HC Deb 11 February 1946 vol 419 cc106-39

Considered in Committee, under Standing Order No. 69.

[Major Milner in the Chair]

Motion made, and Question proposed,

" That for the purposes of any Act of the present Session (hereinafter referred to as the new Act ") to establish an extended system of national insurance providing pecuniary payments by way of unemployment benefit, sickness benefit, maternity benefit, retirement pension, widows' benefit, guardian's allowance and death grant and to provide for the making of payments towards the cost of a national health service, it is expedient to give the following authorisations, that is to say:

A. To authorise the payment out of moneys provided by Parliament of contributions towards the cost of benefit payable under the new Act and any other payments to be made out of the National Insurance Fund established there under, being contributions not exceeding in the aggregate sums computed in accordance with the following provisions by reference to the following Tables:

  1. (a) for each contribution as an employed, self-employed or non-employed person paid under the new Act by a person of any description set out in the first column of Table 1, and for each contribution paid under the new Act by an employer in respect of a person of any such description, there may be paid the sum (hereinafter referred to as the "exchequer supplement ") respectively set out in the said Table in relation to a contribution of that class and a person of that description;
  2. (b) in respect of any period mentioned in the first column of Table "11, there may be paid the sums respectively set out in the second column of that Table

so, however, that, if the Treasury, by order under the new Act made with a view to maintaining a stable level of employment, increase the rate of any contribution for which the Exchequer supplement is payable, they shall have power also to increase by the order the rate of the Exchequer supplement for that contribution but in such manner as not to affect (except so far as appears to them expedient for convenience of calculation) the proportion which the rate of the supplement bears to that of the contribution.

Exchequer Supplement to Contributions
Description of person by or in respect of whom contribution is paid. Amount of supplement.
For contribution as employed person For employer's contribution For contribution as self-employed person For contribution as non-employed person
s. d. s. d. s. d. s. d.
Men over the age of 18 1 1 1 0 1 0 9
Women over the age of 18 10 9 10 7
Boys under the age of 18 7 7 7 5
Girls under the age of 18 6 5 6 4
Additional Lump Sum Payments
Period. Sum payable.
The period beginning with such date as may be provided by the new Act and ending in the with the thirty-first day of March, nineteen hundred and forty-nine. Three million pounds for each complete month period and a proportionate sum for any part of a month therein.
The period of six years next following the thirty-first day of March, nineteen hundred and forty-nine. Forty million pounds for the first year, and for any subsequent year a sum greater by four million pounds than the sum for the immediately preceding year.

  1. B. To authorise the repayment to the National Insurance Fund out of moneys provided by Parliament of such sums as may be required in accordance with the provisions of the new Act for the payment of unemployment benefit to insured persons for days of unemployment occurring within a period of five years beginning with a day appointed under that Act, being days for which they are not entitled to such benefit by reason only of having exhausted their right thereto under that Act.
  2. C. To authorise the payment out of moneys provided by Parliament of any such increase in sums payable there out as may be occasioned by provisions of the new Act—
    1. (a)extending, as from the day appointed under the new Act, the Unemployment Assistance Act, 1934, so as to apply to persons over the age of sixty-five who are entitled to unemployment benefit or only not so entitled by reason of regulations under the new Act or by reason of a disqualification contained in the new Act; or
    2. (b)amending as from the day appointed under the new Act. Part II of the Old Age and Widows' Pensions Act, 1940, and sub- sections (2) and (4) of section four of the Pensions and Determination of Needs Act, 1943, in relation to—
    1. (i) persons who under the new Act are, or are deemed in accordance with regulations to be, entitled to a retirement pension or to a widowed mother's allowance; and
    2. (ii) persons who under the new Act are, or are deemed in accordance with regulations to be. entitled to a widow's allow 108 ance and who either are over the age of sixty or are entitled under the new Act to an increase of the allowance for a child.
  3. D. To authorise the payment out of moneys provided by Parliament of any such increase in the sums payable there out as may be occasioned by any provision of regulations under the new Act made in connection with the modification by such regulations, as respects the period before the day appointed under that Act, of any enactment repealed or amended by that Act (other than the Old Age Pensions Act, 1936). being a modification—
    1. (a) increasing the rate of any benefit, pension or allowance payable under that enactment;
    2. (b) making the right to any such benefit, pension or allowance subject to additional or altered conditions;
    3. (c )modifying the period for which any such benefit, pension or allowance is payable.
  4. E. To authorise the payment out of moneys provided by Parliament, in manner provided by the Old Age Pensions Act, 1936, of any such increase in the sums payable there out in manner aforesaid as may be occasioned by regulations made under the new Act increasing, as from such day as may be provided by the new Act, the rate of any pension payable under the said Act of 1936, or modifying, as from that day, the right to any such pension.
  5. F. To authorise the payment out of moneys provided by Parliament of such other sums as may be required for making any payments (not being payments in respect of the cost of benefit under the new Act or other payments 109 required by that Act to be made out of the National Insurance Fund or payments for which express provision is made by the foregoing paragraphs of this Resolution) which are authorised or required by the new Act to be made by the Minister of National Insurance or any other Government Department.
  6. G. To authorise the payment into the Exchequer out of the National Insurance Fund of such sums as may be provided by the new Act in respect of the cost of any national health service hereafter established by Parliament."— (King's Recommendation signified.)— [Mr. Glenvil Hall].

7.30 p.m.

Lieut.-Colonel Nigel Birch (Flint)

I was one of the many Members who had hoped to speak on the Second Reading. The Lord President of the Council was the other day rather severe with Members on this side who, he said, dropped behind in A.B.C.A. during the war and were not completely in touch. However that may be, some of us have done our best since the war to catch up. This is a Bill in which I have taken a deep interest, and in whose main principles I very firmly believe. I had hoped to say a few words on the human side of this Bill, but it is my duty to turn away from that to the more sour and depressing aspect of finance. I do feel that something should be said on the financial aspect, because, after all, the sums are very big, and they will increase, and the share of the Exchequer itself will increase as time goes on. For instance, over the next 30 years the cost will go up by 54 per cent., but as against that the cost to the Exchequer itself will go up by 158 per cent.

