HC Deb 13 February 1941 vol 368 cc1528-615

Order for Second Reading read.

The Chancellor of the Exchequer (Sir Kingsley Wood)

I beg to move, "That the Bill be now read a Second time."

Perhaps the House will permit me first to make a brief reference to one whose recent loss we all mourn—I mean the right hon. and gallant Member for Hornsey (Captain Wallace). I know that he had friends in every part of the House; and many will remember to-day not only his gay and engaging personality, but also the valuable work that he performed as one of the Commissioners appointed to inquire into conditions in the depressed industrial areas. The report that he then produced displayed so much insight and sympathy, and contained so many practical suggestions, that it has often been quoted in the House by Members of all parties. I thought, therefore, that I should not miss this opportunity, linked as it is with the proposals that we shall presently consider, of paying a tribute, in which I know the whole House will join, to the memory of Euan Wallace.

The House will recall that on 6th November last the Prime Minister announced that, in response to representations from Members of all parties, the Government had given much consideration to the matter of the household means test for unemployment assistance and supplementary pensions, and had arrived at a united conclusion. The first part of this Bill carries out the undertaking then given by the Prime Minister. The test becomes one of personal need, based on certain principles which he then indicated, and to which I shall refer later. The other part of the Bill gives effect to the undertaking of my predecessor, Lord Simon, in relation to war savings and the means test. It contains certain modifications of previous proposals, with a view to meeting objections advanced when the matter was last discussed in this House. Before dealing with the general matter of the Bill, may I say a word about the new procedure? The House has generally welcomed the new procedure which the Government have adopted in connection with these means test proposals. A White Paper, which is, in fact, in the nature of draft regulations, although couched in layman's language, accompanies the Bill; and the House is thus enabled to see, at this early stage, the proposals that it is intended to put into force. I understand from my hon. Friends who have communicated with me that that has proved a convenient course. Instead of simply discussing the Bill—which does not indicate specific proposals —the House can now consider the whole matter.

There have been two principal objections against the household means test. The first is that it puts an unfair and almost unlimited burden upon certain persons because they happen to live with other people who are unable to maintain themselves, and that those other people are themselves placed in a position of humiliating dependence. The second objection is that the household means test entails many detailed, inquisitorial inquiries into the private affairs of persons who themselves are making no claim for assistance; and there is particular objection to the inquiries which are made to employers in order to verify statements about wages. There is a further objection, based on the fact that if a wage-earner gets a rise in wages the allowance of the unemployed person is liable to reduction, even though such rise may be due to a cost-of-living bonus or overtime. There are, no doubt, other objections; but those which I have stated generally indicate the problem with which we have had to deal, and to which we have endeavoured to find a fair and reasonable solution. I would like to remind the House of certain other considerations that have had to be taken into account.

It is impossible to meet needs reasonably unless regard is had not only to the applicant's resources, but also to his circumstances. The needs, for instance, of a person living entirely alone, and bearing the full cost of such items as rent, heating and lighting, are obviously greater than those of a person who shares these expenses with other members of a household. If the applicant is living as a member of a household, some regard must be had to the conditions of that household. In some cases, the major part of the assistance given will have to be paid by the applicant towards housekeeping expenses. In other cases, he will not be required, or expected, to pay for his board and lodging, and his needs will be limited to purely personal expenditure, such as clothes. There are cases also where the applicant is the head of a household which includes sons or daughters at work and earning substantial wages. Here, it is a matter of determining, while at the same time avoiding inquisitorial inquiries, to what extent the householder benefits financially from the contribution towards rent and overheads which the sons and daughters can be assumed to be making. Those were some of the matters which the Government had to take into account in formulating the new scheme.

The first proposal in the Bill is a fundamental one and is of far-reaching importance. It abolishes the requirement under the present law that, in determining or assessing the needs of applicants for unemployment assistance or supplementary pensions, the resources of all the members of the household of which the applicant is a member shall be taken into account. Clause 2 (1) provides that, in future, regulations governing the determination and assessment of needs shall conform to the rules set out in the First Schedule to the Bill. I need refer to these only briefly, as both those rules and their proposed application are fully explained in the White Paper. The first rule deals with a matter that arises, whether an applicant is himself a householder or not and provides that pooling of resources shall not extend beyond the applicant, his wife or her husband, and any dependants of the applicant who may be living in the same household. No other aggregation is to be permitted. I think it will be agreed that just as we included in a man's needs, the needs of his dependants in his household, so we ought to take account of the resources of those dependants.

The next rule—Rule 2—deals with cases where the applicant is the householder or the husband or wife of the householder and there is a member of the household, such as a wage-earning son or daughter, who is not dependent on the applicant. The rule provides that in the normal case, where the non-dependent member is earning an adult's wage and has no dependants of his own, the applicant's resources shall be deemed to include a contribution of a prescribed amount from the non-dependent member towards the household expenses. In other cases where the non-dependent person has a dependant of his own or where the wages are low, a lesser sum would be taken into account and, as my hon. Friends will have seen, it is suggested that nothing shall be taken into account if the wages are below 20s. Let me also say that the amount of the wage-earner's contribution will never exceed the prescribed amount, however much he may be earning and, in many cases, the effective amount of the contribution will be reduced, owing to the important alteration that is proposed in relation to rent. It will mean that in future the full amount of the rent will, in all normal cases, be provided for in the Board's allowance and the contribution of 7s. will be regarded as including the contribution which earning members of the household are assumed to make towards rent under the existing practice. I will give an example. If a household consists of a husband, wife and wage-earning son and the rent is, say 3s. more than is provided for rent in the normal allowance for a husband and wife, that allowance will be increased by 3s. thus offsetting to that extent the contribution which the earning son is assumed to be making.

Mr. Silverman (Nelson and Colne)

The householder is the husband?

Sir K. Wood

Rule 3 deals with cases where the applicant is a member of a household but is not himself the householder. The first part applies only where the father or mother, son or daughter of the applicant is the householder, and where the income of the father and mother, or the income of the son or daughter, exceed a specified sum. Generally, it deals with cases where the circumstances are such that it would not be likely that one of those members, if he were unemployed or an old age pensioner, would he required to pay for his board and lodging.

As far as unemployment assistance is concerned, under the existing law no allowance is payable to applicants who live as members of households, the resources of which exceed a certain level. That, of course, will now be altered. Under the new rule, allowances will be paid sufficient to provide for the applicant's personal needs and he will no longer be left entirely dependent for his personal expenses on the rest of his family. In the case of old age pensioners, there is, of course, the pension itself which will, normally, be sufficient for this purpose. Exact proposals will be found set out in paragraphs 8, 9 and 10 of the White Paper. In this connection I would point out that provision is made to increase the specified amount of income which a householder must have before the rule comes into operation where such householder has two or more dependants exclusive of the applicant and where there is more than one applicant in the household the income limit will also be increased by a specified amount in respect of each of such applicants. I need not tell my hon. Friends, who are so familiar with this matter, that there will be a full discretionary power beyond those income limits in special circumstances and special cases. These will be considered specially, in what may be termed borderline cases.

Mr. Maxton (Glasgow, Bridgeton)

Old age pension cases too?

Sir K. Wood

Borderline cases and all special cases and special circumstances are to be specially considered by the Assistance Board—all individual cases in which there may be special needs.

Mr. Maxton

My point is this. Normally, if I were taking up the case of a pensioner who was dissatisfied with the assessment would I take it up with the Minister of Health?

Sir K. Wood

The hon. Member would adopt exactly the same practice as that which is adopted now. There is no alteration as regards procedure. All I am emphasising is that borderline cases will receive special consideration.

Mr. Graham White (Birkenhead, East)

This is an important point. Is it not the case that the Assistance Board are the only people who, under this Measure, will be entitled to deal with this matter and that the Ministry of Labour and the Ministry of Health do not come into the picture at all?

Sir K. Wood

My hon. Friend will realise that I did not make any suggestion of that kind. I said that in difficult borderline cases special consideration would be given.

Mr. Maxton

The Minister has said that in difficult borderline cases, the dissatisfied applicant would make an appeal and that his case would then be decided. To whom is he to appeal? Is he to appeal back to the people who investigated and decided his case originally?

Sir K. Wood

I think the procedure and practice are well-known. There will be no alteration in the procedure which applies at the present time. What I am emphasising is the point put to me by hon. Gentlemen with whom I discussed the Bill, and the point I want to make now is that, as far as borderline cases are concerned—and obviously there will be borderline cases—special attention and consideration will be given to them.

Sir Percy Harris (Bethnal Green, South-West)

Does not my right hon. Friend wish to convey that the Board has an obligation now to investigate borderline cases?

Mr. Maxton

The Minister is trying to make out that this is some grand new concession.

Sir K. Wood

I hope my hon. Friend will forgive me, but I was endeavouring to meet the case which was being put to me when I was asked about the cases that may be on the borderline. Instructions will be given—and the right hon. Gentleman and I discussed this—that special consideration must be given, as the right hon. Gentleman has suggested, to these borderline cases.

Mr. Maxton

To the same people.

Sir K. Wood

Whatever criticism of that there may be, it is a criticism of the present procedure, but I am emphasising that, in this particular case, full consideration will be given to the borderline cases.

Mr. Maxton

As has been the case in the past.

Sir K. Wood

My hon. Friend may criticise this, but it is a new rule, and it refers to the borderline cases.

Mr. Silverman

Will not new instructions have to be given to the Assistance Board for the carrying out of this new rule, and, if so, by whom are the instructions to be given?

Sir K. Wood

Obviously, when new rules are framed, instructions to the Board's officers will be given as a consequence of the new rules.

Mr. Silverman

Will they be submitted to this House?

Sir K. Wood

I do not know about that. There will also be—and emphasise this point—full discretionary power beyond the income limit in special cases, and an allowance will not be reduced because of a temporary increase in the householder's income which brings it, for a short period, above the limit, and the rule will not apply where the householder with whom the applicant is living, is the son-in-law, or daughter-in-law, as the case may be.

Mr. Tinker (Leigh)

What is the definition of the term "short period"?

Sir K. Wood

I cannot give a definition at this moment.

Mr. Tinker

Cannot we deal with that in Committee?

Sir K. Wood

I daresay we can. I am just giving now a broad outline of the scheme, and I would not like to pin myself down to an exact period.

Mr. Gallacher (Fife, West)

Are we to understand that, if a man transfers his house into the name of a daughter or wife, it will not apply?

Mr. Magnay (Gateshead)

May I suggest that the Chancellor of the Exchequer be allowed to make his speech so that we can understand the proposal?

Sir K. Wood

I do not mind interruptions, as hon. Friends know, but I cannot go into the case of people transferring their property. [Interruption.] We can have a discussion about it later. Now I wish to refer to the second part of Rule 3, which applies to the case where the household to which the applicant belongs is not one to which the first part of the Rule applies, and provides that among the applicants needs there is now to be deemed the need of making a prescribed contribution by way of rent. An addition will be provided to the ordinary scale rates of an amount calculated by reference to the actual rent for the accommodation shared by an applicant with the rest of the household. The rent addition will be calculated on a per capita apportionment of the rate between the applicant and any dependants and the other members of the household. Hon. Friends will find an example of the operation of the rule in paragraph 14 of the White Paper. This, very broadly—because we shall be able to discuss this matter and the points that my hon. Friends have raised in detail—is a statement of the main principles and a general outline of the new proposals, and I hope that I shall have the support, at any rate, of the great majority of the House when I say that, certainly in the view of the Government, and I hope many others here to-day, they represent a far-reaching reform, and one which we believe will be generally welcomed by the House and be of great benefit to all those who come within its provisions.

I want to say a word—because many hon Friends have spoken to me about it —as to when these new rules will apply. Every effort will be made to bring them into operation as quickly as possible, and the Bill provides that new draft regulations must he prepared, submitted to Ministers and made within a month after the Bill becomes law, and laid before Parliament as soon as may be thereafter. After approval by Parliament, they will come into effect on the Appointed Day, which will be laid down in the regulations themselves. It will, of course, not be possible for everyone whose case is affected by the new rules to begin to draw an allowance or pension on the new basis on the Appointed Day. There are, in fact, over 1,000,000 supplementary pensioners and something approaching 200,000 recipients of allowances, as well as an unknown number of new applicants to be dealt with, and the Bill gives the Board two months after the Appointed Day in which to complete their task. This does not, of course, mean that everybody will have to wait for two months, but it ensures that all these numbers that I have mentioned, and the new applicants, must be dealt with within that period.

Mr. A. Bevan (Ebbw Vale)

The right hon. Gentleman was not clear as to what the figure of 200,000 referred.

Sir K. Wood

There are over 1,000,000 supplementary pensioners and something approaching 200,000 recipients of allowances, and my hon. Friend will remember that, in addition to that, we have to deal with a number of new applicants as well. I would now like to refer to the Clauses in the Bill in relation to War Savings. Since the matter was considered by the House on 14th August last the Cabinet have again given careful consideration to the criticisms that were then made, with a view to meeting certain objections. I would like first to say a word to the House as to the position in which I found it, and find it to-day, and the House ought to know it in considering these proposals. The House should know that the National Savings Movement attaches the greatest importance to the pledge given by my predecessor, Lord Simon, which they have extensively used, and to its being honoured, and the necessary provisions being placed upon the Statute Book. The pledge has, in fact, been backed by important publications and by communications from trades unions in support of it.

As I have seen for myself, the National Savings Movement has widely circulated this pledge in factories and workshops throughout the country. There is no doubt that many subscribers to War Savings have made their subscriptions on the strength of it, and in fact a number of workers did not see their way to join, for instance, Savings Groups until some concession had been undertaken. Their case was this: "We are asking the small man to make a special effort to abstain from spending and to lend his money to the Government." It was pointed out at that time—and I have confirmed it—that this was quite a different thing from ordinary savings in pre-war days, and it was represented that when men responded to the call to join the Savings Movement, it was unfair that they should be penalised by deductions if and when they applied to the Assistance Board because they held money so contributed during the war while men who had not responded would not have similar deductions made.

I have seen all the parties who have been concerned in this matter, and it was in such circumstances that my predecessor gave the undertaking to which I have referred. There can be no dispute that at no time was it contemplated that anything but new savings should be exempted, and, so far as the Exchequer and the State are concerned, it is obvious that to be of any value new savings must be money saved now. Nor was it advantageous to the financing of the war to encourage withdrawals from institutions which might have to realise holdings in Government stock in order to meet the demand. The reason why the National Savings Movement so fully utilised the pledge in their campaign is that this limitation of benefit of new savings is a direct and powerful incentive to people to save now and so reduce expenditure on the consumption of goods and transfer their purchasing power to the State. There is no such appeal, but rather a direct disadvantage from the point of view of national savings, if any such concession should apply to savings made in any form and at any time. Directly you said that the whole incentive for people to respond to the National Savings Movement had gone. If one thought that was a solution of the matter, it would, in fact, remove a considerable incentive to war savings in the form of Savings Certificates, War Bonds and the like, because, under the means test an individual would be just as well situated if he placed his savings in non-Government investments and outside the war-time period. From the point of view of the Savings Movement there is nothing in it; the incentive has gone, and the pledge would, in those circumstances, be of little or no value.

