HC Deb 06 May 1937 vol 323 cc1285-92

12.3 p.m.

Mr. Lathan

I beg to move, in page 7, line 25, to leave out Sub-section (7).

I can imagine that the Minister of Health will be metaphorically licking his lips this morning at the prospect of dealing with the arguments in relation to the Amendments which have been placed upon the Order Paper, and I therefore frankly confess at the outset that the effect of this Amendment would not be quite what we should desire. I had hoped that it would have been possible to select the Amendment in the name of my hon. Friend the Member for Central Hackney (Mr. Watkins) because under it the intention we have in mind would be more adequately carried out. As we have pointed out on other occasions, the Bill is of a contradictory character. It professes to, and to a fairly substantial extent does, confer benefits upon a large number of employed people who hitherto have not been provided for in the matter of pensions or insurance benefits, and I have indicated that we welcome the proposal to provide benefits for those for whom no provision has hitherto been made, but, unfortunately the Minister has had—or those who have advised him have had—apparently, some other purpose in mind, because while the Measure will provide advantages in one direction, it will deprive large sections who are entitled to advantages under existing conditions—or, rather, their successors—of those advantages.

At present, persons who are ill are excused contributions. If there were an Amendment of the character which I have indicated, it would mean that those whose illness exceeded the normal 13 weeks would come under the disability allowance upon recovering from that illness, and that they would not thereafter be able to claim any excusal from contributions, if they subsequently fell ill from the same disease. Persons who recovered after retirement, and subsequently became ill, would also be affected. The position under the Clause would be very serious for people who retire before 65 years of age, as considerable numbers do. I have found it difficult, and so have some of my hon. Friends, to understand the Minister's purpose in this proposal. We cannot free our minds of suspicion in certain directions, but I cannot believe that the Minister desires any such result as the detrimental effects which I have indicated. I hope that he will be able to give us some assurance.

12.7 p.m.

Mr. Watkins

I beg to second the Amendment.

While my hon. Friend was speaking, I noticed a pained look come over the face of the Minister as though he had some difficulty in following the point. I hope to be able to put the point to him in a way that he will be able to appreciate and to accept. The Sub-section is a departure in an unsatisfactory direction from the present arrangements regarding excusing contributions during incapacity. At the present time, the weeks in which the insured person is sick, ill and incapacitated, are excused. Under the proposal of the Clause, it is only after 13 weeks have elapsed. We regard that as a definite worsening of the present arrangements.

It is unfortunate that this worsening provision should be tucked away in a Bill which is stated to be a big improvement upon the insurance arrangements. Insured persons who retire on pension at the age of 6o have to wait for their pension benefits for five years. At that later stage of life, and during those five years, men or women are frequently afflicted with illness. Under the present arrangements, if they are incapacitated from work their insurance contributions are excused, but the Minister now proposes to allow no excuse during those years, because of the inclusion in this Sub-section of the words: who is normally engaged in some gainful occupation. The basis of excusal under the existing law is that the person is incapacitated from work, and no other ground is required. I think the Minister will see that this Sub-section worsens the arrangement, and I hope that he can agree to put it right in another place.

12.11 p.m.

The Minister of Health (Sir Kingsley Wood)

The best way of dealing with this matter would be to state the facts in regard to the Clause first, and then to deal with one or two of the criticisms which hon. Members have made as to its contents. Their criticisms arise from very considerable misconception. They are comparing the conditions in a compulsory scheme with those in a voluntary scheme such as this. In circumstances where there is no compulsion, as those who have been concerned with friendly society or trade union systems of insurance or pensions will know, a very different set of conditions is made. It is not, therefore, legitimate criticism to compare the provisions of a compulsory scheme with those of a voluntary scheme. You need only to look at the terms and conditions of many of the voluntary schemes to see that conditions have to be made which would not be necessary if compulsion were available. I submit, having regard to the voluntary nature of this scheme, that hon. Members will not find, elsewhere in matters such as the protracted illness of the contributor, such generous conditions.