My right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) in his Second Reading speech and a minute ago and, also, my right hon. Friend the Member for North Leeds (Mr. Peake) have proposed that the Government should let the people of this country know where they stand and that they should give a general picture of the way this expenditure dovetails in with the other claims on our national resources. If I may say so with great respect, I fully agree with practically everything the Prime Minister said when he was replying, except that to my right hon. Friend he gave a very dusty answer; and the Lord Privy Seal, who has just sat down, gave hardly an answer at all. We are, therefore, left with the Government Actuary's Report as the only thing on which we can work, and that is unsatisfactory for two reasons. First of all, it covers only part of our social security budget; and the second reason is that even that part is not thoroughly covered. He says he was not given sufficient information to make any estimate of the cost of bringing in the earlier old age pension, and the whole of his calculations are deeply affected by the assumption—the major assumption—he makes in paragraph 29, to which I shall refer in a moment. The ardours of peace are such that it is a little old fashioned to talk about the war, but I do not apologise for drawing an analogy from military experience, because I think it is the best way we can illustrate the importance of not dealing with this scheme in isolation but of bringing it into relation with the other demands on our resources.

Many hon. Members during the war, I do not doubt, had occasion to study amphibious operations. In amphibious operations the limiting factor every time was the supply of landing craft. When you had got them you had to see what you could put into them. There were troops, weapons, guns, vehicles, reserve of ammunition, petrol and food, medical supplies, repair facilities for the vehicles, military police, equipment for making advanced landing grounds, and hundreds of other things. All arms and Services were asked to put in their absolute minimum requirements. What always happened was that when you added up the minimum requirements that were estimated you found that the total came to never less than three or four times what the total space of the ships could accommodate. What happened then was that the planners had to reconcile what was desirable with what the different people thought they ought to have with them— to reconcile what was asked for with what was possible. We are in a similar position here. The limiting factor in what we can do will be the real resources available to the British people in 1948 when the Bill starts. Some months ago, in November, "The Economist" estimated that the real resources available to the British people in 1948 might have increased over those available in 1938 by between£400 million and£1,500 million at present prices. That is a very big bracket. What the real figure may be I do not know, but it is a figure of that order out of which we have to meet all the various claims we are to make. Out of consideration for the Lord Privy Seal I will not mention any "meaningless symbols," but I will mention what claims on our resources there are. First, there are the additional charges under this Bill. I put the Bill first because it is a Bill in which I believe, and I feel it ought to be given a high priority. Then there is education the proposals brought in by my right hon. Friend the Member for Saffron Walden regarding the raising of the school-leaving age and school meals. and so on. Then there are family allowances, the National Health Service—

The Chairman

The hon. and gallant Gentleman is not in Order in referring to these matters. They do not appear to me to have any relevance to the Money Resolution.

Lieut.-Colonel Birch

I was endeavouring to put the point that there were a great many claims over those which existed in 1938, which we had to consider in deciding whether this Resolution is correct. I had mentioned the National Health Service. I will not enlarge on that. But there are many other things such as houses, the doubled price of coal—

The Chairman

The hon. and gallant Member is not entitled to refer to matters, which have no relevance to the Resolution.

Mr. Oliver Stanley (Bristol, West)

On that point of Order, Mr. Chairman. Although, obviously, on this Resolution we cannot go into details of these things, are we not entitled to discuss whether the large sums of money involved in this Financial Resolution should take precedence over other claims or not? Have We to consider this as an entirely separate consideration?

Mr. Sydney Silverman (Nelson and Colne)

On that point of Order. Surely, as the House has agreed to the Second Reading of this Measure, with virtual unanimity, the means for carrying it out shall be provided, and all that is in Order is how effective the Resolution is for the purposes of the Bill?

The Chairman

What is in Order is what is set out in the Money Resolution itself. It would not be in Order to extend debate on this Resolution in the way the hon. and gallant Gentleman did.

Lieut.-Colonel Birch

May I refer to one other item in the Actuary's Report, which is presumably relevant? In paragraph 29 of that Report it is estimated that the Armed Forces in 1948 and thereafter will be a million. This is very significant, because, obviously, the number of our Armed Forces will make a tremendous difference to the finances of this scheme. I would remind the Committee that in peace we have never had more than half a million volunteers. One year of conscription brings in 250,000 men; 1,000,000 men is therefore equivalent to all the volunteers we are likely to get plus two years' conscription. We are entitled, I think, to some indication of what the Actuary was told to assume when he gave that figure, because, presumably, he did not just think of a number and halve it. I have endeavoured to list some of the claims. I have not succeeded in mentioning all of them. But the point I want to make is that nobody who is not in the full confidence of the Government knows what these claims add up to, but the thing I would stake my life on is, that they do add up to a great deal more than our real resources in 1948. 'The things I have mentioned are thoroughly desirable' in themselves, and many of the things I have not mentioned are as well. We ought to have them all. But there are very good examples of the absurd consequences that do arise when we consider these items purely in isolation. As an example, in the year 1920–21 there was a basic wage commission in Australia presided over by Mr. Justice Piddington—

The Chairman

The hon. and gallant Gentleman is really going too far. I must ask him to confine himself to the Resolution.

Lieut.-Colonel Birch

I am sorry, Mr. Chairman. It is the same point which I was making: the conclusion that wages should in the aggregate be very much greater than the national income.

The Chairman

That question has no relevance to the Resolution before the Committee.

Lieut.-Colonel Birch

I would conclude by saying that we on this side of the Committee feel that the people of this country should have some kind of indication of where they are being led. What we want, in fact, is a Government plan which will reconcile what is possible and what is desirable in the national interest. If we do not get that and the Government go on blundering forward into inflation—

The Chairman

I am sorry, but I must ask the hon. and gallant Gentleman to resume his seat.

