SOCIAL INSURANCE

HC Deb 03 November 1944 vol 404 cc1101-210

Order read for resuming Adjourned Debate on Question—[2nd November]: That this House welcomes the intention of His Majesty's Government, declared in the White Paper presented to Parliament, to establish an enlarged and unified scheme of social insurance and a system of family allowances."—[Sir William Jowitt.]

Question again proposed.

11.5 a.m.

The Minister of Education {Mr. Butler)

I feel honoured to take part in this important Debate, and my particular task to-day will be to cover not only the scheme of family allowances, but various aspects of the plan as it affects the family. I have a Departmental interest, mainly in the children's sector of the front. This great scheme, which the House began to debate yesterday, is not, as some imagine, an entirely new plan, but a logical development of what is peculiarly a British social experiment and it carries on, to use the words of the Royal Commission on National Health Insurance, the general provisions of a system of insurance which has been evolved by the people themselves in their voluntary and unprompted efforts to meet their own requirements. Under this National Government we have the opportunity to consider the many complex issues involved, with the experience that all parties can bring to bear on this important question, and I would like to say that although I am speaking at this moment for the Government there are many of my colleagues in the Government, members of all parties, who have devoted their life's work to this subject, and from whose experience I, personally, have derived a great deal of benefit. A century ago we were involved in a political Reform Bill which emerged eventually out of the great struggles of that time. To-day we are studying, and, indeed, passing, measures which involve a great new experiment in social democracy, and which will be some recompense for the effort and strain of war.

The hon. Member for East Birkenhead (Mr. Graham White) said yesterday that he feared we were travelling hopefully, but perhaps not arriving. I would say that we seem to be arriving at so many destinations that we are always busy and are always on the job. I think he should reflect on the immense effort and strain which this country has put forward and undertaken during these years of war, and on the immense success which has attended our efforts. I believe that no other country in the world has been able to introduce such a vast programme of social reform as we have, and, at the same time, defeat one of the greatest tyrants that has ever faced us in our history. I believe the words used by my hon. and gallant Friend the Member for Lonsdale (Sir I. Fraser) yesterday were most appropriate, when he said that he was not so anxious about whether the Government intended to carry out their plans as about the real, practical difficulty in the way of finding materials and labour, and the necessary resources to carry them all out. Indeed, I am finding that on my own sector of the front. I intend to push ahead with all determination and, equally, the Government are determined to push ahead this great plan, with all its consequences.

My right hon. Friend the Member for Wakefield (Mr. Greenwood) said yesterday that he attached special importance to the health scheme. We have to consider all these schemes together: the national health scheme, the social insurance plan, the Debates we shall have on workmen's compensation, and many other aspects of the Government's programme of social reform. The success of all these will depend on the thrifty and hardworking habits of our people. Rather than encourage indolence, as was suggested yesterday, or the Santa Clause mentality, they should provide a broader and more solid basis for our national endeavour in the future. It seems that all these great plans for social reform have four features. in common. First, that the demand comes largely from the people themselves; second, that all have expressed a desire for a more closely knit society in which we should share together the risks and opportunities of life; third, that they seem to concentrate more upon the younger generation and upon the children especially, as I shall hope to show; fourth, that not only in the interests of Parliament and of the Government but also in the interests of the workers themselves, we must push ahead with our policies for full employment, without which none of these plans can succeed.

These schemes are not decided by Parliament and paid for out of some sort of privy purse of our own. I have heard it said by some critics of this plan, "Why should not the State's contribution be bigger? It can well afford to pay more." That betrays an elementary ignorance of the financial facts of life, which are summarised in the expression that the contributor and taxpayer are exactly the same person. We find under this scheme that the contributors' share alone is increased, in respect of workers, to some£168,000,000, and in respect of employers to£115,000,000, whereas the taxpayer has to pay some£74,000,000 more. The hon. Member for St. Albans (Mr. J. Grimston), in his attractive maiden speech yesterday, referred to the bottomless purse. He did us a service by drawing attention to the fact that somebody has to pay for these schemes, and that they will be felt throughout the length and breadth of the land. Although contributions are higher, there is no doubt that the benefits in the scheme, taken as a whole, will be much more substantial, and more uniform and fairer, than ever before. But I think they will weigh heavily in some districts, and particularly the agricultural districts, which have not been mentioned much so far in the Debate. I would like to make this one reference to the agricultural and rural districts. I believe that agriculture will benefit greatly by the assured market that the scheme will provide for many years to come by way of the production of milk and fresh vegetables, and many other excellent foodstuffs, which will be required for the children's meals in our schools.

My hon. Friend the Member for Northampton (Mr. Summers) referred yesterday to the difficulties of the small man working on his own, and the difficulties of those in Class 11. Attention was drawn to the fact that a man gainfully employed and working on his own, would pay a contribution of 4s. 2d. instead of the lower contribution paid by the worker who is employed; that he would get lower benefits and would have to wait for his sickness benefit. That is true, but may I remind the House that this man is entering a scheme, and is paying contributions which will take the place of the combined workers and employers contribution of 6s. 11d.? That is the reason why he has to pay a little more, although his compensation may not be quite so much as might have been expected. The reason for the delay in paying for sickness can be summed up like this: a worker, when sick, loses his job or is stood off. It is often the case that a small man, gainfully occupied on his own, can let his job tick over, so to speak, and not have to give it up altogether. I refer especially to the small shopkeeper who, although he may he sick, often finds that his job continues if he can keep his shop open. Similarly, there is the growing difficulty with the man in Class 11 in connection with the ascertainment of sickness, and that is one reason why a period of delay has been introduced in the payment of sickness benefit for that type of man.

The hon. Member for South Tottenham (Mr. Messer), whose contributions are always listened to with such care in this House, and my hon. and gallant Friend the Member for Lonsdale raised a point about blind people. The provisions for the blind are set out in paragraphs 143–6 of the White Paper. In short, the position is that the ordinary sickness and invalidity benefit and pensions under the insurance scheme are provided for those who are wholly incapacitated. For the partially incapacitated there is provision for sheltered employment at subsidised wages. For those who find the pensions provisions not enough there is national assistance. Our difficulty in singling out the blind for hardship pensions is that we could not do that without making a similar provision for other handicapped persons, and there is difficulty in defining "other handicapped persons" and differentiating between them and the blind. The hon. Member said work for the blind is therapeutic. I reply that normalcy for the blind is equally therapeutic. When hon. Members study the provisions made for them they will realise that we are doing our best for the blind on the ground that normalcy is perhaps the kindest way of treatment for them that we can evolve.

Now I come to the particular effect of the plan upon the younger generation. For the young the Government have a positive policy which includes all the other plans that I have mentioned: the improved services under the Education Act, the provision for free secondary education, a new range of educational facilities and, in particular, the extension of the school medical service up to 18. All these will cost ultimately some£80,000,000. I will not say more about the Education Act or the House may think they have come here on the wrong night. There are also additional benefits under the health plan and, in particular, the benefits to which I shall turn my attention under this great insurance plan.

Some say it was wrong for the Government to improve the position of the old age pension rates included in the report. My short answer to that is that, if the Government had not revised these rates, there are indications that pensioners would have gone to national assistance to a greater extent than they will in the special circumstances, in which it will still be open to them to do. If there is any doubt that that is the case, I would remind hon. Members that at the time of the Supplementary Pensions Bill in 1940 it was anticipated that some 400,000 pensioners would apply for assistance. Actually the number who finally applied—not all the applications were granted; one in six failed—was no fewer than 1,500,000. I have said that these new scales do not prevent pensioners from still applying but, had the Government not unproved the scales, there would have been a greater need for pensioners to turn to assistance and the Exchequer would have had to pay just the same. There is one exception, and that is the scheme for family allowances, which is to be financed by direct Exchequer provision. I should like to describe how our minds worked in a mysterious way to reach the plan that we finally decided upon and set out in the White Paper. In examining this matter we had two main difficulties. First, there is the uncertainty about the exact amount of the help which would go to the child—that is a very important point—and secondly, the need for using public money to the best possible advantage. The right hon. Gentleman the Member for Wakefield yesterday said that he attached far more importance to services than to money. That is not exactly the position of the Government, because they are putting their money on what I describe as combined operations, a system partly of cash allowances and a system partly consisting of the provision of free meals and milk in schools. When we came to examine the matter we thought that was the best way of achieving the two objectives that I have outlined. But naturally it is the anxiety of the Government that this country should guarantee to every child the best possible basis of physical health, and I must warn the House that it is very difficult exactly to calculate or to guarantee the nature of the benefits which the child receives. Therefore the Government plan is based on the belief that we are introducing in this system of help in kind a great new social reform which will have very desirable results in improving the children's health, and at the same time we are accepting the view that family allowances in themselves are a very fine measure of social advance. We are spending some£57,000,000 of public money on cash allowances, excluding the first child whether the father is working or unemployed, and£60,000,000 on free meals and milk at school.

If I may consider cash allowances and meals at school separately, I will define the details rather more closely. The system of family allowances is intended to help the general economy of the family and is not intended to be based on any standard of subsistence. The family is expected to maintain the first child. The hon. Member for Dartford (Mrs. Adamson) yesterday asked why we did not include the first child. The answer is that the family should continue to have responsibilities of its own, especially in respect of the first child, but there is a more mundane reason, and that is that the addition of the first child at a cost of 5s. would cost some£73,000,000. That would make a total of£130,000,000 for cash allowances. The real argument for family allowances, which other countries have found, is that they help a family to take the strain where the strain is most felt, and that is where the number of children creates an insufficiency injurious to health and where all meaning is taken away from the words "equality of opportunity."

I have been asked by the hon. Member for Westhoughton (Mr. Rhys Davies) and others whether the introduction of family allowances will result in the raising of the birth-rate. My answer would be that this is not the sole reason why the Government have introduced family allowances. We naturally hope that they will result in an increase in the birth-rate and it will certainly make things easier for families. But what makes the birthrate rise is confidence. I believe that greater confidence will be given to our families by the introduction of this plan as a whole and not only by the sections dealing with family allowances. I am somewhat encouraged in the belief that the introduction of family allowances will raise the birth-rate by the experience of those with whom I have been in daily contact recently who have a close knowledge of our pensions and insurance practice. They tell me that on the introduction of the 5s. pension for old age, there was put about through the country. the view of a certain philanthropic society, which warned the country that there was a real danger in introducing the 5s. pension, because it would probably result in a rise in the birth-rate. If such a modest measure of social reform leads to that sort of recklessness, we may be certain that this scheme will have the desired result. The general object of the scheme of family allowances is that we must maintain a healthy, sane and independent family life, but it is no part of the function of the State to order or to regulate it.

May I now mention some details about the scheme and show how it fits in with the medical plan and so forth. If a child enters hospital, for example, though there will be no charge on the parents under the provisions of the school medical service, the parents will continue to receive the family allowance. Similarly, the family allowance will normally be paid when a child is in an institution, unless, for example, the local authority takes over parental responsibility for the child. The orphan's allowance has been fixed at 125. for all children, including the first. The reason for the difference between the orphan's allowance and the family allowance is obvious. The children with parents will have somebody to look after them and the children without parents need extra help. I believe that this extra allowance for orphans will mean that it is more likely that a potential guardian will feel he may take charge of an orphan and look after it for the rest of its life.

The hon. Member for East Islington (Mrs. Cazalet Keir) and the hon. Member for Aylesbury (Sir S. Reed) raised the highly contentious question whether the payment should be made to the father or the mother. I have no doubt that other hon. Members will desire to raise this matter. I approached this question with great sympathy for the motives of those who believe that the payment should be made to the mother. In fact, I am sometimes in doubt in conversations in the home whether my own views are right. The Government scheme is set out in the paragraph in the White Paper which deals with this matter, and the Government's decision is that the payment should be made to either the father or the mother. I would like to explain how it will be carried out in practice. Both names will be inserted in the allowance order book. The Post Office clerk will be instructed to pay each weekly order to John or Mary Smith, so that either can cash the order. I find that when this matter is discussed sides are taken violently and that most women favour the mother being paid, and most men favour the father being paid. The Government in this difficult situation have decided to adopt the wisdom of Solomon and say that the family itself shall decide. It has been said that if the father is designated the mother will be made unhappy, particularly if the father uses the money for unsuitable purposes which I need not define. But it is equally possible for the mother to do the same. The difficulty is that there is no sure or certain virtue in either parent.

Miss Rathbone (Combined English Universities)

I would like it made clear to whom the order will be sent, if both names are entered on it. Possession is nine points of the law, and the question will be, who gets it first?

Mr. Butler

That is exactly where the wisdom of the Government comes in. It is possible for either father or mother to cash the order, but it is not the business of the Government to resolve differences within the family, and say who shall cash it. It should be left to the responsibility of the family. We have gone some way to meet the legitimate and earnest desires of the hon. Lady that the mother should have the opportunity of receiving the money. We must leave the decision to the family itself.

Dr. Edith Summerskill (Fulham, West)

Will the right hon. Gentleman answer the question? To whom is the book to go in the first place?

Mr. Butler

It all depends on who cashes the order book.

Dr. Summerskill

But to whom is it sent?

Mr. Butler

There is a legitimate technical point here. I have gone into it in great detail with those who understand it. The way it starts is that the father makes an application for an order book, and, once it is granted, it is made out so that the allowances can be paid to either the father or the mother. Therefore it is started by the father. I would like the House to realise the difficulty of leaving out the father altogether. It would be wrong to leave out the father because, after all, he is the first breadwinner of the house and the man upon whom the children ultimately depend for a large proportion of their maintenance.

Leaving that contentious question on the basis that the family must decide, and realising that this is the sort of matter which will be gone into in great detail when the time for legislation comes, I would like to consider the question of assistance in kind. That question has been before the country for some time. The provision of meals and milk has been successfully established hitherto on quite a large scale, but the Government view is that this policy must now be carried to its logical conclusion. Despite the difficulties of the war, the number of children taking their mid-day meal at school has risen in the last three years from 300,000 to 1,600,000. This has entailed a great deal of effort in building and equipping many kitchens, individual and central. In fact, little short of 14,000 canteens have been provided to serve some 19,000 out of 28,000 schools. Milk has, despite the difficulties of the war, been provided in 27,000 out of 28,000 schools. Therefore, there are only 1,000 schools left out from the milk supply.

I must be frank with the House and say that there is a very long way yet to go before all children get their meals at school, or before the demands of parents are satisfied. The Government have, therefore, been reviewing the question, and in view of the urgency of extending. this provision, they have decided, when the immediate urgency for house repairing in London is finished—and I insert that on purpose—to give school meals an equal priority in building labour with the urgent housing needs of the country. That provision of building labour, which I have been discussing with the Minister of Labour, will enable us to press ahead very fast with our plans. We have, so far, had to do with many improvisations. For example, meals are carried in trays into classrooms and are served in crowded hails. I should like to express my gratitude to the teachers, who have had a great strain in fulfilling their duties during wartime in carrying out the meals policy. Hitherto, dining rooms have only been sanctioned exceptionally. The new priority will enable me to authorise the provision of dining rooms where required: Authorities will welcome this, and they will be able to plan school meal arrangements on much more satisfactory lines. I shall ask authorities to forward me their schemes without delay, so that there will be no hold-up directly the necessary labour is available.

I cannot give an exact date for achieving our target. I cannot guarantee—and this is important—that every child will be covered by the scheme, because, to use the words of the hon. Member for Chislehurst (Sir W. Smithers), there is no doubt that you can take a horse to the water, but you cannot force it to drink. This is a provision which we shall place at the disposal of the children and of which we believe the great majority of children will take advantage. With the continued help of authorities and teachers, I believe that we shall be able to make a substantial increase in the provision of meals by the time family allowances are introduced. I should like to make it clear that, in any case, school milk can be made free at the same time as cash allowances are introduced.

I would like to make a further observation in answer to the hon. Member for East Islington, who asked that this should be a great educational and social reform. The standard of school meals has been raised to a degree unbelievable even in peace time. This is the foundation of a real nutritional policy. School meals on this scale are something new in our social system. Under this reform, children will be provided with a fair physical start. All will be able to profit better by the freer and better educational facilities, which are offered in another way. I believe the day school will be able to develop some of that corporate life, which has hitherto been the pride of boarding establishments. In future the school day will not be interrupted by those going home for the midday meal. There will be none sitting in corners, eating their damp and crumpled sandwiches. No longer will some pay pennies, while others do not. I hope that the canteen arrangements will make school life more lively and children most robust. Our national food policy in war has taught us that the Food Ministry is a great leveller. I hope that the school meals will give our children a bulging start.

This is not the whole of our help to children. Certain hon. Members have referred to the need for help for the under-fives, and that has been regarded hitherto as a gap in the Government's policy. I do not believe we should properly cover the whole of our child population unless the under-fives were included. For them, we shall continue for the time being the national milk scheme and that provision of welfare foods—orange juice, cod liver oil, and so forth —which has been a very important part of our war-time plan. On this, the Exchequer expenditure has been of the order of£16,500,000 for the milk alone. This scheme has been adjusted to wartime conditions. Since the circumstances about the supply of milk and so on may change after the war, the Government cannot pledge themselves at this date to continue the scheme in exactly the same form as it is now. We ask, therefore, for further time to consider how best to ensure that the needs of the under-fives and expectant and nursing mothers should be met, when liquid milk is freely available. The Government attach the utmost importance to schemes like this as part of our ultimate provision in kind which will, ultimately, cover the whole child population. I do not think that the benefit of the national milk scheme can be over-emphasised. This leads me, like the Chancellor of the Exchequer, to the place in the Budget where we make an analysis of costs.

Dr. Haden Guest (Islington, North)

When does the Minister expect it will be possible to supply school meals for all children? Will it not take a number of years?

Mr. Butler

I have given previous answers in the House in which I have mentioned a three-year programme. I hope that the priorities to which I have referred, will enable us to proceed with that programme, and to accelerate it to the best of our ability.

Mrs. Cazalet Keir (Islington, East)

Until meals are provided for all, is it intended to give increased compensation to families, in respect of children who go to schools where there are no meals?

Mr. Butler

I think that that form of exact arithmetic will be impossible. Our scheme is a great scheme for the introduction of family allowances, and a great new social reform in free meals and milk in schools, and we cannot undertake any addition to that, such as the hon. Lady suggests.

Dr. Guest

What pressure does the Minister propose to exert on the education authorities who have been backward during the war, and who are likely to be backward when the war is over, to get them to provide school meals at the earliest possible date? Is not three years, clearly, a most optimistic estimate?

Mr. Butler

Perhaps the hon. Gentleman will turn to Section I of the Education Act, in which he will see that the Minister has new powers for helping local authorities onward.

Dr. Guest

Is the right hon. Gentleman going to use them?

Mr. Butler

As I was saying, that brings me to the final remarks I want to make about provision in kind. We cannot guarantee that every child will get an absolutely exact amount of the benefits in kind, but we can guarantee that the children will gain enormously from this great social reform. Consider the figures. We shall pay some£57,000,000 for the cash allowances, some£60,000,000 for the school meals scheme—£420,000,000 for overheads and£40,000,000 for the actual provision of food. We have spent some£16,000,000 hitherto, on the present administration of the under-fives scheme. Anyone with a head for arithmetic will see that we are providing by our total sums under this great scheme, something very substantial and considerable and not very dissimilar from that which was proposed by the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge).

Mr. Thorne (Plaistow)

The Chancellor of the Exchequer is looking very serious.

Mr. Butler

Now I come to another portion of my remarks, which I shall keep quite short, and in which I want to deal with the administration of the scheme and the question of the approved societies. The decision that the services of the approved societies should not be used, was reached after that mature consideration promised by the Chancellor of the Exchequer in the Debate on 16th February, 1943. He then feared there was only one answer to the question, "Could the approved society system be retained in the present form?" And his answer was in the negative. The question is whether we would have been able to fit them in in any other way. We have considered this matter from every angle, and the Government are convinced that it is impossible, within the new unified scheme, to use societies administering only the National Health Insurance part of the scheme.

This new plan involves many benefits besides the National Health portion of the scheme. It is, in fact, unified; and what does that Mean? It means that there will be a single stamp on a single document, involving unified administration of health, unemployment and pensions, and the scheme for death grant. They are all to be the responsibility of a single Minister. It means the setting up of a register of insured persons and the maintenance of records of contributions. Therefore, it seems clear to us that the central machinery should operate in regard to all benefits, and that one class, that is health, should not be handed over to another agency. In fact, economy and efficiency point to the wisdom of administering all benefits directly through agencies run from a central point. I hope that this fact will enable us to collect that data which will enable a more up-to-date research into the incidence and causes of illness to be made. I think that this country is badly behind in that respect.

The first consideration is that independent agents are not appropriate for one aspect of a unified scheme. I must remind hon. Members of the complexity of this question. There are five main types of approved society, covering some 18,000,000 insured persons: big friendly societies with branches, friendly societies without branches, industrial assurance and collecting societies, some few trade unions and some employers' provident funds. All, excepting industrial assurance and collecting societies, which specialise mostly on endowment and death benefits, do private work as well as the State work. In fact, for luxuriousness and complexity, I would compare the approved societies with one of our old English hedgerows, which has grown up as a windbreak to temper the wind to the poor man. It holds out its berries and leaves to attract the passer-by. It offers different degrees of shelter, according to the place chosen and to the way of the wind; but the hedger who approaches it, be he never so wary, may be pricked by an unruly briar, or enmeshed by some coiling creeper. Let us, therefore, all take great care in considering our policy towards these institutions.