I would like to say this to the House: There is also, of course, equal objection to the proposal that all savings made up to current date, however invested, should be eligible for disregard, but that of savings made after that particular date only sums lent to the nation should be eligible for disregard, with a maximum of £375 to apply to the total disregarded.

Mr. Tinker

Why not do both?

Sir K. Wood

If that were adopted and you did both, the distinction between war savings and other existing savings would disappear. There would be no incentive to save in the case of those who have prewar savings amounting to £375. The whole point is that this pledge was given to induce people to make their investments in War Savings Certificates and to meet objections which they themselves had made and had represented to the Savings Movement.

Mr. Bevan

Both forms of investment could be included.

Sir K. Wood

That may well be, but my hon. Friend cannot dismiss the matter like that. I wish we could. This undertaking has been given, and people have subscribed upon the undertaking that was given. I can quite understand anybody coming forward and saying, "The present position is wholly unsatisfactory, and I want to alter it," but all I am concerned with at this moment, under the proposals in this Bill, is to honour the pledge that has already been given.

Mr. Silverman

Surely what the right hon. Gentleman has said outlines only half the pledge. Was not the pledge made for the benefit of existing old age pensioners at the time when the House was being asked to pass the other and earlier Old Age Pensions (Supplemental) Act, and is it not clear that any man in receipt of a supplemental pension now cannot benefit by this exemption?

Sir K. Wood

I cannot agree with that version at all. This pledge was given apart from any legislation or any proposals before the House. It was given for two reasons. It was given to assist the nation's finances and to stimulate war savings, and it is for that reason that the legislation has been introduced. I want to be perfectly frank with the House about this matter. The pledge was designed, as the legislation that is proposed, to confer an exclusive benefit on the war saver. Another thing that I have ascertained, and which I firmly believe, is that there were genuine misunderstandings as to the effect of that pledge. There is no doubt about that. Those genuine misunderstandings can be said to have existed at any rate between the date when that undertaking was given by my predecessor and the date of the Second Reading of the previous Bill. One does not get much benefit in general from discussing whose fault a misunderstanding is. The fact is that there was a genuine misunderstanding concerning the pledge by a number of persons, who really believed, whether with good foundation or not we need not bother to discuss, that they could acquire war savings by switching from non-Government investments.

Mr. Gallacher

It was stated from the Front Bench by the Minister of Labour.

Sir K. Wood

That does not destroy my argument. Let us pursue that argument and endeavour to do the best we can now. I have never found my right hon. Friend the Minister of Labour unable to speak for himself, and I guarantee that he will do so on this occasion. A change of major importance has been made in relation to the definition of war savings in order to meet such cases. The Government have decided that they must retain the distinction between war savings and other savings, but they have found it possible to take the date of the Second Reading of the previous Bill—when the matter was explained so that there could be no possible misapprehension as to the future —as the date after which it will not be possible to turn a pre-war savings into a war savings by realising some other investment and reinvesting the proceeds. Accordingly, the present Bill substitutes 14th August, 1940, for 3rd September, 1939, in order to give effect to that concession. By this means the case of people who acted under a misunderstanding or misapprehension is met, for on the date of the Second Reading of that Bill the matter was made plain. I ask the House to recognise that I have endeavoured in the circumstances to do the utmost I could to meet this criticism.

Mr. Mainwaring (Rhondda, East)

Does the Bill make a distinction between holdings of Government stock before the war and present war savings?

Sir K. Wood

I am changing the date so cover all those cases that were mentioned by hon. Members on the last occasion. Those cases are covered up to the date of the Second Reading of the Bill, when the matter was made clear, and I suggest that is not an unreasonable course to take in the circumstances. [Interruption]. At the moment I am stating the matter on broad grounds. I ask the House to recognise that in the circumstances the pledge has been fulfilled, and I hope that this concession, and another one which I will mention, will substantially meet the case. On the Committee stage we shall be able to examine whether the change covers all the cases. Another substantial change has been made in the Bill. There was criticism of the somewhat cumbersome and expensive procedure that had been devised in relation to the recording of particulars of war savings after the war by a person who wished to retain entitlement to the disregard. Under this Bill, there will be no check on the particulars given until the matter becomes one of practical importance, and machinery has been devised to make the whole matter more simple and practical and less costly. There are two other matters to which I want to refer. The first is that another purpose of the Bill is to wind up the Unemployment Assistance Fund. There are now no arrangements for contributions from local authorities towards the cost of unemployment assistance. It is now borne wholly by the Exchequer. Therefore, it is possible to adopt the usual financial procedure, already in force for supplementary pensions, of charging the cost of the service directly on Votes without the intervention of a fund. This will mean eliminating certain accounting processes which are now unnecessary and thus achieving a very desirable simplification of procedure.

I have reserved to the end of my speech the thing which perhaps concerns me most in my official capacity, and a thing about which nobody has said very much to me in the course of private discussions about this Bill—finance. I would like someone to think of finance occasionally. Obviously, these proposals will impose further burdens on the Exchequer. I cannot estimate the amount, because there are, of course, so many unknown factors. As Chancellor of the Exchequer, I must be content to remind the House that in due course these things have to be paid for. On the other hand, it is right, I think, that I should have regard to the reforms that are undoubtedly being made. These demands on the Exchequer come at a difficult time, and I have agreed to them in the belief that, notwithstanding the heavy burdens of the war, they are right and just, and in the interests not only of the many who will benefit, but of the State itself. I would only add in conclusion—and I think every one will agree with this final observation—that this Bill is another important mark of our confidence in the final issue of the struggle which is now taking place, and of our determination not to be deterred from continuing to the limit of our ability to improve the conditions of our people.

Mr. Pethick-Lawrence (Edinburgh, East)

At the outset I wish to join with my right hon. Friend the Chancellor of the Exchequer in saying a word of appreciation of one who is no longer with us—Euan Wallace. He certainly had a most agreeable personality, as the Chancellor of the Exchequer has already said, and I recollect very well the particular report to which reference has been made. I remember at the time that it struck me as not being a report of what we now call "Yes-men." It was a report, with a distinctive determination of its own, and it showed that Euan Wallace had a heart as well as a head and was not afraid to express his opinions.

I turn now to the Bill, reversing the order of the Chancellor of the Exchequer by first making a few remarks on Clause 3. The Chancellor of the Exchequer has explained the new proposals in regard to war savings. There will he two opinions about these proposals, but for my own part I feel there is very little doubt that they implement the pledge which was given. But having said that, I am bound to say that they will create a large number of anomalies, and that I very much doubt whether they will work out very well in practice. It is very easy to make a simple statement that war savings will be disregarded up to a certain amount, but I am afraid that when we come to construe that in precise terms, it will be found very much more difficult than was at first thought. However, I think the pledge has been implemented, and I am not sure that we shall now be able to make any substantial change, at any rate for the present, in the proposals.

I turn now to what is the major subject-matter of this very important Bill. For many years now we have had a long and bitter controversy with regard to the means test. It has formed the subject of platform speeches in the country, and it has formed the subject of Debates in this House, but, what is more important, it has been felt as a burning injustice in the homes and hearts of large masses of our people. During the years that we have been fighting with the ordinary political party apparatus we have had little or no success in effecting any progress. In addition, war conditions have very much aggravated the evil, because people who have lost their homes have in many cases gone to live with their relatives, with the result that larger households have been formed. The result has been that the grievous injustice of the house- hold means test, as it at present exists, have been felt very much more keenly and by a much larger number of people than has previously been the case. And so it became clear to a number of people of good will that the time had come to cut through the old lines of division and to get a workable compromise. I think the Chancellor of the Exchequer and my right hon. Friend the Minister of Labour, on whose shoulders, I believe, has largely fallen the responsibility of hammering out this scheme, are to be congratulated on devising a scheme which undoubtedly, and by universal admission, does make an immense change and does constitute immense progress in this exceedingly difficult and complicated matter.

I will not disguise from the House the fact that these proposals are not 100 per cent. of what has been asked by my hon. Friends. There are some aspects of the present proposals where we hope some amendment of the scheme may be possible; but the Second Reading of this Bill will have my support, and I am authorised by those for whom I usually speak in this House to say that it will also have their support It is very important, in view of an Amendment which I see on the Order Paper to-day, to which I shall have something to say later, to add that the decision of those for whom I usually speak in this House to support the Second Reading was taken after very full discussion and was carried by an overwhelming majority. Why have those with whom I work decided to give their full support to the Second Reading of the Bill? It is because, in our opinion, this Bill constitutes a revolutionary change in the principles which have been adopted for a very long time, dating right back to the days of Queen Elizabeth. It is because it shifts in general and in the main the obligation to look after those who are old or out of work from the family and the household to the community as a whole. It marks the recognition that to-day unemployment has ceased to be a private affair and is the public concern of the State as a whole. The aggregation of the household means, which existed before, is abolished in this Bill, and the household means test itself, as a principle, is gone. It is quite true that there are some reservations which cause us some disquiet, but the Bill goes a very long way, if not the whole way, to remove the grievances which were so very widely felt, and which in a vast number of cases have been the cause of intensive bitterness and intensive sorrow.

I will give two very simple illustrations. Take the case of a man who is living with his wife and son. The man is an old age pensioner, and his wife has not reached pensionable age. The son is in work and is earning £3 a week. Suppose the rent is about 8s. 6d. Under the Regulations as they exist with the household means test, because the son is earning £3 a week the old man is excluded from any supplementary pension, and he and his wife are entirely dependent on the charity of the son. Under the new proposals that man will receive a full supplementary pension of 16s. 6d. a week. That is a tremendous change, of immense importance to that particular family. It illustrates the great difference between the proposals under this Bill and the existing Regulations.

Now let us take an entirely different case. An old man, having lost his own means of making money, has gone to live with a married daughter. The son-in-law, who is in good work, finds that, because his wife's father has come to live with him, the State makes a humiliating investigation into his precise earnings and finally decides that he has to find the money to keep his father-in-law. Under the new proposal, whatever the son-in-law is earning, if it is £5, £7 or £10 a week, no one inquires into his means and the father-in-law is provided with a sufficient supplementary pension not only to pay for his own board but to pay a reasonable contribution to the rent of the house. I could give a great many other illustrations, some equally favourable, some less favourable, but it is quite clear from the two that I have given, two which have caused special bitterness, that the Bill makes a tremendous practical change as well as a vital revolutionary change in principle.

May I say a few words about points in which some of us feel that the Bill does not go quite as far as we should wish? Broadly speaking, there are two cases—the case where the householder and the applicant are one and the same, and the case where the householder and the applicant are two separate people. Where the applicant is a householder, as I understand it, the persons living in the house are reckoned to be paying a certain contribution towards overhead expenses, and there is a good deal of ground in principle for that point of view. The point to which I wish to address myself is the practical question of how much that assumed contribution should be. According to the Bill and the White Paper, it is to be 7s. a week in what is called the normal case. I do not see any figure put down as to what is considered a normal case, but 50s. has been talked about, and it may be that that is the figure which the Assistance Board has in mind. It may be quite true that one week the son, or whoever it may be, living in the house may be contributing a sum of which it would not he unfair to say that 7s. was the contribution. But I understand that those contributions are not always kept up regularly and, when you take one week with another—take a man earning only 50s. a weeks— 7s. is too large a sum, and my hon. Friends think that 5s. would be a much better maximum to take than 7s. I hope the Chancellor of the Exchequer may be able to accede to that view, but, even if he is not, I would suggest, at any rate, that the 7s. maximum should be confined to cases where more than 50s. is the sum earned. We are living to-day at a time when 50s. does not represent as much as it used to do in days gone by. I hope the Chancellor will look at this point very carefully.

Now I want to raise the question of the 20s. minimum below which no assumed contribution to overhead charges is taken. My hon. Friends think that sum is on the low side. If the Chancellor would think again and agree to 30s., I think my hon. Friends would accept that figure. Coming to the opposite side of the picture, where the applicant is not the householder, there is no burking the issue that in that case something like a household means test remains, and to that extent my hon. Friends, who feel that the household means test is a thoroughly bad principle, cannot be expected to regard this proposal as fully meeting their views. There again the question of amount arises, and the suggestion put forward is that the figure taken is not the right one and that the Chancellor ought to have taken the figure used for insurance purposes, which would be something like £400 a year. Perhaps he will consider that. No doubt we shall hear more about it as time goes on.

I want now to come back to the question of the Amendment that has been placed on the Paper, and I am going to speak very plainly. I believe the right thing is to talk plainly and straightly on matters of this kind. Clearly, it is not for me to say anything on the domestic aspect of the matter—this is not the time or the place—but I am going to say something on its purely public aspect. I propose to deal with my hon. Friends who have put down the Amendment as I would with any other section of the House if it seemed to me that it was something of a wrecking character. Suppose the Amendment were carried. If you put down an Amendment and vote for it, the assumption is that you are seeking to get it carried. There is no doubt the immediate effect of it would be to kill the Bill outright. The immense reform which these proposals constitute would for the moment, at any rate, not come into being. That I should regard as a very grave and serious thing to happen.

I have tried to think out the answer which my hon. Friends would give to that view of their action. I can only conceive of two answers. In the first place, they would, no doubt, say it would not stop there. If the scheme were defeated by a reasoned Amendment being carried, a better scheme would take its place. Even if that were true, there would be immense delay, and hope would be deferred in the hearts of many who would gain great benefit if the Bill was carried early into an Act and the Regulations under it were as quickly brought about as could be done. But there are no grounds whatever for supposing that a better scheme would emerge in the life of this Parliament. Those who have been engaged on the matter have, with considerable difficulty but with good will, produced a compromise solution. There is no evidence whatever that, if it is thrown overboard, some other scheme nearer to the heart of my hon. Friends will emerge, not only at an early date, but at any time during this Parliament, and it would be left until the time when we resume violent party alignments before there would be any chance of a new scheme being adopted, and who knows how much longer events may carry us beyond that time? Therefore, the carrying of this Amendment would block reform temporarily, certainly for weeks, almost certainly for months, and very likely for years, and these people would have to suffer under the injustices, the wrongs and the anomalies under which they are suffering at the present time.

I have no doubt that my hon. Friends who have put down this Amendment have a second answer which, in their minds, is the one which counts. It is that they know in their hearts and they hope in their hearts that their Amendment will be defeated. They know that the good sense of the House and of their own colleagues will turn down their Amendment, will refuse to reject this Bill and will insist that it be carried through the Second Reading. In other words, they believe that the rest of the Members of the House, those of their own party and of the party opposite, will relieve them of the consequences of their own proposal. They want to run with the hare and hunt with the hounds. They want to pose as the champions of the oppressed while they are playing politics and doing their best to sabotage an agreed compromise solution of a complicated controversial question. I said that I was going to speak plainly; I am speaking plainly, and I say frankly that this is not fair fighting. It is not fair fighting to their colleagues in the Government, it is not fair fighting to their colleagues in the House, and it not fair fighting to all those Members of Parliament who desire a solution of this problem. What is still more important, it is not fair to the old people and to the unemployed men and women who are looking to this Measure to relieve their injustices to fob them off in this way.