Mr. Sydney Silverman (Nelson and Colne)

I want to ask whoever replies for the Government if these two parts of the Resolution have any bearing upon possible Amendments in Committee, which have been indicated in the course of the Second Reading Debate. I would first draw attention to Paragraph A of the Resolution in which these words appear: so however, that, if the Treasury, by order, under the new Act made with a view to maintaining a stable level of employment, increase the rate of any contribution for which the Exchequer supplement is payable, they shall have power also to increase by the order the rate of the Exchequer supplement for that contribution, but in such manner as not to affect (except so far as appears to them expedient for convenience of calculation) the proportion which the rate of the supplement bears to that of the contribution. I should like to have confirmation or otherwise that that means that any Amendment moved in Committee, which would have the effect of increasing the necessary contributions in order to make the scheme actuarially sound, would be covered by this Resolution which, in the words to which I have referred, would enable, under authority already given, corresponding and proportionate increases in the Government supplement for these contributions. I think that it will be clear to my right hon. Friend that I have in mind points which I referred to in the Second Reading Debate. I do not propose to repeat them, but I want to indicate that they were as possible Amendments to Clause 12 and Clause 61. Clause 12 (1) provides that unemployment benefit shall cease, except for a slight calculation in the Subsection, after 180 days. Therefore', it is clear that, if the Committee wish that period to be extended, either indefinitely or by some period which to them seems fit, the contributions would have to be increased so as to keep the scheme actuarially sound, and the Government would have power under this Resolution to increase the Treasury supplement in proportion to that increase.

Then I would. like to draw my right hon. Friend's attention to Paragraph B: To authorise the repayment to the National Insurance Fund out of moneys provided by Parliament of such sums as may be required in accordance with the provisions of the new Act for the payment of unemployment benefit to insured persons for days of unemployment occurring within a period of five years beginning with a day appointed under that Act, being days for which they are not entitled to such benefit by reason only of having exhausted their right thereto under that Act.

7.45 p.m.

The intention of that paragraph is to provide such moneys as may be expendable under Clause 61. It seems to me to follow that, supposing the Committee increase the period of 180 days, the cost, under Clause 61 would to that extent be reduced. The number of additional days to be on covenanted benefit would increase the charge for covenanted benefit and. correspondingly reduce the charge for uncovenanted benefit under Clause 61; so that an increase in the number of days under Clause 12, provided it did not last for longer than five years, would not mean any increased charge at all. I should like to be confirmed on that point, if it is right, and criticised if it is not. The reason why I am so anxious about this should be apparent, I think, from the Motion which I put on the Order Paper, and which Mr. Speaker did not call because, no doubt, he thought it was unnecessary. Such an instruction would have been necessary unless the Money Resolution were wide enough to cover any such proposed Amendment, and I take it that the inference to be drawn from Mr. Speaker not calling it is that it was not necessary for the reasons which I have given. I want only to be satisfied that, in dealing with this Money Resolution and not givng it to the Government in the form in which it is on the Order Paper, we are not precluding ourselves, in any way, from doing what the Lord Privy Seal said he wanted us all to do when we came to the Committee stage, and that is to co-operate together in order to remove any defects in the Bill. I think myself— I do not want to make a speech about it I have done that already—that there is in these two Clauses a very serious defect in the Bill—a whole range of unlimited poverty for which this Measure of Social Security makes no provision at all. I want to have an opportunity in the Committee stage of amending, curing and removing that omission, and I would like to be satisfied that this Money Resolution has been drawn widely enough to enable that. to be done, if the Committee are able to do it.

Major Legge-Bourke (Isle of Ely)

I, like my hon. and gallant Friend the Member for Flint (Lieut.-Colonel N. Birch), hope to speak on the more humanitarian side of this great Bill. I would like to confine myself to offering the Government a suggestion or two which I hope will be of assistance to them in cutting down some of the expenses in so far as it affects the Exchequer contribution. I have worked out, using the Government Actuary's figures, that it should be possible largely to meet some of the complaints aired during the Debate, by offering some option as to the benefits to be enjoyed by various classes of people, by paying them instead of their national health benefit, a sum towards the end of their lives. I have worked it out on the basis of 20 per cent. electing to take this option, and that they did not take the option until the age of 35. As a result of the option these people would have the right, instead of getting the benefit of a national health service of 26s., of getting7s. 6d. per week for the last five years of their working lives. As a result, there would be a saving to the Exchequer, working on the very conservative estimate of the Government Actuary's figures that the average period of sickness is 3 weeks as opposed to 3½. On those figures the total saving over a period of 30 years— from 35 to 65 years of age—would be£92 million or more. I suggest that that saving could be utilised in several different ways, and, of course, it would be for the Government to decide which. I think myself probably the most attractive way to those who had elected to take this scheme, would be to pay a slightly, reduced contribution. I think that is one way in which it might be done.

Another way is that the balance might be paid out instead of the death grant, and actually on the figures of the people concerned between the ages mentioned, the figure would be about£25 per head. I do suggest to the right hon. Gentleman opposite that he should consider this, because I believe that some of the people who are, at the present moment, fighting rather shy of this whole idea, would be more inclined to welcome it, if they got some option as to the sort of benefits they were going to enjoy. I think in particular the self-employed would rather jump at it, for the very good reason that a great many of them were not even voluntary contributors under the old scheme. I do believe that some of them would feel there was some opportunity here for them to use their discretion as to what they would do and what benefits they would get for themselves in the future. I am afraid I am not in entire agreement with those on this side of the House who consider the old age pensioners were receiving rather too much benefit under this Bill. I feel personally that the old age pensioner wants more protection than anybody, and, therefore, I do make the suggestion because I believe by beginning with the suggestion the Government would answer to a great extent the spinsters' complaint. It would provide some allowance for them in the last five years, from 55 to 60, and it is just a question of how much benefit is paid or what age should a start be made on this option as to whether or not the eventual benefit can be put up. I would suggest to the right hon. Gentleman that he tries to work out a similar scheme for the unemployed, because I believe there are some who have independent means of their own who would be prepared to run the risk of that. The result would be that not only these people would get the benefit, which they themselves had selected, but there would be a considerable saving to the Exchequer in that option. I do put it to the Government that they should examine this scheme and if possible give it some publicity, because I believe it would appeal to a great many of the public.

