§ 5.15 p.m.
§ Order of the Day for the Second Reading read.
§ LORD BOWLESMy Lords, I beg to move that this Bill be now read a second time. The central provision of the Bill, which will affect the financial position of well over 9 million people, is the proposed increase of 10s. in the standard weekly rate of National Insurance benefits for a single person and of 16s. in the rate for a married couple—giving new rates of £4 10s. and £7 6s. per week respectively. The increase applies to retirement pension, widow's pension, widowed mother's personal allowance, unemployment and sickness benefits and maternity allowance. The proposed rates of benefit are set out in detail in Schedule 2 to the Bill, and the old and new rates are shown side by side in Appendix I of the Explanatory Memorandum on the Bill. Noble Lords will be aware that the great majority of people affected by these increases are retirement pensioners, of whom there are currently 6½ million; and the number is steadily rising.
The purpose of the proposed increase is to maintain the substantial improvement in real standards that we achieved in 1965. In that year, National Insurance benefits were increased by 12s. 6d. for a single person and by 21s. for a married couple. Thus, during their first three years of office, the Government will have increased benefits by £1 2s. 6d. for a single person, and by £1 17s. for a married couple. The real value of the increases in the basic rate since October, 1964, in terms of purchasing power, is 15s. 4d. for a single person, and £1 5s. 5d. for a married couple. And while this does not give cause for complacency, it is true to say that we have effected a considerable improvement in the position of pensioners and other beneficiaries. Price changes affect us all; but the cost-of-living index is a matter of personal day-to-day experience for the many people who are largely dependent on contributory State benefits. Whatever the future may bring by way of changes in the structure of National Insurance—and some important changes have already been made—the Government will con- 58 tinue to honour its obligation to these people.
My Lords, in addition to the increase in the basic retirement pension we propose to reduce the number of contributions needed to earn an increment to such pension. Increments are earned by those who, on reaching retirement age, are able and willing to continue to work. To the flat-rate retirement pension, to which their contributions have already entitled them, there is added at present, an increase of 1s. a week for every twelve further contributions they pay. The Bill reduces the number of qualifying contributions to nine. This means that in future people will be able to increase their pensions by as much as 29 shillings, as against the present maximum of 21 shillings. The Bill also increases the death grant from £25 to £30. The rate has not been changed since 1958, and although the grant is not intended to cover the full cost of a funeral it is intended to provide a substantial contribution towards this inevitable and comparatively heavy expense.
I will now turn to the Industrial Injuries scheme. The Bill increases both the main Industrial Injuries benefits. Injury benefit, which is paid during initial incapacity, will be increased by 10s. to £7 5s. and the disablement pension for an assessment of 100 per cent. will be increased by 17s. to £7 12s., with proportionate increases for lower assessments. The Bill also increases disablement gratuities and the supplementary allowances payable with disablement benefit. These are special hardship allowance, unemployability supplement, constant attendance allowance, and the additional benefits payable for dependants. The standard rate of Industrial Injuries widow's pension is increased by 11s., from £4 10s. to £5 1s. These changes in Industrial Injuries benefits will provide increases for about 350,000 people.
Noble Lords who take a special interest in social security matters will recall that in 1965 the Government increased the old "10s. widow's" pension (a reserved right from pre-1948 insurance) to £1 10s. On this occasion it is proposed to increase the £ 1 pension for the younger childless industrial widow, which has remained unchanged for some years, to £1 10s. This has been done without prejudice to the Government's 59 general review of the provisions for widows, including widows who are bereaved at a comparatively early age. Improvements comparable to the increases in the main Industrial Injuries scheme will be made in the current benefits of those whose disablement dates from the pre-1948 Workmen's Compensation days—the men descriptively, if inelegantly, known as "old cases". Clause 3 of the Bill also makes a slight though, for those affected, important extension in the scope of compensation for malignant diseases which originated from an industrial cause before 1948.
Increases in benefit, of course, require corresponding increases in contributions. The flat-rate contribution for an employed man is increased by 2s. a week, with an increase of 2s. 3d. in the matching contribution paid by his employer. In the case of an employed woman, the increases are 1s. 9d. and 2s. respectively. The self-employed man's contribution goes up by 2s. 4d. Graduated contributions are not affected. A number of elements go to make up the contributions, and it may be helpful to refer to Appendix II of the White Paper for a detailed picture of the contribution rates. The cost of the increases to the National Insurance and Industrial Injuries Fund will be £219 million and £10½6 million, respectively, in the first full year of operation. The Exchequer Supplement to the Funds will be increased by £53 million and £1½8 million respectively.