I know several of the hon. Gentlemen who put their names to this Amendment, and I know that they are honourable men. I believe that they are very likely taking this course without realising fully the unworthy character of the action to which they are being committed. I appeal to them even now, in spite of the fact that their names appear on the Order Paper, not to allow themselves to be made tools of by others less ingenuous than themselves. In saying this, I am not expressing merely my own opinion. I am expressing the opinion of the vast majority of those for whom I usually speak in this House. I call upon all those who have the welfare of the unemployed and the old age pensioners at heart to disown this Amendment and to give their support to the Second Reading of this Bill.

Mr. Graham White (Birkenhead, East)

I desire to associate myself with what has been said by my right hon. Friend the Chancellor of the Exchequer and my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) with regard to our late colleague, Euan Wallace. He entered the House after the same election as myself. He was endowed with a quality of friendliness and personal charm which made him respected by his opponents and won for him the affection of those who were privileged to know him well. We regret his going, and we remember that his last significant contribution to this House was that most remarkable report on the conditions in the North-East of this country, which showed qualities of heart and mind which were worthy of the deepest respect and affection.

Passing to the consideration of this Bill, I am glad to think that on this occasion the means test can be considered in a more dispassionate atmosphere—I say that advisedly—than that in which it has been discussed for so many years past. Since the introduction of the Bill in 1934 the means test has occupied more Parliamentary time and discussion and has caused greater bitterness and dissension than any other domestic issue. That is not open to question. It was not merely the individual hardship, it was not merely the inquisition which were the cause of the bitterness. It was not merely the fact that those who had been most frugal and saving and the most exemplary in the conduct of their affairs suffered most, while those who were most extravagant got better terms from the State. It was not even that which aroused bitterness. There was, of course, the additional fact that the whole of the test and the inquisition did introduce into a multitude of families a completely new atmosphere. There were many households in which the individuals had borne their disabilities and their hardships in common, with good will and without dissension. The household means test introduced an entirely new element, and in far too many cases it created bitter dissension in the household and broke up far more homes than is generally recog- nised. These are the reasons why the means test has provoked so much controversy. It has been a living sore in the social life of this country. One is glad to notice that some of the sources of aggravation and distress will disappear under this Bill. Some remain in a modified form. One of the things which led us to oppose the means test was that there was no sanction behind the carrying-out of the assessment. In cases where an assessment was made of individual members of a household and it was carried out, well and good, but if the assessment was carried out grudgingly or if it was not carried out at all, there was no sanction which could compel it to be carried out. The sole result of the means test in such cases was to make certain that where there was need that need remained in its most aggravated form. That was the case under the 1934 Act, and it is the case under this Bill.

I am glad to see that by this Bill the final humiliation of many old and honourable people will disappear. In cases where the assessment of members of a family was made and carried out faithfully and loyally, multitudes of elderly and honourable people were in fact humiliated to an extraordinary degree. There is many a man who spent the whole of his working life in maintaining his family who has said to me, "I know they are kind, but I am dependent on Joe for the price of a bit of tobacco or a box of matches or an evening paper." They loathe it. The memory of it will live even when this Bill is passed. Therefore, it was with great satisfaction that we heard the Prime Minister say some days ago that the Government had given not "much consideration" to the Bill, as my right hon. Friend the Chancellor of the Exchequer said, but "immense consideration" to it. That is a very significant phrase in war time and I will say a word about it before I sit down.

The Bill does not in fact and in terms abolish the household means test, but if I were to apply a test to this Bill itself in order to make up my mind whether I should support the Second Reading or not it would be a very simple test. It would be this: without any question at all this Bill brings great benefits to a number of people. We are not told how many. Un- fortunately, this is a matter which avoids statistical analysis and investigation. There were a million people who benefited under the Supplementary Pensions Act and 340,000 persons who did not receive any supplementary pension under that Act. We do not know how many of those 340,000 will now benefit, but at any rate a considerable number will, and, in particular, benefits will be derived in those cases where an old age pensioner is dependent upon the earnings of a single child. So often in life we find that it is the eldest daughter of the family who sacrifices herself, her prospects of marriage and everything else. Out of feelings of loyalty and filial affection daughters have denied themselves the satisfactions of life in order to carry out their obligations. Of those 340,000 cases there are many who will benefit, and I am glad that it is so. If anybody is concerned to know whether he should support the Second Reading I would suggest that he should say to himself, "Under this Bill a multitude of people will derive benefit and nobody will receive any injury."

My right hon. Friends and myself opposed as strongly as we could, and with all the resources available to us, the passage of the Act of 1934. It was not entirely because that Measure contained the household means test. We felt then and we think to-day that a very important constitutional issue was at stake. The Unemployment Assistance Board then, and the Assistance Board as it is now, does administer very important social services. Since that time it has been enriched or burdened—I am not sure which —with the care of supplementary pensions, and a number of special help services arising out of the war have also been entrusted to its care. In fact, it seems likely to become a sort of universal residuary legatee for all the new services which are called into being and which Ministers have not the time or the staff to administer. It is becoming immensely important in its contact with the lives of the masses of the people. We felt that it was wrong that such a board should be independent of and not answerable to any Minister in this House, and without Parliamentary scrutiny and control. If that was an important issue in 1934 it is even more important to-day, by reason of the new functions which have been added to the Board, and also because the very reasons why the Board was set up have, in the main, passed out of the national life.

In the first place, the number of applicants to the Board for what was known as the dole has diminished—almost entirely gone. That is the way to abolish the means test—to decrease unemployment Those who have to apply to the Board on account of unemployment have diminished to such an extent that if it had not been for the additional services to be rendered by the Board it could now quietly disappear. There is only one reason why the Board's independence of Parliament can be tolerated. The one plea which can be made for continuing that anomaly in this Bill is that in wartime it is not possible to contemplate the additional labours which would be thrown upon some Minister, or the additional machinery which it would be necessary to set up, if the present position were reversed. That is a reason which we would accept on this occasion, but there is another reason which I would personally accept and which I would like to hear my right hon. Friend accept, and that is that a change of that kind should only be made in connection with the re-casting, the re-survey and the re-integration of the social services. That will be one of the most urgent of our post-war tasks.

On the last occasion when we discussed the matter I pointed out that it was possible for a household to have no less than five special means test operating in it at the same time. If anyone doubts the disorder into which our social services have got, let him contrast the different benefits which are attracted by the dependants of those who die by different types of death. There is no logic in them whatever. But this Bill does nothing to add to the general disorder of the social services; in fact, it goes some way towards simplifying—it codifies—the type of test which is applied to applicants for supplementary pensions and applicants to the Assistance Board, and that is a step in the right direction. This morning received from the Old Age Pensioners Association a letter in which they object to being associated with the Assistance Board. I think they are taking a mistaken view, because the most important thing by a long way which this Bill does is to establish the principle that in cases of need the liability is that of the State and not that of the individual. That carries us a very long way indeed, and one can begin to see that when the process of reintegration, reorganisation and survey of the social services has taken place we shall approach the day when a citizen of this democratic country is entitled as of right to certain standard needs without test or inquiry at all.

That is where this step leads us to in logic. Therefore, one hoped that the Minister might say that these are matters which must be dealt with; and while we cannot deal with them in war-time, when peace comes perhaps the Minister without Portfolio will give his mind to these problems, which call urgently for solution. They are matters which will become the current coin of political controversy as soon as we have what we have not got to-day, some Minister or body of men charged with the duty of surveying the operations of the social services as a whole. I sometimes think that the great skill and ability, and the high standards, developed by the Civil Service in this country are, in some measure, due to the extraordinary administrative agility which they are called upon to perform owing to what is often the illogical but benevolent legislation passed by this House. That is how the social services of this country have been built up. I believe they are the best in the world, but how much better they could be. The Bill is a small contribution which does no harm, and may do much good, and which gives us a possibility of proceeding along a road which everyone in a democratic country would wish to follow.

There is an aspect of this matter to which we have called the attention of the Government for many years, and that is the practice of administration by regulation. We have frequently said that regulations which deal with such intimate matters as the means test should be subject to revision and amendment by Parliament. I am aware that to do so would involve certain changes in our procedure. Statutory rules and regulations cannot, in the ordinary way, be accepted, but when regulations are used as a substitution for Acts of Parliament and not in the old sense, we should alter our procedure so that they might be considered as a whole and be subject to amendment. An attempt has been made to meet that point of view on this occa- sion by producing the draft Regulations at the same time as the Bill, and we recognise that the step goes some way to meet the point of view which we have expressed on many occasions.

The Bill accentuates an anomaly in the existing social services of the country, which is the difference in treatment of a large section of our people, in regard to the means test. I think everybody welcomes the changes that have been made in the rules regarding old age pensioners and applicants for relief on account of unemployment, but what about applicants for Poor Law relief? Men and women who have been unemployed for a few years, and who were insured, are entitled to relief, according to the Bill, but what about individuals who have been working for themselves all their lives and who have carried on that work in a variety of useful and proper ways? Why should they receive less favourable treatment? The passage of the Bill will undoubtedly bring into the forefront of controversy this type of case, whenever we consider the social services in future.

I do not want to prolong my observations on this occasion, but I was very interested in what was said by my right hon. Friend about the financial Clauses which relate to war savings. We should look carefully into the arrangements set out in the Bill with regard to War Savings Certificates, and we should give them further consideration. Clause 3(2) states that in considering any means or investment, in this respect, such investment should be understood to include any interest arising therefrom. Paragraph (f) of the Second Schedule states that the capital value, or the value for the purpose of disregarding an investment for the purposes of the means test, in the case of War Savings Certificates, shall be the value for which they can be encashed on any particular date. I would point out that that makes the qualification not £375 but £500. It does not require very much imagination to see what administrative difficulty might arise where savings which had accrued and had not been paid out year by year had reached their final value of £500,. Such applicants might well say they were entitled to take the whole of that sum and invest it in some Government issue, and so have it disregarded. There are matters which call for further clarification.

I would now like to turn to what the Prime Minister said on 5th November. There is an Amendment, which I suppose may be called later, and which suggests that the Bill does not carry out the pledge which the Prime Minister gave. When I received a copy of the Bill I looked up what the Prime Minister said, and it is my opinion that everything which the Prime Minister did say is, in fact, carried out. The Prime Minister did not say that the household means test would be abolished, but that an effort would be made to remove the complaints which arose from the administration thereof. They are very substantially removed. It is remarkable that a democracy should devote its attention in wartime to a matter of this kind. That fact should not be lost sight of. In the concluding part of his speech, the Chancellor of the Exchequer said that it was a sign of the power of this democracy to carry on the war to a successful end. I think that is perfectly true, but there is something more in it than that, something of greater significance. This is not an isolated instance since the war began, but one of a series of Measures. We have raised the agricultural wage to 48s. a week and increased the income limit for unemployment insurance from £250 to £420, We have introduced a system of supplementary pensions—

Mr. Lawson (Chester-le-Street)

And increased unemployment benefit.

Mr. White

Yes, and increased it also by decreasing the waiting period. These matters require to be considered from another angle, because they are of the greatest consequence at this time. We are hiding our light too much under a bushel in this matter. I would like to see the Ministry of Information take notice of them, but the Ministry is inclined to hide its own light under a bushel. At any rate, one has difficulty in finding out what it is doing. If the potential revolutionary populations of other countries, worn out and hungry, are asking themselves, "Shall we make the best of terms we can with the aggressor or, doubting democracy, shall we turn towards Stalin?" the passing of this Bill would be evidence that democracy in war-time is looking after its people, and that they are determined to build up a standard of life and of happiness which is not found under any other system.

Sir George Hume (Greenwich)

As one who supported the 1934 Measure, I feel that I cannot give a quite silent vote on this occasion. I will say at once that I welcome this Bill very warmly. I think most of us who have taken an interest in the social welfare of the poor in our constituencies have come to recognise during the last few years that there was something wrong in the administration of the Act to which I have referred. Very often things happen which one never anticipates, and there were far too many instances of lack of tact in making the inquiries instituted under the Act, such as to cause infinite suffering to the people being dealt with. It is all very well to make inquiries, but when one tries to drive a thing to three or four places of decimals, one can go too far. In too many cases the position of the families was not dealt with broadly, but the investigators probed into every detail, not only of the household, but of those within the household who were not members of the family.

I am grateful that the Chancellor has seen his way to bring forward this Measure at a time like this. I hope we are recognising more than ever something of the wonderful spirit which the people have shown during the recent attacks on this country. I have seen them coming from bombed houses into the feeding centres without a whimper. With folk of that kind we must do all we can to relieve them of unnecessary stress and strain. I am sure we are grateful to the Chancellor for the effort which he has made to make this Bill as clear as possible to us. There may be details with which we do not all agree, but, taking it by and large, it will give great satisfaction and will relieve some of the main difficulties which we have had to face. The opportunity is a marvellous one. We have now in power a Government consisting of all sorts of elements which at one time were very much opposed to each other. That a problem of this sort can be solved by such a Government and brought forward unanimously is an immense tribute to the working of this Coalition Government, and the fact that they have dealt with this particular matter in a way such as they have done ought to make us all welcome the fact and to receive the Bill, on its Second Reading at all events, with unanimity.

As regards the second part, I think there is nothing that causes more bitterness than a misunderstanding as to pledges given. I remember that when a first attempt was made in this House to deal with the matter, allegations were made that the Bill did not conform to undertakings given. I think we have every cause to be grateful that a step has been taken towards removing grounds for such allegations. True, it is a compromise, but no one can now say to the Government, "You induced me under false pretences to do what I have done." I welcome very warmly the compromise that has been entered into, and I would remind hon. Members moving the Amendment of that old French proverb, "The best is the enemy of the good." If they endeavour to get what they consider the best, they probably will not get the good at all. I hope that this Second Reading will pass unanimously.

Captain Cobb (Preston)

I would like to join with other hon. Members who have accorded a welcome to this Bill. The feeling that has been aroused in the country on the subject of the household means test has already been amply described by other speakers. We all know, from contact with our own constituents, that the household means test is a very real grievance and results in a considerable measure of injustice and in the placing of burdens on shoulders which ought not to be expected to bear them. I therefore rejoice, in common with all Members of the House, that this very real grievance is to a very large extent being removed. Although I recognise that this Bill is a very considerable measure of social reform, I hope I shall not appear to be ungracious when I say that I cannot help regretting that, in view of the fact that the Government are making this great step forward, they have not been able to see their way to removing the household means test altogether. I agree that according to the Assistance Board's White Paper the spirit of Rule 3A is to be interpreted in a very generous way according to modern standards, but I am not altogether satisfied that these modern standards are necessarily right.

I must confess that I cannot agree with the principle that a son should be expected to make provision for his parents except under the most unusual circumstances. Taking it on the basis of the White Paper, and assuming the average family to consist of a father, mother and two children, this rule will not apply until the father's income amounts to £6 10s. per week or more. I agree that that is a reasonably good income, but it cannot possibly be described as great wealth. Very considerable reductions have to be made from it in the way of rates and taxes, rent, insurance and other necessary expenditure. We all know that the average father tries as a rule to provide his own children with rather better opportunities than he was able to enjoy himself when he was young, and I cannot help thinking that if we are to insist that young parents should make provision for their own elderly parents, we shall make it more difficult for them to provide their children with those opportunities, and also more difficult to make adequate provision for their own old age.