Hitherto, the argument has been that no agency dealing with one aspect of a unified scheme, can fit into a scheme centralising all aspects. This may well be the strongest ground on which hon. Members can stand, since it is not necessarily the case that one society is better than another. Perhaps we never should leave this ground—if you are not going to use one society you should not use any. But the argument has been raised that we should fit in the friendly societies which pay private benefits from their own funds, not dissimilar from, but in general less than the benefits under the State scheme. The difficulty here—I will point out these difficulties quite shortly for hon. Members—is that the membership of such societies conies to about one quarter or one-third of the insured population. We cannot compel people to join those societies and, therefore, the Social Insurance Ministry must cater for the great majority of the insured population. Moreover, membership of such societies is very scattered. In Glasgow, in 1942, out of 396 societies, 97 had only one member. In Reading there are not less than 361 such societies. In Dundee, out of 219 societies, 61 had one member only, and 54 had only from two to nine members, and the position is probably the same in other towns.

The scattered nature of these societies and the interlocking nature of social insurance make the use of a society catering for health alone very difficult. I will give the House two or three small examples of administrative difficulty when sickness benefit is claimed. It will be necessary for the Ministry in the future to find the contribution record of the claimant, and to get that from a central agency. If another agency were operating it would lead to a great deal of delay and, I think, a great deal of confusion. To certify the period of incapacity close co-ordination will be necessary between the different agencies, which are better centralised in dealing with these very difficult problems of deciding the existence of dependency, or whether a wife is maintained by the husband, and so forth. Close co-ordination would be impossible if a number of societies were administering sickness benefits alone. Similarly, in the case of a man entering hospital, when it is important to know the date of his entering the hospital, if we do not centralise the administration we fear that there may be real difficulty in deciding upon the merits of cases of that sort.

We have, naturally, considered carefully whether there will not be overlapping if a sick visitor from the friendly society visits the same house as the sick visitor from the Ministry of Social Insurance. In these cases there will be bound to be a measure of overlapping. Therefore, the Government would rather deal with such problems as the dual certificate—which is a real problem—for the sickness benefit granted by the friendly society and the sickness benefit granted by the Ministry, in a way which they will be ready to propose when the time comes, than have in the main scheme the overlapping I have described. The real difficulty of the use of the friendly societies is that we cannot use agents for one aspect of a unified scheme, but what we can do is to give the utmost consideration in continuity of policy and continuing the personal touch by the use of as many agents of the friendly societies as we can manage. The matter will be considered by the Chancellor of the Exchequer, who will also be dealing with the question of consideration for certain officers whose livelihood is imperilled by the Government's scheme.

That leads me to the conclusion of my remarks, which have been centred largely upon the question of family allowances and the use of the approved societies. I conclude in this sense. Our scheme must be simple and easily understood. Otherwise we shall fall into the difficulty described by the Scottish Miners' Federation in their evidence referred to in the Majority Report of the Royal Commission, when they said that they regarded the then position of insurance as the product of an evil genius entertainingly piling up an insoluble insurance puzzle. The aim of this great plan is to coordinate and simplify insurance rather than to make its problems insoluble or complex. It is the work of many hands—of my colleagues in the Government; of the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge); of hon. Members opposite; and of the insured people themselves, who have groped their way towards this plan. It is indeed fortunate that we have so broad a measure of agreement from which to start that detailed scrutiny which the range and character of the plan demand.

11.50 a.m.

Sir William Beveridge (Berwick-upon-Tweed)

I have to ask hon. Members for their indulgence in making my first speech in this House. I hope I may also ask their indulgence if I make that speech a little longer, I hope not very much longer, than I should have done in normal circumstances. May I begin by associating myself whole-heartedly with what has been said by nearly every hon. Member who has spoken in this Debate, in welcoming this Government White Paper. I also thank the Government for the very generous words which they inserted in the White Paper about myself, and which were repeated by the Minister without Portfolio in opening this Debate. One of the sad incidents of war is the separation of parents and children. One of the pleasant foretastes of impending, if not imminent, peace, is that children and parents meet again. I hope I may without impropriety regard this occasion as, in one sense, a meeting of a parent and a child, because it is nearly two years ago since I laid on the doorstep of His Majesty s Government in Whitehall, a Report on Social Insurance—a large and rather noisy baby. But most kindly the Government took that baby in, and cared for it, and I lost sight of it. It is true that the separation in this case took the slightly abnormal form of keeping the child where it was and evacuating the parent from Whitehall. Nevertheless, the separation was very complete. But to-day, by one route or another, we meet again; that baby has found itself moved from Whitehall to Westminster, and I also have moved from another place to Westminster.

The admitting of paternity is always a slightly delicate operation; perhaps it is a particularly delicate operation in a maiden speech. I can only say that I think this plan of the Government's is the baby which I left on their doorstep two years ago. I think it is, substantially, the same as the plan which this House debated a year and a half ago, improved in some respects, dis-improved in other respects, but, on the whole, so little altered that every now and again, I do rather wonder just what that baby was doing, how it filled in the long time that it spent in Whitehall. I will not pursue that subject. I would only like to say that in so far as it is not my child, I wish it were my child, and I should like to behave to it as an old-fashioned father. Let me remind the House that an old-fashioned father has two functions—of helping on the career of his child, and of correcting bad features in the child. I hope the House will forgive me if I devote most of my time to-day to this second function, that is to say to criticism of points on which I would like to see this plan improved, rather than to praise of the plan. I would be sorry to do so if I felt that would give any wrong balance to what I have to say. Therefore, I hope the House will allow me very rapidly to name, and welcome the main features of this plan, and emphasise the enormous changes which it is going to make in the life of the people of this country and the addition it will make in the happiness of the people of this country.

The first great change is the change to universality of insurance; instead of having a scheme for employees only, we shall have a scheme for all citizens, including housewives and persons working on their own account. Secondly, there is the principle of classification, treating different classes of citizens, according to their needs. Third, there is unity of administration, typified by that appointment, which we all welcome, of the Minister without Portfolio to be the Minister of Social Insurance. There is the idea of making pensions not a birthday present to be got when you become 65, but pensions to be given on retirement and increasing as retirement is postponed. Then there are the family allowances. That, I think, is the greatest of all the revolutions in this scheme. There is far better provision for housewives and widows. There is the abolition of the approved society system, on which I shall have a word to say later. I strongly support the proposal to abolish the approved society system while I desire to keep a responsible place for friendly societies.

Finally, there is the death grant. Hon. Members may wonder whether the introduction of the death grant is really a major change. I suggest that it is, having regard to the history of this proposal. Everybody in the country will die some time, and everybody will need, even if he does not enjoy, his funeral. Provision for funeral expenses which then occur is an admirable subject, almost the ideal subject, for compulsory insurance. When my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) planned his great insurance scheme, 33 years ago, he wished to include a death benefit. He was compelled by opposition to give up the idea. Social insurance then was not so strong as it is to-day. But the case for compulsory insurance for expenses that occur at death, is overwhelming. It is this—that, by introducing a death grant compulsorily, for the necessary funeral expenses, you can reduce the administration costs to something like 6d. in the£—something like two per cent. If you leave it to voluntary insurance through the industrial life offices, the cost ratio is anything up to 30 per cent. or 40 per cent.—6s. to 8s. in the£. The proposal to include a death grant in the National Insurance Scheme of 1911 was defeated then by the opposition of a sectional interest of the insurance companies. Its introduction now signalises the victory of a common interest over a sectional interest.

This scheme is, as the Prime Minister said, a gigantic scheme, and having said all that I have said in its favour, may I pass to three points—I shall deal with three points only—on which I think it should be improved. These three points are family allowances, the ultimate rate of retiring pension, and the administrative method by which sickness benefit should be paid. In regard to family allowances, here and elsewhere there are two issues: whether the money allowances which we give should be related to the cost of living or not, and whether they should aim at adequacy in themselves when there are no other means. Hon. Members will be aware that in the Report—I will call it the Report, because it was not only the work of Sir William Beveridge, if I may refer to him by that name—the scales of benefit were all based on the assumption of the 1938 prices increased by 25 per cent. The average cost of each child, omitting rent, was put at 9s., of which it was proposed that 8s. should come in cash and perhaps is. in kind. We discuss later what should happen if that assumption of cost of living was not realised—and, in fact, the cost of living has risen more than 25 per cent. over the 1938 level. The Government plan proposes 5s. in cash plus greatly extended provision in kind. These proposals are based on the statement of principles in paragraph 50 of the White Paper, to which I must briefly refer. The first principle laid down is that nothing should be done to remove from parents the responsibility of maintaining their children. and the second is that it is in the national interest for the State to help parents to discharge that responsibility properly. I rather wondered, when I heard my right hon. Friend the Minister of Education speaking of the Government having a positive policy about children, whether it is very positive to lay down as your first principle that you are not going to remove parental responsibility for children. That is rather negative than positive. We should deal with this question of children on rather different lines. The first principle should be that we should regard it as a primary aim of social policy to ensure every child against want, against going hungry, cold, ill-clad and ill-housed, not because the parents are spending their money badly, but because the family income is not sufficient to provide the bare necessities of healthy life.

I would name as a second principle—that we should do that in such a way as to preserve the parental responsibility as completely as possible. I would urge the Government, most respectfully, to take these as their principles in dealing with childhood after the war, in place of the principles laid down in the White Paper. Perhaps the House will allow me to recall briefly some of the salient, the rather dreadful facts about childhood in this country, shortly before the war. First, the sinister concentration of want on children, owing to the fact that wages, necessarily, make no provision for the size of the family, and to the fact that the social insurance schemes made little or insufficient provision. The sinister concentration of want on children is shown by the fact that in all those surveys of social conditions made between the two wars, 40 per cent. of all human beings found in want were children of school age. Mr. Seebohm Rowntree, in the city of York—rather a prosperous city—found out that nearly half of the working class children passed through want at some time or other. That concentration of want on children is the first fact that I want this House to consider.

The second fact is the effect of going cold and ill-fed upon the citizens of the future. If anybody has any doubt, if he wants to verify what happens when children are in want and what happens when they are not in want, let him consider the very interesting figures published each year by the Corporation of Glasgow, showing the heights and weights of children coming from houses of different sizes, and, therefore, from families of different degrees of prosperity or want. In every case you will see that the children from the better homes are better developed physically; the childish frame responds immediately and directly to better conditions of feeding, housing and clothing. Let us rescue the citizens of the future from crippling want. There is a third important fact about childhood in Britain before the war. There were not enough children altogether to keep the British race going. I do not know whether family allowances will increase the birth-rate, but, at least, we ought to do nothing to risk the loss of any child or risk the insufficient growth of any child we have. These are the facts in one of the richest countries in the world—a country with rising standards of living. May I remind the House that the average standard of living in this country, in spite of the last war and the devastation of our industries, was 25 per cent. at least higher in the thirties than it had been a generation before. Is it not clear that we were misusing our material wealth, in not maintaining our human wealth?

I beg the Government to take as their primary aim the elimination of want among children. They can combine that aim easily with the principle of not destroying parental responsibility. First, if they give allowances only for children after the first, that means that the cost of every family is shared between the community and the parents. Second, they can avoid interfering with parental responsibility in proportion as they give allowances in cash rather than services in kind. But whatever form the provision for children takes, whether of cash or of kind, the amount for every child after the first, when the father is earning and for the first child also when the father is not earning, should be enough by itself to maintain that child in health. If the amount is less, there is no security against want.

Let me pass from the question of amount to that of the form in which provision for childhood should rank—cash or kind. I hope we all most heartily welcome the prospect of a great development of school feeding. I do so myself, but I would venture to give my reasons for doubting whether this provision is the best way to set about abolishing want among children. The first is that it is, in fact, a greater interference with parental responsibility. If the cost of a child is going to be 9s. or 10s. a week and you are only going to give 5s. in cash, it means half the care of the child is taken by the State. That is an invasion of parental responsibility. My second reason is that anything done at school does not cover the holidays and does not cover the children under five. The right hon. Gentleman said that the Government planned to deal with children under five. Is not that also a further reduction of parental responsibility by further care of the children, instead of concentrating responsibility on the mother and seeing that she has enough money to fulfil those responsibilities?

My third reason is that provision in kind involves the spending of public money where it is not urgently needed. Provision in kind, I imagine, and I should be glad to be corrected if I am wrong, cannot omit the first child, and therefore you will be spending money on feeding the first child although, by the theory of the White Paper, that is entirely unnecessary. My fourth and final reason is that all this is going to take so long. In the Debate yesterday, while the hon. and gallant Member for Spen Valley (Major Woolley) was speaking, he was interrupted by the hon. and gallant Member for Preston (Captain Cobb) who said, "Are you not introducing a wholly new outlook on life by abolishing parental responsibility?" I do not want to abolish parental responsibility, but I do suggest that we want an entirely new outlook on the problem of the children of the country. We should put children and the future first. I beg the Government to consider, after this Debate, whether they should not take as their guiding principle, in dealing with this problem of family allowances, that, while the cost of every family should be shared between the parents and the community by leaving out one child, they should by giving adequate allowances, either in cash or in kind, take steps to ensure, and ensure at once, without waiting for many years, that no child in Britain need go cold, hungry or ill-clad because there is not enough family income.

Now I come to my second point of criticism, at the other end of life—to the provision for old age. Here I am concerned, not with the immediate rate of pension but with the ultimate rate of pension at which we should aim. I suggest that our aim should be that every British citizen, who works while he can and contributes while he is working and earning, should be assured of an old age without want, without dependence on the young, and without the need for charity or assistance. The Government quite definitely reject this aim. Thirty-five shillings a week for a man and wife is not, on any reasonable forecast of the cost of living after this war, a "reasonable insurance against want"—those are the words of the White Paper—unless by reasonable you mean inadequate.

Why do the Government reject this aim of adequate provision for old age? They give two reasons. The first is the great variety of individual needs. Of course, individual needs are very varied, just as the size of the feet of human beings are varied, but I do not think that the variety of human needs is a reason for deliberately aiming at something well below the average. It really is as though the President of the Board of Trade, on the grounds of the variety of people's feet, ordered the production of utility shoes two inches shorter than the average length. I suggest that the variety of individual needs is no reason for making your aim definitely well below what are likely to be the needs of the great mass of the people.

The second is a somewhat stronger reason, which may have moved the Government more. It is the need for financial prudence referred to in Paragraph 86 of the White Paper. It is "the compelling need for caution" which the Minister without Portfolio yesterday deduced from the fact that, in 1975, the cost of the pensions will be£324,000,000. Why will the cost be so much? Because the old will be there and will need to be fed, and the real difference of cost between providing for them adequately by a subsistence pension and providing for them by inadequate pensions eked out by assistance on a means test is very small indeed. I do not know whether hon. Members realise how small it is, but the difference between the cost of pensions, including assistance, in the Government proposals and in the Report, is, in 1965,£15,000,000. For 1975, 30 years from now, the difference is not so easy to calculate exactly, but I estimate roughly that if the ultimate retirement pensions are made 40s. a week in place of 35s. a week, the pensions themselves in 1975 will cost about£50,000,000 more, while on the other hand, assistance would cost£25,000,000 or£30,000,000 less.

So all that is in question is£20,000,000 or£25,000,000, 30 years hence, when the national income may well be£8,000,000,000 or£9,000,000,000. For the sake of that the Government are proposing a scheme which does not enable the young people of this country to con- tribute for adequate pensions. Are we really going to say that this country is going to be so poor after this war that we cannot keep our old above want? Being above want does not mean relief on a means test. There is no greater discouragement to thrift than the prospect of being subject to a means test in old age. I urge that the Government should introduce a scheme by which all contribute for adequate pensions now. That will lower general taxation now and hardly increase it later. Prudence means providence and providence means making a provision for the aged and making that provision now and co-operatively.

I have spoken too long and I think I hid better leave out the next section. [HON. MEMBERS: "No"] May I say to you one word shortly on the question of the relation to cost and price levels. I do not want, and I do not suppose any Member in the House wants, pensions and benefits on a sliding scale changing continually with the cost of living. The real reason we do not want it is that we do not want the cost of living to be changing continually. We cannot build up a good economic system when such changes are continually taking place. At the same time to have fixed benefits in money and to let prices rise indefinitely would be to cheat all expectations. I suggest that what we have to do about the cost of living is to make the very best possible estimate of where it will be possible to fix the general level of prices, and to keep to that general level of prices—I speak only of the general level of the cost of living after the war—and relate the benefits to it. I am sure that for other reasons the country will need to work out the policy of stabilising the cost of living. With the present trends I think we have to contemplate more than a 25 per cent. rise in prices after this war. My own view is that we may have to contemplate a rise of at least one-third. That, of course, would involve increasing all the money rates of benefit and contribution, but it would not increase the real cost in relation to the total national income, because salaries and wages as measured in money would have risen proportionately. We must make our estimate of where it is going to be possible to stabilise the cost of living after the war and relate the benefits to it, and afterwards have a policy for keeping the cost of living there.

I want to come to my third important point of criticism and that is the method proposed for administration of sickness benefits. The decision of the Government, one which all people will know that it needed considerable courage to take, to abolish the approved society system, is one with which I am in wholehearted agreement. A system of equal contributions under a compulsory insurance scheme producing unequal benefits is one which cannot be defended. I know that there are Members who differ and that there are others who are still doubtful of the wisdom of the Government's decision. I would only ask them to read again the argument which is set out in the Beveridge Report, reading not the words of Sir William Beveridge there, but reading the evidence which was given by the various associations or societies. Practically all agreed on the need to abolish the system of giving unequal benefits for equal contributions, that is the approved society system.

There are however two main types of approved societies, those connected with the friendly societies and those connected with industrial assurance offices, and they are as different as chalk and cheese. The friendly societies, which practically all give sickness benefit, are associations for mutual aid, and their cost-ratio is something like 10 per cent., 2s. in the£. The industrial life offices with trifling exceptions give no sickness benefits, and are businesses selling insurance of other kinds; their cost-ratio is exceedingly high, anything from 30 to 40 per cent? I do not believe we can have industrial life offices in the administration of social insurance, and I do not see any reason for doing so in their present form, but we can and should keep the friendly societies as responsible agents. If voluntary insurance is to continue as well as compulsory insurance we must make it easy for people to insure, we must avoid that duplication and overlapping which otherwise would take place in the home of every person who joins friendly societies. On this point my right hon. Friend the Minister of Education referred to the arguments against changing the system which are set out on page 58 of the White Paper, but did not mention all of them. Let me say something briefly about them. The first is the argument that as the friendly societies cover only one-third of the people that is an argument against using them. Frankly, I do not understand that argument at all. Sickness benefit has to be administered individually. There is no reason at all why the one-third in friendly societies should not be dealt with by the societies and the other two-thirds by the Ministry of Social Insurance. The second argument is that few of these societies give substantial benefits from their own resources for more than a limited period, so that in cases of prolonged sickness the incentive to the society to careful administration of State benefit would be much reduced. But so long as any benefit is given by the friendly society from its own resources, incentive to care remains, and in the larger societies the tendency is to give permanent benefits. In any case, I suggest that in the cases of people who are sick for a long time there will be no difficulty in having special medical inspection. There ought to be such inspection for the sake of the members themselves.

The third reason given in the White Paper is that it is difficult to see how a society with a scattered membership can maintain personal contact with its members. But if there is such a society that cannot undertake an agency is that any reason for ruling out all the societies which can? That is not a reason at all. In fact, one of the conditions of using the friendly societies, which I proposed in my Report, and which they would accept, is that there should be an adequate visiting system for all people wherever they are. With all respect these three reasons against the proposed society agency are about the three weakest reasons in defence of an indefensible position that I have ever seen put forward.

I must apologise to the House, but the next time I will not take so long. On the question of industrial life offices I only want to say that we cannot use such offices, which are businesses, and do not give sickness benefit, for the administration of social insurance. But I would beg the Government to consider the proposal which is made in the Beveridge Report, under Change 23, for taking over industrial assurance and making it into a public monopoly service under an Industrial Assurance Board. Industrial assurance is a business which, on practically every occasion on which it has been the subject of a Report by an independent committee, has received an adverse report. Quite apart from this if we are proposing to abolish approved societies and introduce a death grant we shall produce so many internal difficulties in the industrial life offices that we had better take them over and run them for the public good. In that way we could still use their staff.

I have said that these societies are as different from friendly societies as chalk from cheese, but the agents are not different; they are hard-working responsible citizens, and we could make use of their services in the administration of social security if the Government will consider my Change 23. Change 23 was the only recommendation in the Report which had the extreme honour of being definitely rejected by the Government a year and a half ago. The only reason given then for rejecting it was that they already had too much else to do. With respect, that is just no reason at all. I urge the Government that they should think seriously over the proposal for an Industrial Assurance Board, in the interests of the consumers of industrial assurance, in the interests of the staffs and for the sake of getting rid of a possible political danger.