The Report on the Circumstances of Families has just been published and is likely to be widely read with both interest and concern. Parents will not need to be reminded what a heavy responsibility children are, as well as being a great joy in favourable circumstances. Their welfare is a community responsibility as well as a family one, particularly where family resources are inadequate because of misfortune or low wages. The Government have promised to announce later this month their proposals for family endowment. There has been much discussion over the question of family poverty, but it is a problem to which there are no immediate or simple answers. The Government are seeking special and temporary power in this Bill, as it may be desirable to make an interim increase in family allowances to coincide with the 60 increases in other benefits at the end of October. Without this special power, any such increases would be impossible because of the imminence of the Summer Recess.
My Lords, a few minutes ago I mentioned costs, and noble Lords on both sides may have felt, "Ah! Here is the snag." Concern has been expressed, both in public debate and in another place, that so much money may be receiving too wide a distribution, and that it is going to those who do not need it, while those who are in real need are passed over. Since resources are not unlimited, such debates inevitably raise the issue of a choice between universal benefits and selectivity based on some test of need. My right honourable friend, the Minister of Social Security, has said, in reply to questions in another place, that she does not see the issue in terms of two mutually exclusive alternative solutions. It is surely right that people who have contributed to the National Insurance Scheme throughout their working lives should be able to look forward to the benefits for which they feel they have paid, in the expectation that the value of those benefits will not be eroded progressively by rising costs.
It is quite misleading to suggest that there are large numbers in receipt of State benefits who could manage without them. A substantial proportion are at or near the supplementary benefit level—which is intended as a basic acceptable standard. The question one must ask of those who speak in favour of selectivity is: do they mean that the increases proposed in this Bill should not be given, or should be given only to those whose resources can be established to be inadequate? This is tantamount to freezing pension rates and letting them progressively decline in value, while extending means testing to all contributory benefits. I am bound to say that there is a great deal of very understandable reluctance among our critics to give a straightforward answer to the question.
The Government are very much aware of what remains to be done, although much has already been achieved. Since the Government took office in 1964, they have been carrying on a continuous review of the full range of social security provisions. The problems are being tackled in turn, and improvements have 61 been introduced as soon as possible; for example, the supplementary benefits scheme, earnings-related short-term benefits, and redundancy payments. Work is continuing on the earnings-related pension scheme, and on consideration of provisions for the disabled and for widows. My Lords, as a Socialist I am an idealist, but I hope that I am also a realist, and it seems to me that ideals are not very fruitful when they become detached from reality, while reality is not very palatable when it becomes separated from ideals. This Bill is a realistic step towards the fulfilment of the ideals which I am sure all of your Lordships share. I hope that after the debate, to which my noble friend Lord Sorensen has kindly agreed to reply, the Bill may be given a Second Reading. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Bowles.)
§ 5.27 p.m.
§ LORD DRUMALBYNMy Lords, I should like to thank the noble Lord not only for having explained the purposes of this Bill, but for taking the opportunity to go into the Government's philosophy; and, I think it is true to say, the philosophy which has guided successive Governments in this matter. I do not think it would be appropriate on this occasion to debate that issue. After all, this is a rates Bill, and apart from Clause 5 it does little else besides altering the rates benefit to take account of changes in the value of money and the general standard of living in the country.
It is widely expected by the public that the precedents established during the 13 years of Conservative Government and since will be followed. In that period rates were adjusted every two to three years, and of course during that time it was always justifiable, because of rising national prosperity, to provide increases which were more than was required, simply to restore the value of the benefits to what they were at the time of the last increase.
But this time the circumstances are somewhat different. We are told that the amount required to restore the value of the single standard benefit to what it was at the beginning of 1965 is 6s. 11d. The increase which it is proposed to bring into effect at the end of October 62 is 10s. Meantime wages are likely to rise, and it seems probable that the cost of living will increase within the next three months. So it may well be that by the end of October the value of the new rates will not greatly exceed the value of the present benefits when they were brought into effect. In any case, it is always a good thing, if possible, to bring in new rates at the start of winter, and also to leave a little margin for further decline in the purchasing power of the pound.