That is the point of view of the son, but I feel that the old parent has a very definite point of view too, which I have frequently had expressed to me by old age pensioners in my own constituency. As the hon. Gentleman the Member for East Birkenhead (Mr. White) said, they loathe the position of dependence on their children. They not only feel the indignity of their position, but they dislike also the feeling that they are being a burden on their own children. I have no doubt that there are very good reasons which have made the Government feel that they are not able to go the whole way and abolish the means test altogether, and I hope that whoever is going to wind up this Debate will let us know what those reasons are.

When the Chancellor of the Exchequer was telling us what the effect of this partial abolition of the means test would be, he said it would result in a great diminution in the number of inquiries that would be made. But I cannot see that it will result in any diminution at all. Every old age pensioner living with his son or daughter and applying for a supplementary old age pension will still have to undergo inquiries as to the income of that son or daughter with whom he is living, in order to see whether or not he comes within the rule. I hope that during the Committee stage it may be possible for the Government to consider with some favour an Amendment which would have the effect of removing the household means test altogether. That is a question which, it seems to me, will have to be settled at some time, and I should prefer to have it settled now.

One further point in regard to the inquiries made from old age pensioners. I understood that an old age pensioner applying for a supplementary pension would, in the first place, have to qualify for it as a result of inquiries, but that thereafter inquiries as to whether his circumstances had changed or not would be very few and far between. My information, however, is to the effect that such inquiries are constantly being made, that it is not a matter of a quarterly or half-yearly inquiry, but of constant inquiries and visits to their houses. I cannot help feeling that those inquiries are really a great waste of time, effort and money. Surely, when you have reached the age of 65 and have qualified for an old age pension, it is extremely unlikely that your circumstances will change either by obtaining employment or by means of a legacy or anything like that. I do hope that the Board will be given instructions to have these inquiries cut down to the absolute minimum, and avoid giving rise to the constant irritation which they are causing at the present time.

I welcome this Bill very much indeed, and I realise that it is a very real step forward and a great improvement in our system of social insurance. I hope that it will prove to be but one of many steps forward, and that the Minister without Portfolio, who, I understand, is responsible for the reconstruction of our post-war world, is directing his mind to the possibility of creating a real system of social insurance, financially sound, which will make adequate provision for every possible contingency—sickness, old age, unemployment and the rest—so that there need never be any question of any kind of means test, either personal or household. I congratulate the Government on bringing forward this Bill and I hope it will be accorded a Second Reading.

Mr. McLean Watson (Dunfermline)

I have been interested in this matter for quite a number of years. I can remember the beginnings of what is now known as the Old Age Pensioners' Association, and while the Measure which we are now considering deals with the unemployed as well as with old age pensioners, I am interested in it particularly from the old age pensioners' point of view. I think I took part in the first meeting held in my constituency when the Old Age Pensioners' Association was begun. That is a number of years ago, but it has now spread all over the country. We have kept hearing about it from the opposite benches, and a few minutes ago reference was made to the Old Age Pensioners' Association in certain constituencies. That association has now spread all over the country and has certainly used its influence during the past few years to have its members' particular grievances attended to. As far as I am concerned, I want to make it perfectly clear that I am voting for this Measure to-day. I know there is an Amendment on the Order Paper, and I agree with the hon. and gallant Gentleman opposite, for I too would like to see the means test completely abolished. But we have always had it in connection with old age pensions.

Captain Cobb

I meant that I should like to see the means test altogether abolished as the result of the creation of a better and financially sound system of social insurance, not under the existing system.

Mr. Watson

I agree with the hon. and gallant Gentleman; I would like to see a better system of social insurance as well. It would do away entirely with the means test. But we have always had a means test in connection with old age pensions. Even to-day the old age pensioner, at 70 years of age, cannot have his pension unless he shows need. That has always been the system; a person of 70 years of age has to demonstrate that he is in need of a pension before any part of the 10s. is paid to him. So I am prepared to accept this scheme; and I would prefer, before attempting to remove the means test completely, to bring in other classes who require attention. Widows, for example, are not dealt with under this scheme. Widows who are receiving a 10s. a week pension, and who get nothing more, should be brought up to the level to which we are proposing to bring old age pensioners and the unemployed. The Amendment which is to be moved by my hon. Friends to-day does not meet the demands of the old age pensioners. My hon. Friends had no instruction from the Old Age Pensioners' Association to put forward such an Amendment. I daresay that the Association would agree to the wiping out of the whole thing if possible; but what they are asking for is that there should be a flat rate of £1 a week for each pensioner, and, in addition, an increased cost-of-living bonus. My hon. Friends who are responsible for this Amendment need not imagine that they are proposing any revolutionary change. They are evidently prepared to quibble over an interpretation of the Prime Minister's pledge to this House. We, as a party, have decided to accept this Measure as something to go on with, subject to our right to move certain Amendments in Committee. I have received from old age pensioners in my constituency a copy of their demands, and, unless the House is prepared to discuss those demands, of which I have already given details, it is no use accepting the Amendment which my hon. Friends propose.

Mr. Bevan

On a point of Order. Are we discussing the Amendment at the moment? Many hon. Members have referred to it. Its merits have been discussed, and the motives of those who are to move it have been discussed. Surely, while reference may be made to the Amendment, it is not in Order for hon. Members to discuss it in this way?

Mr. Deputy-Speaker (Sir Dennis Herbert)

No. The Motion for the Second Reading of a Bill is a very inclusive one; and if a notice appears on the Order Paper in reference to it, an hon. Member is not at all out of Order in making reference to that notice. The point is that when the Amendment is moved later on, the question will be a less inclusive one. Perhaps I might remind the hon. Member that there have been occasions when an Amendment on the Order Paper has been discussed entirely on the original Motion, and has merely been moved and put formally for the purpose of decision at the end of the Debate.

Mr. Bevan

Is it not perfectly clear that if frequent references are made to the Amendment which it is proposed to call, the earlier the Amendment is called the better?

Mr. Deputy-Speaker

That is entirely a matter for the discretion of the Chair.

Mr. Watson

I will endeavour to keep in Order. I have said all that I desire to say about the Amendment. I welcome this Measure, because I believe it will make a considerable change in the position of the old age pensioners. They will be able to get a supplementary allowance that they were not entitled to under the last Bill. Had the right hon. and gallant Gentleman the Financial Secretary been able to persuade us to accept his Bill, on the last occasion, old age pensioners with savings would have been in a very bad position; but now we have the assurance of the Chancellor of the Exchequer that investments by old age pensioners in War Savings Certificates will be exempted when their resources are considered. When the Financial Secretary was trying to persuade us to pass the last Measure some of us were faced by the difficulty that we did not see how either unemployed persons or old age pensioners—and it was the old age pensioners with whom we were dealing at that time—could save anything out of 10s. a week. However, the Chancellor of the Exchequer has explained that they will now have exemption for investments up to £375 in War Loan or Savings Certificates. I believe that this Measure will greatly improve the position of the old age pensioners and of the unemployed, who have suffered grievously under the means test. I appeal to my hon. Friends to see that the Measure goes on the Statute Book as speedily as possible. I know personally of many old age pensioners who have been unable to get a supplementary pension because they were thrifty in by-gone days and had some resources, or because some members of their families came within the scope of the household means test, and we want to get the Measure on the Statute Book for the sake of such people.

Mr. Gallacher (Fife, West)

I would like to draw attention to the remarkable attitude adopted by some hon. Members on the other side, who, previously, have stood solidly behind the Government in support of the means test. I am for the complete abolition of the means test; but many Members on the other side took the stand in the General Election of being against a household means test, and for a personal means test. Theirs was a hybrid position, somewhere between a household means test and a personal means test; and, like all hybrids, it will be productive of very little, if anything, of great value.

I also have had long association with old age pensioners. They want a general flat rate, because they want to get rid of the means test. This proposal does not do away with the means test. The thrifty have been penalised. The ex-Minister of Labour, now Minister of Health, has always been an advocate of thrift—and the means test. He has spent years of his life trying to persuade people to save, and when they have saved, what has happened? They have gone to the U.A.B. and they have been asked, "Have you any money in the bank?" and they have said perhaps a few hundred pounds or £500 maybe. They have then been informed, "You will get nothing here. You did not know how to spend your money when you had it." What we have advised the old age pensioners to do has been to get rid of their money. What could they do after saving for perhaps 30, 40 or 50 years but get rid of their money? I used to advise them to hand some of it over to the "Daily Worker," but that is out of the question now, or for the time being, at any rate. That is one of the things that happened.

Another thing happened, and I want particular attention to be paid to this, especially on the part of those who have been responsible for the operation of the means test. We had many old men and women living with relatives in the same house, occupying a separate room or rooms, but having an independent home as it were. They were entitled to apply and to qualify for the supplementary pension. What happened? A number of hon. Members on the Benches behind Ministers opposite drew attention to the fact that the business was not a question of three or six months, but that it was going on continuously. For example, an old couple live in a house on one side of the street and the family live in a house on the opposite side of the street. In the evening, and perhaps especially on a Sunday evening, the old folk cross over to join the rest of the family and have a cup of tea, but in cases where the old people occupy a room or two rooms in the same house, the sneaks go about watching, and it the old people come out of their room on a Sunday evening and sit down to tea with, say, their daughter and their grandchildren, the matter is reported, and it is called a habitation and the supplementary pension is cut off. Can any minister opposite deny that that sort of thing is going on?

I know an old friend in the Highlands who has been before the Unemployment Assistance Board for the supplementary pension. He has always been an independent, hard-working man. He occupies a room, and they ask him, "Have you a fire in the room?" He says "Yes, I always have a fire." He is told that that is extravagant—two fires in one house. When the daughter came before the Board to give evidence they asked her whether she ever prepared food for her father, and she said that, if her father was not very well she prepared it and took it in to him. The case also arises under this Bill of the old man or woman living with a married son or daughter, where the married son or daughter has his or her name down in connection with the rental of the house. If there is a certain income the old age pensioner gets nothing. Am I entitled, therefore, to advise him immediately to change the name of the person responsible for the rental? I would like to see the big fellows in the City going down to the stockbrokers' offices and considering a situation of that kind. It is scandalous to come forward at this time, when there is a proposal to abolish the household means test, and try to sneak it into this Bill in this manner. I hope that the Minister of Labour will say something on that matter.

The Government are talking about pledges. I hope that the Minister of Health will not leave the Chamber for a moment. There is a reference to a pledge given by the Prime Minister, but there is also a reference, in connection with investments, to a pledge made by the Chancellor of the Exchequer. It is within the memory of the Minister and of many Members of this House, that on one occasion I pointed out that the pledge of the Chancellor of the Exchequer had nothing whatever to do with the savings of the old folks at the present time, and that it concerned only the savings of those who were now working, and would only come into effect when the war was over and they were unemployed. The Minister of Health, who was then the Minister of Labour, declared before this House that I had deliberately misquoted me Chancellor of the Exchequer, and he quoted what the Chancellor of the Exchequer had said about the old age pensioners of the present day. So, therefore, it there was a misunderstanding, it was deliberately encouraged from the Front Bench opposite.

Why should we have this position? If people transferred their money before August, 1940, it will not be taken into account before the war is over. It may be that within the next month there will be a special appeal by the Government to some of these people to transfer this money in order to hand it over to the Government. Yet when war is over you may have two neighbours, one with £385 invested in Government loans, and the other with £375 in other investments, and in the one case it will be counted against him in respect of benefit. The Chancellor of the Exchequer said that it would not be fair to the man who made savings now not to be given some opportunity or special treatment or incentive, because, if he saved now and did not get some consideration as far as his savings were concerned, he could not draw pension owing to the fact that he had given money to the Government. This sort of thing was done in respect of the allowances from the Unemployment Assistance Board, and the man who had not saved was not affected at all. The argument of the Chancellor of the Exchequer is one of the finest arguments against the operation of the means test in any form whatever. Surely you are not going to say to men or women who have been thrifty and saved money, that they are to suffer when it comes to the question of a supplement to the old age pension. The whole question of the means test is one that we should face in its entirety. Labour leaders who are in this House and who are in the Government have pledged themselves time and again to the complete abolition of the means test, and I say that the Government should be forced to take back this Bill and bring in a Measure that will completely abolish the family means test, even if it does not abolish the means test altogether. Only the personal position of the applicant ought to be taken into consideration.

There is another point which is very important. Two months will be allowed to the Assistance Board to sort out the cases which come before them. The Chancellor said that that does not mean that nobody will get anything during this time; but you may have this situation. Two old age pensioners may put in an application following the appointed date. One case may come up within a week and the other not for two months. If they both get increases, is the increase to be from the appointed day? There is nothing in the Bill that deals with that. This matter can, I know, be subject to Amendment, and something will have to be done. I want to suggest that the household means test should be removed, that all attempts to discriminate in regard to savings should be eliminated and that for any old age pensioner who has savings in Government certificates of any kind the £375 should apply over-all. In many cases workers have little money to spare, and this idea that some particular incentive is necessary is so much nonsense. So I say, let us return the Bill to the Government and tell them that we must abolish the household means test completely and eliminate all further discrimination so far as the £375 in Government loans is concerned.

Mr. Magnay (Gateshead)

I would like to associate myself with the remarks that have been made about our late colleague the Member for Hornsey (Captain Wallace). Indeed, I have been asked to do so by my party, which represents the largest number of Liberals in the country. It is a sad thing for me that I have to say this, because when he, with a high personage whose name cannot be mentioned in this House, visited Tyneside, he put the distressed areas on the map. We shall never forget what he did in that illustrious, or at any rate, illuminating report in which he displayed statesmanlike qualities of heart and mind in abundance. The old must die and the young may die, but if one is cut off in the prime of life, it is, I am sure, a sad thing.

In regard to the Bill, I want to say quite frankly that I welcome it, and if the House will be good enough to listen, I will tell them why. The right hon. Gentleman who spoke from what used to be the Opposition Front Bench stated the case exactly right, and I would like to say with him and the hon. Member for East Birkenhead (Mr. White) how much I hope this will improve the lot of the folk who live in constituencies such as mine. It has not been at all a pleasure—although it has always been an honour—to represent Gateshead, because it was second to Merthyr Tydfil in the list of most distressed areas. It is no use the hon. Member who has just spoken talking hot air, as he often does in this House, about abolition, in face of the tangible benefits which will accrue, as a result of this Bill, to constituencies like mine—

Mr. Silverman

The hon. Gentleman has gone out of his way to attack me, and I do not know why.

Mr. Magnay

I was not referring to the hon. Member. I know the difference between a brass man and a silver man. I have quite a collection of cases which have suffered abominably. They include friends of mine who have been out of work and about some of whom a doctor said, "They never put up a fight." They were broken-hearted men who could not get work—friends of my father's whose only fault was that they had lived too long and had exhausted their capital With tears in their eyes they told me what they were suffering, and I was quite ready to help forward their lot. The Treasury have been under conviction, as we Methodists call it, for a long time. The Chancellor and I have been well brought up theologically, and he knows, or ought to know, what it is to be under conviction. It is the job of the preacher to make everybody uncomfortable so that they can make their peace with God. The reason why so many do not go to church to-day is that there is nothing to be afraid of; there is no fear of death now. Well, we had the family means test, and the only thing I want to say about it is that it could, at least, be understood. It was unconscionably harsh, and I could never agree with it, but it could be understood. Then, in our typical, illogical English way we tried a household means test, a thing which I always described as ridiculous. It referred to anyone who met regularly at a common table for meals—aunts, uncles, old Uncle Tom Cobley and all. That was the basis of the household means test. I ought to say here that we owe a deep debt of gratitude to those officers who, in such constituencies as mine, administered the household means test in such a kindly and humane manner.