Let me end with two general points. First, we ought to make this plan not a mere improvement of social insurance but a first step towards a new Britain, a Britain without want. The fact that my Report set out to abolish want was the cause of its appeal to the people of this country. The plan now put forward by the Government cannot make that appeal because its puts its aim lower. But it could easily be turned into a plan to abolish want. The structure is there. All that is needed is the change of a few figures. My right hon. Friend the Minister without Portfolio concluded his speech yesterday by saying this plan was at once a challenge and an act of supreme faith in the future of this country; it is nearly, but it is not quite that. Is it an act of supreme faith in the future of this country to doubt whether we can afford to keep all our children above want, to doubt whether we can give honourable security to old age? That is not an act of faith, but defeatism. Yet very little more is needed to turn this great plan into a plan for the abolition of want. It could be done so easily with a little more of the courage and imagination of our great war leader. My final point is to associate myself very warmly indeed with what was said by my right hon. Friend the Member for Wakefield (Mr. Greenwood) and echoed by the hon. Member for Rugby (Mr. W. J. Brown) and many others, that we should carry through this plan now by agreement before a General Election. Social insurance is not a controversial issue, but it does lend itself fatally to being made the subject of political auction. Social security is more important to this country than party capital to any party. It would be wrong for anyone to speak on this subject without mentioning the name of the great author of social insurance, whose scheme we are completing to-day, the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). Let me end with one saying of his 25 years ago after the last war, one which I am interested to see was quoted by the hon. Member for Seaham (Mr, Shinwell) in a recent book. The right hon. Member for Carnarvon Boroughs said 25 years ago: It should be the sublime duty of all, without thought of partisanship to join in rebuilding a new world where labour shall have its just reward and indolence alone shall suffer want. There will be some important questions as to the nature of the new world on which we who sit in different parts of this House will not be able to agree. We shall disagree, not of malice but through conviction, and in due course shall refer our differences to the electors. But on attacking want by social insurance, might it not be possible for us to agree? Cannot we do this thing at least by agreement—in the next 12 months? Cannot we in the next 12 months pass the legislation to make the Britain of the future a land in which "indolence alone shall suffer want"?

12.31 p.m.

Sir George Schuster (Walsall)

I count myself honoured to have the privilege to follow the hon. Member for Berwick (Sir W. Beveridge).

Sir W. Beveridge

May I ask my hon. Friend to call me the hon. Member for Berwick-upon-Tweed?

Sir G. Schuster

The hon. Member for Berwick-upon-Tweed (Sir W. Beveridge) is no ordinary maiden and one can hardly refer to his speech in the usual terms which are used in following up a maiden speech. I will not attempt to do justice to that speech. It cannot fail to do justice to itself, and others too, will want to speak about it, indeed I feel sure that reverberations of praise and congratulation will continue long after my words have faded away. I should like to be more personal and to welcome my hon. Friend on three special grounds. The first is as a fellow "new boy," because I still count myself as one of the new boys of this House. I welcome him secondly as a fellow Liberal. [Laughter.] I disregard those interruptions, and shall continue in very serious vein to express the hope that we shall remain united in our faith in those great Liberal principles of liberality and freedom, even though we may for the moment be divided by ephemeral and, in my own belief, petty factors.

I welcome him lastly as a fellow schoolmate. This truly is one of the occasions when I would not have been ashamed, even in this democratic House, to wear the "old school tie." I was at school with the hon. Member and my knowledge of him since his school days justifies me in calling attention to some of his qualities. The House will find in him the element of surprise. I remember him so well in his last term at school. He had been a specialist in mathematics; but having got a mathematical scholarship at Balliol he came back in his last term to do classics. Then he not only beat everybody else, but set up a new standard of excellence in Latin verse and Greek prose. Then he has the quality of youth. In spite of his white hair, I believe he is one of the youngest Members of this House in mind. Lastly and above all there is his spirit of adventure. That is particularly important in these days, when many people are criticising this type of scheme because they say it embodies a desire—a very unworthy and demoralising desire—for "safety first." At least the hon. Member cannot be accused of that mental attitude. He has thrown up an honourable, secure and comfortable post, at an age when most men seek security and leisure, to undertake a great adventure. I feel that we ought specially to welcome him for that.

I myself only want to talk on one point. I did not intend to deal with the general aspects of the scheme, but, following my hon. Friend, I must say a few words on that. I find myself in agreement with what he said about the friendly societies. I find myself very largely in agreement, too, with what he said about the necessity for stabilising the cost of living. I put it to the House that, if we fix to-day certain benefits in cash and there is a very substantial alteration in the purchasing power of that money, it will be absolutely impossible to avoid reconsidering the whole scheme. Anyone who seeks to dig himself in on a particular line of cash payments and disregards large changes of that kind is not only guilty of dishonesty, but deceiving himself as to what is practically possible. On one point I feel that my hon. Friend was not quite fair. He indicated to us that it would be quite easy to enlarge this scheme to an extent which would really provide adequate cash benefits. But in comparing the plan as it is now put before us by the Government with the plan as it was embodied in his great Report, the one feature which strikes me above all others is, that the Government, in this plan, have honestly faced up to the need for paying a reasonably adequate retirement pension from the very beginning.

I do not think that enough emphasis has been put on that point, or that the Government have taken enough credit to themselves for that great advance. In the original plan full benefit only became payable in 1965. But who can tell what the conditions will be in 1965? I regard all those estimates of 1965 as completely unrealistic. What the people are looking to, and we must look to, is the next five or ten years. In this connection I would like to express my appreciation of the two speeches we have heard from the Government front bench. My right hon. and learned Friend, in an admirably clear statement, certainly won my heart by the modesty and honesty with which he put this plan forward. He did not put it forward as a great scheme for abolishing poverty. It is not that, and let us be quite clear about it. I see in it a great pattern very modestly filled in. I certainly hope that this is only the first step on a road along which we shall travel very much further.

Having said that, the only point on which I wish to dwell is the vexed question, Can we afford it? In my view, that is not the right question. The right question is not, "Can we afford it?" but "How can we make it possible for our- selves to afford not only this, but a great many other things?" I entirely agree with the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) when he said yesterday that we must afford it. When one turns to ask how, the answer is clear. We can only do it by our work. We shall be able to afford neither idle rich nor idle poor, nor any waste or misuse of our national resources. That is the real question to which we must address ourselves now. How can we so organise our national activities that we have no waste or misuse of our national resources? I want to put this point in plain language to the Government. I would say to them, "Here you are, coming before us to declare the second of your great post-war dividends—the first in the Education Act which I supported so strongly with everybody else. Having declared these post-war dividends it is high time that we put our heads together—and you must be frank with us—about how we are to earn the revenue from which these dividends have to be paid." I do not imply that I rely only upon the Government. The ultimate driving force must come from other agencies, too. But at present the Government have a stranglehold; and unless they come forward and tell us how our national plans are to be shaped, and initiate action to prepare for them, then we shall fail not only in financing adequately the scheme we are discussing to-day, but all those other things which are so necessary if we are to make a success of peace.

Having said that, I want to dissociate myself as widely and emphatically as I can from the line of thought which runs through the type of speech which we heard yesterday from the hon. Member for Chislehurst (Sir W. Smithers) or the utterances which we have read of certain Noble Lords in another place. Speeches like that are animated by the psychology of fear—by the psychology of the servant who buried his talent. That will not do for us. Such jeremiads have been wailed at many periods during the last two centuries, and it was to one of these gloomy prophets of ruin for the nation that Adam Smith gave his famous reply: "Sir, there is an awful lot of ruin in a nation." We can look back, too, to what happened after the last war and see how figures which might have been used to justify just as pessimistic expectations as are being put forward to-day, proved to indicate no insurmountable difficulties. But that is not the way to answer that type of argument. We want something more than that. It is not enough now to say, "We have done it before." We have to consider how we can succeed now in circumstances of difficulty unparalleled in the whole of our long history.

This obviously is not the occasion on which to go into that aspect of the matter in any detail. But I must say a word. I travel about to-day with three Reports in my bag—the Report giving the statistics of coal mining, the recently published figures of our overseas trade during three years of war, and lastly, the Report of the Commission to the United States on the Cotton Textile Trade. These Reports reveal an alarming and even desperate position to which we must face up. I believe that my hon. Friend has been right when he has talked of his plan in terms of war—war against giant evils. We are truly going to be faced after this war is over with an emergency as desperate as any we have faced during war. And so, when I read a Report like that of the Cotton Textile Mission, I feel that we are going to ask our army of fine British workers to go into action against the enemies that we shall have to fight in battles of 1950 armed with tanks of 1917, and working with tactics of the Crimea. This question of the reorganisation and re-equipment of some of our main industries is the matter above all others which demands our urgent attention. What I want to put to the Government is, "What are your plans? Take us into your counsel. Tell us what you are going to do." I am tired of mere weighty assurances that "the Government have carefully considered the position and are satisfied that we can afford these things." We want more than that. If we express our approval of this scheme and, as I hope, proceed very rapidly to embody it in legislation, we must simultaneously and at the very next stage demand from the Government a full and frank statement of how they propose to deal with these urgent and extremely baffling problems.

This has been a Debate in which many speakers have indulged in quotations, and I shall venture on one. It is a quotation from a speech made by a great American, Ralph Waldo Emerson. Speaking at Manchester in 1847—nearly 100 years ago—he said this: So I feel in regard to this aged England, pressed upon by transitions of trade and competing populations. I see her not dispirited, not weak, but well remembering that she has seen dark days before—indeed, with a kind of instinct that she sees a little better on a cloudy day, and that in storm of battle and calamity she has a secret vigour and a pulse like a cannon. Those are fine words—"a pulse like a cannon." They might not unfittingly be applied to our people in the darkest days of this war and to the leadership of our Prime Minister. But when I look at those sections of the Government which are to-day responsible for preparing us for our tasks of the future, I am constrained to fear that it would require a very skilful doctor indeed to feel the beating of any pulse at all.

It is that point which I have felt justified in emphasising to-day as we sit here together expressing our approval of this plan. It is no good for us to imagine that we can live on promises for the future, or on complacency and boasting about our achievements in the past. We have got to brace ourselves, to rouse ourselves to meet a new emergency. I am no alarmist. I have faith in this country—I believe fully that if the Government will shape its plans rightly, and give the people of this country a chance, they will respond just as well as they responded to the troubles of the past century. But the time for action is now—it must not be delayed.

12.48 p.m.

Mr. Mack (Newcastle-under-Lyme)

I enjoyed, as indeed did every other Member of the House, the great privilege of listening to the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge) in his maiden speech. As a representative of insurance agents I wish to thank him personally for the great tribute he paid to a large body of men, numbering well over 60,000, engaged in that occupation, which, while not popular with many people, nevertheless is an honourable pursuit and one which has in the past served the country greatly, and may, to a large extent, serve it in the future. I understand that this afternoon the Chancellor of he Exchequer will reply to this Debate. It has been urged by some elements in this House that we cannot possibly afford to indulge in grandiose schemes of national expenditure upon social insurance. Like the preceding speaker, I would quote a very distinguished American who spoke of another American. Daniel Webster said of Alexander Hamilton: He smote the rock of national resources, and abundant streams of revenue gushed forth. He touched the dead corpse of public credit and it sprang upon its feet. I do not suggest that we can, in some mechanistic manner, produce wealth in superabundance like that, but I do believe, if there is a national urge to do these things, and if the good will exists, there is nothing which it is beyond the capacity of this country to achieve.

My right hon. Friend the Member for Wakefield (Mr. Greenwood) spoke of the necessity of dealing very definitely with vested interests. If I have any criticism of the Government to make, it is that they have not always dealt as trenchantly as they might have with vested interests. Very little has been said about the big insurance offices. There was however an allusion to them in the speech of the hon. Member for Berwick-upon-Tweed when he said that they might be formidable political influences in the future. I venture to say that if the Government had faced this in the past, and had been prepared to take over the business of industrial insurance as a public responsibility, instead of leaving it in the hands of these people, they might have done much to smooth out the difficulties which confront us at the present time.

I was, as many hon. Members know, an insurance agent, and an insurance agent is a man who has to make his livelihood in various ways. His first source of income is the business of industrial weekly collections. This comprises the major part of his business. He has his ordinary branch collections, which means premiums collected quarterly, half yearly or yearly. He has the National Health Insurance which he operates on behalf of his office, and on which I will say a word later. In addition, there are the general and fire branch of his business and, in certain cases, a small amount of workmen's compensation. The National Amalgamated Union of Life Assurance Agents, the organisation to which I belong, as long ago as 1926 urged upon the Labour Party and upon the Trades Union Congress, the necessity of giving urgent attention to the nationalisation of industrial insurance. I am sorry to say that this proposal did not receive the treatment it deserved. As a matter of fact, because of the foresight of members of my union, we were in many cases unpopular with certain offices, and even with certain of the field staff, who were misled into the belief that nationalisation of this industry would be detrimental to the interests of the agents concerned.

We demanded, as a primary condition, that the terms and the conditions of the men working in the business should be not less favourable under nationalisation, than those which prevailed in the best offices. But the Labour Party did not handle this too diligently. The Labour Party shelved it. It was discussed from time to time and certain things were said such as, "In principle, we are in favour," but some hon. Members of my own party felt that if we embarked upon this scheme we might cause certain misunderstandings and even exacerbate the Government. But after all this report should not be a bargaining report; this report should gush from the hearts of men of all political parties who claim that they believe in democracy and in the great principle of freedom from want. If we are to withdraw the demand for Change 23, which is the establishment of the Industrial Assurance Board—to which very few Members have alluded at all in this Debate—then I believe that we are taking away the keystone of the very arch of this Bill.

Let me say briefly that the insurance agents are extremely concerned and apprehensive about the outcome of the Government's proposals on social insurance. They have every reason to be. I know we have been told that we have no need to concern ourselves unduly, because there will be accretion of business in the future; that if Change 3 is instituted—which is the supersession of approved societies and means a considerable loss of earnings to agents—and if, further than that, Change 18 is instituted—which is a compulsory death grant of sums ranging from to£6 to£20, and which, in itself, will mean less business for the agents—we shall have the consolation of more endowment business, perhaps, and more voluntary insurance, as a result of the greater wealth that will come to the population of this country in the future. That may be true. Equally, it may not be true, and we have every. reason to be gravely alarmed on that score.

The effect of Change 3 in itself is not inconsiderable. Before the war it was computed that the average insurance agent earned from 5s. to 20s. per week as a result of his work in connection with National Health Insurance. In the case of the Prudential agents, the average amount earned, was 11s. 11d. per week in 1938. Hon. Members will appreciate that that is a very important part of their livelihood, and if that is to be taken away from them on the specious argument that it is necessary in the interests of the country—it may be so and I do not necessarily dispute that—then, surely, they are entitled to compensation in one farm or another for the loss of income which they will sustain? Then again there is the question of Change 18, the compulsory death grant. I want to say this to my right hon. and learned Friend the Minister without Portfolio. He is still without a portfolio but he is a big-hearted and generous man, if I may say so without being fulsome, with a great deal of understanding and "aliveness." I am sure that it does not enter into his mind for a moment, to cause injustice to a section of the community in a scheme, the purpose of which is justice for all. Indeed, I would urge upon him the desirability of giving close consideration to insurance agents, who may not only become redundant, but may suffer very considerable loss of earnings when the scheme is put into operation.

After having given very great consideration to this, the National Amalgamated Union of Life Assurance Agents came to the conclusion that we were, as citizens, prepared to make certain sacrifices for the benefit of the whole community. We do not believe in sectionalism; we do not believe that a few should dictate to the whole. But we do believe that the whole community and the Government should have due regard to that very big-hearted gesture on the part of the insurance men. We decided that only Change 23, which means the establishment of the Industrial Assurance Board, was a change which would at least give us some hope and would lessen the hurt which this social insurance might conceivably cause to us.

Let me remind the House of what Change 23 implies. It is, in effect, the conversion of the business of industrial insurance into a public service which would involve the creation of a statutory corporation and which would, in the words of the Beveridge Report, be to a large extent founded upon the experience and abilities of those engaged in the business. It would compensate the shareholders; it would employ or compensate the staff, including dealing fairly with book interests—that is to say, with the valuable right of agents in certain offices to nominate their successors and, in effect to sell their books. In paragraph 191 of the report, it is stated that the Industrial Assurance Board would set out to encourage more economical methods of insurance—I say this parenthetically—thereby allaying much of the criticism directed against the business, and it would reduce the staff required for collection as rapid1y as it could be done without hardship. I commend this to the attention of my right hon. and learned Friend—and it would, at the same time, place the staff at the disposal of the Minister of Social Insurance for other work in the field of social insurance, whether in connection with health insurance, or other forms of insurance.

We believe that Change 23 is the only practical solution of the problem, but we are not unmindful of the fact that there appears to be relatively little chance of the Government accepting it. Indeed, the Chancellor very airily and lightly dismissed it in a previous speech in exactly 20 words. It has never been a bone of contention, and some of my hon. Friends on this side of the House have never shown any particular desire to press it, no doubt because of their belief that if they did press it too much, they might get rather less of the Beveridge scheme than they were asking for. But the fact remains that you cannot solve this problem of industrial insurance, until the nettle is firmly grasped, and it is taken over as a public utility, and not allowed to remain the interest of offices which have been potential political forces in a reactionary direction. If the Government do not take that course, insurance agents are confronted with another difficulty. If there is a period of relative poverty in the future it is clear that there will be little extra business to take the place of that which we are relinquishing under the Government's proposals.

If the Government intend to investigate later, as the Minister said yesterday, the question of further insurance it may, con- ceivably, mean that something like 30 per cent. of insurance agents' normal business will suffer interference. That is a rough computation. That amount, in one direction, will make possible two things: First, workers will be denuded of a considerable part of their livelihood, and, second, there will have to be some form of rationalisation whereby those workers are taken over to do other forms of work which, in turn, will mean considerable redundancy. Surely, such redundant workers should be cared for, because of what they have sacrificed for the benefit of the community. The Government should take over the responsibility for seeing that these agents are put into suitable employment, where they can do useful public work for the scheme. I am entirely in favour of a progressive scheme for social insurance, but I hate to think that that can only be brought about by making insurance agents sacrificial lambs on the altar of political expediency. I know that if we have a period of prosperity after the war it may be—indeed it is likely—that the public will desire to insure on a wider and broader scale, and that that will certainly help us to reduce some of our losses and ameliorate our difficulties. But if national prosperity reaches unlimited heights after the war, as some of our more optimistic friends believe, then the Government can well afford, arising out of that prosperity, to consider allocating a certain amount of money for compensation for those who have fallen by the way under this scheme.

There are precedents for that, and while it would be unwise for me, and not strictly relevant at this stage, to talk about methods of compensation which might be pursued, I would like to remind the House that in the case of public utility companies most of them have been based on legislation. When reorganisation has become necessary through legislation, there has usually been a protective arrangement for the affected staffs, not only for the purpose of compensating redundancy but also for the loss of emoluments, status and special privileges. I need not do more than quote the Railways Act of 1921, the Electricity Supply Act of 1926, and the London Passenger Transport Board Act as examples of this kind, where precedents have been established and where redundant workers have been given consideration. Insurance men, who are gravely perturbed and concerned about the outlook under this scheme, if full justice is not applied, would like to ask the Minister to give due regard to the hardship and hurt which they will have to suffer. I cannot talk about priorities in regard to which men shall be taken into the new Ministry of Social Insurance. I know that the friendly societies' men have a claim, and I am not unsympathetic, but I say that industrial insurance men, particularly those who have bought their books, should have some consideration.

Many of these people have gone into the business and bought small books at anything from£200 to£500. The purchase has meant almost a lifetime's sacrifice. They have incurred considerable debt. They are often paying interest on the capital borrowed for the purchase of the book, and they find that a great burden on their already limited earnings. I am sure that it would not be the intention of the Government, viewing the situation aright, to place these men in such a position that their book interest was completely disregarded as an intangible asset, and, therefore, no responsibility of those who were making the change. I will not speak of compensation to shareholders, because that is, for the moment, outside my province, but it has always been the principle of the Government to regard compensation on equitable lines, and if it is right and proper for big property and land-owners, people who have taken advantage of this country in her hour of dire need, to get compensation sometimes on all too generous lines, then it is only right and fair that insurance agents, who are members of the working class, often poor members, should have special consideration given to their needs.

I feel that we have been fobbed off with very hazy promises. We have been dismissed very lightly. I regret that in the course of the Ministerial speeches which have been made no specific and direct allusions have been made to the plight of over 60,000 workers in industrial insurance. I know that general observations have been made about it here and there, but the question does not seem to have concerned the Government—at least, it was noticeable by its omission from their speeches.

It reminds me of the story of a forlorn and downcast man who, many years ago, went to see the great practitioner Abernethy, who looked at him and said, "You are run down and dispirited. What you want to do is to pull yourself together. Go and see Grimaldi. He will tone you up." The man replied, "But I am Grimaldi." In the same way, we are asked to solve our own problems. We have not been given, by the Government, any definite assurance that they will pay particular regard to this question of compensation. Speaking on behalf of a large number of patriotic citizens, men of good type, who work uncomplainingly and who do not get the limelight, I ask that they should not be overlooked in the consideration of the question of absorption into this scheme and of dealing with the loss of earnings. There should be full and adequate compensation for any loss they may sustain, from whatever cause it may arise under these proposals.

1.14 p.m.

Lady Apsley (Bristol, Central)

I will not delay the House for many minutes, because I know that many want to speak in this interesting Debate. I would like, first, to associate myself with those who offered a warm welcome to the Government for the vision and imagination with which they have brought forward this scheme of social insurance. There are two points I would like to make, and one criticism. The first is with regard to children's allowances. I am glad that my right hon. and learned Friend has maintained the view that these allowances should be partly given in kind, and I agree with what he said yesterday about these allowances giving this country very rich dividends in the future. Those of us who were associated with evacuees from our big cities in the early days of the war were horrified to find that so many of our children had been brought up on unsuitable—at least not sensible—diets. I believe that this payment to parents, by way of better food and a warm midday regular meal for their children, will reap rich dividends by making better the health of our future generation. I believe that at least nine-tenths of the ill-the country to-day was conceived in childhood, due to children having the wrong food and at the wrong time.