In a word, for my part I welcome the increases as appropriate in the circumstances, but I must add that the country was led to expect, by what was said by the Party opposite at and before the last two General Elections, that we would by now have had before us a rather different kind of Bill, which would not just have been a rates Bill. We are once again told by the Minister that work is continuing—and I noticed that the noble Lord used the same phrase as was used in another place—on an earnings-related pension scheme to replace the existing scheme, and on improved provision for widows and the long-term sick and disabled.
In the light of my experience I readily admit that I was not surprised that the scheme is not yet ready to bring to Parliament, for I know how much study is required before a new scheme can be formulated that will be fair as between contributors, and which will be financially viable. And the Labour Government now know that, too. We said that it would take a long time, and it certainly has. Meanwhile, I for one believe that it is right that the value of benefits should be readjusted, so that the reasonable expectations of the 6½ million retirement pensioners, not to mention the widows, the sick and the unemployed, should not be disappointed.
We have, of course, the Government Actuary's Report on the financial consequences of the Bill. It is perhaps a little unfortunate—I do not blame the Government for this—that we have not got the Annual Report of the Ministry to assist us. It is always dated July, but I am afraid it is generally towards the end of July before it appears. In a full year, as the noble Lord said, this Bill will mean an increase of £208 million in contributions, plus £53 million in 63 Exchequer supplements; that is, £261 million in all. In fact the benefits are expected to cost only £219 million, so that the real cost to the Exchequer for the next three years will be only some £11 million to £15 million a year. What has aroused most criticism, as the noble Lord has said, is the increase in the flat-rate contributions—I think he said 4s. 3d. for each employed person; 2s. for the employee and 2s. 3d. for the employer. It certainly would have been possible for the Government to reduce the burden on the lowest-paid workers. They could, for example, have raised the upper limit of income subject to graduated contributions, as was done in 1963. I readily agree that this is not an easy operation, for first of all it would in many cases mean adjustments in occupational schemes, and would certainly mean an increase in what is known as the "equivalent pension benefits". It would also involve an increase in the contracted-out contributions, which could bear heavily on those in the lower-income groups who contract out.
Provided, therefore, that the new scheme promised by the Government is not going to be too long delayed, it is reasonable in my view not to raise more through graduated contributions at this moment. I would make one strong plea to the Government. If they really are going to put forward a new scheme, let us have it as soon as possible, with plenty of time for the country to study it, think it over and debate it. I hope that we shall not be presented with a ready-made scheme which we are told cannot be altered, which will be forced through Parliament by the crack of the Whips.
In preparation for this I would ask the noble Lord to consider one suggestion. I wonder whether a comparison has been made between the value for money that a lower-paid worker receives for his National Insurance contribution and what he would have to pay in other countries and what he would get in return there. One reads O.E.E.C. and other overall comparisons, and I am bound to say that I do so with very considerable reserve. It is little use comparing baskets of goods: one wants to know exactly what is in the basket. I suggest that it would be a good thing if the Government could get out some kind of comparative 64 statement. I know how difficult it is, but I think it would bring home to people what the position is in this country, and what improvements we might look for; and in my view it will be found that our social security arrangements are better than they look on paper in comparison with other countries.
There is one aspect of this measure on the handling of which I do not think the Government are entirely to be congratulated. I suppose it would be generally admitted that the worst poverty is to be found among those who at the present time are not covered in any way by our social security arrangements. I am not referring, and I do not intend to refer to-day, to those old people who were too old to enter into the National Insurance Scheme and who are now unwilling to ask for supplementary benefits. Noble Lords will know my views on this, and I shall not inflict them on your Lordships once again. Poverty, after all, is a relative term, and there must still be many surviving in circumstances severely reduced through no fault of their own. But there is also what might be called the absolute poverty of those with small wages and large families. As they are earning, they are not eligible for supplementary benefits; and I think that in some education authority areas, because they are not eligible for supplementary benefits, they are either not entitled to free school meals or, at least, they do not apply for them for their children. If they are lucky enough to have council houses, their rents may be reduced, but not otherwise. If they lose their jobs or fall sick, the supplementary benefits are limited by the wage-stop, so that the total benefit that they receive cannot exceed what they were earning.