Now, only the applicant's resources, the resources of the husband or wife and those of any other person living in the house who is a dependant—and that is the vital word—of the applicant come into the computation. To revert to the Methodist phraseology, there has been a change of heart. The Treasury have come out of the state of conviction, there has been true repentance, sincere sorrow for their sins, and—at any rate, I hope and believe—an honest and true conversion. I welcome that repentance. [Interruption.] I do not suppose the hon. Member for Nelson and Colne (Mr. Silverman) knows anything about Methodism. In considering this complex question, it is true to say that circumstances alter cases, and that might well be a guiding principle in the administration of this Bill. In my opinion, for what it is worth—and I have had some experience of this matter—a flat rate could not deal with cases each of which is different from the other, and cases which often vary in themselves owing to a change of needs. The Bill proposes to examine the needs so that a just determination may be made in the case of the applicant and his dependants. Clause 2 and the First Schedule describe the methods that will be adopted. I had intended to give sample cases to justify the methods that have been adopted and that will be of enormous benefit to everybody concerned, but as there are many other hon. Members who wish to speak, I will not do so.

The second rule deals with the case where the applicant is a householder and the son, or some other member of the family living with him or her, is earning money, and therefore, is not dependent on the applicant. I welcome this provision wholeheartedly, as I am sure every hon. Member does. Instead of having an irksome and unwelcome inquiry into the wages of such a person, it is assumed that the household fund is 7s. better off because that person is a lodger and is paying for his board and lodging. What is very significant to me is that, whatever is being paid into the household fund, no more than 7s., which is the maximum, will enter into the calculation, and if the wages are considered to be low, a sum smaller than 7s. will be assessed.

The third rule deals with the case of an applicant who is not a householder. The first part of the rule deals with what may be called the well-to-do working-class household. There are such households. I came from one of them, in which four lads were working, so that the total household fund was quite good. The householder may be the parent of the applicant or a son, but not a son-in-law. I am thankful for that. What trouble I have had with these in-laws, trouble which, I suppose, in other connections, is not uncommon. It has not been an easy thing for Members of Parliament to try to explain the difference, in this connection, between sons and sons-in-law and daughters and daughters-in-law, and one has had to exercise what is called, in certain theological quarters, the economy of truth. In these cases the income is, it may be fairly said, on a high level. In such households the out-of-work son, or the pensioner parent, is not expected to pay anything by way of contribution. In such cases the Bill is most gracious. A Bill is like a speech in that it is the clever asides that matter; it is the little embellishments that distinguish between an ordinary speech and a classic speech. I hope to have some success in this matter as time goes on. In these cases, even if an allowance or pension is granted, it will be termed pocket money. As a life-long total abstainer I will not attempt to say what the et ceteras mean, but I do feel that any man is entitled to a smoke without being beholden to anybody. It is a gracious and kindly thing, under this rule, to make an allowance for personal expenditure. I thank the Government on behalf of those men who like to drink and smoke occasionally.

The second part of the third rule deals with households where the relationship of the householder to the applicant is not as close as in the first rule, or where the householder's income is below a decent level, however closely he may be related to the applicant. In such cases the applicant will be assisted so that he may be able to contribute towards the rent as well as pay for his board and lodging. This is precisely the thing which, 30 years ago, we young Liberals, under the leadership of the present Prime Minister, deliberately said. The Prime Minister then said two illuminating things which I have never forgotten. He said that Liberalism is a quickening spirit and not a creed, and he said that we must attemp to build up minimum standards of living, of comfort, of education—

Mr. Silverman

Did he say that in the speech in which he said that the Tory party was the party of the rich against the poor?

Mr. Magnay

Really, I cannot be expected to complete the hon. Member's political education; he must study more. The present Prime Minister then said that there ought to be these minimum standards. Things have changed very much in my short life. When my father was out of work, he was seven days from the workhouse. That is not the position of a man who is out of work to-day. We have, indeed, proved ourselves to be a Christian nation. Let those who are outside the law keep quiet. The Christian people and the Christian conscience of this country have done those things. Thirty years ago, the present Prime Minister uttered those living phrases which I have mentioned. He was all the better for being a bright young Liberal. He said that we should build up these minimum standards. (Interruption.) Lord Shaftesbury and our Prime Minister were trained by Christian nurses. Homely Christian women trained the Prime Minister and Lord Shaftesbury and moulded their lives in the right way at an early stage. The aim of us all, to whatever party we belong, should be to build up these minimum standards, and this Bill, to my mind, does set up those minimum standards.

Finally, I wish to say a word about savings. I had something to say against the Government on this subject last August. It is right that the misunderstanding—after all, that is what it is—should he cleared up. If the term "new money" had not been used by the then Chancellor of the Exchequer, there would have been no dubiety about it. If he had said "new savings," we should have understood, because it would have been self-explanatory and self-evident. It would not be fair if old investments in building societies, Co-operative stores and insurance companies, cashed in and invested in war savings, received pre- ferential treatment to those whose savings in past years have been in Savings Certificates and Post Office Savings Banks. The date in the Bill is 14th August, 1940, instead of the outbreak of war, and so no injury can be done to those who have been misled. The sum of £375 remains as the "Plimsoll Line" for the unemployed and old-age pensioners. It gives them that buoyancy and that uplift which everyone here desires to see. They are not to be provided for by public assistance or out of public sources, but they are to have, as Robert Burns says, in his own way: Their ain fireside, their ain savings, and their ain comforts.

Mr. Gallacher

When did lie say that?

Mr. Magnay

I have said before to hon. Members who are born in such ignorance that because they talk in a Glasgow accent they think the Kingdom of God is theirs; but they are far mistaken.

Mr. J. J. Davidson (Glasgow, Maryhill)

Is the hon. Member aware that the hon. Member who interjected that remark is not a Glasgow Member and was not born in Glasgow? Will the hon. Member refrain from making references to Members who up to the moment have withstood his speech in a very grand manner?

Mr. Magnay

We sometimes hear appeals made to Members to keep up the morale of our people. "Keep up our morale"—such "clotted nonsense" What our people want is to take off their coats and to be told what to do, so that they can get at the other fellow. Let the world read this Bill and see the significance of it. Here we are legislating for years to come, and at a time when we are spending £10,500,000 a day. We are legislating for years to come for those whose need is most. To me, that is the best evidence that we are sure to win this war, and there can be no possible or probable doubt about that among us here.

Sir Irving Albery (Gravesend)

I want to say only a few words in reference to that part of the Bill which deals with the means test. Any hon. Member of this House, if he is honest, will admit that even in his own family circle there are many things which cannot be arranged without regard to what is in fact a means test. On the other hand, I welcome the proposals in the Bill which modify the means test. The whole essence of a means test is to make it as lenient and as little a burden as possible. Chiefly, I want to deal with that part of the Bill relating to savings. I, together with some other hon. Members, had some Amendments down when last this matter was discussed, which I think may have had some influence on the Chancellor of the Exchequer. With reference to that part of the Bill, I must say that I do not feel any happier about it to-day than I did on that occasion. The Prime Minister appealed to the country at a very dramatic moment, saying that he had nothing to offer but blood and tears and toil and sweat. There never has been an appeal made to this country which had a greater effect.

On the other hand, this pledge was mean and petty. The effect of it is that the only people who can really save at the present time are those who, if they are not better off, are at any rate no worse off as a result of the war. A great number of people are definitely worse off, and to put out, at a time like this, as a hind of bribe to those who are better off, that if they will come with their savings, to help their fellow countrymen in their time of need they will ultimately get an unfair advantage over others, totally misjudges the character of the people of this country. Very often, I think, our working men and women are misjudged. They are not always credited with intelligence, and certainly not always credited with patriotism. It is my considered opinion that if that pledge had never been given, there would have been possibly more savings made than has been the case. I want to make it quite clear that I am not in any way depreciating the great services that have been given by those who have worked on Savings Committees. What they have achieved has been achieved through their untiring efforts in the propaganda that they have made and not by the extra bribe that was thrown in. At the same time I am bound to recognise that the pledge was made, and the Government have to implement it. I wanted to say these few words to explain why, when the Second Reading has been taken, I do not intend to put anything forward in the way of Amendments.

Mr. Ness Edwards (Caerphilly)

I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof: this House, whilst appreciating the substantial improvements made by the Bill, cannot assent to the Second Reading of a Bill which continues to provide for the application of the household means test, and which fails to give full effect to the pledge given to the House by the Prime Minister on 6th November, 1940. It is with some regret that I have felt constrained, with my friends, to put this Amendment on the Order Paper. We should have been extremely happy if it had been rendered unnecessary by the nature of the Bill itself. The Bill has the object of doing away with the household means test. It may be said that that is a wrong formulation. To put it in the Prime Minister's own words, it promises to remove causes of complaint against the existing means test. On this side of the House we have complained for very many years that the application of this test to poor applicants for State assistance has been a piece of spiteful class legislation. That it applied only to members of the working classes, and not to the rich class, has always impressed us as typifying some of the contradictions in the society in which we live. For very many years this House has listened to stories of the iniquitous consequences of the household means test. Certain right hon. Gentlemen who have to-day justified it have on previous occasions attacked it most bitterly and most vehemently. One can understand that perhaps some of the venom that was shown to it was due to the fact that their own pledges were sticking in their throats.

We welcome the attempt to bring some equity into the administration of State funds. We thought, when the Prime Minister made his statement, that at last a grave injustice was to be remedied. The great working class, on whom this country now depends, has been told, both in the House and in the country, that a most hated injustice was at last to be removed. The head of the Government, the Prime Minister, made the declaration in this House. Members of the War Cabinet have told the country that the household means test is to be abolished. My right hon. Friend who spoke from this side of the House earlier in the Debate has issued a memorandum showing how the household means test is to be abolished. A lady member of the Government has already written a book in which she declares that the household means test has been abolished.

When, therefore, we analyse the Bill by which it is proposed to redeem these undertakings, we have to see whether it really carries out what is intended. More than this House is involved in this matter. The declarations that have been made have built up expectations among a vast number of applicants for supplementary pensions and unemployment assistance. It will he in the recollection of the House that over 250,000 applicants for supplementary pensions were refused. The number is now over 300,000. Some hundreds of thousands have been led to believe that they will get additional relief by this Bill. Some 200,000 applicants for unemployment assistance are looking forward to the passage of this Bill in the hope that it will relieve them of the injustice under which they have been suffering. The undertaking which has been given so widely to so many people ought to be carried out in this legislation. The House may feel that it ought not to be bound by statements made outside the House, but the House is entitled to have fully and amply redeemed all pledges ma de inside the House by the Prime Minister.

The main part of my case is that the Bill does not carry out the Prime Minister's undertaking to the House. I will not seek to justify the Amendment by the general injustices which arise out of the Bill I will seek to justify it on the Bill's failure to redeem the pledge. The acceptance of the Bill by the party to which I belong is based on the assumption that the pledge has been amply and fully carried out in it. I believe that they are profoundly wrong. There is a misconception either of what the Prime Minister meant or of what this Bill means. Unfortunately, that misconception results in the misleading of hundreds of thousands of people who follow very largely the lead of this party. In examining the pledge made by the Prime Minister, we have to consider the circumstances in which it was made. It was not an impromptu outburst of rhetoric. Here was no careless roaming around in his tremendous vocabulary. It was a written statement, read out carefully to this House. I think we must look at this declaration in the light of those circum- stances, and every word of it must be weighed and given the meaning with which it is pregnant. Let me quote from the OFFICIAL REPORT what he said: The Government intend to introduce legislation to enable them to give effect to certain changes designed to remove causes of complaint against the existing means test. There is the declaration. Let us analyse that part of it. PE does not say "some causes," it does not say "all causes," but there is nothing to warrant any hon. Member saying that this only applies to removing some causes or special causes. Hon. Members who, like myself, have experience in industry, and have had to negotiate about causes of complaint in a factory, know that if they gave an undertaking to the workmen's representative that they would remove the causes of those complaints and then failed to remove all the causes they would be charged with being tricksters. I say that the Prime Minister, a master of English prose, if he had intended to mean "some causes" would have said "some causes." I agree that there is the other side of it—but is this pledge to be redeemed in a petty way or a generous way? Is it to be redeemed in a lawyer-like fashion or in a practical fashion? If we are clear as to its meaning let us follow it. There is a second principle. The second principle is: The test will become one of personal need."—[OFFICIAL REPORT, 6th November, 1940; col. 1343, Vol. 365.] First, remove existing causes of complaint —unqualified; and, second, the test will become one of personal need. Unless those two principles are embodied in this legislation the Prime Minister's pledge is not being carried out. I would ask my right hon. Friends whether they are satisfied that this legislation carries out these two principles? If not, they have become party to the failure on the part of the Government to implement the considered, joint and united conclusion that has been arrived at by our representatives in the Government. I say that the satisfaction of these two principles must run side by side. Unless you abolish completely the household means test you do not implement the other part, that there must be a personal test. The two things are intertwined, interlocked and dependent one upon the other.

If the test of personal need is the principle to be applied, surely the needs of all old age pensioners in the same age group in the same category must be, on an average, the same. They all need clothes, they all need shelter, they all need food. I put it to the House that the Bill does not assume, as its fundamental basis, that the personal needs of all old age pensioners are alike in that respect, because it makes a distinction between the needs of different categories of old age pensioners. It fails not only to abolish the household needs test, but to apply the principle of the test becoming one of personal need.

May I explain the matter in a little more detail? The operation of the household needs test, and what exactly if has meant in practice, have not been so widely understood as they might have been. The household needs test operates in two ways. It operates first on what is called the left-hand side of the case paper, on which the calculation is made. On that side, particulars are entered of the needs of the applicant. It has been assumed that, in determining the needs of the applicant, the household needs test is not applied, but that assumption is contradicted by the facts. On the other side of the case paper are brought into review all the resources of the applicant that can, by Statute, be brought in. The household needs test operates to put on the needs side a scale of need determined by whether or not the person is living in a household. It operates on the other side by bringing in the resources. I submit to the Minister of Labour that the Government have not touched the side of the household needs test at all by this and that the distinctions which have been in operation under the household needs test by which one person's need is regarded as less than another's, still remain in existence.

Let me, if I can, express the matter more clearly, because it is very involved. Under the operation of the household needs test, the needs of five old age pensioners living in precisely the same household circumstances, and next door to each other, were, as a first effect, established as differing in this way: No. 1, a need of 19s. 6d.; No. 2, a need of 13s. 6d.; No. 3, a need of 12s. 6d.; No. 4, a need of 18s. 6d., and No. 5 a need of 19s. 6d. Those distinctions as to need, which is the important thing, were arrived at by the application of the household needs test before beginning at all to consider resources. I have tried to make that point as clear as I can. By the first effect of the operation of the household needs test you establish a personal need, and in each of those five cases the need was different, because the households were different.