Miss Jennie Lee (Cannock)

I rise to call attention to a curious discrepancy in this Money Resolution, in dealing with the provision for retirement pension, and for unemployed workers. I feel that I could quite easily say any amount about the position of the old age pensioner, and the retired worker, but I do not want to raise new matters particularly affecting sick people or children. I hope I am not unduly fearful or suspicious in asking the Minister if he would be kind enough, in replying, just to say one word more, in regard to the financial provisions we are now making for unemployed workers. On the Second Reading of the Bill—a Debate to which I do not wish to return—the Minister was good enough to give a personal pledge that after the 180 days of covenanted benefit were over, there could not possibly be under this Bill a return to the means test or to "not genuinely seeking work." If we on this side of the House, in addition to the assurance given by the Minister person ally could also be told that, after consultation, the Law Officers of the Crown endorsed and supported his point of view, then I think we would feel very happy indeed in regard to the joint financial provisions of the Bill. I raise this point because, in many ways, the unemployed worker is in the most vulnerable position of all. If economic circumstances go badly, there are always many jealous eyes turned in his direction, wondering if he has got something out of the public purse to which he is not entitled. These jealous eyes are usually turned in the direction of people who work for their daily bread, have no savings and find themselves in a position of acute mental anxiety, for they are working within a period of 180 days, after which they feel rather bewildered and unsure. There were many other points I intended to raise, but I ask the Minister to add to his personal assurance that of the Law Officers of the Crown, that in the working of the Bill, for which we are now supplying the essential money, there will be no recurrence of the means test and "not genuinely seeking work."

8.0 p.m.

Major Niall Macpherson (Dumfries)

I rise to put a very different aspect of the. point already put by the hon. Member for Nelson and Colne (Mr. S. Silverman). He has asked, with regard to Clauses 12 and 61, whether the additional expense that may be required by Committee Amendments is covered in this Resolution. I should. like to ask the same question from the point of view of the self-employed man. In Table 1, I see that the contribution from the self-employed person is virtually just under one-half of what it is in respect of the combined contributions of the employed person and the employer. It may not be possible to alter that, but I should like to know whether, under Table 2, any additional benefits that may be considered in Committee and passed will enter into this sum of£3,000,000 per month. I have in mind, particularly, the question of the 24 days waiting period for sickness benefit for a self-employed person being reduced to the same level as that for an employed person. So far as I can see from the figures in the Actuary's Report, the proportion of the total contribution borne by the Exchequer in respect of the employed person is 21.4 per cent., whereas in respect of the self-employed person it is only 16.4 per cent. It seems that there is a strong case that this should be equalised. If the Exchequer paid the whole of the 4½d. difference, the proportion would be only about 23 per cent., and still the total contribution in respect of the self-employed person would be far lower than it is in respect of the employed person.

I strongly urge the Minister, in making his regulations in connection with this matter, to have regard to this point, and I ask for an assurance that any improvements agreed to in respect of the self-employed person—and if there were a free vote in Committee I am sure, that there would be agreement—are fully covered by this Money Resolution. Paragraph C (b) of the Money Resolution deals with supplementary payments towards retirement pensions. Here, also, we have to cater for something that should be added by regulation in order to equalise the treatment that is given to those who are just under 65 and that which is given to those who are over 65. Under the Bill, a man who is just under 65 would have to work for 10 years before he. would be entitled to the extra 16s. That seems to be a real hardship, and one which, I hope, the Minister will ease. The same applies to the non-contributory pensioner. A man would have to contribute for 10 years before being entitled to pension at the full rate, otherwise he would get only the. present amount.

The Financial Secretary to the Treasury (Mr. Glenvil Hall)

Does the hon. and gallant Member mean the extra 2s. a week?

Major Macpherson

No, the extra 16s. a week. I would commend to the Minister's consideration—.

The Minister of National Insurance (Mr. James Griffiths)

I would like to get this point clear. When the hon. and gallant Member refers to 16s. I presume he means the difference between the basic 10s. and the 26s. In what circumstances does he not think we shall increase it?

Major Macpherson

It seems to me that it is left to the discretion of the Minister to make regulations regarding the circumstances in which a person can have a supplementary payment. I consider that the difference between the treatment given to a man now entitled to his old age contributory pension and a man entitled to his old age non-contributory pension, and those who are just not entitled to. it yet, is very marked indeed, and I would like an assurance that this will be amply covered under the terms of this Resolution.

As regards the question of the cost to the Exchequer of the whole scheme, it may be that the national wealth will increase at the rate at which it has increased in the past. But it is difficult to say to what extent that was a function of the increase in population. There is little possibility of saying whether that is so or not, but if it is not so what will happen is that we shall be asking the next generation to shoulder our burden for old age pensions. We shall be asking them to supplement our retirement pensions, instead of financing them ourselves, here and now, by a fund which could be set up to cover the disparity between the cost to the Exchequer now and the cost in 1978.

Mr. Gallacher (Fife, West)

I would like to draw attention to a point which has not yet been raised on this Money Resolution, but before raising it I would like to make a general observation. I have listened to discussions on many Resolutions but this is the most striking, the most amazing that has ever come before a Committee of the whole House. We are accepting it in a matter of fact way which shows the development which has taken place in the social sense of the country. The Resolution says: That for the purposes of any Act of the present Session (hereinafter referred to as "the new Act ") to establish an extended system of national insurance providing pecuniary payments by way of unemployment benefit, sickess benefit, maternity benefit, retirement pension, widows' benefit, guardian's allowance and death grant, and to provide for the making of payments towards the cost of a national health service.… If anyone cares to read the discussion which took place on the Money Resolution at the time when a pension of 5s. a week was proposed he will get an idea of the advance which has taken place. I would like to support the Members who have spoken from this side about unemploy- ment benefit. I think there should be no uncovenanted benefit. According to the statements made continually by the Government, it is intended to fight for full employment. That being so, we should have no hesitation in making arrangements for nothing but covenanted benefit. We should not contemplate prolonged unemployment on a large scale, and if it is on a small scale it could be met easily out of covenanted benefit.. The Members who have raised this question have made a good point. I take it, from the way the Money Resolution is worded, that it will be possible to press, in Committee, for a 30s. a week old age pension. There is no reason why we should not do the best possible for the old age pensioners, especially as new sources of power are being developed to increase production which will ensure that we have the necessary finances.