My Lords, it is easy enough to be wise after the event, but in retrospect it was almost certainly a mistake in 1945 not to create a Ministry of Social Security then. This is not a Party matter, because study was given to this before the General Election. It was also a mistake that such a Ministry should not have full control over family allowances. I was very conscious of this myself when I was at the Ministry of Social Security, and I have no doubt that the present Minister is, too. I think this could have been done even although family allowances were not to be paid for out of the 65 National Insurance Fund. According to the review that has just been published, I understand that there are something like 125,000 families where the fathers are in full employment, and where the total resources fall short of the minimum requirements according to supplementary benefit rates scales.
The Minister has said in another place—and the noble Lord has confirmed it—that family endowment proposals will be announced shortly. Is this the same thing as saying that the Minister is going to make an announcement about family allowances before the end of this month, or is that dealing with two different things? I should like to be clear about that. In Clause 5 the Minister is seeking power to make adjustments in family allowances by Order, which would come into force at the same time as the alteration in the National Insurance rates and the supplementary scale rates, which are also being altered by regulation. I should have thought that it would have been better if, along with this Bill, Parliament had been enabled to consider the proposed changes in family allowances. After all, we now have a Ministry of Social Security. It cannot be said that family allowances are not relevant: certainly the Government Actuary did not think so. He did not think they were irrelevant, because he referred to the cost of increasing them. I would ask the noble Lord whether he is able to say that the Order is likely to be laid before Parliament before the House rises, or whether there is to be only an announcement made. If it is only an announcement, then I hope that there will be time to debate it, because it will be the only opportunity before it comes into effect. My noble friend Lord Windlesham will be referring to other groups needing special help.
My Lords, there are four comparatively minor points I would mention before concluding. For the first time, I believe, industrial injury benefit, as distinct from long-term disablement benefit, is increased only by the same amount as the standard National Insurance benefit; that is to say, 10s. for the injured employee plus 6s. for the wife or other adult dependant. I would ask the Government to say what significance is to be attached to this change. It looks as if it is intended that the industrial injury 66 benefit should in future increase by the same amounts and not by amounts proportionate to the increases in the standard rates. Schedule 4 deals with four changes which are not mentioned either in the Explanatory Memorandum to the Bill or in the White Paper (Cmnd. 3320) which are difficult to follow. I wonder whether the noble Lord could explain two of them.
The first is the relief from disqualification for sickness benefit through failure to give the prescribed notice of illness. The second is the provision which enables a widow to receive the maximum amount of retirement pension without making election between different courses open to her. Both of these changes seem worthy of support, but they are hard to understand. If they have been referred to the National Insurance Advisory Committee and have been reported on, perhaps the noble Lord will tell us when. Otherwise, perhaps he could let the House know about them, either now or on Committee stage, or in some other way.
Clause 4 is also beyond me. It certainly seems that there should be some means of informing your Lordships what such provisions mean. I think this is a point worthy of consideration. It is not necessary to go into details now, on Second Reading; but I think we should like to know what it is all about. As I say, it is very difficult to understand; and I do not think it has been referred to at any of the discussions that have so far taken place.
I come now to my final point. I welcome the improvement of one-third in the inducements to defer retirement. I would ask the noble Lord to say what will be the cost of this.
§ LORD SORENSENMy Lords, I did not quite hear what cost it was that the noble Lord wanted to know.
§ LORD DRUMALBYNThe cost of alteration in the inducements to defer retirement. I think that perhaps the noble Lord has now got the point. The noble Lord, Lord Bowles, explained, as I understood it, that in future nine contributions will earn one shilling, instead of 12 contributions being required. As I said at the outset, I do not think this is the occasion for a wide-ranging debate on a rates Bill. I would only say, in 67 conclusion, that, for what it is worth—and I think it will be worth a great deal—in keeping rates in line with the cost of living, the Bill is to be welcomed.
§ 5.44 p.m.
LORD INGLEWOODMy Lords, I intervene to make only three very short points. They all arise out of the speech of the noble Lord, Lord Bowles, who moved the Second Reading of this Bill; and I make them in the hope that the noble Lord who is to reply will be able to say something, however briefly, about them, because I think they are relevant. Because this is a rates Bill, all the points, I am afraid, are fairly technical. The first concerns the Exchequer supplement, to which the noble Lord referred. We are all familiar with up-rating procedure, since it has happened a number of times since the war. There is a fairly familiar pattern under which the increased costs have been met between the employer, the employee and the Exchequer. The noble Lord referred to an increase in the Exchequer supplement of, I think, £53 million. That seems to me to be a larger part of the increased cost that will fall on the Exchequer than we are familiar with. I wonder whether the noble Lord who is to reply could tell us whether the proportions are broadly the old ones or whether there has been any substantial change.