That was the position under the household needs test. It is significant that this principle is continued in the Bill. Here is the first indication of where the Bill fails to carry out the pledge. First of all, it fails to establish the personal need as being the same for all pensioners in the same circumstances; secondly, it uses the term "household" so as to rob certain pensioners of pensions which they otherwise would receive. The right hon. Gentleman shakes his head. I am very anxious that he in particular should understand this phase of the matter. Neither I nor my hon. Friends want to be at loggerheads over this question. We are not pursuing this matter in order to play the part of wreckers or saboteurs. That is a very unworthy motive to impute to one's comrades. I have never heard the right hon. Gentleman impute it to his enemies. That apparently is left for his comrades when his comrades try to redeem pledges on which they were able to get into this House.

One gets a different personal need by the application of the household means test, and there is no bringing in of any other resources. The provisions of the First Schedule refer to and preserve the very foundation of the household means test. That is on what I call the left-hand side of the case paper in assessing the need. The need of each old age pensioner is the same except as that need is varied by the utilisation of the resources of other members of the household. The Prime Minister has made a pledge not to utilise the resources of other members of the household. This Bill provides for the continuation of the utilisation of the resources of other members of the household in order to relieve the State of its responsibility to the individual applicant. It was the declared intention that the resources of other and non-dependent members of the household should not be so utilised. Here we find, therefore, a twofold breach of the undertaking.

I should like to carry this point one stage further and to give a concrete example A widow has reared her family. She has been left with an adult son and lives in a colliery house. She gets a widow's pension. Her need is assessed at 18s. 6d.; leave the resources out of the calculation altogether. The colliery owner wants to make sure of his rent. The son also wants to get cheap coal from the company. The colliery owner says, "Put the house in the boy's name," and the house is put in the boy's name. The name is changed on the rent book, and immediately the present legislation and the proposed legislation reduce the old lady's need from 18s. 6d. to 12s. 6d. I am not talking about a supplementary pension; I am referring to her need. I am not bringing in any other resources; leave that out of the calculation altogether. There is the position. If the house is in the old lady's name, and if the rent book has her name on it, she will get 18s. 6d. as her need. If the rent book has her son's name on it, her need is assumed to be 12s. 6d. I hope the point is well noted by my right hon. Friend.

The White Paper is drafted with this conception in mind. Referring to the White Paper, which is supposed to interpret this Bill, it will be seen that the distinction between the householder and the non-householder is at the very basis of almost every rule and principle. I now turn to another point. This is how the proposal is to be carried out according to the Explanatory and Financial Memorandum attached to the Bill: Household Means Test: Clause 1 abolishes the requirement that in determining the need or asssessing the needs of applicants for unemployment assistance or supplementary pensions the resources of all members of the household of which the applicant is a member shall be taken into account, … In other words, the fact that an applicant is a member of a household or a householder himself is one that ought not to be taken into account in fixing the normal need of the applicant. But then we find the very strange position that the First Schedule immediately contradicts the Memorandum. The purpose of the Bill as explained in the Memorandum is destroyed in the Schedule. I submit that this is not a very good attempt to carry out the undertakings that have been jointly arrived it. This contradiction persists all the way through the Bill, and, to my mind, is one of the most substantial criticisms that can be made of it, but unfortunately it is not the only failure of the Bill to redeem the pledge of the Prime Minister. Rule 2 of the First Schedule makes it clear that if an applicant is the householder consideration of the resources of other members, no matter what their earnings, shall be limited to their contribution towards the household expenses. I think that is sound. I have no complaint to make. But Rule 3 provides for applicants who are not householders, and it is with those that my main argument has been concerned. In addition, whenever the income reaches a certain point, the full force of the household means test is restored.

My right hon. Friend may say that it will apply only to a few. But why not get rid of it altogether? Is it a weapon that is being kept in cold storage, to be sprung upon us, when vast numbers of our fellow countrymen are unemployed? Is this an instrument that is to be kept in the museum of the Assistance Board, to be brought out by a Tory party in order to whip our people into subjection? The old age pensioner will get nothing in those circumstances, and the unemployed man will get 5s. Is it not ironical that, in a Bill designed to abolish causes of complaint against the means test, there is provision to give statutory sanction to a practice which was devised by the old Unemployment Assistance Board, the practice of "dignity money," which was brought into being in order to avert the worst consequences of the old household means test? If you abolish the old household means test, why keep the practice of "dignity money" in the legislation? Is it not proof that the old household means test is not abolished?

Many earning members of families now are getting round about £4 10s. or £4 15s. a week. So long as their earnings are below the amount prescribed—the amount I presume to be £5—their relatives will get their supplementary pensions or the full unemployment assistance rate. But once they have worked a few extra hours, or put a bit more ginger into their piecework with the result that their earnings rise above the prescribed amount, all the supplementary pension goes—all of it—and 5s. "dignity money" remains for the unemployed. In other words, the Minister of Aircraft Production, with that fine flair of his for "go-getting," will tell the lads "Go to it!" and my right hon. Friend the Minister of Labour and my right hon. Friend the Minister of Health will say, "Go to it at your peril, because if you do we will take the supplementary pension off the old man or the old woman." People are asked to work at the week-end; if they refuse they get the sack, and have to go to a court of referees.

Mr. Bevan

Or be called saboteurs.

Mr. Edwards

Or be called saboteurs. Not only is the Prime Minister's pledge broken, but a brake is put on production at the very moment when we are fighting for our existence. There are advantages in the Bill. We should be foolish not to admit it. There are substantial improvements. It seems that those who want the Bill have been concerned about magnifying the advantages, and the charge may be made that we who oppose it are not prepared to find any advantages in it. Whoever worked in the new rent adjustment showed a recognition of the kernel of one of the grievances from which these people have been suffering. But perhaps my right hon. Friend the Minister of Labour will be able to tell the House Whether these conclusions of mine are right or wrong.

Is it a fact that a widow, with a house in her name, and a son earning as little as £2 a week, is not entitled to any supplementary pension? Perhaps my right hon. Friend can tell us whether that is one of the consequences of this Bill, and whether that is a redemption of the pledge given by the Prime Minister. In the converse case, if the house is in the widow's name, even if her son is getting £10 a week, will she not get some supplementary pension? There is the household means test. In the case of an old age pensioner and his wife, with the house in the pensioner's name, if they are living with their son, who is earning £6 a week, the pensioner is entitled to some supplementary pension. But if the house is in the son's name, the pensioner is not entitled to any supplementary pension. In the case of an old age pensioner and his wife, with the house in the son's name, and with the son getting unemployment benefit, will my right hon. Friend tell us that a half-crown will not be taken out of the son's benefit, and the supplementary benefit of the old age pensioners reduced by a similar amount? Is it proposed to continue to take 7s. 6d. out of the workman's compensation, in order to rob the widow of her supplementary pension? The household means test does not work in a vacuum. It is not a mass of papers or theories. But it creates a vacuum which is something to be filled.

Let me mention one or two other points. Take the case of a father, working, wife, and an adult son, the adult son being on Unemployment Assistance. The father is earning £5 a week, and the son will get 5s. In other words, the father contributes 5s. towards the maintenance of his son. Reverse it. Suppose the father to be unemployed and the son working, then the son will have to contribute 7s. towards the maintenance of the father. Carry it a little further. Suppose a father and mother, both old age pensioners. Living under the same roof is a son-in-law and daughter. The son-in-law earns £5 15s. a week. Look at the rent book wangle that has been employed in this household means test. If the father is a householder, he will get 12s. supplementary pension. If the son-in-law is the householder, the supplementary pension is reduced to 6s. per week. If the house is in the daughter's name, they will get no supplementary pension at all. If there is a married son and a daughter-in-law living in the house, the position is as follows. The father of the householder will get 12s. supplementary pension. If the son is the householder, there is no supplementary pension, but if he puts the house into the name of the daughter-in-law, the father will get 6s. supplementary pension. Yet we are told that the household means test has been abolished. They write books about it, issue memoranda about it, and they defend it by attacking their own comrades.

Finally, I would warn the House that, having raised expectations, and having led the pensioners to believe that this Bill will give them justice, it is worse than cruelty to let them down in the manner in which they are being let down by this Bill. This Bill, when it is worked out, I am profoundly convinced, will lead to more disappointment than the first Act. You are not entitled to play with the misery of our people in this connection. The Prime Minister has a personal respon- sibility in this matter. He made the pledge; he gave the undertaking. It is not only that his honour is at stake, but also the honour of those Members of the Cabinet who arrived at this decision. There is also to be considered the well-being of some hundreds of thousands of poor people in this country to whom we owe our first allegiance. I ask the Government, therefore, to take this Bill back and bring forward at an early date, proposals that will do credit to the pledges that have been given and do good to our country.

Mr. Ellis Smith (Stoke)

I beg to second the Amendment.

My hon. Friend the Member for Caerphilly (Mr. Ness Edwards) has moved this Amendment in a very able and well-informed speech. A short time ago I happened to be absent from the House, and many of my hon. Friends on this side came and told me of the provocative language which had been used by one of our right hon. Friends. I felt hurt when I heard that, but I have been somewhat consoled by the fact that my hon. Friend the Member for Spennymoor (Mr. Batey)—and I am proud to call him my hon. Friend—has in spite of great domestic difficulties travelled down here specially in order to vote for this Amendment. I am indeed glad to find myself in company with an hon. Friend who has stood the test of 50 or more years of service in the movement to which we are proud to belong. There is no need to-day to go into the old controversy of the past 10 years except to remind the House—and both sides are being put to the test to-day—that many of our friends and relations have been subject, during that time, to domestic friction and humiliation through the operation of the household means test. Indeed, many have been driven to suicide through this means test. We are smarting—at any rate I am —under the lash of the administration of that test during the past 10 years and to-day the issue is: Does this Bill implement the promise made by the Prime Minister on the 6th November? I have a copy of the OFFICIAL REPORT before me and it shows that the Prime Minister said: The test will become one of personal need, …"—[OFFICIAL REPORT, 6th November, 1940; col. 1343, Vol. 365.] Following that statement I made a speech saying: When the statement was made I was pleased with it but since looking at a copy of it which my hon. Friend the Member for Spennymoor has obtained I have become a bit sceptical about certain portions of it. I shall not to-day make the observations that I had intended to make on it but I shall look forward to the statement being interpreted to the House in the most generous way— To the cheers of nearly every Member on this side I said— … the only satisfactory interpretation, as far as we on this side are concerned will be the complete abolition of the household means test."—[OFFICIAL REPORT, 6th November, 1940; col. 1396, Vol. 365.] Since that statement was made, I admit that various interpretations have been put upon it. My hon. Friend the Member for Caerphilly gave concrete illustrations to show how this household means test will still apply. I approach the question in a different way. The day after the Prime Minister made his statement every leader-writer and every Lobby correspondent in this country wrote "This means the abolition of the household means test." During that week-end many old age pensioners and unemployed people came to me saying, with high glee, "At last this means the abolition of the household means test." I was more cautious; I said, "Wait until we get the Bill." Here is one example of what a newspaper said —not our newspaper, but the "Times." On 7th November it said: The household means test is to be abolished and the personal means test will take its place. The effect of it is that the household means test will soon be a thing of the past. Does this Bill interpret that statement in the "Times"? Does it implement the promise made by the Prime Minister? It is true that the sting has been taken out of the household means test, but many of its anomalies will be perpetuated, and new anomalies will be created if the Bill in its present form becomes an Act. Can we be told what the changes will mean, approximately, in terms of the proportion of applicants for supplementary pensions who will benefit under the Bill, and the amount by which they will benefit? Can we have the same information concerning applications by people who are unemployed and apply for assistance?

At the present time the engineers and munition workers, in particular, are making herculean efforts to obtain the maximum production in war industries. If the Bill is passed as it stands at present, these men will be penalised as a result of the great effort they are making. If any hon. Member doubts that statement, let him look at Rule 3 (a), paragraphs 8 and 10, of the White Paper. There he will see that—if I interpret the Rules correctly —this Rule will mean that the men who are making these great efforts will be penalised. I remember what happened from 1914 to 1918. At that time these men worked overtime, and they worked as hard as it is possible for men to work. In 1922, they suffered, within a period of a few weeks, a reduction in wages of approximately 25s. a week. From 1924 to 1937, they were subject to short time, unemployment, and the mean household means test. Now, when this Bill becomes an Act, these men will be penalised and will suffer as a result of the great efforts they are making.

I admit that the Bill makes substantial improvements, but when one considers the costs of administering it, is it worth perpetuating the anomalies, as the Bill will do? We fought the last General Election on the question of the means test. Since those days we have moved a long way. We are now prepared to accept a personal means test. Surely we cannot be expected to go further than we have gone along this road. We stand for the successful prosecution of the war, as do the men in the workshops. But this Bill does not implement the promise that was made by the Prime Minister, and the promises that were made by hon. Members on both sides at the last General Election. We say that, if we are living in a state of real democracy, there should be, together with a successful prosecution of the war, a simultaneous development of the social services. I was brought up in large-scale industry, and I learnt that in industry if a thing is worth doing, it is worth doing well. Therefore, if it is worth introducing a Bill of this sort, surely hon. Members, if they are to be worthy of the people they represent, ought to be prepared to introduce a Bill in a big way.

I understand that this is a Coalition Government, representing all parties. I have here the election manifestos of all the parties which make up the Government. What did they say in 1935? The Labour party said: The Government have robbed the unemployed of benefit and subjected them to a harsh and cruel household means test. The Labour party will sweep away the humiliating means test. The Liberal party said in 1935: The Liberal party condemns the means test Regulations. It considers that to treat the household as a unit is wrong. The National Government said: The question is not whether there should be a means test, but what that test should be. Nearly every supporter of the National Government in that General Election interpreted that election manifesto as meaning the abolition of the household means test. Scores of scores of candidates in the last General Election were able to keep our men out of the House of Commons because on the election platforms they interpreted that National Government manifesto as meaning the abolition of the household means test. I have spoken in many by-elections since 1935, and in all of them National Government spokesmen have said that they now stand for the abolition of the household means test. I remember standing at an open-air meeting in Stafford and listening to the right hon. Gentleman the Member for Kelvin-grove (Mr. Elliot). After he had spoken, a number of questions were put to him from all parts of the audience. They all asked, "What is your attitude towards the means test?" The right hon. Gentleman, who was then a member of the Cabinet, said, in reply, "As soon as possible we stand for the complete abolition of the household means test." Now that we have a Coalition Government, all we ask for is something of a reasonable character. We do not ask for a new social order about which so many are talking at the present time, but something in a concrete form. Let us have something to go on with. Therefore, we shall support the Amendment in order that the Government shall have the opportunity of reconsidering their attitude towards this question, and of bringing in a new Bill which will implement the promise.

Mr. A. Bevan (Ebbw Vale)

I rise to support the Amendment which, I think the whole House will agree, was moved in a speech at almost classic simplicity, and seconded by my hon. Friend with all that sincerity and knowledge which we know he possesses. I was away from the House when the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence), who has left the House, made his historic splenetic attack on our party. He made an attack upon us and used language which I think he ought to be called upon to explain. The use of the term saboteur as applied to hon. Members in this House is, in my submission, a term of abuse which ought not to be permitted unless it is justified. When a man is called a saboteur it means that he is consciously engaged in trying to undermine and hamper the national effort, and that he is deliberately sabotaging the national effort. When I decided to speak to-day I was going to address myself in a most temparate fashion to the Amendment, but I am bound to warn my right hon. and hon. Friends that I also have some capacity for invective, and, if they are going to use language of that sort, I shall begin to examine their speeches with a miscroscope.