The point I specially wished to raise was this: Will it be possible, on the Committee stage, to raise the question of the spinsters' pension, and the retirement of spinsters at an age lower than is provided for in the Bill? I ask the Financial Secretary to remember that this is a very pertinent question for many thousands of people in this country. Many hon. Members have time and again pledged support to the spinsters in the efforts which they have made, and these spinsters have worked hard for many years to try to get this consideration. I would like the Minister, when he replies, to say whether, under the point about retirement pensions, the Money Resolution is wide enough to allow of the spinsters' case being put in Committee and, if the Committee is agreeable, being granted. I conclude by referring again to the significance of this Money Resolution, what it stands for in the way of growth of social consciousness, and the Government's appreciation of that fact. I hope that not only will this Measure be carried, but many other supplementary Measures that will ensure the future health and well being of the people of this country.

8.15 p.m.

Mr. Oliver Poole (Oswestry)

There are one or two points on which I would like to have further enlightenment. On Wednesday last, when the right hon. Gentleman the Minister of National Insurance moved the Second Reading of the Bill, I rose to interrupt him, but he was unwilling to give way, and as the point which I wished to put had a very direct bearing on the financial provisions of the Bill, I wish to refer to it now. It has been raised during the Second Reading Debate, but it has not, in my opinion, received a satisfactory answer from the Government. In the Government Actuary's Report, in paragraph 17 (11), it is a question of an estimate of 8½ per cent. unemployed. I cannot see how it can possibly be estimated that we are going to have 1,600,000 unemployed if, as the Minister said in his speech, the Government are resolutely determined to have full employment. Before we agree to the Money Resolution, I think we are entitled to know on what basis that figure is made. It is a very big point in regard to the actual cost of the Bill.

During the Debate on Second Reading, the case of the self-employed man was referred to, and the Parliamentary Secretary stated that if self-employed persons were prepared to pay an additional contribution of 4½d., His Majesty's Government were prepared to look favourably upon an Amendment which might be placed on the Order Paper. I am not clear exactly how it is intended to find out whether the self-employed persons are prepared to pay or not, because self-employed persons are not a very highly organised body of people. I have been engaged in this sort of business all my life, and I have spent a weekend trying to find out to which body one could refer to discover whether they are willing or not to pay the extra amount. I find great difficulty in discovering a comprehensive body representing self-employed persons. I should be interested to know how the Minister proposes to fulfil that pledge which has been given.

The question of the use of the approved societies has been raised. In considering the cost of administering the scheme, is the right hon. Gentleman giving careful consideration to the cost of administering the sickness benefit? His advisers will have told him that the administration of any other benefit is a perfectly simple matter, whereas the administration of sickness benefit is extremely difficult. The cost of establishing a claim and how to deal with it is a somewhat difficult problem. There is no doubt that, because they worked for a profit, the industrial group have brought the cost down to a very low level Does the right hon. Gentleman intend, or is he prepared, to publish from time to time the cost of administering the scheme? Sir William Beveridge has said that he considers 30 per cent. would be reasonable. We know that the Prudential group have brought the cost down to 23 and 22 per cent. I think we are entitled to know the cost of administering this scheme. One of the criteria by which the new scheme will be judged will be not only whether it is as efficient and humane as the present organisation, but whether it is cheaper than the present organisation. The right hon. Gentleman has to build up in less than two years an organisation capable of dealing with sickness benefit throughout the whole community. I think we should have answers to those questions before we agree to the Money Resolution.

8.18 p.m.

Mr. John McKay (Wallsend)

I would like briefly to discuss the question of uncovenanted benefit, which has been raised in this Debate. I think we all realise that the benefits set out at the moment are based on the actuarial reports, and that if the money does not come from the Exchequer it must come from contributions. The point I want to make is that in the case of unemployment benefit it ought to be paid, regardless of the time, as covenanted benefit, but there is one thing that I want to emphasise in connection with this Money Resolution. In the case of unemployment benefit given to an unemployed man after his covenanted benefit has expired, I think that every hon. Member on this side will agree that whatever inquiries may have to be made when a man reaches that stage, there ought to be no question whatever of dealing with one man in one way and another man in another way. I can understand, as a result of the explanation that has been given, that when this stage is reached, the industrial conditions of the area may have to be taken into consideration, but those industrial conditions will apply to all men in the same grade of work, and I cannot see how any differentiation can be made between one man and another when it is a question of considering uncovenanted unemployment benefit. I am sure that if it is found that in the administration of these provisions a difference is, being made between one man and another, there will be a serious growth of feeling against the people who are administering the job. I am not quite happy with regard to the general position.

We have all agreed that something had to be done, we are all satisfied that the Minister has done all he could do with the finances that were coming into the funds, but what has rather amazed me, in a way, is the general position admitted from all sides of the House, and by every Member in the House, that this particular problem is one so serious that we must deal with it in a very effective way on this occasion.

When we examine the position we find that it is apparently accepted by this House that the pound today will only purchase what could have been purchased for 8s. 4d. in 1914, so that the 26s. in benefits which we are giving in this Bill to the unemployed man is equal in purchasing power to 10s. 10d. in 1914. The 42s. which we are giving to the married couple is equivalent, I think, to 17s. 6d. The question then arises, Have we done all that we could do on this particular matter, knowing the urgency of it, knowing how it hits every family in the land, knowing that ultimately every one of us will meet that situation where we have either to get health benefit, unemployment benefit, or old-age benefit? Are we really satisfied, can we glow with enthusiasm over the results of our negotiations? At this time, after all our agitations, is this all the benefit we can give?

The Deputy-Chairman (Mr. Hubert Beaumont)

The hon. Member is going rather wide now, and should return to the Resolution under discussion.

Mr. McKay

As I understand it, the cost of this Bill is practically 6 per cent. of the expected income of the country. I think myself that surely we can do more than that. Even if we cannot I think we could get more than that into the fund in a more equitable way. The method by which we get the money into the fund is not satisfactory. If we are in a war we get the money in, far more money than is needed for a case like this, but in my view we get it in a more justifiable way. We get it in largely on the ability to pay—

The Deputy-Chairman

Again the hon Member is dealing with matters outside the scope of the Resolution.