The second point concerns the old cases. This is a very complicated question. All I am going to ask is: Can the noble Lord tell us broadly how many of the old cases are still in payment? The third point concerns Clause 5, to which my noble friend referred. I think it is a new procedure whereby changes in the family allowances will be brought about by Order under the Negative Resolution Procedure. The noble Lord, like me, has served in another place and probably he, too, has grown to be suspicious of these Orders when they are introduced under the Negative Resolution Procedure. Subsection (2) seems to show that that is intended. I should have thought that an Order which concerns the rates of family allowances ought to be introduced under the Affirmative Procedure whereby the responsible Minister explains, albeit briefly, what the Govern- 68 ment intend to do. If noble Lords will look at to-day's Order Paper they will see that we are later to be asked to approve the Hill Land Improvement Scheme 1967 and the Hill Land Improvement (Scotland) Scheme 1967, both under the Affirmative Procedure. Yet we are now being asked to approve the making of changes in the rate of family allowances under the Negative Resolution Procedure. I should have thought it ought to be the other way round.
§ 5.46 p.m.
§ LORD TAYLOR OF MANSFIELDMy Lords, I welcome this Bill, and there is a note of satisfaction to which I wish to give expression. It concerns the "industrial widow", by which term I mean the unfortunate woman who loses her husband either through industrial accident or disease. At present the widow who is left without dependent children and who is under 40 years of age receives a pension of 20s. a week. This rate was fixed in the original Act of 1948, and despite all the increases that have been made since that time this is one of the categories of beneficiary who has been left out. I am pleased to see that under this Bill the industrial widow's pension is to be increased from 20s. to 30s. Ever since 1951, on many occasions, both in the other place and in other spheres, I have argued and agitated that it has been less than generous that this type of beneficiary should be left out for so long. To me it is a great satisfaction to know that at long last this type of widow is to participate in an increase under the Bill.
§ 5.48 p.m.
§ LORD WINDLESHAMMy Lords, I shall be brief, but I do not think we should let this debate conclude without giving a little thought to the way in which our system of social security should develop in the future. There is now an increasing amount of discussion on the most appropriate forms of social provision for the 1970s. Much of it has been crudely presented as universalism versus selectivity; and the noble Lord, Lord Bowles, referred to this in his own speech. There are two reasons, I believe, for this upsurge of interest. The first is the growing cost of social security at a time when the economy as a whole 69 is still weak; and the second is the growing concern with pockets of severe poverty, rather than with general poverty. The extent of child poverty in large families, for example, has now been documented, although it has taken a very long time to deal with. The problem is at any rate known and recognised. The circumstances of the very old and chronic sick and disabled are also much more widely known.
But, that having been said, it is sad, in spite of all the fine words of the Party opposite about their plans for "a far-reaching reconstruction of social security", that their main contribution towards the public debate so far has been to displace from office Mr. Douglas Houghton, the Minister responsible for the review of the social services. Ironically this has enabled Mr. Houghton to play a major part in stimulating wider public discussion in a series of thoughtful and highly informed papers and speeches, inside Parliament and outside. It is a paradox that it is only when he regains the freedom of a private Member that someone with the experience and knowledge of Mr. Houghton can play a part in public discussion denied to him when he was a Minister with overall responsibility for the social services. Meanwhile, a number of piecemeal changes have been made, although several of them, including this Bill, perpetuate the system described by Labour in its Election Manifesto of 1966 as inadequate and in need of radical reconstruction. This Bill perpetuates that system. The comprehensive review of the social services, I understand, continues under Mr. Gordon Walker. But it is now two and a half years since the Party opposite came to power and we still wait for any indication of a long-term plan of real vision and promise.
The heart of the problem, recognised by thinking people in all Parties, is that Britain cannot conquer poverty until its social services become much more discriminate. At the present time there is a wide range of social needs which are sometimes, as Mr. Houghton has remarked, provided for unnecessarily by benefits as of right, and inadequately by benefits by need and discretion. The present system of indiscriminately distributed benefits for which full contributions have not been paid, and never will 70 be paid, is becoming a barrier to progress in the social field as a whole.