The second point I would like to make, and on which I would congratulate my right hon. and learned Friend, is the introduction of a wide and comprehensive scheme of maternity benefits. I believe that nobody has hitherto mentioned this very important and far reaching reform. It is one which strikes at the very roots of our national life and will greatly strengthen family life and add not only to the number of our children, but also their quality. The 13 weeks' benefit which is suggested to be given to the woman who is gainfully occupied is extremely valuable, and I sincerely welcome this reform. The point I should like to mention in the way of criticism is that it seems to be highly uncongruous that we should be considering giving£20 for a funeral or death grant and only£4 for the bringing in of a new fine life to the nation. I feel that this should be put right. I should like to remind by right hon. and learned Friend of what Napoleon said when someone asked him what is the greatest asset to a nation. The questioner expected the emperor to reply that it was military glory, or art, or literature, or something of that kind. But he replied "the nation's mothers." Therefore, in congratulating the Government on this scheme of social insurance, I would ask him to remember that this is an important point for the future and to see if something better could be done.

1.16 p.m.

Mr. Leach (Bradford, Central)

I listened yesterday to my right hon. and learned Friend giving his account of the meaning of the White Paper with all that clarity and skill which comes of his long experience and training. To-day I have listened to the speech of the Minister of Education showing very clearly the Government's exceedingly firm intention to proceed with this scheme and the seriousness with which they regard the problems that they are seeking to solve. That has given me very great satisfaction. The White Paper is certainly a great document. It has had a good reception and it represents a very big step forward. But there is one section of the community, for whom I am going to put in a plea, to which it is a keen disappointment. I speak of those unmarried women of advancing years whose future, I believe, is less secure than that of any other section of the people. Their case has the support of at least 138 Members of the House in a Motion which stands on the Order Paper. These ageing unmarried women have been led to suppose that the Ministerial reply given me some seven months ago would bear more fruit than it has done. I was then told that the position of unmarried women was being fully considered in the framing of the Government's proposals. This full consideration has so far only had limited results.

What happens to the spinster in the plan of the White Paper? If she works for an employer she begins to pay 25. at 16 and 3s. at 18 and over. If she runs a little business she pays 2s. 5d. at 16 and 3s. 6d. at 18. If she stays at home as a house help she pays is. 10d., and at 18 that rises to 2s. 8d. It is not clear to me where she is going to find the wherewithal to make the payments. Perhaps her parents will have to see to it. But housewives are to be exempt from payment. The assumption, I take it, is that the housewife is always a married woman, whose insurance is combined with that of her husband. My dictionary definition of housewife is "any female domestically employed." We know that many unmarried women are housewives. Are they outside the scheme, dependent in old age on public assistance and the pension that comes at 70? I should like that little point cleared up. Spinsters are certainly to get better sickness insurance and unemployment benefits from the increased charge put upon them, but in other respects they are very largely still left in the lurch. Take, as a first example of that, the case of the widow. Her standard pension age is to be reduced to 50. The conditions for getting it will readily be fulfilled by the vast majority of widows. But the spinster's standard age remains at 60. Why this differentiation? As citizens, surely these two sections are on an equality of worthiness.

Why do the Government have a softer spot in their heart for widows than for spinsters? At 50 the widow is surely more safeguarded than is the spinster. Her grown-up Children are round her and can and do assist her. Her home circumstances are likely to be more favourable than those of the spinster. If it is argued that the widow needs consideration because she has lost her husband, so has the spinster. The widow who loses her husband in the war gets a pension at whatever age she may happen to be, but the spinster who loses her sweetheart in the war—and thousands of them are doing that—has to wait till she is 60. The White Paper says that pensions are being fixed on an actuarial basis related to contribution. I hope this rule is not to be made cast iron in the case of spinsters. The just and proper rule I believe to be the one governed by need and not by actuarial calculations.

Let us recall some of the handsome benefits which are to be granted not on an actuarial basis at all. Family allowances are to come entirely from taxes. They amount to£59,000,000 in cash and at least an equivalent sum in kind. A spinster will not draw a penny of these very handsome benefits, yet it must be remembered that a large body of spinsters are taxpayers. Surely this fact must be borne in mind in assessing the contribution due from her. It is idle to talk of the actuarial calculations in her case in these circumstances. If she is making benefitless contributions for the advantage of others, which she is doing under this plan, surely an adjustment of her pension need is called for. I do not think it is realised how much will go into family households through provisions from which spinsters are entirely excluded. Take the case of a family of six to eight children. For an all-in payment of 3s. 10d. a week, that is 1s. 11d. each for man and wife, it is to get maternity benefit, chilldren's allowance, school meals, medical service and dental and eye services. I calculate that there can go into such a household£2,000 in cash and in kind over a course of years. We are not raising any criticism or objection about that. A married man's contribution of 3s. 10d. includes two persons. The spinster's single contribution is 3s. Can it be said that this payment is fair to the spinster? The White Paper will, therefore, continue the era of benefitless premiums which the Beveridge Report laid down for the spinster.

Look again at the provision that is being made for the widow. The standard age is reduced to 50, but there is one condition that must be observed. She must have been married for at least to years before. But two other benefits are included. At whatever age she becomes a widow she receives a death grant of£20 and 36s. a week for 13 weeks. If she has children, 5s. a week is allowed for each up to the time of leaving school. After 13 weeks the 36s. becomes 24s. and it is then called guardians' benefit. This continues until the school-leaving age. After all the children reach school-leaving age the payments cease. In most cases she is then over 50 and the pension of 205. begins at once. All these provisions go very far ahead of anything provided in the Beveridge Report. The claim that the Government are out-Beveridging Beveridge has a substantial foundation in fact, but, looked at through our eyes, it places the widow still further ahead of the spinster than she was before. It is certain that the vast majority of widows will get an unrestricted pension of 20s. when they reach 50. Why do the Government feel so much more generous to the widow than towards the spinster? The war-widow and the war-spinster are much too far apart in the benefits which will come to them under the provisions of the White Paper. We do not seek in the slightest to make the scheme any less generous to the widows and to families. Nothing of that sort is in the minds of the people for whom I am speaking. Let them all have what is promised to them, good luck to them, but this generosity brings once more into relief the almost stinginess of the treatment of spinsters.

A question was asked in July as to how much it would cost to grant 10s. pension to all insured spinsters of 55. The answer was£2,800,000. A 20S. pension, therefore, would cost£5,600,000, but the Chancellor of the Exchequer said that such a concession could not be restricted to insured spinsters. I racked my brains for a long time to discover to whom the door would be opened if this concession were granted. I could think of nobody to whom the door would be opened and nobody has publicly suggested who those people may be. Since the publication of the White Paper it must be abundantly clear that there are none. Let us look at the cost again, and put it at£5,600,000. The total cost of the scheme is£650,000,000 in 1945, so that the comparatively small amount for which we are asking represents less than an additional 1 per cent. of what is proposed to be spent. Surely that little sum could be added to remove the one small blot on an admirable scheme. I have previously given reasons why 55 is the proper age to select for the granting of pensions to unmarried women. Their industrial use becomes negligible at that age. It must be remembered that the Home Office permit a policeman to retire at 50, and even younger. The reason is that age begins to destroy his usefulness at 50. The same reason applies to spinsters in the industrial field.

What evidence is there that spinsters in the industrial field begin to deteriorate in health at 55 and that their hold on their job becomes more and more precarious? On 8th July last year I asked the Minister of Health for the best estimate of the number of unmarried women of 55 and over and of 60 and over. He gave me these figures: single women aged 55 and over, 760,000; widowed women of 55 and over, 1,680,000; single women of 60 and over, 560,000; widowed women of 60 and over, 1,439,000. The reduction in the number of spinsters between 55 and 60 is 26½ per cent. A tiny few may have married and still fewer may have left the country. The same reasons apply also in the case of the widows. The reduction in their case, however, is only 15 per cent. compared with the reduction in spinsters of 26½. How, therefore, can we escape the conclusion that the death rate of spinsters of 55 and over is 10 per cent. heavier than the death rate of widows of that age? That, I think, is evidence that at 55 the unmarried industrially employed woman begins to fall away in her physical capacity and in her possibility of holding her job. I am putting in this plea for that person in order to persuade the Government to treat her a little more generously than the White Paper provides.

1.34 p.m.

Sir Arnold Gridley (Stockport)

Judging by the attendance on the Benches at this moment, the only conclusion one can come to is that the majority of our honourable colleagues have found it necessary to try to abolish hunger and want. At any rate, those of us who remain will find less difficulty in addressing our remarks, quite properly, to the Chair. I am sorry that even the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge) has found the need for abolishing his wants, because I wanted to congratulate him on the great speech that he made to-day. His maiden speech, of course, will be a memorable Parliamentary occasion. We all know, whether we have much or little courage, however experienced we may be in speaking outside, it is an ordeal to make a maiden speech in this House, which is the most critical of all assemblies, though one of the most friendly, and a place where we all very soon find our level. Having had to cross swords with the hon. Member for Berwick-upon-Tweed on a previous occasion, when perhaps I may have claimed touché, I am glad to-day to hands him back his social security sword with full honours. We have just listened with interest to the champion of the spinsters. I do not propose to follow him, because I have always told the spinsters who have written to me that it would be dishonest on my part to give them any encouragement to believe that any Government could possibly meet the demands that they make. However, the remarks that have fallen from my hon. Friend will no doubt receive the fullest consideration of the Government.

What is this important scheme that we are discussing in this two days' Debate? It seems to me that it can be accurately described as a scheme of compulsory self-help roping in every one of us as contributors and/or as taxpayers. It is true that there are many millions of our fellow countrymen who need neither unemployment benefits nor retirement pensions in view of the nature of their occupation. I think, however, that the country has now come round to the point of view that universality is an essential feature of a comprehensive social insurance scheme, and when all is said and done, in this precarious life, while one may be comfortably circumstanced to-day, one can never say whether in five or ten years' time one may not need a pension or assistance of some kind or another. The plan itself is not universally understood by every one in the country. I received a letter a few days ago from a correspondent, who wrote: Dear Sir,—Re social insurance. I should be obliged if you would let me know whether my wife will be entitled to death from me, under the above scheme. I propose to ask the Minister-Designate of Social Insurance if he will tell me what I should reply. Those of us who attended a large meeting shortly after the Beveridge Report came out and were addressed by a well-known speaker, were told that unless we swallowed the Beveridge medicine we would suffer political extinction at the next General Election. That is not the way in which we should approach consideration of a scheme of this kind. To look at it purely as a vote-catching scheme shows neither wisdom, courage nor statesmanship.

It has been suggested that legislation to carry out this great plan should be carried through before the next General Election, and the hon. Member for Berwick-upon-Tweed, at the end of his speech, though he rightly urged that this should not be treated as a party matter, asked that legislation should be completed before we are called upon to face the next General Election. I do not see how it is possible in the time to carry through a plan which will apparently involve six or seven major Bills, and, as those who have read every word of the Report will see, which leaves some 12 matters for later discussion and decision. The Government have rightly asked in the White Paper for adequate time to complete the further stages of this plan, and the House would be ill-advised to press the Government to hasten too fast, because the last thing we want of this great social scheme is that it should be jerry built.

I would like to say a word on the question of approved societies. I believe that there are other speakers who intend to deal with that quesion at some length. These societies, with their millions of members, have made a tremendous contribution during the last half-century, and some societies longer, to the social welfare of a considerable percentage of our population. I know that changes in their constitution may be necessary to fit them into co-operation with this plan. All I ask is that, having regard to the services they have rendered in the past and to the pride which is felt in the societies by their millions of members, the Government might at least think again to see whether it is possible, even now, to formulate some method of bringing them in. There are precedents for the Government thinking again, and not infrequently when that has happened, better proposals than those originally brought in have emerged.

I want to say one or two words on the question of cost. Not infrequently, when one approaches this matter with the question in mind, "Can the country afford this scheme?" ridicule is poured upon one. We are told that if the country makes up its mind to do it it can afford anything. I do not say that the country cannot afford this scheme, but it is only wise and prudent that we should examine what the cost of it is likely to be and how all of us who have to pay for it can find the money required fully to implement it. Very seldom have I heard in speeches any reference made to what I always consider in schemes of this kind is a most important part, and that is the report of the Government Actuary, who has to consider their financial implications. If hon. Members will turn to their reports, there are three short quotations which I should like put on the records of the House. The first is on page 43, paragraph 6, where the Actuary, in discussing the cost of the scheme, says this: I have not allowed for an increase in longevity in the future—which might substantially affect the cost of pensions in later years—or for a change in the fertility rate (either upward or downward) which would affect the cost of family allowances at once and, in due course, the other items of expenditure as well as the contribution receipts. And then, on page 57, having pointed out that there are certain items of cost which it has been impossible for him to calculate, he says: The working of the scheme in all its aspects will clearly have to be tested by periodical actuarial investigations. These will have regard primarily to long-term trends as affecting the financial equilibrium of the various parts of the scheme, the continued suitability of the rates of contribution prescribed, and the growth in the charge falling upon the Exchequer. In the light of these reviews the Government will be in a position to take early action, by modifications in the rates of contribution, or otherwise, in order to maintain the financial balance of the scheme. The Actuary's Report is one that ought to be carefully studied by all of us before we come to the conclusion that the cost is going to be this in 1945, that 20 years later and a larger sum 20 years after that. If, as is foreshadowed in the Actuary's Report, the Government's intention is to review the financial aspects of the scheme, say quinquennially I for one have no hesitation in saying that in the early period of the operation of this scheme the country should have no difficulty in being able to find the money—that is to say the people of the country. It is a question of distributing a proportion of what we all may earn.

We must; however, never forget that the success of this scheme depends upon the success of the Government's employment policy. No amount of dialectical argument and debate can confute that fact. Employers and employed alike have to combine their energies now, from this moment onwards, to do everything possible to bring about full employment as quickly as possible during the transition stage between war and peace. I can tell the House that employers, especially those responsible for export business, have become extremely anxious owing to the limitations imposed upon them at the moment which prevent preparations being made to secure an early resumption of the export trade. One realises that our own British Government will have to come to trade agreements, if possible, with the United States and with the Dominions and that discussions with our American cousins and our Dominion people should take place as soon as possible. I would say to the Government that, in negotiation with our opposite numbers in the United States of America, no progress will ever be made until our representatives stand up to those on the other side. Far too often during recent years have we given way. That has happened time and time again and we gain no respect for it. If there is one thing our American cousins understand it is those who tactfully but firmly place themselves on a level with those with whom they are negotiating. The time has come when great firmness is necessary on the part of those responsible for carrying on Government negotiations.

There is one other thing. If the Government are to make their employment policy practicable, what urgently calls for attention is the present organisation of the Board of Trade. It is a very old institution. I believe it to be a fact, although I may be wrong, that even the Archbishop of Canterbury has a right to attend meetings of the Board.

Mr. Deputy-Speaker (Mr. Charles Williams)

This is really more than I can stand. The social insurance scheme will not be administered by the Board of Trade and we cannot discuss the organisation of the Board of Trade now. The hon. Gentleman's remarks are completely out of Order.

Sir A. Gridley

I am sorry, Mr. Deputy-Speaker, I intended making only a passing reference to the Board of Trade, linking it with the Government's employment policy. There, however, I will leave it. Before I sit down may I ask my right hon. Friend whether he will endeavour to secure that we have answers to these three questions: Are the benefits receivable under the Government's plan included for Income Tax assessment? Is it intended to keep separate funds for each benefit, accounting for both receipts and expenditure, so that one may know whether the respective funds are solvent or insolvent from time to time? What does the plan provide for illegitimate children in this country? So far as I can see there is no provision for a class which must be taken into account. We all know that in wartime it is a class which increases rapidly in number. I can find nothing in the scheme which makes provision for them.

I am one of those who have now come to the conclusion that the country can afford to face the cost involved in carrying out this scheme, at any rate during its early years. We shall find out, if the quinquennial valuation is made, whether we can continue to afford it. We shall have knowledge in the interim period whether the Government's employment policy has succeeded or not. If it has succeeded, and a policy of expansion, not only here but in other countries, has been pursued, I think we shall be able to face the future of this scheme with confidence that the wherewithal can be found.

1.55 p.m.

Mr. Kenneth Lindsay (Kilmarnock)

I am very much tempted to follow the hon. Member in his line of argument, but I am afraid I too should find myself out of Order, but I would like to make a suggestion, if I may, to the Leader of the House. It seems to me that the time has come when we ought to have a separate discussion, not only on the export trade but another discussion, on the general question of finance, separating a capital and long-term Budget from annual commitments. Many of the speeches in this Debate, especially what I regarded as the deplorable contribution from the hon. and gallant Member for North Ayrshire (Sir C. MacAndrew)—a very different type of speech from the excellent one which we heard on finance from the hon. Member for Chippenham (Mr. Eccles), which really did try to face the problem. Any hon. Member or a man in public life, who, like the hon. and gallant Member for North Ayrshire, starts gambling on 17 per cent, of unemployment after the war seems to me to be taking on a very serious respon- sibility. I am not sure that we have heard the end of that particular speech.

I would like to pay a very great tribute to the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge), whose speech must have been unique. It was not only unique because it was authoritative but because of the determination and will of his comparative middle-age—at any rate he is not a young man. I appreciate the remarks which were made by the hon. Member for Walsall (Sir G. Schuster) when he said that it was an act of great courage for the hon. Member at his age to throw up an extremely interesting and happy job in the ancient university of Oxford, and to take on this new responsibility.

I wonder whether the House would pardon a short personal reference. The other day I had the privilege of hearing a very great friend of mine, Mr. Brook Claxton, who is now Minister of Reconstruction in Canada, speaking in Ottawa on a Bill for children's allowances. Among many references which I heard—references to the hon. Member for Berwick-upon-Tweed, Lord Keynes and to the Chancellor of the Exchequer—there was a reference to my hon. Friend, whom I am glad to see in his place. The reference read: To the great British trade union leader, Mr. James Griffiths, M.P."— who is well known here as the hon. Member for Llanelly— who said: 'I would feel more resolved and more determined facing the employers, if I knew that the children of the men for whom I was negotiating were outside the power of the owners to starve, if conflict came.' Then, by some strange coincidence, I heard a Liberal hon. Member of the House make the precise quotation from Pitt used by the Minister of Social Insurance yesterday. This makes me ask whether it is not time that the Ministry of Information made known, not only in the U.S.A. but in the U.S.S.R. the fact that in this British Commonwealth of Nations we are almost competing with one another in schemes of social security, and that it may be that we have reached to-day in the Commonwealth a point at which it will not be the old type of pioneering—there being very few virgin lands left—but a social pioneering in public schemes, which will become our great contribution to the outside world. Nor do I think this is unconnected with national security.

The two particular points I wish to mention to-day are firstly, some references to the speech made by my right hon. Friend the Minister of Education, and secondly, the general approach to the question of the younger generation. First let me say how much I welcome that my right hon. Friend was included on this occasion among the Ministers who speak on behalf of the social services administration as a whole. Education is not confined, as used to be the case, to examinations and questions of towels and milk, though milk provision certainly was one reason why he was included to-day. There were many other reasons, namely, that the Minister of Education now fills a really important post in the Cabinet and an integral part of the social services generally. I would like to congratulate him wholeheartedly on securing a fair share of the money for his Department. That sort of tussle is always going on, and I see signs every now and then that more is coming in the way of the children, which means that his Department is probably the best channel for accepting it.

There is another aspect of education in its wider aspect, that is training. I am very pleased that the Government have separated the whip of so-called reconditioning centres from unemployment benefit. How well I remember in my own constituency men coming to me and saying "You want me to go to a reconditioning centre? Thank you for nothing," and they went away to some remote place, stayed there about two or three months and then came back, and there was no job at the end of it. I do not think we have finished with this question. I have been impressed in the last two days by how much remains to be thought out yet, and what a vast administrative task awaits us. While I am in absolute agreement with the hon. Member for Berwick-upon-Tweed and also with the right hon. Member for Wakefield (Mr. Greenwood), about getting this scheme through while the House of Commons is as near as possible a Council of State, I am not so sure how the timetable, unless a great deal of work about which we do not know has gone on behind the scenes, is to work. My right hon. Friend said this morning that he hoped the climax of school-feeding would come at about the same time as the introduction of the Endowment Bill. I do not know which way to take that. I hoped that the Bill dealing with children's allowances was coming early next Session. I am absolutely certain, even in the light of the great and important fact mentioned by the Minister this morning about priorities, that 70 to 75 per cent. of the feeding of school-children cannot be attained in the next year.