We have had to devise a reasonable safeguard for the voluntary contributor in the event of protracted illness, always bearing in mind, as one must in connection with any pension schemes, the reasonable interest of the other contributors. I suggest that in every proposal which is made to relax this or the other condition, while one naturally feels disposed to do so, one must act fairly in the interests of the other contributors. One must see that everything is fair and square. Having made that general observation I would like to tell the House exactly what we have endeavoured to provide for contributors who have a protracted illness and who are engaged in a gainful occupation. I emphasise the words "gainful occupation" because the object of this provision is to avoid hardship where people, through illness, are losing income. It is only in cases where they are engaged in gainful occupation that they lose income.

The hon. Gentleman must not overlook the provision in the scheme under which people who are not engaged in any occupation at all can come in if they desire and if they comply with the other conditions of the scheme. It may be that there will be many—I hope there will—who will come into the scheme though not engaged in any occupation at all. They are not suffering any loss of income during illness, and there is no necessity or justice in making provision so far as they are concerned. Provision in the case of contracted illness is only necessary for people who are gainfully employed and who otherwise would lose money on account of their illness. Title to widows' and orphans' pensions is secured by the actual payment of at least 104 contributions. It is true, as the hon. Member said, that allowances will be limited to the duration of illness beyond 13 weeks, but you are not in a position, as in a compulsory scheme, to adopt certain methods and regulations so far as shortening the period is concerned; and it is thought by my advisers and the actuaries and other officials who have been consulted that on the whole it is better to make provision for illnesses which last beyond 13 weeks. It is the same for everyone. If you put in a shorter period of time, unless there is a further financial contribution, whatever scheme you devise would have to operate equally amongst all contributors. I have not heard that challenged anywhere except here this morning.

Most insurance experts will agree that this provision, applying to people who are only gainfully employed, is right, and that it is best in the interests of the contributors, having regard to the section of the community concerned. They are small shopkeepers and others independent workers on their own account. Having regard to their particular needs, the 13 weeks would be the most beneficial and the best in the circumstances. When you have regard to the differences of the two schemes and the fact that you are not dealing with people who are under a legal contract of employment, this is a fair and generous proposal for a voluntary scheme. I hope hon. Members will he satisfied with that explanation. I am sure they do not desire this Sub-section o be dropped, and I understand that they move its deletion merely in order to have the matter debated.

12.20 p.m.

Mr. Rhys Davies

The right hon. Gentleman is always very dexterous when he speaks about these problems in the House, but, quite frankly, he has not met our case at all. He has received all the money he is to get from the Treasury and is not going to give way on any point which will mean the expenditure of more money than he is already allowed. The right hon. Gentleman cannot get away from this fact: The provisions we are talking about in respect of these voluntary contributory pensioners are not as generous as the provisions that were laid down for other contributory pensions. That is the case in a nutshell. The right hon. Gentleman knows well that it is so, and he has not met the point. He talked of being fair to the fund. First of all, contributors pay 104 contributions and lay the basis of their pension rights. The same thing applies to National Health Insurance. The right hon. Gentleman knows that the original contributory pensions scheme was interlocked with National Health Insurance, and now that he has set up a new central fund for this pensions scheme he is departing from the generous principles that were laid down in the original contributory pensions scheme. He knows that full well. Of course, he is right in saying that my hon. Friends will not press this Amendment. Half a loaf is better than none, but a whole loaf is better than half.

The right hon. Gentleman talks of being fair to the fund. Let us see what happens in connection with National Health Insurance. We must use that by way of comparison. The right hon. Gentleman shakes his head. He is a great authority. As a matter of fact the people who fashioned the National Health Insurance scheme were more broadminded and generous than this Tory Government. There is no argument about that. Let me put the case to see where it falls foul of the principles laid down in the National Health Insurance scheme, which gave the qualification for the contributory pensions. A young fellow joins both the National Health Insurance and the contributory pensions schemes. He pays for two years. He falls ill and for 26 weeks gets a statutory benefit of 15s. If he falls ill at 20 years of age he can be on the funds at 7s.6d. a week, disablement benefit, for 45 years. The right hon. Gentleman does not shake his head this time. The first contributory pensions scheme was based on and interlocked with the principles of the National Health Insurance scheme.