This matter falls into two separate parts. First, the honour of the British Labour Party is involved in it. There is no single political issue upon which we have pledged ourselves so deeply as this matter of the household means test. I was in the House in 1934 when the Bill was introduced establishing the Unemployment Assistance Board. There were only 40 or 50 or us, and we kept up a day-by-day battle against it. We had demonstrations in the country. There is not a Member before or behind me who has not pledged himself more deeply than any single politician has ever been pledged. Is there a man here who has not committed himself on the platform at some time to abolition of the means test altogether? Nothing does more deadly damage to democratic institutions than for politicians to run away from their pledges. We sit here because we made that pledge. Many Members would not be here if it were not because of that, and it is dishonourable in the extreme to run away at this moment. There is no justification for running away at all; indeed, the national interest is bound up with it, because the morale and well-being of our people are the best single contribution that we should make to the national effort.

The right hon. Gentleman, I understand, accused us of putting an Amendment on the Paper because we knew that it would not be carried. He said that other Members of the Labour party were standing by the Government, and we wanted to be able to say that we never voted for the household means test and we knew we should not have to accept the consequences of what we were doing. This is the first time I have been accused of political cowardice. We put the Amendment on the Paper because we wanted to have it carried. It is a reasoned Amendment. We shall vote for it, and we shall not vote against the Bill. It is the regular procedure of the House. It is the only way in which the House can accept the benefits of a piece of legislation and at the same time say that it ought to have gone much further. My right hon. Friend suggested, I understand, that if we carried the Amendment, it would be the end of the Bill till after the war. Was he serious in that?

Mr. Pethick-Lawrence


Mr. Bevan

All I can say is that the right hon. Gentleman has fully discharged his service to the House, because it means that if the House by a majority says to the Government, "This Bill does not go far enough and, because it does not go far enough, you must take it back and bring in another, taking it as far as the majority wishes it to go," it would be flaunting the wish of the House. Is he serious?

Mr. Pethick-Lawrence


Mr. Bevan

Then the right hon. Gentleman is stupid as well as serious. Such a situation could not conceivably arise. The Government could not in these grave times carry on the government of the country and flout the wishes of the majority of the House upon so serious a matter. Everyone knows that it could not possibly be done.

There is another aspect of this matter which is equally serious. When my hon. Friends entered the Government it was recognised that a new and unique Parliamentary situation had been created and that it would be a great test of the flexibility, resiliency and dignity of our Parliamentary institutions. I suggested, and I understood that the House and Mr. Speaker accepted it, that the Opposition would be wherever opposition disclosed itself and that the Government should collect their majority from the House by free and open discussion. I understood that that was to be our procedure and that the procedure would not be to attempt to drive an unpopular Measure through the House by back-stairs methods and by bullying Members into acquiescence. Now I understand that the Parliamentary Committee of the Labour party have decided to hold a special meeting next Tuesday morning in order to bring to book those Members who dare to fulfil their pledges in the House. Why are they going to do that? Because when they go to their constituents they will be asked why it was that A, B, C and D went into the Lobby and they did not, and they do not want to have the unpleasantness of having to reply. Why should we allow them to bury their consciences secretly? Why should we exempt hon. Members here from the obligation of making public explanations of their public conduct and permit them clandestinely and secretly to violate their pledges? It is not in keeping with the honour of a Member of Parliament that he should seek to find in closed and secret rooms upstairs an excuse for betraying the people whom he represents in the House o Commons. That is exactly what the right hon. Gentleman is doing.

I have never claimed that there is not a good deal of advance in this Bill. I have fought the household means test as much as any Member in the House. I submit to the right hon. Gentleman that I could take him into the Smoking Room or the Library and draft a better Bill in a quarter of an hour. It is a perfectly simple matter. I remember when in the House there was a long argument about the "not-genuinely-seeking-work" Clause. It was described as so complicated and difficult a matter that it was not possible to draft any Amendment to it. We drafted one, which remains on the Statute Book, and it took half-an-hour to do it. Why? Because we did not ask all sorts of complicated vested interests to give a hand. We could start with a perfectly simple principle in this Bill. It is that no resources shall be taken into account except the resources of the applicant and those dependent upon him. A perfectly simple, symmetrical and administratively practical Bill could be drafted in two Clauses. If that principle were followed through the Bill, no trouble would arise. The complication begins when a conception which is unreal is introduced. When the system of the relief of the poor was started under Elizabeth the family was the basis because it was the unit of society. It was a purely objective and tangible reality which formed the basis of administration, and it remained for centuries until a few years ago. When the industrial revolution came and the family was dispersed, the family ceased to be a real basis for the administration of assistance. Every board of guardians then employed officers to chase relatives of applicants all over Great Britain in order to get them to contribute half-crowns to their families' maintenance. The family thus became an unreal thing.

Then the Unemployment Assistance Board had to give up the family and take the household. But there is no such thing as the household as a unit. It is too intangible, too flexible, too fluid, too ambiguous a unit as a basis. As has been pointed out, the Bill does not deal with the worst injustice of all, the fact that because a son continues to live with his parent he is subject to a tax from which a far better-off son who does not live with the parent is exempt. In fact, we still make it profitable to break up the family, still make it advantageous to the son to leave home. I suggest to hon. Members opposite who, by reason of the changes in the Government, may now be less strangled by "the old school tie," that there cannot be very much money involved in the change for which we ask. There may be a few million pounds a year, but what is that in order to make a clean sweep of this business; and, as an hon. Friend reminds me, a great deal of money will be spent in administrative costs under the proposed system.

Why do not the Government do the big and generous thing? Why not do the simple thing? My right hon. Friend the Minister of Labour has spoken more than once in public about the necessity of getting our social system on to a scientific foundation. Is there any science in this? Most of the households which come under this Bill will be disturbed by it. There will be resort to all sorts of shifts and twistings, the diversion of the rent book from one to another, in order to seek to obtain the greatest bene- fit out of it, and the espionage system of the Assistance Board will be following every trick. It is a very bad piece of legislation which forces people to adopt all sorts of bad practices in order to evade it. It is far better to alter the legislation and bring it more into accord with social reality than to try to preserve principles which are inapplicable. Like my hon. Friends I shall be told that this step which we are taking is making a great contribution to national disunity. Is that really so? I suggest that it would be simpler to withdraw the Bill and to bring in one which was in accord with what I am quite satisfied are the wishes of most hon. Members if they were to express them freely, and what are also the wishes of the country. Why have we not got the Bill we want?

When our hon. Friends are asked to explain, what explanation will they give? They will say, "Oh, we did not want this Bill; we wanted the abolition of the household means test; but the Tories stopped us." I ask the right hon. Gentleman in his reply to tell us why he has not got the abolition of the household means test. Did he try to get it? If he did not, why not? And if he did try, who stopped him? Does he believe in the household means test? No, because if he believes in the household means test he should at once resign from the Labour party. Then I ask simply, why have we not got the abolition of the household means test? Did the Prime Minister stop him? I find it difficult to believe that a man of such a massive sweep of mind could impair the unity of the Government and the tranquility of the country over so comparatively small a matter. The contribution of my hon. Friends opposite to national unity will be to say, when they are challenged about this, "Had it not been for the meanness of the Tories we should have got rid of the household means test." The right hon. Gentleman is really under an obligation to answer these questions and to explain them. They are not trick questions. They are real questions. [Interruption.] They are tricky.

Dr. Morgan (Rochdale)

They are more than that; they are dirty questions.

Mr. Bevan

It is suggested that the questions are dirty. They are questions addressed to the Minister, asking him: "Why have you found it impossible to carry out your promise?" Did he try to carry it out? If he did, and he failed, who stopped him? The Tories? If so, the Tories are getting themselves into difficulties in this matter, but I do not believe that the Tories stopped him. I dare say that the right hon. Gentleman had trouble and that he found difficulty with Ministers, but I think that he was stopped by the usual obstruction of the Unemployment Assistance Board and the Treasury. They want to keep the household means test in the general body of the social legislation of this country, because it is a most flexible instrument to use in time of crisis in order to unload the cost of keeping the poor from the Exchequer on to the working class. I do not believe that the right hon. Gentleman made a really hard effort to get this matter out.

I suggest to my hon. Friends on both sides of the House that it would be helping to sweeten our relationships and to make our politics more wholesome if the Government took the Bill back and brought in one that made it clear to the country that the country is too big to persecute the old people. I am deeply disappointed at the procedure which has been followed. When the Prime Minister made his speech I rushed out of the House, so pleased was I, and wrote an article, in which I said: "At last the household means test is dead." As usual, I was too ingenuous. I took things at their face value. I thought the Prime Minister meant what he said. I believe the Prime Minister meant what he said, but I do not think he was quite certain what he did say. He is not necessarily asked to inform himself of the intricacies of this matter. We understood the Prime Minister to make a perfectly clear pledge that the test would be one of personal need and that he trusted other people to carry it out. They have not done so, and there is only one thing left. I ask my hon. Friends: If you put principles before party, if you believe that party is the embodiment of principle, if you believe in decency in public life, if you think that keeping faith with our people is far better than playing power politics, if you think it is better to have a decent reputation than to hang on for jobs or sweat on the top line for jobs, if you think that it is more wholesome to do those things, you will say to the Prime Minister, "We are satisfied that the Bill does not do what was wanted. Take it back, and bring in another that will maintain the honour of our people and the dignity of the old age pensioners."

The Minister of Labour (Mr. Ernest Bevin)

I would like, at the outset, to answer the questions put so deliberately to me as to responsibility for the Bill. I have been a long time, not in politics, but in collective responsibility, and on committees in other walks of life. When I have entered into an agreement with colleagues, whoever they may be, I would not escape, or attempt to escape, my responsibility for the final decision. I do not blame the Treasury, the Assistance Board, or Conservative or Liberal Members of the Government. As a Member of that Government, when the final decision had to be taken, I, with them, accepted that decision. I will make no apology, and give no explanations, of the discussions that went on inside. That is a policy which I have followed throughout all my career, even when I have been in a minority and have had to accept the decision of a majority.

It is said that the Bill is not carrying out the Prime Minister's pledge. I shall not attempt to develop any clever debating points, but I will try to deal with the facts of the Bill. I would like to answer for one of whom I have a very great regard—as indeed has every hon. Member of the House—my hon. Friend the Member for Stoke (Mr. E. Smith). He put a very definite question to me as to how many people are affected, and I answer, frankly, that I cannot tell until the investigations are made. I do not shirk the issue, but I really do not know. The hon. Member for Caerphilly (Mr. Ness Edwards) put to me certain conundrums which demonstrated what an amazing expert he has become on the distribution of these benefits. I am afraid I must confess that, as regards the actual details of the operation of the means test or the rules of the Assistance Board, I have not, with the other tasks which I have had to undertake since I entered this Government, had time to master every detail of the administration. I am trying to do so, and I will give the House this undertaking—and indeed I am sure I speak for the whole Government—that we are satisfied that a great deal more simplification is needed. But you cannot put that into a Bill. That is a question which, even if you had no Bill at all, would make no difference. You can make your rules as nice as you like, but it is the person who administers them who counts, and the spirit of administration is, after all, the governing factor. Therefore, it must be remembered that we are dealing with needs, and if a needs test were applied in this House I doubt whether the needs finally decided on would be an actual common denominator. There might be differences.

Mr. Maxton

We do not do that sort of thing to Members of Parliament.

Mr. Bevin

I understood that hon. Members did carry a Bill applicable to themselves, but when their own pensions were concerned they did apply a means test.

Mr. Gallacher

It was purely personal.

Mr. Bevin

I thought it was a bad example. [HON. MEMBERS: "It was personal."] I will show you that this is also in a minute, if you will have patience. I want to deal with the details. Great play has been made with the case of the mother who owns a house or at least is the householder and the colliery company which compels her to hand it over to the son. I wondered whether that was possible in the mining areas. If it was possible it is not a tribute to nearly 100 years of the Miners' Federation. [Interruption.] It is no good getting excited.

Mr. Sloan (South Ayrshire)

It is the law of the land.

Mr. Bevin

But I do not accept the view that it is the colliery company which compels the transfer. If it is, it is news to me. I think my hon. Friend was drawing the long bow. [HON. MEMBERS:"No."]

Mr. Bevan

He did not say any such thing. He said it was to the advantage of the colliery company.

Mr. Bevin

Let us assume that it did happen. As I understand it, the hon. Member's calculation is wrong. I am not to be drawn into a general discussion. I will deal with two points only, and if my hon. Friend is wrong on those two points, I think I have a right to assume that he is wrong on all. The assessment quoted by my hon. Friend was 18s. 6d. If the house were transferred to the son, a contribution from the son's income would be deducted and the applicant's need would be assessed at 12s. 6d., plus the new rent allowance which almost wipes out the difference or, at any rate, narrows the gap, and so removes one of the grievances that exist.

Mr. Ness Edwards

Does not my right hon. Friend recognise that in go per cent. of the cases the gap will not be bridged and, if it is not, the household distinction and the household means test is maintained? He has rather proved my case.

Mr. Bevin

That may be a debating point, but the real point is that the hon. Member's balance was wrong from the beginning.

Mr. Edwards

Oh no, it was not.

Mr. Bevin

I have now learnt that there is apparently an old Parliamentary game which consists of interrupting a Minister as much as possible when he has to answer a complicated question. I shall understand the procedure of this House in time. I now want to deal with another point which does affect the position of the workman and which would be very serious if it went unanswered. That is the question of assessing the £5 limit. The hon. Member said, I believe, that if overtime was worked in response to appeals for increased output and so on, the increased income would be taken into consideration. Let me lay down, on behalf of the Government, a definite pledge that the Assistance Board will not be able to take into account anything above what is regarded as the normal wage of the industry concerned. I cannot go into details in a short reply, but when we come to make the Regulation it will be made clear that if we ask people to work on Sundays or to work overtime in order to increase output, any increase of wages is not to be taken into account.

Mr. Edwards

Why not prescribe a precise amount?

Mr. Bevin

In this Bill we are trying to amend the position, and if we look forward instead of backwards I think we shall see what we are trying to establish. Now I come to the question of personal need. Hon. Members will no doubt forgive me if I do not answer every Member, but take the general points that have been raised. How is this problem approached? I claim that we have established fundamentally the basis, not of a family but of a personal need. It was my good or bad fortune, at the beginning of this controversy, to try to discover how one could determine personal need. Later on, with the combined efforts of the Committee who dealt with this question for the Cabinet, we arrived at this conclusion. The person at home must be treated exactly as if he were living away from home. That is the answer to the hon. Member for Ebbw Vale (Mr. Bevan). The question is, whether our assessment of the profit of a boarder is right or wrong. That is a matter of a figure, and hon. Members have the right to challenge it in Committee; but the principle is here. The gravamen of the complaint was that the working of the means test drove people away from home. How could that be stopped? Not a soul in this House to-day has suggested how it could be stopped, otherwise than by the way adopted in this Bill.

Mr. Batey (Spennymoor)

Abolish the means test.