I seem to remember that the Chancellor of the Exchequer said, on the occasion of the previous Debate, that 2,000,000 out of 5,500,000 school-children would be provided with dinner before very long. That was 21 months ago. My right hon. Friend stated this morning that the figure was 1,600,000. I am not complaining about it. I am only too pleased to see the increase, but it only shows that it is bound to be a slow process. How much I agree with him that all these children are not being fed properly. Some, in places which I know, are getting food from canteens, often in five or ten minutes, sitting on a form. They have to eat where they can. It is by no means the position we had in a comparatively few schools before the war where there were separate canteens, and tables with table-cloths, where feeding became an educational act. That is the thing which matters. It is better to go to a school and have a hot meal than just to take an old, crumbling sandwich as I used to take. I admit that. But there is a long way to go yet. In short, I am not sure about this time-table, and yet school-feeding is an easy thing to achieve compared with the shift-over of the approved societies and other vast administrative Acts which will become necessary.

The important thing to be done is to separate training completely from the giving of assistance. I hope this scheme means quite a new approach to training. I have just come from a country where the school-leaving age is very often 18, and where there are 300,000 people having sub-professional training between the ages of 18 and 20 and no one regards it as the least bit odd. There is one State in which it does not pay to employ anyone under 18 years of age. I refer to the State of New Jersey. We have some way to go in this whole approach to training. It is no good sending people off to reconditioning centres, and nobody in this country, in my opinion, has the faintest notion what to do when the 30 weeks' benefit are finished. The hon. Member for Berwick-upon-Tweed said, "Send them to training." I say, "Training for what?" That, to my mind, was the, weakest point in his great Report. After 30 weeks there will be a means test, as, we heard from the right hon. and learned Gentleman yesterday. There is only one real answer to this problem, and that answer is something like full employment. It seems to me that the time has come when, as with finance and exports, we ought to consider that question separately from this Debate.

May I put a few questions to my right hon. Friend? We are still a little in the dark about this 2s. 6d. If I understood the hon. Member for Berwick-upon-Tweed aright, he said that in effect 9s. was his figure, 8s. in cash, and 1s., which I think was based on the existing feeding in schools at the date he wrote the Report. Then the Chancellor of the Exchequer, during a Debate, said there were "many things besides meals at schools" which Come into this service. The Home Secretary referred to "a Charter of Child Welfare." These are big phrases and very general phrases, and as we get on with these Debates we shall, I hope, become more and more particular. To-day my right hon. Friend has become a little more particular. He has told us that£20,000,000 of this figure of£60,000,000 goes to overheads. That I presume is labour, staff, canteens and equipment, so that£20,000,000 goes, not directly to the child, but indirectly, and£40,000,000 represents the actual meals and milk. I cannot do the arithmetic because I do not know how many children are involved, so I do not know whether the figure per head works out at 2s. 6d., 3s. or 4s. In my opinion we shall never get 100 per cent. of the children taking meals. Probably 70 per cent. will be a high figure. In villages the total will be nearer 100 per cent., but in, towns very often people will still prefer their children to have their meals at home.

There is the question which the hon. Member for East Islington (Mrs. Cazalet Keir) put this morning, the question which I suppose was answered by the Minister of Education, when he said that we did not intend to make this an exact business, that we are to give 5s. a week, and improve the social services and have a nutritional policy. Could he or the Chancellor be more precise about what is included in addition to meals? I liked the approach of the hon. Member for Berwick-upon-Tweed this morning when he said "Let us face this question of want among children in a comprehensive way, and put that first." I think he puts the parents' responsibility within that framework. I think that was the difference between him and my right hon. Friend. The school-leaving age is to be raised to 15 and then to 16. From what I know, the average boy between those ages gives 10s. to 25s. a week to his mother. Thus there will be between 10s, and 25s. less going into the home, and there will probably be no maintenance allowance below the compulsory school-leaving age. Are we quite certain that there will be enough money to look after the children? Are we quite sure that the 5s. for those on benefit will be sufficient?

I raise this in the friendliest possible way. I would like to see a proper attack made on this whole question of the child. The first study I ever made under the supervision of my hon. Friend the Member for Berwick-upon-Tweed was in relation to children in London. It was abundantly proved that one school in a borough like Lewisham won more scholarships than the whole of Bermondsey and Rotherhithe put together, and that the economic social conditions prevailing in those two areas were so alarming as to confront us with a fundamental problem of poverty. I am not persuaded yet. that 5s., plus meals to 70 per cent. of the school children for five days a week for 45 weeks in the year, will meet it. There will be huge gaps left to deal with in this fundamental problem, and I think they are at the root of social security in this country.

2.12 p.m.

Sir Adam Maitland (Faversham)

I hope that if I do not follow the points made by the previous speaker, he will acquit me of any discourtesy. As many hon. Members wish to speak, I would like at once to refer to some of the matters which are in my mind, and which I wish to place before the House. I am sure that, on this Motion, the Government will find themselves supported by an overwhelming majority, and that when legislation is submitted to this House affecting the happiness and conditions of our people, and seeking to improve that happiness and those conditions, such proposals—even if criticised in detail—will be welcomed by Members on all sides. As suggested by the Minister in his very able and modest opening speech, it is indeed remarkable that in the very midst of war we find ourselves accepting as a certainty that military victory will be ours, and we are now thinking and planning how we shall find the solution to some of our post-war problems. It is a great tribute to Government and people alike, and it is worthy of our British people that at this time we should now be concerned in finding and discussing solutions which will help to meet the problems of our post-war years. It is creditable to the Government and to the House that there is such profound interest in these problems, and such a profound desire to find the solutions which will best add to the permanent happiness of our people.

I am sure it is right, although some hon. Gentlemen seem to object to it, that from time to time we should consider the financial aspect of these matters. After all, the House is the traditional guardian of the public purse. I sometimes begin to think it is a mere tradition, but I believe such consideration is particularly important now, because in the years of war this House has never had the opportunity of considering the detailed expenditure of His Majesty's Government. Therefore, it is vitally essential that we, as Members of this House, should take every opportunity, before we assent to any legislation, to be satisfied we are not entering into commitments which we cannot fulfil. It is not enough for me to say that I was persuaded by the eloquence of the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge). It is not enough for me to say that I was persuaded that the Government were satisfied that these things were possible of accomplishment. We have heard about the speed with which this thing can be done. Pressure is coming to get these proposals put into operation before events occur which may divide us who now support a united Coalition Government.

Those are very bold and courageous suggestions. They are bold, because it is only a few months ago that the Chancellor pointed out, I think rightly, that no one could foretell what the national balance-sheet would be at the end of this war, what commitments we should have to face, or what priorities would assert themselves in regard to those commitments. I believe it is wrong to assume that we can, in what is at present a purely artificial financial atmosphere, under the stress of artificial conditions, adopt a long-term policy which will determine what is the right and certain thing to be done over a long period of years. I agree with my hon. Friend the Member for Walsall (Sir G. Schuster) that in many respects it is a mistake to try to legislate for 20 years ahead. I have the gravest doubt and suspicion of some of the proposals and suggestions of the actuaries who are responsible for the Report, not because I doubt their capacity as mathematicians but because I believe that the circumstances are such that it is impossible to forecast with accuracy the factors which will affect the calculations they have now made. I do not know whether hon. Members saw a cartoon in one of the papers the other day, dealing with some of our problems, and suggesting that the astrologers were just as likely to be helpful as the actuarial experts who attempt to forecast what our commitments are likely to be. I believe there is truth in that suggestion.

There are certain obligations which will assert their own right of priority. The first, I am glad to see, is referred to in the very first paragraph of the White Paper. The first priority—and, attempt to hide it as we may, we shall be driven back to it—is that as many people as possible in this country should be gainfully employed. [HON. MEMBERS: "Hear, hear."] That finds universal acceptance, which makes my task easier I suggest another matter which asserts its own right of priority. That is the rehousing of our people, on terms they can afford to pay. I say to my hon. Friends on the Government side of the Hoose, "Do not let yourselves be too rushed: I believe you have made a very rapid advance already in committing yourselves to this vast scheme of expenditure, when the future cannot be foretold." I was glad to hear my right hon. Friend remind the House that one-third of the yield of Income Tax and Surtax is found by people whose incomes are less than£500 per annum. I was glad that my right hon. Friend courageously faced that fact. My hon. Friends of the Labour Party may think that there is some kind of golden treasure which we can loot—

Mr. George Griffiths (Hemsworth)

Tell us when we expressed that opinion, or thought it. Do not charge us with that.

Sir A. Maitland

All I can say is that actions speak louder than words. I am astonished at the number of times hon. Members of the Labour Party, with whom I am on such good personal relations, are prepared to sacrifice human considerations for some abstruse political theory. I do not mind the interruptions of my hon. Friend, but I hope he will not make me digress too much, because I know that you, Mr. Deputy-Speaker, do not want me to take too much time. If I have time later I will give one illustration of what is in my mind. I was about to say there has been a definite advance on the part of the Government now that they have accepted the financial obligations of this scheme. We must assume that they are satisfied that the financial side of it is a responsibility that they can assume. I think we must accept that. Further, by their acceptance of this proposal they show that they feel that the scheme generally is in the best interests of the community. We have certainly advanced to this extent, that while my right hon. Friend the Chancellor of the Exchequer said last February when the matter was discussed that there could be no commitments, we have entered into a definite commitment involving the expenditure of large sums of money by this country for a long period of years. There are two matters about which I would like the Chancellor of the Exchequer to be good enough to give me some information.

Lieut.-Commander Gurney Braithwaite (Holderness)

Would my hon. Friend agree, for purposes of record, when he is talking of priorities, that the highest and most essential of all is the adequate defence of this country, by maintaining military, naval, and air power?

Sir A. Maitland

I do not dissent from my hon. and gallant Friend but we are discussing to-day rather matters of social or domestic policy. I think it is accepted that the defence of our country is a very essential and important part of our expenditure. But I want now to clear up one or two matters with my right hon. Friend the Chancellor of the Exchequer. I put down a Question to him yesterday which he promised to answer in this Debate. He was good enough to ask me to await the Debate to-day for an answer. I want to make sure that the answer is not overlooked, in view of the multifarious matters with which he has to deal. The Question was whether the benefits which were foreshadowed in the scheme were to be subject to taxation, and whether the contributions which were to be paid—whether by employers, employees, or people on their own account does not matter—were to be relieved from taxation. Those are two separate questions, both important. They have a wider aspect from that of benefit to the individual, important as that is. They have a very important effect on the whole cost of the scheme. I could put up a very good case for the exemption of the contributions from taxation based on the fact that these are compulsory payments. Incidentally, I do not know what the Government proposes to do with people who refuse to be insured, but I have no doubt that they have ideas. It means that these payments have the immediate effect of reducing the income of the contributors. I am glad to think that my hon. Friends of the Labour Party will appreciate this, for now everybody is concerned in the imposition of taxation, working men not least of all, and they will be very interested to know whether the contributions are to be exempt from Income Tax or not. My right hon. Friend might say, "Yes, we will exempt the contributions, but we will treat the benefits as subject to taxation." That might appear a logical situation. I doubt if it is completely logical because although the contributions may be relieved from taxation it could be argued that the benefits later paid to him represent partially capital savings and partially income. So I do not think that the case will be completely met by saying that contributions shall be free from Income Tax, and that benefits shall be subject to Income Tax. I will not argue the point, but I shall be very glad to get my right hon. Friend's answer.

There is another point, raised the other day in a letter to "The Times" dealing with Income Tax questions, which raises much wider issues. I am sure my right hon. Friend will have some regard to the suggestions contained in the letter. The letter refers to the fact that under the Pay-as-you-earn system there are quite substantial Income Tax rebates during sickness, and some rather revealing figures are given as to the effect that this scheme will have. If these arrangements stand as they are to-day the writer suggested there will be a premium on people going back to work. That may be a good thing or a bad thing; but I am certain that the suggestion in the letter is right, that, if this scheme is proceeded with on the lines now suggested, it will be important to co-ordinate the various regulations with regard to Income Tax, rebates, children's allowances and insurance benefits under the scheme.

There is one other matter, which is highly controversial, and I will get to it as quickly as I can. It deals with one of the proposals in this scheme, with which I will not say I find myself completely at variance, but as to which I find myself apprehensive. I am not anxious to disturb the harmony of this National Assembly, and, therefore, I put down, not an Amendment to this Motion but a notice of Motion, expressing the apprehension which I feel with regard to the decision to abolish the approved societies. Since that Motion was put down, 91 hon. Members have added their names. I believe that, as time goes on, more names will be added, but, what is more important, I believe that there will be a growing feeling outside this House of a lack of understanding why the services given in the home which have been enjoyed under the existing national health system could no longer be enjoyed under the more expansive or wider scheme. This is one of the points on which my hon. Friends have too glibly accepted the suggestion.

I submit this to the Labour Party. I am surprised that they have so readily accepted the decision to abolish these agencies, which, for over 30 years, have been so much appreciated by the members of the societies who have administered these benefits. That is perfectly sincere. I believe that the best agents in the friendly societies and approved societies are regarded by their members as personal friends, that there is a personal contact which is of great psychological value in the operation of this scheme, and I say to my right hon. Friend that he has blundered and that the Government have blundered. I repeat emphatically that, in the decision to discard an agency which can be of the greatest value to them, certainly in the initial stages of the scheme, they have blundered. The Minister said that this was a great advance, as it is, in our schemes of social insurance and reform. Whether we think this is a good scheme or not, to use a colloquialism, my right hon. Friend has to "sell this scheme," and I do not accept the suggestion of some of my hon. Friends that it is necessarily a scheme which is going to be embraced by all sections of the community as a gift from heaven. There are going to be very many years of payment before hundreds of people get some of the benefits which this scheme foreshadows. The Minister should not lightly discard the services of organisations which know intimately about this service—especially the home service—what the work is and haw it is begun. I say to the Minister in all seriousness that I believe the Government are blundering if they insist upon discarding an agency which has been of the important character in the development of the national health insurance scheme. I think it was Disraeli who once said that he was a Conservative to conserve that which is good, but a Radical to remove that which is bad.

Mr. G. Griffiths

He never was a Labour man.

Sir A. Maitland

I accept that doctrine and I say emphatically that, before I am persuaded that what is to be eradicated ought to be removed, I must be persuaded that what is to be put in its place is an improvement on that which is about to be removed. In spite of the decision of the Government, in spite of the arguments, some of which the hon. Member for Berwick-upon-Tweed criticised, I am not persuaded that the Government are acting wisely. I put this Motion down not because we are concerned whether its effect will be disadvantageous to large financial corporations or institutions. I did not do it from that attitude at all. As a matter of fact, I find myself quite at variance with the hon. Member for Berwick-upon-Tweed when he says that the friendly societies might be better for the administration of this scheme in an efficient and economic way than the societies which are associated with the industrial companies. I should have thought that the contrary was the case. In the small friendly societies, according to the Minister who made such a charming speech this morning, there were such small numbers that you need not think about them. It is up to the Government to make use of an organisation which has built up this business for 30 years and knows all about it.

My right hon. and learned Friend has an immense task, but why, for heaven's sake, should he throw away now, in the initiation of the scheme, forces that could be of the greatest possible help? I do not say this as a threat, but I am by no means persuaded that the Government have taken a right decision, and I am quite sure that, as the days go on, there will be an increasing volume of apprehension about their proposals, and I think it is only right, that, in the early stages of this scheme, when they are planning out the administration, views strongly held should be communciated to them, not in any sense of opposition to the scheme as a whole, but with the desire that, when the scheme is put into operation, every agency shall be used to make it a success.

Why has this decision been arrived at? It cannot be on the grounds of cost, or, if it is on the grounds of cost of administration, let the Government give the House the details. I make this earnest suggestion to the Government, because I think it would be helpful. I ask them not to accept the views of the hon. Member for Berwick-upon-Tweed, not to accept my view, not to accept their own conclusions, because many of these right hon. Gentlemen are tired Ministers, with many pre-occupations, but to submit this question to a Select Committee of hon. Members of this House, with the following simple terms of reference: "Can these agencies be usefully incorporated in the scheme in order to ensure its success?" So far as I am concerned, I would be prepared to stand by whatever decision that Select Committee reached. I hope the House will not think I am fighting for delaying action. I am not. This Committee which I suggest should be charged with the responsibility to report in a certain time. I believe that we should be lacking in our statesmanship if we ignore the work done by this vast body of decent citizens, and we should not lightly discard agencies and forces which have helped in the development of our social services over 30 years. I believe we can find some method of using these services, not in the interests of any section, but in the interests of those people whom this scheme seeks to help.

2.40 p.m.

Miss Rathbone (Combined English Universities)

I welcome the happy coincidence which allowed the godfather of this scheme to make his maiden speech in this House. The Minister made kindly reference to my own connection with a part of this scheme, that dealing with family allowances, and it is true that, for something like a quarter of a century, I have been working on that subject. It was a long process of conversion. Long ago that great woman Beatrice Webb remarked to me that it usually took about 19 years for a new idea to take root and grow to fruition in the British mind. That is curiously borne out in the present case. When I, with others, began propaganding for family allowances, we converted a few economists and sociologists. I think I may even claim that the hon. Member for Berwick-upon-Tweed (Sir W. Beveridge) was one of my converts. But the general public took no notice, and it was very slowly that the light spread.

But we are concerned to-day, not with the past, but with the future, and it is entirely to the future that I want to address my remarks. I am going to confess that the argument, on which I want to lay most stress—and it is one which had little part in those early days. We were then concerned with the fear that family allowances might produce too many children. Now the fear is entirely the opposite. The point to which I want to draw attention is the bearing of this scheme on the population. The White Paper makes hardly any reference to that. It is a scheme for insurance against want, not against race suicide, but the danger that is menacing us to-day is nothing less than race suicide. The very figures in the White Paper illustrate that. How is it that, whereas the relatively minor expenditure proposed on children's allowances, after rising by just£1,000,000 from 1945 to 1955, is expected steadily to decline after that, while the much more ample provision for retired persons mounts steadily by leaps and bounds?

I wonder how many of the general public have realised the facts which experts, statisticians and economists are pressing on us. I will give two examples. Take the figures given in a recent book by a competent economist which show that we have already 2,000,000 fewer children under fourteen than we had in 1914, and that we have even 1,500,000 fewer now than we had at the time of the Boer War. Again, from about 1960 onwards the population will be beginning to decrease so much that in each generation, that is, about 28 years, we shall lose from a fourth to a fifth of our population. That is, to me, a positively terrifying prospect. I shall not live to see whether it is realised or happily prevented.

But there are plenty of Members in the House young enough to see it and, what is still more certain, their children will see it. Let us suppose that that great world organisation which we know is contemplated for permanent peace is not a success, just as, owing to the failure of the nations concerned, the League of Nations was not a success. Supposing that some day there is another world war—I will not say who the enemy may be; it may be a European State or an Asiatic State, but it may happen—what will be the position if we enter upon a conflict like that with a population which is enormously smaller? Our population from which to recruit our Forces was small enough at the beginning of this great war. Suppose it is a quarter or a half less than it was. What chance shall we have of survival? But even if it does not materialise and we have peace, will our efforts be likely to secure greater productivity, if the proportion of our population of working age is increasingly less in proportion to the population living in retirement?

I am not going into some of the general arguments for family allowances, as many of them were dealt with in a Memorandum circulated to Members of this House who were particularly interested. I am going to address myself particularly to two main questions. The first point is, that the allowance should be paid to the mother. Many people say that that is a Committee point, or as the right hon. and learned Gentleman who introduced this scheme said, "Do not overlook the wood because you are so interested in the trees." It is not a Committee point but one of principle. I want to give two reasons why we stress it, though we do not pretend that it is the most important point. The first reason is, that if we make a mistake there, it will be an irrevocable mistake. We had some experience of that recently when we wanted to make an alteration in the regulation by which the wife's lodging allowance for officers in the Armed Forces is paid to the husband. All the experts who were consulted agreed that it worked out extremely badly, yet we were told by the heads of all Army departments that it could not be changed, because it would be administratively difficult, and because a change would seem to reflect on the officers who had previously received the allowance. It is going to be a far greater difficulty to transfer the family allowances of millions of people, instead of, as in the officers' cases, only to a few thousands. That is one reason why, if we make a mistake here, it will be an irrevocable mistake.

The second point is the great importance which women attach to this point, because they regard it as a test question. Does the community really want the mother to continue to be regarded as a mere dependant, as a person who may risk her life in bringing children into the world with great physical agony and may spend all the hours that God makes—a phrase familiar in my part of the country—in rearing and caring for them, and while the father because he takes home the wage packet is considered as the more important person—the economic head of the household? The right hon. Gentleman dealt with that point and explained the arrangement proposed by the Government. That arrangement is a deliberate throwing of an apple of discord between husband and wife. The allowances are to be made payable to either husband or wile, but the father will receive it and possession is nine-tenths of the law and the father will get it first. It is the fathers who are likely to misuse the allowance who will refuse to let the mothers draw it. [HON. MEMBERS: "No."] My right hon. Friend said the Government were going to behave like Solomon. Solomon would never have made that extra ordinary proposal to cut a living child in two, if he had meant to act upon it. But the Government are acting upon it in their proposal. They should tell us what is to happen, if the father says, "I have got the allowance and I intend to hold on to it."

Mr. Montague (Islington, West)

Does the hon. Lady think that a father would be so lost to a sense of decency that he would misuse the 5s. a week intended for a child, and that he would not be above saying to the wife, "If you get 5s. more, there will be 5s. less in your pay packet"? That is a working-class problem and does not arise. This is a middle-class problem.