Then the right hon. Gentleman referred to the provision regarding trade union funds, and he tried to assume that trade union contributions were compulsory. He knows full well that friendly societies and trade unions are voluntary institutions. You cannot compel their members to do anything. You can compel the officials to do something on their behalf, I agree. Let me pass to one more consideration. We have to remember that, although this scheme covers some persons like those employed by the railways in excepted occupations, in the main the people coming into the scheme will be small shopkeepers, a few ministers of religion, musicians and the like. But really the right hon. Gentleman was wrong in one respect and he ought to know better. He is rather a wide-awake Minister. When there is any difficult job to be done on the Front Bench the Government generally appoint him to do it. He would have the House to believe that because a man is in business on his own account and he falls sick his income does not decline.

Sir K. Wood

He would be all right; he would be gainfully employed. This Clause only excepts people who have a private income and do not work.

Mr. Davies

I think the right hon. Gentleman wanted us to assume that the vast majority of the people who will come under this scheme will be small shopkeepers. That is clear.

Sir K. Wood

People on their own account.

Mr. Davies

Surely, for the sake of supporting his rotten argument the right hon. Gentleman cannot get away from the idea that in the main the provisions of this scheme will attract people who are in businesses on their own account. I ought to know a little about this subject by this time. I say that when a man in business on his own account falls ill very often his income declines with the length of the period of his sickness. That is true. I do not want to dwell unduly on the subject. The right hon. Gentleman certainly is giving something when he gives us Sub-section (7) of the Clause.

Sir K. Wood

I would like the facts to be put on record because the hon. Gentleman is under a misapprehension. All those people who are in business on their own account will come within the operations of Sub-section (7) and will not be excluded.

Mr. Davies

We shall, of course, have the regulations on this issue laid before Parliament and that will give us another opportunity of dealing with this problem if we care to do so. Although we are critical of this Sub-section we feel that in any case it is better than nothing, I strongly advise the Mover and Seconder of the Amendment to withdraw it, as they have now ventilated their grievance.

Mr. George Griffiths

I want to follow the Minister's remarks for a few moments. I have not yet got the point clear. I agree with the Mover of the Amendment that this Clause puts the present voluntary contributor in a worse position than he is in to-day.

Sir K. Wood

It does not take in the existing voluntary contributor.

Mr. Griffiths

All right; I will say no more.

12.28 p.m.

Mr. Lathan

Before taking the action suggested by my hon. Friend the Member for Westhoughton (Mr. Rhys Davies), I would ask is it not a fact that voluntary contributors in future occupying a similar position to the voluntary contributors of to-day will be prejudiced by this provision? I would ask also whether this term "normally engaged in gainful occupation" will be held to apply to those who have retired from services like the railways or local government or similar services and who are in receipt of annuities?

Sir K. Wood

The answer to the latter part of the question is, of course, that all depends on the interpretation of "gainfully employed" People who are not dependent on an occupation for a livelihood and who have retired either on their own means or on some other provisions made for them, are not gainfully employed and would not in fact lose their pensions. So far as voluntary contributors are concerned, the Clause does not apply to existing contributors at all. I think it is a generous and fair scheme.

12.30 p.m.

Mr. Mathers

Does not the Minister see that people who are normally gainfully employed, when they retire at the age of 60, come on to a lower income at a time when, between the ages of 60 and 65, they are more likely to be ill, and therefore not to be so well able to meet the contributions? No relief is afforded to these people, in such circumstances.

Sir K. Wood

indicated dissent.

Mr. Lathan

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.