Mr. McKay

I will conclude. While making this effort we hope it will improve in the future, and the only way I can see that it will improve is by getting more goods produced more cheaply, and thus reducing the cost of living.

Major Bruce (Portsmouth, North)

The benefits conferred by this Bill are such an advance over anything that has preceded it in this country that one is perhaps a little reluctant to say very much in criticism of them, but I do think that one should bear in mind, when one surveys them, that in the meantime the cost-of-living index and the cost of living generally have risen considerably.

Under Clause 40 of the Bill, and I believe within the ambit of this Resolution, it is provided that the Minister shall review the rates and amounts of benefit in relation:

  1. "(a) to the circumstances at the time of insured persons in Great Britain, including in particular the expenditure which is necessary for the preservation of health and working capacity; and
  2. (b) to any changes in those circumstances since the rates and amounts of benefit were laid down by this Act or any Act amending it and to the likelihood of future changes."
When introducing the Bill on the Second Reading the Minister said:

The House will be aware that the Chancellor of the Exchequer has expressed the Government's intention to hold the cost of living at about 31 per cent. over the September, 1939, level. We decided, therefore, to review the leading rates proposed in the White Paper and in the Beveridge Report on the basis of an overall addition of 31 per cent, instead of 25 per cent."— [OFFICIAL REPORT, 6th February, 1946: Vol. 418, c. 1750.] I think many of us in this House must be aware that the cost of living in this country has in fact increased considerably beyond 31 per cent., and it is, therefore, perhaps opportune that we should note that the official Ministry of Labour cost-of-living index is based on rather obsolete data. According to the Ministry's own publication it is intended to show the average percentage increase in the cost of maintaining unchanged the standard of living prevailing in working class families prior to August, 1914, no allowance being made for any changes in the standard of living since that date, or for any economies or readjustments in consumption and expenditure since the outbreak of war. I would like an assurance from the Minister that, when the time comes for the benefits to be reviewed, they shall be reviewed in the light of any changed cir cumstances, particularly those reflected in any revised cost-of-living index which the Government may bring into operation. It may well be that in the passage of the next few months the cost-of-living index and its whole basis may be reviewed. In that event I would like to ask the Minister's intentions about the benefits contained in this Bill and covered by this Resolution.

I would like to concur very largely with what was said by the hon. Member for West Fife (Mr. Gallacher) with regard to the benefits payable to old age pensioners. The 26s. under the new Bill is a very considerable increase over anything the old age pensioner has had before, but I do think, in view of the present cost of living, that if it were possible in the near future to increase it to 30s. it would be a tremendous advantage to them and something which the country as a whole owes to them.

I would now like to pass to the position of the self-employed person, already touched upon in several quarters of this House from both the Government benches and the Opposition benches. It is quite clear, I think, that at the moment the self-employed person cannot expect the identical benefits that are accorded to other sections of the community, at any rate, on what are popularly called conservative methods of computation where benefits are in any way related to the rates of contribution. I think it would be most inequitable, by conservative standards, if that should be so. The self-employed person contributes initially 5s. 9d. a week with 6s. 1d. as the permanent rate, as against an aggregate of 8s. 5d. initial rate and 8s. 9d. ultimate rate to be contributed in respect of the employed person. Therefore, it is quite clear that on a basis of contribution there should possibly be some inequality in regard to the benefit received. The obstinate fact remains, however, that the benefit under the sickness part of the Bill is not much use to the self-employed person at the present time. He gets the same benefits as the self-employed person in regard to retirement and all the other contingencies covered by the Bill, and I think, frankly, that he does very well out of it.

8.30 p.m.

On this one point regarding sickness, it has been generally agreed that there ought to be provision whereby a self-employed man can participate, after a far shorter period of sickness than 24 days. It may well be that the Minister can tell us that it will be possible upon a contributory basis, but I should like to hear his answer to the actuarial calculation which came from the hon. Member for Huntingdon (Mr. Renton). I should be very pleased to see these people brought, in the same way as the others, into the sickness part of the Bill. The position of spinsters has already been touched upon at some length. I would like to point out that they do not receive all the benefits to which their contributions entitle them. Certain types of benefit for which they pay are denied to them as a matter of custom, or respect ability For example, they pay in part for the motherhood benefits that the married woman gets. I would ask the Minister for information about the position of the Service men. I do not know whether the matter has been mentioned, but Clause 56 does not make the position of the Service man very clear.

The Deputy-Chairman

I must point out to the hon. and gallant Member that he cannot discuss the Bill as a whole, but only what is contained in the Financial Resolution. The points he is raising are for the Committee stage of the Bill.

Major Bruce

May I ask a question on a matter which I think does come under the Financial Resolution, since it is concerned with benefit that is to be paid? I want to know whether the Serviceman who pays the normal contributions and who by reason of his service in the Forces, becomes entitled to the ordinary Service pension is entitled also, as of right, to receive the benefit for which, he pays by his contributions under the Bill. Finally, I ask whether any special arrangements are intended to provide for any unestablished civil servants. who are compelled to retire at the age of 60, at which age it is difficult for them to get employment. Subject to those observations I support the Money Resolution, and I sincerely hope that it will be agreed to.

Mr. Walker (Rossendale)

There is a point which I am anxious to get quite right. I am sure it affects a very large number of deserving people. I refer to the subject of non-contributory pensions and I would quote from the summary of the main provisions of the Bill, paragraph 39. This paragraph states: Persons aged 70 and over, who are drawing non-contributory pensions when the new scheme starts, will have these pensions increased. It is the next sentence about which 1 am concerned and which I wish to get clear. I hope that my right hon. Friend will be able to give me a perfect assurance about it. If he does, I shall be far more enthusiastic about the Bill than I should be in other circumstances. The sentence says: Anyone who has reached the age of 55 when the new pensions begin to be paid will qualify, subject to his means, for a non-contributory pension, on reaching 70, if he or she is not qualified for a retirement pension. That is very important. People have written to me asking to know where they stand. They have arrived at the age of 60, 65 or 66 and they have never been insured under the old Act. They want to know where they come in under the new Act and are to receive 26s. a week. That will be something for nothing. We are often charged by our opponents with giving something for nothing. Well, here is something for nothing—I was afraid I would be called to Order.