Miss Rathbone

We all know that the majority of fathers will want the wife to draw the allowance, and will not reduce the pay packet, but the danger that others may reduce the pay packet by the amount of the allowance, is greater if the payment is addressed to the father. If he has given 30s. or 40s. to the wife, he is more likely to reduce it by 5s. if the allowance is given to him. I am not making a charge against the working class or against any class. I have continually to remind my friends that in dealing with millions of people, a tiny minority may be a large number actually. It is not an insult to the working class to say that there are in this country a number of bad fathers and unkind husbands.

The Government have made a great mistake in raising this question. If they had assumed from the first that the allowance was to be paid to the mother, everybody would have taken it for granted. There was a Notice of Motion on the Paper signed by 211 Members of Parliament equally distributed over all political parties, which asked for payment to the mother, and not one said that the money should be paid to the father. There was a Committee of the Trades Union Congress and the Labour Party which ten years ago sat on the question and discussed it very fully. They came by a three-quarters majority—and the minority did not disagree on the point—to the conclusion that the allowance should be paid to the mother. Why on earth did the Government ever start this hare or throw in this apple of discord, which will lead to many quarrels between husband and wife. I beg of the Government to reconsider the matter and I warn hon. Members if there are any—and no doubt there are—who have not had letters from women constituents on the point, that it is because the women in their constituencies have not realised that it is not to be so. The allowance in Australia and New Zealand, and under most French schemes is paid to the mother. Most British people wanted it paid to the mother, so we all assumed that it would be so, and it has come as a very great shock to the women of this country to find that it is likely to be otherwise. This precious gift of family allowance without payment to the mother, is like an egg without salt. An egg to-day is a precious morsel, but it is savourless without salt.

I pass on to my second point, which is the amount of the allowances. I am not going to argue that at length, for it is not a very big question. The hon. Member for Berwick-upon-Tweed gave some of the reasons why he thought the children's allowance of 5s. was too small to remove child poverty. But will it be enough from the point of view of sufficiently raising the reproduction rate, to stimulate parenthood, and avert race suicide? The economic obstacle against parenthood is the most serious obstacle. There was an article in "The Times" the other day which showed that the actual value of 5s., leaving out the first child, will be round about 4s. 3d. because the rise in the cost of living is likely to be greater than the White Paper has allowed for. 1s 4s. 3d. for each child, leaving out the first, going to make much difference to the stimulus to parenthood? It may just tip the balance in the minds of parents who very much want another child, but it will not be enough for those—and they are not the worst parents by any means—who have high standards for themselves and their children, who are determined not to produce one more child if everything that child eats is to be taken out of the mouths of its predecessors, or if those predecessors will have a less good opportunity in life, and of continued schooling, and so on. So I beg the Government to think over again whether they cannot adopt the not unreasonable proposal of an 8s. allowance made in the Beveridge Report.

Do not let the Government exaggerate the importance of the contribution in kind. While I am all for school dinners and school milk—I will not go into the figures, which are in the memorandum distributed round the House—the three things against it are, (1) that it is going to be slow in coming into operation; (2) it will be very costly, for school dinners cost at least twice as much as it would cost parents to give an equally good dinner at home; and, (3) it will meet less than half the food needs of the child. The basis of those calculations is quite carefully given, so I beg the Government to revert to the proposal for 8s. a child. But further, even 8s. a child will not really meet the needs of those parents in the higher income classes who are at present reducing their birth rate so very rapidly. Poverty is a relative matter. People feel poor by comparing the conditions they enjoyed before marriage and also the conditions they see enjoyed by people in the same professions and class of life as themselves. Hence we should have a supplementary scheme. On this point I would particularly ask for the attention of the Chancellor of the Exchequer. The whole insurance scheme, we are told, may not be brought into legislative effect until after the next General Election, but we hope that the part dealing with children's allowances will be dealt with sooner than that. I beg the Chancellor to consider whether, in his next Budget, he cannot introduce a supplementary scheme in the shape of a revised system of Income Tax allowances. We all know that the family allowances on Income Tax at present work out extremely inequitably. The rebate does not benefit anybody who has a smaller income than£300 a year, because the other standard allowances already swallow up all the family allowance they would get. It really only benefits the people with about£300 to£1,000 a year.

Vice-Admiral Taylor (Paddington, South)

Would the hon. Lady confirm that in regard to the differences between allowances in kind and in money for children, she has just said that 5s. is only worth 4s. 3d.?

Miss Rathbone

Yes.

Vice-Admiral Taylor

Surely, with an allowance in kind, you would get the actual value?

Miss Rathbone

Yes, it is quite true that you get the full value if there is an allowance in kind, and that is one of the arguments for it. As I have said already, I am all for allowances in kind, but do not exaggerate either the speed at which they can be accomplished or their value when they are accomplished.

As I was saying, we want a supplementary scheme. I was rather dis- appointed at the reply I received from the Chancellor yesterday when I asked him a question about the Rhys-Williams scheme. Quite honestly I am incompetent to discuss it in its financial aspects because it involves very elaborate calculations in future budgeting and taxation systems, but I am rather unhappy that the Government should so lightly have dismissed a scheme which, according to so great an economist as Sir Walter Layton, had the merits of great simplicity, should lead to increased efficiency, combined with a great saving in expense. Again, "The Economist"—no unimportant journal—says: it is not a proposal for greater expenditure; it is a proposal for the simplification and rationalisation of the scale of expenditure to which the community is already committed. I have an uneasy feeling that if that scheme had been properly brought before the notice of everybody two years ago, it might have been more fully considered than apparently it has been. I beg the Government not to ignore it for any reason, and certainly not because a woman has devised it—and there is a certain amount of sex prejudice still afloat.

My final word is: "Be quick." From the population point-of-view, we have not a year to lose, and so I beg the Government to get on with their proposals for children's allowances and to try to make them adequate enough to stimulate the population sufficiently. It is no use saying that parental love ought to do this or that; I am a realist, I am never much concerned with what ought to be, I am concerned with what is and what will be, human nature and conditions being what they are. I am desperately afraid that this scheme is not big enough, and will not operate quickly enough. I beg the Government, therefore, to lose no time, to spend what is necessary to meet the danger of race suicide. Accompany the plan, whatever it is, by an assurance of certainty that the plan will be carried out, and by propaganda about the facts, so extensive and so widespread that there shall not be a woman or a man in this country who will not realise the danger of race suicide. Bring those facts home, combined with a joint appeal to self-interest and the interest of the nation, and I am sure that will call forth a response as it did in the dark days of 1939.

3.3 P.m.

Mr. Storey (Sunderland)

My hon. Friend the Member for Berwick-upon-Tweed (Sir W. Beveridge) referred this morning to a child of his. He said that it had not been, during the last two years, a very active child. There is another child of his known to this House which is exactly the same age. It has been a very active child, and a very much criticised child. That is the Tory Reform Committee, and I should like, on behalf of the Tory Reform Committee, to congratulate my hon. Friend upon his maiden speech, and upon the great body of his work which has been accepted in these Government proposals. My hon. Friend referred, in his speech, to the survey which Mr. Rowntree carried out in York. It is this survey and others which have made me so much in favour of these proposals. For, when one realises how few are those whose income, through loss of earning power or through family responsibilities, falls below the bare minimum of subsistence compared with those whose income is above it, when one realises how many times the surplus of those just above that level exceeds the deficit of those who are below it, then one is forced to admit the need for some measure of redistribution of our national income. If we admit that need, then social insurance is the right way to meet poverty due to loss of earning power and an Exchequer grant to assist the assumption of family responsibility. Social insurance places on no one more than the actuarial risk which he himself incurs, but it does provide that those who are fortunate shall assist those who are unfortunate. The Exchequer grant ensures that the nation shares the charge of those who, by the assumption of family responsibilities assist it to avoid the disadvantages of a declining population.

The decision to cover the risk of loss of earning power by insurance necessitates the adoption of a rate of benefit which is not linked with the subsistence level, otherwise a steep rise in the cost of living, and also in the benefits, would involve an increase of contributions, which would be quite beyond the capacity of the great body of contributors. There are, doubt-Jess, some who sit opposite who will say that if the cost of living rises the Exchequer must indemnify contributors for the fall in the value of the pound. I would remind those hon. Gentlemen that only last week they joined with some of us on this side of the House in resisting a proposal that the owner-investor should be indemnified by the Exchequer against any fall in the value of the pound since 1939. You cannot have it both ways. When two interests suffer from the same cause, you cannot refuse to compensate one and compensate the other. Benefits can only be what contributions will provide, otherwise the whole scheme will break down. The way to maintain the value of benefits is for the country to respond to what the White Paper calls a fresh outburst of creative energy.

While we may agree that the benefits, once fixed, must not vary with the fluctuations in the cost of living we can, and should, insist that the rates fixed must, at the inception of the scheme, approximate closely to the subsistence level, and we must see that the Exchequer pursues a policy which, coupled with hard work on the part of the nation, maintains a fairly stable cost of living. There are other consequences which arise from the adoption of a flat rate of benefit. For instance, flat rates take no account of variations in rent. The problem of rent is a difficult one; indeed, the only solution is an adequate supply of houses at reasonable rents. Until then national assistance must make good, where the need exists, the excess burden of rent. The burden which falls upon national assistance under this head will be the measure of our success or failure in dealing adequately with the housing problem.

The most important consequence which arises from the decision not to link benefits with the subsistence level is the need to make national assistance available where special circumstances make benefits inadequate. The administration of nation at assistance must, therefore, be skilled and sympathetic. The creation of a social insurance machine will make very great calls upon our resources of competent administrators, but on no account must this prevent national assistance from being in the hands of the best trained social workers available.

Mention of the social insurance machine leads me to approved societies. Flat rate contributions and benefits make it desirable that higher income contributors should enter into voluntary insurance. We should, therefore, do nothing which will necessarily weaken the organisations of voluntary insurance, among which are the friendly societies and the industrial assurance companies. The approved societies have been a very useful bridge between voluntary and social insurance, and they have also rendered great assistance in building up social insurance. One would have liked to have been able to find a way in which they could have continued to play their part. It is a difficult matter, and the arguments put forward, both by the Government and the societies, are fairly evenly balanced; but the lack of incentive to economical administration for some of them and the need for the setting up, for at any rate part of the population, of machinery to administer this scheme seems to tip the balance in favour of the Government's proposals. In undertaking the whole the Minister should aim at achieving the standards of the skilled social worker. He should endeavour to create a system which will be helpful to the friendly societies.

For instance, I see no reason why the Minister and the friendly societies could not agree upon a common form of claim, a common form of medical certificate or why the sickness visitors employed by the Ministry should not be available to the societies. We might go further and consider whether the limits placed upon the insurance which friendly societies may do may not now be raised somewhat higher. For industrial insurance companies, I think the best the Minister can do will be to deal with the question which arises from the inclusion of the death grant in social insurance. If the abuses which have grown up around industrial insurance were cleared away I feel that the ground would be clear for the fresh development of industrial insurance on sound lines. I hope, therefore, that Paragraph 136 of the Report will not be forgotten and that consideration will be given to it at an early date and that action will be taken.

I turn now to the proposals for retirement pensions, which I do feel are open to grave criticism. My chief criticism is of the full rate of pension. I have always held that social insurance should be the basis of a retirement pension upon, which voluntary insurance should build, but I do also hold that that basis, at the inception of the scheme, should, at any rate for those who have the whole of their insurance life before them, be at least on a subsistence level. The Government, however, propose that the rate of pension should be lower than flip rate that many supplementary pension now receive. This means that even for Class A, for those who enter the scheme at 16, the rate will never provide enough for them to live on, without recourse to national assistance if, for any reason, they have been prevented from adding to their pension by voluntary insurance. On the other hand, the Government propose increased pensions to many in Groups B, C, and D, who have no need of them and who have paid little, if anything, towards them. Personally, I should prefer to see the money spent on an improvement of sickness benefit, and in other ways. I think that for Group A, those who enter the scheme at 16, the basic pension should be 40s. a week joint, and 24s. single. Limitation of this rate to that Group, which has its whole insurance life before it, would not add to the cost of the State during those decades when the State will have to carry the extra cost of its failure to establish a system of higher contributory pensions at an earlier date. It would, however, help the rising generation to start to provide for retirement pensions large enough even without other provision, to prevent them from having to seek assistance on retirement.

I find myself in a large measure of agreement with the proposals for sickness and unemployment benefit. The decision to limit the duration of benefit is, I think, wise and the encouragement to accept training is, I think, also right. I hope, however, that in preparing their training schemes the Government will make the fullest use of industry, for I feel that if they do that they can make the prospect of training much more attractive to the unemployed. They foreshadow doing that in the White Paper on Employment Policy, and I hope they will definitely carry it out.

There is one limitation on sickness benefit on which I find agreement difficult, that is that class 2 are not entitled to receive benefit for the first four weeks of illness. I fully realise the difficulties of administration and the possibilities of abuse but I cannot overlook the fact that most illnesses, even serious illnesses, last less than four weeks. As the White Paper states that the increased contribution required if benefit is to be payable from the onset of the illness is only 3d., I feel that most contributors would gladly pay the increase. I think, too, that the Government might well accept the risk of abuse involved. If the sickness rate tended to rise above what was provided for by the contributions, or above the rate for other classes, it would always be possible to impose a waiting period. As to the risk, I do not think the Government will be taking any greater risk of abuse than they are prepared to accept on the question of the earnings of old age pensioners. If the Government are not prepared to go as far as I suggest, the least they can do is to make sickness benefit for this class available if they have to go into hospital for treatment. There would then be no question of abuse and I see no reason why it should not be given.

I turn next to family allowances. The real value of these will depend on how quickly we can make the allowances in kind available. I feel, after the speech of my right hon. Friend the Minister of Education this morning, considerably happier about when these allowances will be available. What he said about priorities was encouraging. I beg the Government to press on and not delay more than is absolutely essential the making available of these allowances for school children. I agree with the Government's contention that these allowances must not be regarded as the cost of maintaining a child but as a contribution towards the charges of a family, but I am not quite certain in my own mind that this will be satisfactory when the parents are upon benefit. I feel that there is a good case for considering whether, when the parents are on benefit, there should not be an additional cash allowance for the children so that a good many parents will not have to apply unnecessarily for national assistance. I hope these allowances are going to be treated for Income Tax purposes as allowances and not earnings. Unless they are they are going to be of very little use to the middle income groups, who will have to bear a large part of the cost of these allowances.

There will be some, like my hon. Friend the Member for Chislehurst (Sir W. Smithers), who will condemn these proposals on the ground that they afford security and therefore deprive the recipients of incentive. That, I submit, is an erroneous view. These proposals are not security. They are merely insurance against the common hazards of life for which, because of their uncertainty, few individuals are able to make adequate provision. Where, as with sickness and accident, neither the desire to avoid such a calamity nor the effort to overcome the consequences are weakened by the provision of assistance, where, in fact, you are dealing with a genuine insurable risk, there are valid arguments why the State should help in organising a system of social insurance. There is nothing incompatible in principle between the State providing greater security in this way and the preservation of individual freedom. For the benefit of my hon. Friend the Member for Chislehurst, I will add that if some people do not think that the arguments I have put forward why these proposals should not act as a deterrent to incentive are sound, they are very largely drawn from one of the sources of inspiration of my hon. Friend, Professor Hayek's "Road to Serfdom."

There is one other question that I must try to answer. Can we afford these proposals? To answer that question would entail an estimate of our national income for the next 40 or 50 years, and I do not intend to embark on such an estimate. What we can say, however, is that all the indications are that at the inception of the scheme the cost is not outside our national resources. After that all will depend upon our national productivity. Unless we can expand our national productivity and our national wealth, not only this scheme but many others that we all desire to see will fall to the ground. We are, therefore, left with this choice, either to go on as we are now or to go forward with faith in our ability to extend our national wealth. Let me compare the effects of these alternatives. If we go on as we are now, the White Paper shows that in. 1945 we shall have to find£278,000,000 out of rates and taxes. For this we shall only get a system of social insurance which at the best can be described as a thing of shreds and patches. We shall get benefits some of which are already almost untenable. We shall be faced with constant pressure to extend those benefits and past experience shows that the cost of these exten- sions will be largely borne by the Exchequer.

On the other hand, if we implement the proposals we shall have to find£356,000,000, or another£78,000,000, out of rates and taxes. For that we are to get a comprehensive system of unemployment and sickness insurance, we are to get a system of children's allowances, we are to get industrial compensation, a funeral grant and a comprehensive health service. When we consider those advantages, when we consider, too, that a large part of the cost of those services will be borne by the contributor, which will be a salutary reminder to everybody that increased benefits bring increased costs, I think there is only one answer that the House can give. That answer is the answer which I and my hon. Friends on this bench give—"Forward by the right."

3.24 p.m.

Mr. Hubbard (Kirkcaldy)

I rise to welcome the White Paper, but I think it can be said that there is much that is causing quite considerable disappointment to those who are expecting to participate in the proposed benefits. It is remarkable that in an important Debate such as this the voices of Members from Scotland have not been very much heard, and it might be supposed, because of that, that Members from across the Border have not a particular interest in the White Paper. I propose to confine myself to that section which refers to retirement pensions. The White Paper proposes to put most old age pensioners in a better position than they are in now. I do not know that there is anything in the Paper that proposes to make any of them worse off. We have to be thankful for that.

On the other hand, we must admit that the proposed benefits fall far short of what has been expected in many quarters by responsible people. We ought to consider who those responsible people are. We admit that good legislation cannot be found in slogans, but I suggest that the call for an adequate old age pension is not really based on a slogan. The Scottish public assistance authorities have met on more than one occasion in conference, and nobody would suggest that they are irresponsible bodies. They have been dealing with the administration of social relief since it was instituted, and they have agreed that the proper figure for an old age pension is 30s. a week. That opinion has been backed up by other responsible people, such as the trade unions, who in the main comprise the people who will supply the funds from which these benefits are to be paid. Therefore, we are entitled to give some consideration to their proposition. Something ought to be added to the 30s. basic pension if there should be an increase in the cost of living, because the pensioner should not have to lose the purchasing power which that increase would cause. It is true that the proposed basic pension can be implemented from national assistance, but the old age pensioneer is looking for something better than that. For far too long he has had to depend upon a subsistence allowance. He belongs to an important section of the community who have done their jobs and made their contributions to the country. Because of that they are entitled to something better than a mere subsistence allowance.

I contend therefore that serious consideration should be given to something greater than a mere 20s. plus subsistence allowance. It is also true that the pensioner may implement the 20s. basic pension by doing some form of work, if he is able to work and can get work. I submit, however, that when a man has been engaged in industry up to 65 he has earned the right to rest and that poverty ought not to be the lever to encourage him to continue in gainful occupation. The person who reaches 65 will, when these proposals become law, be entitled to continue in occupation. If he does so for 12 months, he will be relieving the fund of the responsibility of paying him the basic pension for that year, a saving of If he decides to retire at the end of that year, the White Paper proposes to give him 1s. a week on top of his basic pension. That amounts to 52s. a year, which is a bad bargain for him. He forfeits the right to claim£52 when he works, and in return it is proposed to give him 52s. If he were to draw the pension for 20 years, he will have recovered the sum that he forfeited for the privilege of working the year after he reached 65. It is an important question whether the old age pensioner ought to be encouraged to work while young and fitter men are available for work and unemployed. The White Paper provides that a young fit man should receive 24s. if he is unemployed. It is, therefore, a bad principle to encourage the continuation in employment of the old age pensioner and at the same time make provision for younger people being unemployed. There ought to be a floating number of young people available for employment to obviate the necessity of old age pensioners being obliged to work.

It will be difficult to discuss the question of those old age pensioners who have not contributed to an insurance scheme. The basis of any insurance scheme are those lucky persons who do not have to have recourse to the scheme and who pay a considerable amount for the more unfortunate ones who must draw benefits. I regret that a large number of our old people, who have not had the opportunity of contributing to pension schemes, are now likely to find themselves in splendid isolation. Nothing appears to be provided for them except a right to appeal for national assistance. I would like to learn from the Government what it would cost the country to make provision for those old people who have not had the advantage of contributing to an insurance scheme, and I would like to have put against that cost the service that these old people have given to the country, so that we can decide whether it would not be a worthy thing to include them in this scheme. We should have more figures and reasons to show why non-contributory pensioners should be kept out. I am certain that they could be included and that it is the good will of the country that they should be. I would urge that consideration ought to be given to these points concerning the old people. This country of ours, which I have heard described to-day as one of the wealthiest and most highly industrial countries, ought not to be lagging behind other countries in the treatment of its old people. It ought, indeed, to be leading, and we should not hesitate to remove the old people from the misery that comes from existence on a subsistence level.

3.33 P.m.

Lieut.-Colonel Elliot (Glasgow, Kelvin-grove)

We are approaching the end of a further example of a very useful method of government to-day which might be described as Government by White Paper. My hon. Friend the Member for Berwick-upon-Tweed (Sir W. Beveridge) will always occupy a very honourable niche among the patron saints of this new technique, because he was the first who ever succeeded in making a White Paper a raging best-seller all over the world. It has been said that both statistics and emotion are necessary if any new legislation is to be put through. I think it is true that my hon. Friend the Member for Berwick-upon-Tweed did succeed in the same document in generating a considerable amount of both statistics and emotions. I am sure that the House will long remember the maiden speech with which he graced his arrival on our scene to-day. But he has stepped at one bound into the ranks of the professionals, and he must not mind if he is no longer treated, even in the afternoon of the day on which he made his maiden speech, as a maiden speaker, but as a full-blown gladiator ready both to give and to receive hard knocks.