Nor is the problem only a financial one. It is a commonplace to say that in many cases care is just as important as cash. Few social needs can be quantified solely in financial terms. Yet because the basic cost of universal provision is so high—about £220 million is the total of the increases proposed in this Bill—there are pitifully inadequate resources available for the training and paying of the additional social workers who are urgently needed to reinforce existing efforts. The present system is, I believe, preserved by two factors, both unfortunately highly emotive. The first is the rooted attachment to the so-called National Insurance principle, when in fact benefits have only been paid for to a small extent by the contributions of those receiving them; the short-fall being made up by the contributions of people currently at work and, to a certain extent, by Exchequer supplements. It was this system that The Times recently described as "a bath with no bathplug".
The second factor is the very understandable hostility towards the idea of means tests, with their unwelcome historical associations of indignity and personal humiliation. Yet both these stumbling blocks can be, and must be overcome if there is to be a real step forward in social strategy. The computer may provide the answer to finding an acceptable form of testing means by linking the payment of social benefits to the income tax system. The cost of collecting taxes and contributions from the public and paying them back again in social benefits has been calculated at about £200 million a year. So why should there not be a single computer system combining all cash dealings between the State and the citizen, particularly in the collection of income tax and National Insurance contributions, and the payment of social benefits? This is an idea which has been explored by, among others, Mr. Douglas Houghton in a pamphlet Paying for the Social Services, which was published by the Institute of Economic Affairs earlier this year.
To continue with our system of social security as it is, my Lords, is to run the risk of putting equality before humanity. Indeed, as Mr. Arthur Seldon has argued recently, even the virtues of 71 equality are suspect in this context, since equal treatment of people in unequal circumstances is inequality. This same point was developed by a Member of Parliament supporting the Party opposite, Mr. Brian Walden, in the Sunday Times of June 25. He said that,
by refusing to be selective in the provision of services, equal treatment has been given to unequal needs".These, I think, are some of the reflections which we must keep in mind when we talk about social security measures. I recognise, my Lords, that the difficulties are formidable, and I would not be so arrogant as to try to minimise them, or propose any easy answers this afternoon. I agree with my noble friend Lord Drumalbyn that this is a subject for a much more wide-ranging debate to which we might look forward in this House on a later occasion. But there is a really fundamental issue here, and it is one which I suggest we should do well to keep in mind when we consider the Bill.
§ 5.56 p.m.
§ LORD SORENSENMy Lords, we have had a most interesting and humane debate in which noble Lords on both sides of the House have regarded this matter with sympathy, yet objectively. We are most gratified to note that this afternoon there have been no oppositional incantations (if I may so call them), such as those in which all Oppositions, including Labour Oppositions, engage from time to time. Instead, there has been this very humane approach, with many constructive proposals for probing inquiries. I confess that it is quite impossible for me to answer them all at this juncture. I have taken a note of them and I will see that all the questioners to whom I do not reply this afternoon will receive a written reply in due course.
I shall be, I hope, as brief as preceding speakers, partly because we want to get on to the remaining items of business, including the Criminal Justice Bill, and therefore if in my remarks I do not do justice to many of the valuable points that have been raised, I am sure that noble Lords will appreciate why. It will not be from any desire to evade the issue, but simply because I have before me such a pile of suggested answers to questions that if I started to give them orally to the House 72 we should have to break off for supper somewhere about 10 o'clock.
My Lords, as is recognised, the Bill is an up-rating Bill and not a complete and comprehensive Bill. It is in no sense a substitute for the review which is now taking place of the whole question of our social security structure; but within the limits imposed there are certain real improvements, quite apart from the proportional improvement in the benefits now available. For instance, the death grant will be increased from £25 to £30. No such increase has, I believe, taken place since 1958. The income limit below which self-employed and non-employed persons can claim exemption from National Insurance contributions has been raised from £260 to £312. These are minor matters, if you like, but, within the limit to which I have referred, they mean small but substantial gains.
Many criticisms have been voiced this afternoon, but I think we can all rejoice in the fact that in the proposals made by the Government there is not just a proportional increase according to the cost of living, but an absolute increase. The figures I have before me, which of course may be open to analysis and criticism, are as follows: the increase in benefit provided by this Bill is a 12.5 per cent. increase. The increase in retail prices, according to the index, since October, 1964, is 10.7 per cent., and since January, 1965, it is 9 per cent. So there has been a substantial increase. The increase in the index of weekly wage rates for men since January, 1965, is 8.5 per cent., and from September, 1964, 10.2 per cent. I would draw particular attention to the fact that, according to the retail price index, the increase in the cost of living is substantially less than the actual benefit increase provided by this Bill. I know that that does not take account of what may happen in the months ahead, but even there, so I am informed, it is assumed that any increases will not make a very considerable inroad on the overall increases which are within this Bill. We shall have to see what will happen; but we hope not.