Mr. Bevin

We have abolished it, in that sense, entirely. It has gone. I challenge refutation of that. We said that if a person was living as a boarder with a landlady, that landlady received from the boarder something to pay for rent, light and heat; and a profit—otherwise, the landlady could not live. We said, "In the case of an adult person at home, paying the same amount for his lodging as he would pay to a stranger, what is the amount that he contributes to the overheads of the home? You may say that the figure of 7s. is wrong, but we have adopted the fundamental principle. That is a complete answer to the family argument which has been put up hitherto. This is the first time since Queen Elizabeth's reign that that principle has been accepted in British law, in dealing with a problem of this kind.

Mr. Bevan

But it is not carried out in the Bill.

Mr. Bevin

Will the hon. Member possess his soul in patience? If he becomes as good a listener as he is an interrupter, he will understand. What about the amount of 7s.? This test has been applied. My hon. Friends, members of the Labour party, suggested that you could not go below the British Medical Association test. The Government have accepted the British Medical Association test, and have added an amount more than adequate to cover the increased cost of living, in making the fond-basis calculation of the amount reasonably paid in lodgings. I am willing to supply figures to show how it has been calculated. It has been calculated on the latest returns, which were published the other day, as to the cost per family—which is quite up to date—plus the necessary amount for the increase in the cost of living. On that basis, we have calculated that the amount which would be left over after supplying a lodger with food, etc., would be 7s. Every figure put forward by hon. Members of the Labour party in this House has been taken into account, and accepted, including the British Medical Association basis, which we thought would give satisfaction. I think we cannot be accused of not going into this thing with great care.

Now I come to the third part, before the middle part, to take it in the reverse way, so as to complete that story. What was to be done? And really under this head I thought we had met one of the main grievances in removing the family basis and the household basis, and putting it on to an individual basis, when we said, "We will take the amount paid by the scales, and if it is assumed in the first part of the Bill that a person by lodging is contributing to the overhead, then, obviously, the person who has gone on the scale cannot be contributing to the overhead, so we will plus the scale with a contribution to the overhead." I suggest that that is a real attempt to meet personal needs on the basis of the pledge given by the Prime Minister.

Then we come to the most vexed part of all. That is the question as to whether this should be applied right through, whatever the income or circumstances of the home might be. It is easy to argue it in this House, but I am bold enough to suggest that this kind of administration— and it has been complicated by the attachment of the means test to old age pensions—on the unemployment side, is much simpler. The complication arises in the main on the pensions side of the administration.

Mr. Batey

Who did it? Not the U.A.B.?

Mr. Bevin

This House did it, and no charge could be levelled against me as an individual that, as an individual, I have not done my best to put it on a contributory basis as a right. I still adhere to that principle personally, because I have never liked pensions being subject to budgetary and other considerations. At some time or other, possibly in the future, the thing may have to be revised, but it is too big a job to revise now in the middle of a war, with all the other tasks, and I would deprecate—and I believe my colleagues in the Cabinet would deprecate—tinkering again with this social service payment. If it is to be done, it had better be done as a complete job right through and on a comprehensive and consolidated basis. Therefore, we have to take the legislation just as it was, and it is no use criticising a thing which is part of a bigger scheme and building up a very careful argument on quite a false hypothesis that it can be remedied in one short Bill of this character. Most of the criticism which I have heard is criticism against the basis of the Pensions Act itself and not criticism due to its attachment to the U.A.B. administration. That cannot be remedied, and therefore we have to consider whether or not there should be a point at which it could reasonably be assumed that a father, if the boy or girl was out of work, would provide that boy or girl with board and lodging, if living at home, at no cost to the State. And I do not believe, at this stage, with all these events that have developed, that parents are burning to throw off all the responsibility.

Let us face the facts. I have seen these issues fought out in local elections as well as national elections, and I have found that there is one attitude when it comes to the question of public assistance and another when it is applied to a Bill of this character. I have not been a candidate very often, but I did find, when I was defeated by the hon. Member for Gateshead (Mr. Magnay), that he received more votes from the unemployed, whose money I was trying to protect, than I did, although he was pledged to take "a couple of bob" away from them.

Mr. Magnay

The right hon. Gentleman is right, but not quite right. When I was asked if I did not think it was hard that they should be reduced to 16s. 3d. a week instead of 18s., I said: "Yes, it is hard, but I would rather you had 16s. 3d. to buy 16s. 3d. worth of goods than 18 discs."

Mr. Bevin

The hon. Member probably knows more about high finance than I do. It was decided quite definitely, having regard to this great problem, that a point should be fixed, and administered at which the State's liability for board and lodging should end. That was fixed at £5 for a man and wife. Again, it may be argued that that is not the right figure. It was also agreed that dependency should be added to by 15s. per person, and I do not know that it is a bad thing which the House will do to-day by their vote. Inferentially they are saying that for the first time in their lives the minimum standard they are laying down before a citizen is called upon to take responsibility for any other citizen, even for board and lodging and shelter, is, in the case of four people, £6 10s. a week. I welcome that decision in principle by this great House of Parliament; it will have a very great effect on the standard of living for some time to come.

In the administration of the £5 it has been clearly accepted that there will be borderline cases. For example, the applicant will not lose all benefit because the wage, say, is £5 10s. The circumstances in these cases will be taken into account. On more than one occasion consideration has been given to the question whether, instead of having an investigation into needs, Parliament should lay down some kind of a flat rate. It has been said that the answer to the criticism of an investigation into needs is a flat-rate payment in which exactly the same obligation as under the insurance scheme is accepted. But hon. Members cannot shut their eyes to the fact that in the administration of the Unemployment Assistance Board there is a very high percentage of people whose needs are assessed far beyond the minimum. That is the issue which everybody who studies this matter has to face. Merely for the sake of currying favour by using the simple words, "abolition of the means test," I do not intend to commit an injustice to thousands of people who are getting a good deal the other way from allowances given on account of their needs. There are all sorts of allowances, in kind and in money, to meet certain eventualities. One cannot accept a simple rule of the pen, and even if one did, it would be necessary immediately to build up rules of administration.

I want now to deal with the bottom end of the scale. There has been criticism about the amount of 20S. The hon. Member who moved the Amendment and those who support it, have not said very much about this. My answer to the criticism is that if there is unemployment pay of 20s. and nothing is taken out of those 20s., at any rate 2s. 6d. is gained as compared with the position prior to this Bill. It has been the practice that, where the income was 20s. from any source, 2s. 6d. was taken as a contribution to the rent. That deduction has been completely abolished. The argument has been made that the sum of 20s. is too low. I want to explain that the amount will be graduated down to make it comparatively small at the lower end, but I do not know whether it is wise to say that, even with the 20s. which a young fellow has, there should be no contribution to the overheads. Let it be remembered that it is a question of the overheads, and that there is no contribution to the rent. I think that there should be some obligation, however small it may be, in assessing that personal relationship. If the person were living somewhere else he would have to pay something, and it is a question of assessing what would have to be paid. We will undertake to look into that matter very closely when we are considering the Regulations.

I think I have completely answered the charge that we have not lived up to the Prime Minister's pledge. We have given effect to the undertaking to remove the causes of complaint. That is acknowledged, indeed, by the hon. Member for Caerphilly (Mr. Ness Edwards), who, with a wet towel round his head, so to speak, tried hard to find some weaknesses in the Bill in order to make a clever speech. The hon. Member has found a few points of detail which, I think, I have answered satisfactorily. The pledge that it will be a personal needs test, with the exception of the £5 limit, I have, I think, also completely answered. There is one point in the Prime Minister's pledge which the hon. Member did not quote, namely: If the applicant is not a householder and is living with relations, regard will be had to the constitution and circumstances of the home in assessing his personal needs. In giving effect to that pledge, I think we have taken every possible precaution to produce a Bill which removes one of the biggest bones of contention, at any rate a very large proportion, from this House. When I listened to the Debate and heard the attempts to take examples and make the Bill very horrible, and when I heard hon. Members indulging in a little rhetoric in order to play with an amateur in this House, I then harked hack to the Bill and remembered that it was a good one. I thought that, after all these hon. Members who are attacking this Bill have had such a good time all these years with this great bone of contention, and in fighting away at it continuously, they are almost disappointed

Division No. 6.] AYES.
Adams, D. (Consett) Fremantle, Sir F. E. Peters, Dr. S. J.
Adamson, Jennie L. (Dartford) Granville, E. L. Pethick-Lawrence, Rt. Hon. F. W.
Adamson, W. M. (Cannock) Green, W. H. (Deptford) Ponsonby, Col. C. E.
Albery, Sir Irving Greene, W. P. C. (Worcester) Power, Sir J. C.
Allen, Col. J. Sandeman (B'k'd, W.) Greenwood, Rt. Hon. A. Pownall, Lt.-Col. Sir Assheton
Ammon, C. G. Gridley, Sir A. B. Price, M.P.
Anderson, F. (Whitehaven) Griffiths, J. (Llanelly) Profumo, J.D.
Anderson, Rt. Hon. Sir J. (Sc'h. Univ.) Gritten, W. G. Howard Radford, E.A.
Assheton, R. Gunston, Capt. Sir D. W. Reed, Sir H. S. (Aylesbury)
Attlee, Rt. Hon. C.R. Hall, G. H.(Aberdare) Reid, W. Allan(Derby)
Barnes, A. J. Hall, J. H. (Whitechapel) Rickards, G.W.
Barr, J. Hannah, I. C. Ridley, G.
Beauchamp, Sir B. C. Hannon, Sir P. J. H. Ritson, J.
Beaumont, Hubert (Batley) Hill, Dr. A. V.(Cambridge U.) Robertson, D. (Streatham)
Beechman, N. A. Hudson, Capt. A. U. M. (H' okn'y, N.) Robertson, Rt. Hn. Sir M. A. (M' ham)
Benn, Rt. Hon. W. W. Hudson, Rt. Hon. R.S.(Southport) Royds, Admiral Sir P. M. R.
Benson, G. Hume, Sir G. H. Russell, Sir A. (Tynemouth)
Bevin, Rt. Hon. E. Isaacs, G. A. Russell, R.J.(Eddisbury)
Bird, Sir R.B. Jarvis, Sir J. J. Samuel, M. R. A.
Blair, Sir R. Jenkins, A.(Pontypool) Sanderson, Sir F. B.
Boles, Lt.-Col. D. C. Jenkins, Sir W. (Neath) Schuster, Sir G. E.
Bossom, A. C. John, W Scott, R.D.(Wansbeck)
Broad, F. A. Johnston, Rt. Hn. T. (Stl'g & C'km'n) Scott, Lord William (Ro'b'h & Selk'k)
Brocklebank, Sir C. E.R. Jones, A.C. (Shipley) Seely, Sir H. M.
Brooke, H. Jowitt, Rt. Hon. Sir W.A. Shaw, Capt. W.T. (Forfar)
Brown, Rt. Hon. E.(Leith) Kennedy, Rt. Hon. T. Silkin, L.
Butcher, H. W. Lamb, Sir J. Q. Sinclair, Rt. Hon. Sir A.
Cadogan, Sir E. Lathan. G. Smith, Ben(Rotherhithe)
Campbell, Sir E. T. Lawson, J. J. Smith, Bracewell (Dulwich)
Cape, T. Leslie, J. R. Smith, Rt. Hon. H. B. Lees- (K'ly)
Cary, R. A. Levy, T. Smith, T. (Normanton)
Chapman, A. (Rutherglen) Lloyd, Major E. G. R. (Renfrew, E.) Somervell, Rt. Hon. Sir D. B. (Crewe)
Charleton, H. C. Lucas, Major Sir J.M. Southby, Comdr. Sir A. R. J.
Cluse, W. S. Lyttelton, Rt. Hon. O. Stewart, W. Joseph(H'gton-le-Spring)
Cobb, Captain E. C. McKie, J. H. Storey S.
Cocks, F. S. Macmillan, H. (Stockton-on-Tees) Strauss, H. G. (Norwich)
Cooke, J. D. (Hammersmith, S.) Magnay, T. Stuart, Lord C. Crichton-(Northwich)
Crookshank, Capt. Rt. Hon. H. F. C. Makins, Brig.-Gen. Sir E. Stuart, Rt. Hn. J. (Moray and Nairn)
Davidson, Viscountess (H'm'I H'mst'd) Mathers, G. Summers, G. S.
Denville, Alfred Mayhew, Lt.-Col. J. Summerskill, Dr. Edith
Doland, G. F. Milner, Major J. Sykes, Sir F.H.
Douglas, F. C. R. Morgan, Dr. H. B. W. (Rochdale) Tasker, Sir R. I.
Duckworth, Arthur (Shrewsbury) Morgan, R.H.(Stourbridge) Tate, Mavis C.
Duckworth, W.R.(Moss Side) Morris-Jones, Sir Henry Taylor, R. J. (Morpeth)
Ede, J. C. Morrison, R. C. (Tottenham, N.) Thomas, J. P. L.(Hereford)
Edmondson, Major Sir J. Mort, D. L. Thomas, Dr. W. S. Russell (S'th'm'tn)
Edwards, Rt. Hon. Sir C.(Bedwellty) Munro, P. Tomlinson, G.
Emrys-Evans, P. V. O' Neill, Rt. Hon. Sir H. Touche, G. C.
Entwistle, Sir C. F. Paling, W. Walkden, A. G.
Evans, Colonel A. (Cardiff, S.) Peake, O. Walkden, E. (Doncaster).
Fildes, Sir H. Pearson, A. Ward, Col. Sir A. L.(Hull)
Frankel, D. Ward, Irene M. B. (Wallsend)

now that the bone has gone. They reminded me of the two Irishmen who had been on strike for six months. One of them bought a paper, and the other, looking over his shoulder, said, "Pat, is there any danger of a settlement?" When I heard the way in which attempts, were made, with difficulty, to find criticisms, I thought the situation was very similar. Therefore, I think the House may well give this Bill its Second Reading and get it on the Statute Book as quickly as possible.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 173; Noes, 19.

Wardlaw-Milne, Sir J. S. Wilkinson, Ellen Wood, Rt. Hon. Sir K. (W'lwich, W.)
Waterhouse, Capt. C. Williams, E.J.(Ogmore) Woods, G.S.(Finsbury)
Watson, W. McL. Williams, Sir H. G.(Croydon, S.) Young, A. S. L. (Partick)
Westwood, J. Williams, T.(Don Valley)
White, H. Graham (Birkenhead, E.) Windsor, W. TELLERS FOR THE AYES.—
Whiteley, W. (Blaydon) Winterton, Rt. Hon. Earl Mr. Grimston and Mr. Boulton.
Wickham, Lt.-Col. E. T. R. Womersley, Rt. Hon. Sir W. J.
Batey, J. Dobbie, W. Shinwell, E.
Bevan, A. Gallacher, W. Silverman, S. S.
Chater, D. Hall, W. G. (Colne Valley) Smith, E.(Stoke)
Cove, W. G. Maclean, N. Stokes, R. R.
Daggar, G. Mainwaring, W. H. Strauss, G. R. (Lambeth, N.)
Davidson, J. J. (Maryhill) Maxton, J.
Davies, S. O. (Merthyr) Pritt, D. N. TELLERS FOR THE NOES.—
Mr. Sloan and Mr. Ness Edwards

Bill read a Second time.

Bill committed to a Committee of the Whole House.—[Mr. Grimston.]

Committee to sit upon the next Sitting Day.