The proposals we have before us have certainly had a generous welcome from all quarters in the House, and my first words will be to re-echo the words of my hon. Friend the Member for the Combined English Universities (Miss Rathbone)—"Be quick." The iron is hot now, and I believe that the work can be done. There is grave danger that if we wait we shall lose our chance, for many suggestions have been made for even further improvements on the scheme, which is already so large as to be very nearly unwieldy. If it gets any larger, it will, I am afraid, fall by its own weight. We had an example in the speech we just heard from the hon. Member for Kirkcaldy (Mr. Hubbard). He was appealing that steps should be taken to bring in those who are not dealt with under the scheme. No doubt sympathy with them will be felt in many parts of the House; but we shall find, when we begin to examine the contributory angle of the scheme and the premium required from the ordinary working man, that we have to take into very serious account the weight that will have to be borne by the pay packet of the ordinary working man. It may then be that the enthusiasm with which we regard these schemes at present will be somewhat tempered, and that if we go forward with proposals for a considerably increased premium we will find that enthusiasm disappear altogether.

Nor is it enough to say in that case, "Let it be borne by the State," for the State means the taxpayers. The Minister-Designate of Social Insurance reminded us yesterday at the beginning of this Debate that the taxpayer is already very largely the lower Income Tax payer and not the higher, as used to be the case in days gone by. Nothing is more sinister in the brightly decorated little volume in which the Government set forth their shorter Catechism to the main volume, than the picture of the solitary man in the higher ranks of Income Tax payers up at the top while at the bottom the lower Income Tax payers standing in serried ranks. There is not very much more to be got out of the higher ranges of income. The bulk of the cost of this and other schemes will have to be borne by the mass of the people of this country by direct taxation.

Mr. Montague

And by indirect taxation too.

Lieut.-Colonel Elliot

Yes, but that is even more regressive, because it falls more heavily on the man with the small income than the man with the large income. There is another point, which was mentioned at the beginning of the Debate but has not been mentioned since, and that is the weight of these great measures of social reform upon local authority finance. It is already so great that it is beginning to crush it entirely out of shape. The Minister-Designate has already said that the whole relationship of local taxation to central taxation is now under the closest reconsideration. In Glasgow and other places the weight of the rates is so great as already to impinge on some of the most valuable services, such as the provision of houses. The weight of the rates has a great deal to do with the actual lack of provision of shelter, which is one of the great factors in the abolition of want.

Let us always remember then that the weight of these schemes is not the weight on the higher ranges of income. That is not the most sensitive point, which is the effect on the lower ranges of income. The question, therefore, is, not "Can we afford it?" but "Can we stand it? Will we stand for it? Will the ordinary working man stand for the subtraction of such a percentage of his weekly income to be spent communally on these schemes?" That is the right way in which we have to look at the matter. So far, representatives of all classes of the community have said:

"We wish to proceed along these lines." Good; let us do so; but do not let us run away with the idea that we can ignore the weight of these things on the purchasing power of the ordinary man's weekly wage. We are coming to the point where these schemes represent a marked inroad upon that power.

I have great sympathy with what was said by the hon. Member for Kirkcaldy, who raised a point which I wish to take up with the hon. Member for Berwick-upon-Tweed as to the character of the retiring pension, namely, that a man cannot in future get his pension unless he stops his work. I admit that it is a fundamental point in his scheme. It is a fundamental point in the Government's scheme also and it is a point which I wish to challenge. I do not think that the emphasis laid upon retirement from employment as a necessary concomitant of drawing anything out of this scheme is a fair one or one that it will be possible for us to stand. Look at the figures given by the Government Actuary, Mr. Epps, whose report on the Beveridge scheme said that it is true that these provisions may lead to an earlier retirement from work. He did not put it very strongly. He said in actual words: The tendency to retire will be somewhat stronger. The figures which he gave were very important. He said that it would lead only 50 per cent. of the employed people to retire at 65, and of the self-employed none would retire at 65. That is to say, those people who have served many years and who have paid contributions, on the understanding that this was their own money which they would begin to draw at 65 as a right, suddenly find that, by the decision of Parliament, having served seven years for Rachel, they now have to put in seven years for Leah before they can get her. I do not think that would be acceptable to the people of this country. I do not think it should be.

The hon. Member for Berwick-upon-Tweed spoke of the pension being no longer merely a birthday present but one which would be given for retirement. That is not my view of this at all. This scheme at present represents the savings of the working man, which he greatly values, because he believes that they have become his own property. I do not think we have any right at all suddenly to tear up the conditions in which a man can get hold of his own property. People will have paid contributions for many years. Suddenly they find that a neighbour, who happened to reach the age of 65 a day before they did, will get 10s. a week and go on doing so, while because they reached the age one day later they get nothing at all, unless they agree to give up their employment altogether and, never again in the course of their lives, earn more than 20s. in any given week. They will think that is an injustice. It cuts across the principle of contributory insurance and it is a point which we shall have to look at again. I suggest to the Government that it might be necessary to produce a third option whereby a person would opt, if he wished to take his covenanted benefit of 10s. whether he is working or not. It is his right—and why should it be taken away from him? Then he should, if he wishes, when he retires, come under this new proposal. Thereafter he should have a pension if, and only if, he gives up the gainful employment on the lines on which he has been at it before.

Sir W. Beveridge

May I interrupt the right hon. and gallant Gentleman? Perhaps he would let me say why I made this proposal about the retirement pension. It was because I am perfectly prepared to apply to the whole population what applies to myself. I belong to an insurance scheme. I pay quite a large contribution but I am not able to get a pension at 65 until I retire. Then I get the pension. It is just the nature of the contract, and I suggest that it is a fair contract and an economical contract.

Lieut.-Colonel Elliot

An economical contract. I certainly agree. It is economical indeed; but there is all the difference in the world between a contract which my hon. Friend would rivet on the necks of everybody in this country and would gaol them if they did not obey it, and the contract into which he freely and openly entered. Does my hon. Friend deny that he could obtain from any insurance company a contract by which he could obtain a pension payable at 65 according to the contribution he wished to pay? Suppose, then, that the company came along and said, "Sir William Beveridge has been doing very well lately. Unless he gives up all this agitation and stops talking about his Report, we will not pay him any of this money."

Sir W. Beveridge

My contract is quite compulsory. I had no choice as to whether I could take it up, when I took my job. That is exactly the same for everybody else.

Lieut.-Colonel Elliot

The job which is being taken up under these proposals is that of being born. That is a very different thing from selecting one's employment. Anyone born in this country after this scheme is passed, comes under it. That is a very different thing from choosing one's employment, even though that employment has an onerous condition tagged on to it. I think the weakness of my hon. Friend's case, if I may say so, has been shown by the arguments which he used to support it. On one or two occasions his argument did not seem to me to be quite consistent. He spoke of the desirability of avoiding a means test, with which we are in hearty agreement. Yet the Government's scheme, the immediate£1 a week, does more to avoid the means test in the next five years, than his proposals were intended to do in seven. I could not, at first, believe it, when I checked his proposals, which were that a man should get 14s. a week in 1945, 15s. in 1947, 16s. in 1949, and that he would not reach 21s. until well after 1950. There are millions of old age pensioners who are drawing more than that now. They are drawing it from the Assistance Board and under a means test. If this scheme goes through, they will be taken off the means test forthwith in respect of that money. That seems to me to be a thing for which he might have given the Government a little more credit. They have not only surpassed his scheme, but have done so to the extent of time to be covered between 1944 and 1951. He asked what had happened to his baby all that time and what it was doing in the recesses of Whitehall in those two years. I think the reply would be that it has grown more in Whitehall in two years than in the first seven years of his proposals. If the Government had left the baby another two years it might have solved the whole question of want completely. I think a very great advance has been made there. As for the argument that the rate was not fixed at 40s. in the year 1945, or 1955, of 1965, or 1975—I think it was 1975, but I will knock ten years off—

Sir W. Beveridge

It was 1965.

Lieut.-Colonel Elliot

Really, arguments about 5s. a week more or less in 1965, leave me very cold indeed. If anybody believes he can foresee and prophesy the course of events in this country up to 1965 to the accuracy of 5s. a week, Old Moore will be left gasping. This improved scheme for old age pensions alone as proposed in the White Paper, would justify the whole of the delay between the time the Report was laid before Parliament and the time at which the Government have brought it to the House of Commons.

In addition to the closing of a chapter in insurance there is the opening of this great new chapter of family allowances. On that, I am sure, much debate will need to take place. No doubt many arguments and counter-arguments will be brought forward. I must say I was impressed by what was said by the hon. Member for the Combined English Universities (Miss Rathbone) as to the weight which allowances in kind would represent, as against allowances in cash, but for all that, I hold that the allowances in kind are essential and vital and, in some ways, more advantageous than the advantages in cash. I hope my right hon. Friend the Minister of Education will not run away with the idea that he will get arrangements made for these school meals simply because he has been granted a priority in relation by the Minister of Works and Buildings. There is£20,000,000 of expenditure to be put into the schools before he will be able to provide the school meals he has in mind, and anyone who will prophesy that he will put£20,000,000 worth of contracts into anything but slates on the roofs and glass in the windows of people's dwellings, within three years is optimistic indeed.

Dr. Morgan (Rochdale)

Another 1965?

Lieut.-Colonel Elliot

I would not go as far as that, but I would remind the Minister of Education that he has already had to come to the House and delay one of the most important features of his Education Act, the raising of the school age. That should be a lesson to him about speaking too confidently on school meals.

What I have said does not apply to milk, which can be provided quickly and easily. Also, it does not make those great demands upon accommodation or cooking which other forms of nutrition entail. I am extremely anxious that that part of the nutrition policy should be pressed forward with all possible speed. I was delighted to hear that the National Milk Scheme was to continue, because that, in its turn, is of the very greatest importance for the under-fives. When it is asked whether such a scheme really improves matters, I am reminded of the most interesting survey carried out in June, this year, by Dr. May Mellanby of the teeth of London school children. In 1929, only 8 per cent. had perfectly formed teeth. In 1943 the figure had gone up to 19 per cent. In 1929 over 60 per cent, had heavy dental caries. The figure in 1943 had gone down to under 30 per cent. Dr. Mellanby attributed that very largely to the milk scheme of the Milk Marketing Board in 1934, because milk was going into the bones and the teeth of those children from that time. It struck me as characteristic in connection with this great reform, that although, in its initial stages, the research work was carried through by the Medical Research Council, the pioneer work was carried out by the Colonial Secretary through the Empire Marketing Board, and the matter was finally hammered home by the Minister of Agriculture, neither the Minister of Health nor the President of the Board of Education having entered the process at any stage. It seems to me one of the arguments in favour of overlapping as against trying to narrow these things down too much.

I had other points which I wished to bring before the House, but the time is late and there will be many opportunities for further discussion. In these proposals we touch the underlying assumptions of the Beveridge Report, and I have often thought the three assumptions to be among the most important parts of the report—the assumptions of full employment, children's allowances and adequate health. To-day we begin to deal, not only with insurance, but with the subject of allowances. We shall look forward with the greatest interest to the further contributions which the hon. Member for Berwick-upon-Tweed will make to our Debates on the subject of full employment. But on the subject now under discussion let the Government strike now, while the iron is hot, for in the present temper of the people and the country it can forge a great instrument of social reform.

3.54 P.m.

Mr. James Griffiths (Llanelly)

My right hon. Friend the Member for Wakefield (Mr. Greenwood) was asked on a memorable occasion in this House to speak for Britain. I, and many other Members, recall another occasion on which he spoke for Britain as much as he did on that vital day in September, 1939; that is, on the day when, at the Box opposite, he announced the decision of the Government to set up a Committee to examine and report on the social insurance schemes of this country, and present a report to the Government and Parliament. Eventually we had the report. To-day we have had the very great advantage of a maiden speech, to which we all listened with great pleasure, from the chairman of the Committee and the author of the report. When considering these schemes we ought to bear in mind that this is a democratic Assembly, and that the people who finally decide what shall be done in this country are the British people. I believe that the British people have made up their minds, very definitely, that they are not going back to the old days of insecurity and poverty. They have made up their minds that poverty can be prevented, and that it shall be prevented. That is a fundamental thing to remember. I believe that we have to accommodate ourselves to the fact that either we become the instrument to secure the changes that the people will require, or the people will do something else. When hon. Members talk about what we can and what we cannot afford, let them bear in mind that the people have made up their minds that they are not going to put up with poverty and insecurity and all that they mean. If the people are determined on that, they will have their way.

This Debate, for obvious reasons, has covered a very wide range of points. I want to refer to only two or three aspects of the discussion. Many suggestions have been made, and I am certain that my right hon. and learned Friend the Minister-Designate will give full attention to them. I would like to congratulate him upon the excellent statement with which he opened the Debate yesterday morning. My party have been asked to put one point to him. I ask him to consider if, between the end of this Debate and the presentation of the Bills, he will meet representatives of the seamen of this country—I ask no more of him at the moment that that—who have special problems arising out of the relations of their employment to this report, and if he will listen to what they want to put before him. Let me congratulate the Government upon having changed their mind, in regard to the machinery of this scheme, since the Debate which took place in February, 1943. The view which was expressed from the Government Front Bench then was that they did not think it practical or desirable to establish a single Ministry of Social Insurance. They have thought about it since, and have come to the conclusion—a conclusion which I am certain was shared by a majority in the House at the time—that to launch and administer a scheme of this kind a single Ministry was essential.

I come to a point which has been mentioned many times, and to which we have given a great deal of attention. There is to be a single Ministry, a single piece of machinery, to administer this scheme. We have looked at it very carefully, in association with our trade union colleagues, who, in relation to this subject, have very wide experience. We have come to the conclusion, honestly, that if we are to carry this scheme out, in the spirit and in the letter, the approved societies must go, and there must be one administration. We have come to that conclusion not because we are opponents of the friendly societies—because we are not: in many ways the trade unions and friendly societies have overlapped; they cater for the same people. But if there had been no Bill of this kind, and if we had been discussing the old social insurance schemes of this country, we should have felt the same. There was already a very universal feeling in this country, and not least among the workers, that the old approved societies should not continue, for they meant that people paying the same contributions got widely varying benefits, and also that the people who really suffered the greatest hazards of sickness—the heavy workers of this country—were those who, in the main, got the lowest benefits, because they were shut out from the society which could pay the highest benefits in the country. We have come to the conclusion that, as we are going to begin a new chapter in the history of social insurance as we are going to establish a central Ministry to administer the whole of the schemes, it is essential to the efficient, fair, and equitable administration of the schemes that there shall be a single piece of machinery, from the centre right down to the homes of the people.

A good deal of the discussion, naturally, has turned upon the problem of the scale and the level of the benefits, and, in particular, on the fact that the Government plans do not implement the principle which was embodied in the Report, and which made such a wide appeal to the whole of the country, and especially to the people with whom I am associated. That was, that we should try to combine, in our typical British way, two things. We made up our minds that it was essential and desirable to maintain this principle of insurance. There is a principle which is part of the character of the British people, and the loss of which would mean the loss of something worth while in the national life—the feeling that when they get any benefit in any kind of adversity they must get it not as a charity, but as a right. The second principle is the principle which the Government have laid down in the Atlantic Charter, that they were determined, with the other nations and Governments associated with them, to establish freedom from want.

It is possible for an insurance scheme to include a provision by which the scale of benefits will ensure freedom from want. The principle is that of what has been called the subsistence level, but for which I prefer to use the term used before my hon. Friend wrote his report, the principle of a national minimum, laying it down that every person in this country is entitled to a minimum below which no one ought to fall. The Government say that one reason why they reject the adoption of this principle is that that would involve a variation of contributions and of benefits in relation to the cost of living. I want to express the view that if at the end of this war we manage our economic affairs and control our economic system as war-time experience has shown to be possible, and as we believe will be possible in the post-war period, the argument of a fluctuating cost of living need not be in itself a great objection to the rate of subsistence principle. We believe that the Government can do this now. We are discussing this plan, which contains figures which are admittedly inadequate to maintain people at a subsistence level. I want to repeat a question which has been asked more than once in this Debate. What is the Government's view of the post-war level of the cost of living? Is it the declared intention of the Government to maintain the cost of living on a stable basis? If so, why not accept the principle that benefits should now be placed at a level adequate to maintain that national minimum standard of life?

There is one other skeleton in the cupboard in regard to this matter. If we are doing this job now, let us do it properly. This, too, is part of the British character—that the people like to get benefit as a right, and the more adequate those benefits, and the more they conform to the maintenance of a decent standard of life, the better it will be, because the alternative is something which has come to be hated, too. I take as an example the retiring pensions of 35s. for a couple and 20s. for a single pensioner. If these figures were adopted now or next year, I make bold to venture the opinion that 75 per cent. of the pensioners of this country would make application for assistance to the Assistance Board. That means that 75 per cent. of the old-age pensioners of this country would receive, first of all, a pension as of right, in accordance with the scales in this plan, and, to supplement that in order to maintain themselves at all, they would have to go to the Assistance Board.

I beg the Chancellor and the Government to realise that the people of this country, and the old people in particular, object to and dislike going to the Assistance Board at all. I am certain that is true, and that it is a fact of very great importance, and I would, therefore, urge upon the Government the reconsideration of the whole scale of benefits so that they may come nearer to the level required to maintain subsistence. Unless that is done, the people will have recourse to the Assistance Board, and we shall have in the post-war period all those old fights we had in the inter-war period about the Assistance Board, the means test and everything else. I hope the Chancellor will say something about the Assistance Board, and that he will agree that consideration shall be given to the level of benefits, bearing in mind particularly that the less our people have to go to the Assistance Board the better it will be for the people and the nation.

I want to refer to the other principle in the Report which is rejected in the plan and which I ask the Government to reconsider. That is the principle of continuity of benefit. Reference has been made by more than one speaker to the fact that it is proposed to pay sickness benefit at a certain rate up to the end of the third year of sickness, and that, after the third year of sickness, the benefit is going to be reduced to an invalidity pension rate 5s. a week less. The Government gave as their reason for this the advice which someone else had given them, and, if it is not asking for a State secret to be betrayed, I would like the Chancellor to say whose advice they had on this point, because I am certain it is contrary to all the human experience which I have had, and that is very considerable. The view they take is that, if the sickness benefit is continued as long as sickness remains, without change or reduction, it will induce a kind of neurosis and that the man will become a chronic invalid and settle down to chronic invalidity. Their view is that, when a man has been ill for three years, we must reduce the income of the family, otherwise he will settle down to the life of an invalid. Is it seriously suggested by the Government that the way to help people to recover from sickness is to reduce their income? I say that the reasons given in that part of the plan are not worthy of the Government or of the people of the country, and will, as a matter of fact, operate in quite the reverse way. It is insecurity, fear, poverty and low income that paralyse the people. Surely the way to spur people on to improve their efforts is not to reduce their standard of life.

There has not been a great deal of reference to the provisions for unemployment benefit. It is proposed in the Government plan that unemployment benefit shall be continued for 30 weeks, and that, at the end of that time, it shall cease. What happens then? I cordially share the view expressed by more than one speaker that the provision of training to fit a man for other work, when there is no real prospect of getting work in his own occupation, ought to be removed from any idea of a sanction and from the old association of the idea of giving them unemployment benefit and putting them on the basis of driving them into these centres. Training ought to be offered to a man as an opportunity of starting a fresh life, rather than as a penalty for his having been in unfortunate circumstances.

Why should the unemployment benefit stop at the end of 30 weeks? I have lived with this problem. for 20 years and I have seen what can happen, and how the unemployed can be divided into two classes—those who get benefit as a right and those who get it as a kind of charity. The worst thing we can do to an unemployed man is to heap indignity upon indignity, because the loss of work in itself is a bad thing. I have seen fine, brave men reduced by continuous, enforced unemployment to a state in which they feel they are forgotten, unwanted, thrown on the scrap heap, and to say to them at the end of 30 weeks: "Your benefit stops and you go on assistance" is not the way to build the kind of Britain we want. I hope consideration will be given to this problem and that the Government will reconsider these points of the continuity of benefit while the man is unemployed and of the responsibility of finding employment being placed squarely where it ought to be placed—upon the Government. We cannot place it upon the man. Questions of economic conditions and the availability or lack or employment are outside the control of the individual workman and there is no justification whatever for putting it upon the individual. It must be placed upon the State and upon the Government, and I would say quite frankly that the experience of 20 years has taught me that the only way to deal with it is to grant unemployment benefit as a right, conditional only on the acceptance of work when it is provided.

I want to say a word or two about family allowances. On this side of the House, we came to the conclusion some time ago that a mixture of payments in cash and in kind is desirable. We do not accept these scales as being adequate, and we were very glad to hear the Minister of Education say that there will be a speedy arrangement to expand and develop the services for the children. We believe it is essential that the children of the country shall be raised above want, and we cordially approve all that was said by my hon. Friend the Member for Berwick-upon-Tweed (Sir W. Beveridge). We hope, therefore, that the Minister of Education will push forward with all his might, and that he will get the wholehearted support of all his colleagues in order that the services in kind may be fully developed, as speedily as possible. The end of the war is going to be a period of great strain for all of us, and particularly for the children of this country. The expansion of these services will be one of the most urgent necessities at the end of the war, if we are to maintain the health of the people, and of the children in particular. We press him to make as much haste as he can, having regard to all the circumstances, in the provision of services in kind.