I would refer to one or two of the questions that have been raised. I forget which noble Lord asked the question, but I was asked the number of "old cases" currently in payment. I understand that these are now some 18,000. Another 73 question was in regard to increments. The cost will be only some £330,000 in 1968–69, but £2 million in 1970–71. The noble Lord, Lord Drumalbyn, asked a question in regard to Clause 4. This clause deals with two sides of what is a rather technical problem about dual entitlement to colliery workers' supplement and earnings-related benefits. It enables one benefit to be adjusted to take account of the other or treated as payable on account of the other, as appropriate. The two are not payable in full together. But this and other matters are highly technical and require consideration, and I will see that amplified information is sent to the noble Lord.
A question was asked in regard to the comparison of the benefits paid in this country and those paid in others. I agree that this is a complex matter, because a great many factors have to be considered before an equitable comparison can be made: indeed, the noble Lord indicated this. But certainly some effort will be made to obtain the information, even though I cannot guarantee success in this respect. Then the noble Lord, Lord Drumalbyn, asked whether the Minister's reference to an announcement before the Recess about family endowment was to be taken as the same thing as an announcement relating to family allowances. It is not envisaged that any Order will be made under Clause 5 before the Recess. Whether there will be an opportunity of debate on this matter is subject to the many arrangements that have to be made on business between now and the Recess.
The noble Lord, Lord Windlesham, also raised a point. On that I would say that the proper place of the Exchequer in the financing of National Insurance is something that will have to be considered in the context of the proposed general review of the scheme. Meanwhile, the Government have thought it right not to alter the existing formula, which in the case of an increase based on flat rate contributions produces an acceptable result for the time being. Under the proposals of the Bill, contributors will pay an additional £208 million in 1968–69, and the Exchequer an additional £53 million. This will increase the proportion of the total income of the scheme made by the Exchequer from less than 14.7 per cent.—the estimate for the current year, apart from the increase—to over 15.2 per cent. in 1968–69.
74 To come back to the noble Lord, Lord Drumalbyn, he asked about injury benefit and 100 per cent. disablement benefit. These have hitherto been at the same rate. On this occasion, however, injury benefit is being increased by the same amount as the increase in the standard National Insurance benefit—that is to say, 10s.—while disablement benefit is being increased by 17s. The reason is twofold. First, the introduction last October of earnings related supplement has altered the relationship between injury benefit and disablement benefit, as the latter does not attract earnings related supplement. Secondly, as a result of proportional increases over the years the gap between injury benefit and sickness benefit has widened considerably from what it was. The differential is now 50 per cent. higher than it was in 1948.
Those are replies to some of the questions that I have been asked, but I am conscious that I have been asked many other questions which I have not dealt with. Again I assure all noble Lords that I will see that replies are given in detail to the questions they have raised. I want to thank all noble Lords who have participated in the debate—the noble Lord, Lord Taylor of Mansfield, whom we did not expect, but who intervened, and equally the noble Lord, Lord Inglewood, and noble Lords opposite, respectively Lord Drumalbyn and Lord Windlesham. We are fully conscious that there are many defects and shortcomings in the scheme as it has evolved through the years. The Government are engaged in this task now and are making strong progress. But even within the two and a half years in which this has been taking place, rather than the 13 years that we might possibly have had, one can realise from the complex nature of the whole scheme that it demands very careful attention. But we have not waited for this before introducing certain minor improvements. These are being made because we feel that they can be done under the existing arrangements. But we are fully conscious that the whole structure needs the review that is now taking place and about which I hope a statement will be made in the not too distant future.
75 Again I thank all noble Lords for their sincere approach to this human question. It is gratifying that the whole country now accepts this moral responsibility for the sick, unemployed, injured and aged. To me this is a great advance in the sense of moral responsibility of the nation. Although in bygone days voluntary societies did great work philanthropically to ease the burden of people in this country, to me it is heartening and impressive that now the nation as a whole, and all Parties, are engaged in the task of finding how they can improve the existing ways in which to serve the needs of the brethren in our midst.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.