The Deputy-Chairman

The hon. Member's fear has been realised. He cannot discuss the provisions of the Bill in this Debate, apart from what is in the Money Resolution. He appears to have been aware that he was out of Order, so perhaps he will now remain in Order.

Mr. Walker

I want to know whether my construction of the paragraph to which I have referred is correct. If it is correct—

The Deputy-Chairman

I am afraid the Minister would be out of Order if he tried to reply to the question.

Mr. Walker

I am sorry that I have got so far out of Order, but I believe the Minister will grasp what I am trying to say.

Mr. Oliver Stanley

Several hon. Members opposite have been fortunate enough to make their points before they were ruled out of Order. An hon. Friend of mine tried to do the same, but as his point perhaps took longer to develop he was not so fortunate. I am sure that the Chancellor of the Exchequer must be more disappointed even than the rest of us that the Ruling of your predecessor, Mr. Beaumont, prevented him, upon a Bill of this magnitude, giving to us and the country what I know he would like to give, the general financial background.

The Chancellor of the Exchequer (Mr. Dalton)

There will be a Budget in April.

Mr. Stanley

There was a Budget last November, when we asked the right hon. Gentleman the same sort of thing. He said, "No." The same thing may happen on next Budget day. The right hon. Gentleman sits there like a coy but nubile maiden, archly picking the daisy and saying: "This year, next year, some time, never." Unfortunately, it is always "never." As it is not in Order to discuss a matter of such great importance upon this Financial Resolution there is only one point to which I would refer. This is a particularly difficult Financial Resolution to understand, owing to the contributions from the Exchequer as well as the contributions from the individual. I am afraid its effect, if it is passed, may be extremely restrictive upon the Debate in Committee. I cannot see that it will be possible even to discuss any Amendment in Committee which would tend to increase the aggregate contribution from the Exchequer, as set out in Tables I and II.

Mr. S. Silverman

Surely not. I think it was made clear that the Treasury can, by Order, increase the contribution from everybody else, but if it does, the Money Resolution gives power to increase the Treasury supplementation proportionately.

Mr. Stanley

Perhaps the Minister will resolve this wrangle. I am not sure that that is so. I thought there were these restrictive words: By Order… made with a view to maintaining a stable level of employment. I thought that provision was only to enable the Treasury subsequently to carry out the suggestion thrown out in the Bill, and developed in the Second Reading Debate, that during a time of prospective slump the contributions would be decreased and during a time of boom they would be increased. It did not seem to me to deal with the case I had in mind, a desire of hon. Members in the Commit- tee on the Bill to make some alteration in the scheme which would have the effect of increasing benefits and so increasing contributions. I have in mind several points that have been made by hon. Members on both sides, and particularly something which was said by the Lord Privy Seal when he was winding up this Debate. He referred very briefly to the coming report of the Monckton Committee in answer to one of my hon. Friends who had called attention to the big disparities now existing between benefits under the Bill and benefits under Industrial Accident insurance.

The right hon. Gentleman certainly told us that it would be possible to take the result of the report of that Committee to increase benefits under the Bill, or bring them into line with benefits under another enactment. Many hon. Members have been concerned with those who have finished what in the old days we used to call the uncovenanted benefit. It would seem to me that under this Financial Resolution it is quite impossible to raise that matter upon the Committee stage, except on the basis of an extra contribution from the individual and from the employer, to cover it. I am not even sure that that would be in Order; perhaps the Minister would be the proper person to answer me.

Finally, there is the self-employed man, and the suggestion thrown out by the hon. Gentleman, when he was winding up the other night, that some alteration might be made. It would seem that an alteration of the waiting period in that case could only be made if an increase of contribution more than covered the increased cost coming from the benefits.

As we go through this Bill, there may be many other cases where it will, in fact, be impossible to do what the Prime Minister asked Members of the Committee to do and to try and improve it. It was unnecessary to include these two Tables in the Financial Resolution. In doing so the Government will have made a Debate upon the Committee stage extremely difficult, and I ask the right hon. Gentleman, if that is the case, if he will give us a pledge that we shall be able to discuss upon Committee stage the many matters raised by hon. Members on all sides of the House during Second Reading, and if it would not be worth while to consider an Amendment of the Financial Resolution which would admit the figures. After all, the right hon. Gentleman has a majority behind him which will ensure that we shall not run away from the main financial principles of the Bill. If he were able to do that, it would enable us, perhaps, to make small Amendments which might still be of value.

8.45 p.m.

The Minister of National Insurance (Mr. James Griffiths)

The hon. and gallant Member who began this discussion on the Money Resolution, as well as the right hon. Gentleman who has just resumed his seat, have made another attempt to get us to accept total expenditure under this scheme, instead of a general commitment of the Government. The Prime Minister referred to that last Friday, and my right hon. Friend the Lord Privy Seal referred to it in his closing speech on the Second Reading of the Bill. I wish that right hon. and hon. Gentlemen opposite would be frank when they are continually referring to the expenditure under this Bill, and try to relate it to others. Are they suggesting that this scheme, on its own, is one which costs too much and should be rejected? I gather that that is not the position. If so, I can only say that there has been a statement by the Prime Minister, and also by my right hon. Friend the Lord Privy Seal, that, in due course and at the proper time, which is not now, there will be a full statement from the Government of the total commitments under their programme and the relation of the commitments upon social security to the others. There is one aspect of this Bill to which the Government have given very careful consideration, and though it has come before us in what has been a short time since we came into office, all of it has been very exhaustively considered. We are satisfied that the cost represented by this scheme is one that the country can carry.