There has been, as there must be, reference to cost in this Debate. I noticed that there was an Amendment on the Paper which was not called but about which the hon. Member for Chislehurst (Sir W. Smithers) spoke. I noted that out of the 10 Members who signed that Amendment, no fewer than six had their names down to another Amendment a fortnight ago, which would have involved the State in a very heavy extra expenditure of money, despite the fact that they thought that the financial system of this country was in the melting pot. We who belong to the Labour Party have no illusions about the fact that the success of this plan, as of all our plans, depends upon there being a sound economic foundation in this country at the end of the war. We know well that if we go back to the old economic system of the period between the wars, when, for 17 years, we had something like 2,000,000 people unemployed on the average, this plan, and every other plan, will fail and fall down. British industry over a very wide range in the inter-war period had become defeatist in its attitude, restrictionist in its practice and inefficient in its methods, and very largely because, when they faced up to the problem at the end of the last war, they sought for a way out by depressing the standard of life by a reduction in wages.

One of the reasons why we have inefficiency in the coal industry to-day is because the owners tried to tie the men down to a lower level, and the establishment of a national economy will be the greatest possible urge to the efficiency of our industries. Our old basic industries are inefficient. The hon. Member for Walsall (Sir G. Schuster) referred to reports issued which contrast the efficiency of these industries with similar industries in other countries. That is true. If we are to achieve freedom from want and full social security, we shall have to lay down a new economic foundation in this country, and that can only be done in a planned economy in which the resources of the nation, material and human, are used for national and not private needs. Insecurity is a great malady which is deeply and widely felt. Men and women feel themselves in the grip of fear over which they have no control. Man somehow seems to be reduced in circumference and is not master of his destiny. We have to cure this insecurity or our civilisation will perish.

If we lay down a scheme of this kind, improved in the ways I have suggested, it will give our people satisfaction if misfortune and adversity come. If that is done, there will be a great release of new forces among the people of this country. They are fine people. They have shown great qualities in the war. Those qualities of adventure will be required when the war is over. We shall shortly begin a new and a last Session of this Parliament—a Parliament during which we have made greater calls for sacrifice and effort from our people than any Parliament has done in our long history. The people have responded in a magnificent way. I hope, therefore, that in the next Session we shall pass this scheme and make it an Act of Parliament. That, at least, is what our people deserve for what they have done in the last five years.

4.21 p.m.

The Chancellor of the Exchequer (Sir John Anderson)

My hon. Friend the Member for Lianelly (Mr. J. Griffiths) has addressed the House with his usual eloquence and he has raised, as he always does, a number of points, put with great force and clarity, which everyone must recognise as being of first-class importance. I shall endeavour as far as I can, within the limit of time available to me, to take up his points as I go along. I am afraid that I cannot refer to every point of substance that has been raised in the course of this Debate, but I can assure the House that everything that has been said will be taken fully into consideration by His Majesty's Government when they proceed to the next step of framing the legislation required to give effect to these proposals.

On this occasion, when I have the honour of winding up a two-day Debate on social insurance, my mind naturally goes back to an earlier occasion, when I had the honour of opening a Debate, and I cannot help contrasting the two occasions. I am bound to confess that the general impression left upon my mind by the Debate which is just concluding is more comfortable and satisfactory than the impression with which I emerged from the first Debate. Let me remind my hon. Friends of what happened on that occasion. The Government gave a welcome—a sincere welcome—to the great scheme which will always be associated with the name of my hon. Friend the Member for Berwick-upon-Tweed (Sir W. Beveridge), to whose speech it was such a pleasure to listen. I say that the Government through myself and through other spokesmen gave a welcome to the scheme. I held out certain definite expectations on quite a number of points and hon. Members who have studied the White Paper will, I am sure, recognise that every one of those expectations has been fulfilled—and amply fulfilled—and, in a number of cases, improved upon. But I did strike a note of caution. I said that, while we welcomed the scheme and while we would go on as speedily as possible with our preparations, we must reserve the final judgment until we could look at the financial aspects of the scheme—and it is, apart from everything else, a great financial measure—and consider the obligations involved in relation to other commitments and other obligations of the Government at a time when we should know better than we did at that moment exactly what our position was likely to be.

I do not regret that speech, and if the occasion were to arise again, I would utter the same note of caution. I was not then Chancellor of the Exchequer, and I have heavier responsibilities in that respect now, but I do say that note of caution was justified and should not have been mistaken for either lukewarmness or insincerity. Now I shall have more to say before I sit down on the subject of finance, but first I should like to deal with a few of what seem to be the more important points that have been raised in the course of the Debate. Unfortunately, I have not been able to listen to every speaker, and I apologise to those whose speeches I did not hear if I am not in a position to deal with the points they raised.

My hon. and gallant Friend the Member for North Ayrshire (Sir C. Mac-Andrew) raised a question with regard to one of the basic assumptions on which the scheme rests, the assumption of unemployment at the rate of 8½ per cent. He thought that was a rather optimistic view. Well, Mr. Speaker, I do not agree. Eight and a half per cent, over the whole field of the insured population to be included in the new schemes corresponds to 10 per cent. of unemployment in the case of that section of the population which is now insured against unemployment. Now the figure, whether it be 8½ per cent, or 10 per cent., is an average of continuous unemployment. It must, if it is an average of continuous unemployment, be adequate to make provision for periods of unemployment on a higher scale than that average and of heavy unemployment in particular parts of the country. Sir, having regard to the plans which the Government have pledged themselves to develop for securing the fullest employment of the people of this land, I cannot think that the sort of assumption one has to make in framing an insurance scheme of this kind can fairly be regarded as too optimistic if it takes so high a figure as 10 per cent. for the existing insured population.

A question was raised by my hon. Friend the Member for Faversham (Sir A. Maitland) and I think also by my hon. Friend the Member for Stockport (Sir A. Gridley) about the application of the Income Tax law to benefits under this scheme—a very important question but, I suggest, a question that will have to be dealt with finally not in legislation giving effect to this scheme, but in some Finance Bill, in some Bill dealing with Income Tax. The position under the existing law so far as friendly society benefits, insurance benefits, pensions and the like are concerned, is not altogether satisfactory. There is, in fact, no uniform principle that one can discern. The practice has been to treat contributions as expenses to be deducted from income for the purpose of assessing Income Tax in the case of employers, where the employer conducts a trade or business or profession, but not in the case of a private employer. In the case of the employed person, some contributions are at present deductions and some are not; but it would seem that in future a deduction should be made in every case; then the benefits, when they come along, would properly be treated as what indeed they are, additions to income.

I think that represents the sort of principle that we ought to apply. It is a principle which is favourable, on the whole, to the insured person concerned. If you once agree that the exemption of the contribution logically goes with the levy of tax on the benefit, which is the rule that applies, for example, in the case of all superannuation funds, I think it is favourable to the insured person, because at the time when the income is higher, when the person is not unemployed he gets a relief, and tax comes to be levied at a time when his income is reduced, and when, in the case of the vast majority, it will be a matter of very little consequence under a reasonable system of Income Tax whether the tax is levied or not. Anyhow we shall have the fullest opportunity of considering all that at the proper time. I merely indicate the broad principle which is in my mind; and while I am on this point, there is an aspect to which perhaps I should make passing reference—I do not think it has been raised in the course of the Debate—that is the bearing of the introduction of family allowances on the Income Tax relief for children under the existing law. I think it may well be that it will be found desirable to continue the system of Income Tax relief for children notwithstanding the introduction of a system of family allowances. I do not pledge myself—that again is a matter which we shall have to go into carefully at the proper time—but I Suggest the businesslike—

Miss Rathbone

rose—

Sir J. Anderson

If my hon. Friend will pardon me a moment, the businesslike and orderly way to deal with this is to settle the content and details of the social insurance scheme, and then look at the existing Income Tax law and see to what extent, if at all, it ought to be adjusted.

Miss Rathbone

Would my right hon. Friend consider the complete revision, not revocation, of the scheme which at present works out so inequitably as regards the poorer Income Tax-payer?

Sir J. Anderson

I do not want to be drawn into too much detail on that matter, I doubt if I should be in Order. However, I have indicated that I contemplate the whole thing will have to be looked at in due course.

My hon. Friend the Member for Llanelly made reference, as did several other hon. Members, to the subsistence basis which was taken for the purposes of the original Report but, which it is said, has been rejected by the Government in framing the scheme which is now before the House. Mr. Speaker, the reasons for the Government's decision are set out at some length in the White Paper. I have not very much to say by way of supplement, but the first observation I would make is that there is not necessarily any actual inconsistency between the plan as set out in the Report and what has been included in the White Paper.

I say that for this reason, whatever views any of us may have as to what constitutes subsistence in any particular set of circumstances—and views will differ widely on that point from individual to individual and from time to time—there is nothing whatever in this scheme to prevent the Government and the House from taking the question of subsistence rates, of what is adequate for subsistence, fully into account in settling the rates of benefit and the rates of contribution for which provision is to be made in the Statute—the essential difference is one of approach. The full adoption of the subsistence basis would mean incorporating somehow in the law a pledge that, however circumstances might change, the benefits provided under the scheme would in fact amount to reasonable subsistence. Now that is very difficult indeed as a practical matter. What is reasonable subsistence must vary with the different circumstances of the population which is to be covered by this universal, comprehensive scheme. Moreover, this is conceived as an insurance scheme, it is not in all respects insurance but it has a very considerable element of real insurance in it, and that is an element to which the framers of the original plan and the Government attach great importance. However, you cannot have a scheme which involves, as any scheme of this kind must, an obligation to pay contributions at a fixed rate and which leaves the benefit rather at large to be determined somehow or other by reference to some principle of subsistence. That is the difference in the approach. We say, "Make up your minds as to what you think is right. Fix the rate of benefit and fix the contribution, and if circumstances change by all means look at it again." Following the insurance analogy, while the policy remains in force, have a fixed rate of benefit and a fixed rate of contribution. That seems to be the sensible approach in this matter.

Another point which is very relevant here was raised by the hon. Member for Berwick-upon-Tweed and by other hon. Members, including the hon. Member for Rugby (Mr. W. J. Brown), namely, the bearing of the cost of living upon the rates of benefit under this scheme. The hon. Member for Rugby argued on this line, which seemed to me a little odd: he said it had been demonstrated that the Government have it in their power to control the cost of living, and that there must be, therefore, a guarantee in the scheme against the effects of a rise in the cost of living.

My approach is quite different. I say that because it may be difficult for the Government, with the best will in the world, to keep the cost of living steady which, as the House knows, is my declared aim and purpose. Let us not so arrange our affairs as to make it a matter of indifference to substantial sections of the population whether or not the cost of living remains steady. Before you come to apply the principle of a guarantee against an increase in the cost of living, whether it may be in connection with an increase of pensions to existing pensioners, as was done recently, or whether it be a guarantee to the owner of property against the consequences of an increased cost of living, any step you take in that direction, in so far as it eliminates the economic consequences of a rise in the cost of living, weakens your national bulwark against any disastrous rise in the cost of living. I want all sections of the public to be united with the Government in doing everything possible to prevent the cost of living going up. That is what I had in mind in my Budget speech, when I said that I would let prices move within specified limits. I said that, not because I wanted prices to rise, but because I knew that if I went on indefinitely pursuing a policy of concealing the operation of forces which were putting prices up, a point would be reached at which my efforts would be futile and prices would get out of control. I want to make the position clear, because the hon. Member for East Middlesbrough (Mr. A. Edwards) unwittingly misrepresented my point of view.

Another point raised in the Debate, and developed by the hon. Member for Llanelly, was the importance of ensuring the continuity of benefit. The hon. Member spoke of it in relation to the health side as well as to the unemployment side, although he dealt rather more with the unemployment side. The hon. Member for Benwick-upon-Tweed referred to it primarily in connection with health insurance, but I think he fell into a slight error in stating that the common practice of the friendly societies was to pay sickness benefit indefinitely. The contrary is their practice. In almost every case benefit does not disappear altogether, but it falls to a very low level, something like 2s. 6d. a week, in the case of a vast majority of the old friendly societies. That practice is based upon experience, a great volume of experience.

What we have done here—if I may separate sickness benefit from unemployment benefit—is greatly to liberalise the existing conditions. We have made what we call the link-up rule, which links one period of sickness to another, much more liberal. We have reduced the interval which must elapse from one year to three months and under those conditions the three-year period represents an enormous advance in existing practice. My hon. Friend opposite says, "Why do it at all?" Well, nobody wants to make it difficult for a person suffering from chronic sickness to get back to work, but the conditions of the administration of sickness benefit must, in practice, be rather rigorous. All experience bears that out. Benefit is payable only in the case of total incapacity for work, although that is interpreted reasonably so that you would not, for instance, stop a man who is a coal miner from receiving benefit if, although he could not go down the mine, he was able to do a job at his fireside. In the case of a person who has a continuous allowance the point will be reached at which he ought to consider changing his economic condition. We have put that point as far advanced as three years, at the end of which we propose to convert him from sickness benefit to invalidity benefit, which will be equivalent in amount to a retirement pension. I think there is something to be said for that plan.

Now, I come to the question of unemployment benefit, where different considerations apply. The original scheme contemplated that after a fixed period, unemployment benefit should give place to a training benefit, and that that benefit should be administered in circumstances that had something of a penal character. We do not like that, and we will not have it. Nor do we intend to introduce training after a fixed period. Where the unemployed man goes on unemployment benefit and immediately his case attracts the attention of the Minister of Labour, if it appears from the circumstances of his employment that he is not likely to get back to work at his old job quickly then, irrespective of the time that has elapsed, he is eligible for training benefit, and is given training to enable him to take up a new job. In those circumstances, it seemed to us, after much consideration, that there is no necessity to provide for continuity of unemployment benefit. Let me point out that a man who has completed his first 30 weeks on unemployment benefit can, by a further payment of 10 contributions, qualify for further benefit. We think that that is a well worked out and balanced scheme which takes account of the practical difficulties which arise, better than if you had a scheme in which benefit could be paid indefinitely.

Mr. Tinker (Leigh)

It is not the man's fault if he cannot get employment; he ought not to be penalised for that.

Sir J. Anderson

It is a practical question which can be discussed on another occasion. There is no intention of penalising the man if he is doing his best to [...]nd work, but the Government are pledged to a policy of full employment and we have fitted the scheme into that policy, The provisions proposed are not unreasonable. There are a few other detailed points I would like to take up, and I think that the most convenient course for me would be to address myself now to certain points raised by the hon. Member for Berwick-upon-Tweed which, coming from will, I know, be regarded by everyone of us as having very special importance.

The hon. Gentleman criticised somewhat severely the rates of benefit which are proposed in the scheme, particularly for pensioners, and the arrangement proposed to be made for family allowances. He said the primary aim ought to be the prevention of want. The Government are with him. He said that benefit in kind involves interference with parental responsibility. In that I am not with him. To give benefit in kind to a child who is away from home—at school—cannot be represented as involving any interference with the regime of the home. He said that no child should go hungry or ill-clad because of inadequate means in the home. I absolutely agree.

Where I disagree, and am bound to express my disagreement, is that I do not regard this great scheme of social insurance as if it were a complete, self-contained scheme of social security. It is only part of a plan of social security. I do not look forward to the state of things which the hon. Member for Llanelly appeared to envisage where a vast proportion of the people in receipt of old age pensions or of children's allowances will have to consider going to the Assistance Board. The Assistance Board will be there to deal with exceptional cases. I hope we are all going to look forward to a state of things when the standard of life of the people in general will be high, when the level of employment will be good and when the distribution of wealth will be much more equal than it has been in the past. I am concerned very much every day of my life with the business of gathering in the savings of the people to pay for the war. That process is not going to end when the war ends, and we shall be in a very bad way indeed if there are not savings, spread over a wide area, which can still be gathered in to meet the expenditure that we have to face under the various plans which have been under consideration. In those conditions I believe it will only be in exceptional cases that recourse will have to be had to the machinery of the Assistance Board, Anyhow that is the point of view from which I approach this question.

Mr. J. Griffiths

Assume that this scheme was in existence now, with the cost of living what it is, and 35s. paid to old age pensioners. I said that 75 per cent. of them would be applying for assistance.

Sir J. Anderson

We have to take rather a long view of the scheme. I am not saying what the cost of living may be when the legislation comes to be enacted. There is one further point made by the hon. Member for Berwick-upon-Tweed to which I must refer. It concerns the position of the friendly societies. I have a very warm corner in my heart for the approved societies—not merely the friendly societies but all the approved societies—with whom I worked in close association for a number of years. The hon. Gentleman said the industrial approved societies and friendly societies are as different one from another as chalk from cheese. But the difference is not limited to that. As between one society and another there are great differences. There is all the difference in the world between one of the great affiliated orders, such as the Foresters, and a small, centralised local friendly society. I think in his desire to help the friendly societies, as I want to help them, the hon. Gentleman left out of account one feature of his own scheme, and that is its unification. You could not bring friendly societies, whose experience is limited to sickness benefit, and in a few cases to pensions, into unemployment insurance or the other features of this scheme. With every desire to maintain this most beneficent system of friendly societies that we have, the last thing that I should wish to do would be to give them under the new legislation a job which they are not really qualified to discharge efficiently. There is room for difference of opinion but, in my judgment, to ask them, as a class, to undertake the administration of benefits under this scheme would be to do them a very great disservice. I think there may well be other ways in which we can help them, by associating our administration with theirs and so on.

Now may I say a word of a rather general character about the fundamental principles that are embodied in the scheme. Leaving out of account family allowances and the health service, which are rather assumptions underlying the scheme than parts of the scheme, we are concerned with insurance to deal with interruptions of earning capacity and with the special hazards of life in connection with death, maternity benefit and so on. We ought all to recognise what on the average these interruptions amount to. Taking a person who is continuously in employment from 16 to 65, with a normal expectation of life when he retires from active work at 65, the proportion of his life from the age of 16 onwards which will be spent in sickness or unemployment is 12 per cent., the proportion during which he will be drawing pension is 11 per cent. and for the balance, 77 per cent., of his life he will be at work or on holiday. That is the basic position. It indicates the kind of hazards against which we have to ensure. When you come to the scheme let me indicate the three main features which mark the step that we are taking now. The first is that the plan is to be universal and it is to be comprehensive. No income limit, no excepted classes, and no personal exemptions, with one small exception. Then we have raised the benefits all round, assimilating sickness and unemployment and bringing pensions into relation with sickness, putting the pension at a little lower level than sickness or unemployment benefit, for the reason that pensioners have not all the obligations of persons in the full vigour of working life, and we have raised the allowances to a uniform level. Those are the outstanding features of the scheme. I will not attempt to develop the arguments that are put forward in the White Paper in detail about universality, comprehensiveness, and so on.

Let me come to the more immediate question of finance. I confess that when I addressed the House in February of last year, I had it in my mind that it might be possible when we came to consider the scheme in further detail to put forward a pro forma Budget for the post-war period. We are not in that position. There are too many uncertain elements and I have had to make a rather different approach. I will indicate what it is. The total cost of benefits, including the industrial injuries benefit, under the Government proposals, rises from£673,000,000 in 1945 to£854,000,000 in 1975. On the basis of the services as they exist to-day, the income from which benefits are met would be£449,000,000 in 1945. The increase in 1945 of£224,000,000 will, taking the new scheme, fall on the employers as to£37,000,000, on the workers as to£109,000,000, and on the Exchequer as to£78,000,000. These figures include nothing for the development of services in kind, which may run to£60,000,000, nothing for the training of the unemployed, and nothing for the continuation of the national milk scheme.

Though that charge is a very heavy one, the first thing I have to consider as Chancellor of the Exchequer is what would be likely to happen if these schemes were not introduced. Could the existing scheme continue as it is? Certainly not. There would be demands for bringing health insurance up to the level of unemployment insurance. There would be a demand for an improved health service and a demand for family allowances. Considering what is included in this scheme by way of levelling up of benefits, by way of the extensions in the direction I have indicated, I have come to the conclusion, which I put to the House very seriously, that the additional expenditure is well justified in the benefits that will accrue. Of course, unless this great scheme operated so as to give an equivalent or more than an equivalent increase in national productive efficiency, my hon. Friend the Member for Berwick-upon-Tweed and the rest of us will have been wasting our time. What I have indicated is the test that must be applied in the economic sphere. What that test means is that if the community does its duty by the individual, the individual must recognise and perform his duty by the community. If more easy money were to mean only indifference and idleness, we should not be justified in having gone ahead on these lines.

I take my stand with my hon. Friend the Member for Llanelly (Mr. J. Griffiths). I base myself on a faith, which experience in this war has justified, in the people of this country, and I believe that, if we all concern ourselves to see that public opinion keeps abreast of these developments in material matters, all will be well. I am prepared to take such risk as is involved, and I counsel my hon. and right hon. Friends not to be alarmed at the prospective charge on the Exchequer. I say that after very careful consideration and after looking as closely as I can at our prospective sources of national income and Government income and all our prospective liabilities.

Before I sit down, just one word on a point I had almost overlooked, and that is the position of full-time officers of approved societies, affected by this scheme. The Government intend to do their best to see that employment is provided for those persons in connection with the new scheme, so far as they are qualified; and, as regards those who are displaced by the scheme, to consider sympathetically the question of compensation.

Question put, and agreed to.

Resolved: That this House welcomes the intention of His Majesty's Government, declared in the White Paper presented to Parliament, to establish an enlarged and unified scheme of social insurance and a system of family allowances.