assumes full job replacement, it would be nearly £2 billion. For financial reasons, that proposal is a nonstarter. No Government, even if they decided that a reduction in the retirement age was the No. 1 priority, would readily be able to find such money.

Another important factor in matters relating to retirement is that only about two-thirds of men aged between 60 and 64 are active in the labour market. About 10 to 15 per cent. retire on occupational pensions, while others effectively retire on sickness or invalidity benefit or unemployment benefit. It would be helpful if we were able to give those people the dignity of retirement status as part of the changes in our retirement law.

Because of the financial and political problems of compulsory retirement at a new common age, or simply an earlier age for men, we need to consider some proposals for abated pensions. A number of variations have been discussed over the years. The difficulty so often is that they can be expensive. The other major flaw is the possibility of topping up an abated pension with other forms of social security benefit. Unless the basic level of pension, with any additional state pension, is far enough above the income level for the new income support, those on abated pensions would merely rely on other benefits to boost their income.

I sought to introduce yesterday new clause 12 to overcome this problem by allowing the payment of abated pensions, with the intention that other topping up benefits would not be payable. The formula for the abatement is the reverse of the current incremental formula. It is now possible to defer receipt of a pension until after retirement age and to earn increments to the basic rate. Those increments accrue at the rate of one-seventh per cent per week. That results in a 7·5 per cent. annual increase. If an incremental system of that kind can be operated, I believe that an abated system could also be operated.

There would continue to be considerable problems. The abated system may be attractive only to small numbers of people, and they would need to accumulate a considerable amount of additional pension entitlement if there were to be no other benefit top up. Such a scheme would be a useful adjunct to the personal pension provisions in the Bill. Its impact would not be extensive or immediate, but it is worthy of further consideration.

The second issue that I wish to raise is relatively small—the impact of the Bill on unemployed people who undertake voluntary work. There is concern that the income support provisions will curtail the repayment of expenses incurred by unemployed people during their volunteering activities. I am sure that that is not the intention of my hon. Friend the Minister for Social Security. It would be helpful if assurances could be given that expenses reimbursed for volunteering will not count as income in this case. It is very important, because a large number of unemployed people in my constituency are active volunteers. They play a useful and important role in the community. It would be a great shame if this role were jeopardised by the Bill.

I wish to refer to the need for a growing awareness about the problems of the terminally ill. Many terminally ill people, usually cancer sufferers, have a short prognosis of three to six months, during which time their condition may deteriorate rapidly, and their circumstances may change considerably. They do not qualify for attendance allowance, invalid care allowance or for other benefits because of the 26-week rule. Many of them are not now eligible for single payments. Even if they were, the system might not be flexible enough to respond with sufficient speed. Sufferers and their families obviously experience considerable stress at these times. The sufferers wish to die with dignity, often in their own homes. Many of them cannot do so because at present our benefit system is inadequately flexible. Many die in hospital, where the weekly cost of treatment could be as much as £1,000.

The social fund offers an opportunity to cope with the terminally ill in the community. It could provide a quick response to their needs. It would mean social fund officers being involved with general practitioners and social workers. That is a new possibility under the new system. I hope that the needs of the terminally ill will be fully recognised within the community care element of the social fund.