I will now deal with the point made by the hon. Member for Nelson and Colne (Mr. S. Silverman), as to whether it would be in Order for him to move the. Amendment which it is clear from his speech he would desire to move on the Committee stage. The Chancellor of the Exchequer, who is here and has a special responsibility in regard to the Financial Resolution, advises me that it would be in Order. Two or three other Members referred to this Clause, and I presume therefore that I shall be in Order in replying to them. When I spoke on the Second Reading I explained what was meant by Clause 61 of this provision for an extended unemployment benefit. The hon. Member for Nelson and Colne spoke in the Debate the next night and questioned whether the words used would be interpreted in the way the Minister interpreted them. He suggested, on reading the words in Clause 61, that those words could be interpreted as including the power to apply a means test for those who applied for extended benefits. I say very frankly that that was not the intention. If, on examination of the words, that was found to be possible, we should change the words. I have not had an opportunity since of consulting the Law Officers, but may 1 cite something in the Financial Memorandum to the Bill, which makes clear what we have in mind? If hon. Members will turn to the Bill and paragraph 10 of the Financial Memorandum, they will see that Clause 61 provides for a period of five years, that where an applicant has exhausted his insurance benefit the cost of the extended benefits made under this provision is to be met by the Exchequer. That makes it perfectly clear that we have benefit and not subsistence in mind.

Mr. S. Silverman

I think that is perfectly clear, but the difficulty does not arise there but in the fact that the Minister cannot act at all, until the local tribunal has made its recommendation, and the local tribunal, in making its recommendations, must have regard to the particular circumstances of the applicant. What worried me was this: If the particular circumstances of the applicant did not include his means, what did the words mean?

Mr. Griffiths

If I may refer again to Clause 61, I think it says that the Minister may make regulations. I said, quite frankly, what we have in mind, and if these words were held to be such as to give any possibility of applying a means test., then the words should be changed. I think that that covers the point raised by several hon. Members. We will leave the merits or demerits of the question as to whether there should be this provision, to the Committee stage. One or two Members have raised the question of the self-employed, to which I would like to refer, because there has been a suggestion, for example, that the Exchequer contribution is less just to the self-employed than it is to the employed contributor. Actually, the position is that the Exchequer contribution on each individual's contribution is fixed on a basis which has been accepted in the past, and which has been adopted in this Bill. First there is unemployment benefit. Class 2 self-employed contributors are not covered for unemployment benefit for obvious reasons. It will be appreciated that for unemployment benefit the cost is divided between the three parties equally, in the existing scheme as well as in the new one. The cost of it is divided as to one-third from the insured contributor, one-third from the employer, and one-third from the State, and that has been the arrangement ever since unemployment insurance began. We have, there fore, incorporated that division of the cost between the three parties into this new scheme. In the case of the other benefits—sickness, retirement pension, etc.—the Exchequer contribution is one-sixth of the contribution of the others.

The proportion of contributions, there fore, towards the benefits for which both classes are equally insured is the same. What makes the contribution of the Exchequer towards Class 1 bigger than the other are two factors: first of all, that it is a proportion of the contribution paid by both the employer and the employee, and, secondly, it includes a contribution in respect of unemployment for that class for which the other class is not covered and, therefore, makes the total a little different, but the proportion in respect of each benefit is actually the same. I think that makes it perfectly clear that there is no discrimination in this Bill between the proportion of contribution made by the Exchequer towards the employed and the self-employed person. A point was raised by an hon. Member opposite about old age pensioners which I am afraid I did not quite catch and, as he is not present now, perhaps when he reads these words, he will come and discuss the matter with me.

Another question raised was the estimate for unemployment in this scheme. The Actuary was instructed to base the calculations upon a notional figure of 8½ per cent. unemployment. This Bill is the consequence of the Beveridge Report, of the White Paper, and of the discussions, and all the way through we have accepted what the Beveridge Report suggested, and the Coalition White Paper accepted—this notional figure of 8½ per cent. I would more than hope—indeed, I am confident—that we can hold un employment at less than 8½ per cent. I would express the view that this country cannot afford anything like 8½ per cent. of unemployment. At the same time, since the Beveridge Report and the Coalition White Paper thought it prudent to accept this notional figure, we have accepted it too. Anyhow that will be on the safe side, but I would call attention to the fact that there is a provision in this Bill by which at the end of five years the Minister is under an obligation to review the whole of the provisions, including the provisions for unemployment, for sickness, and so on and it is upon this basis that the Bill is drafted. I shall, if I am still privileged to be Minister—or if I may speak for my possible successor—look forward after five years of a Labour Government with real confidence to reducing that figure of 8½ per cent.

The hon. Gentleman also asked me which body I was to consult in regard to the self-employed on this question of the 24 waiting days. I think it was the hon. Member for Hornsey (Mr. Gammans) who suggested the other day that this further penalising of the self-employed man was an impossible business. The actual truth is that this is a really serious problem, financial and administrative. Class 2 is a very big class; it includes the coster and the barrister, in fact, everybody not under a contract of service. Sir William Beveridge suggested that the waiting period should be 13 weeks. The Coalition Government brought it down to four weeks. I have been amazed to hear hon. Gentlemen opposite, for I did not write the White Paper but right hon. Gentlemen opposite had a hand in it, and this four weeks' waiting period, which shocks them now, was put into the White Paper by them in 1944, when they had an overwhelming majority and when none of them protested against it. I think the little man is entitled to know that, too.

Mr. Oliver Pooler

As a professional insurance man, may I say that I never made the suggestion? I know the administrative difficulties just as well as does the Minister—

Mr. Griffiths

There are administrative difficulties and, of course, this class varies much more widely in its circumstances than Class 1. The Committee will have. heard what the Parliamentary Secretary said the other night about this problem. I am afraid there is not a single organisation which can speak in a representative capacity for 2,500,000 people who vary so widely, but there are ways in which we can sound opinion upon this matter, and I think, very largely, we shall find that opinion reflected in the opinions of hon. Members when we come to deal with the question.

The hon. Member for Oswestry (Mr. Poole) asked about the administration and cost of sickness benefit. I do not want to add anything to what I have said be fore on this matter. Sickness benefit will require very careful handling. I will tell the Committee one thing we are doing. Sickness benefit now does not provide for sickness. One hon. Member said, "You are putting the relieving officers on the road; why do you not compensate them? "Why am I putting them on the road? Because by raising sickness benefit I am rescuing the sick from pauperism. The claim is that thousands of relieving officers will lose their jobs because so much of their time now is taken up in augmenting sickness benefit. I know perfectly well, because I am a worker my self, that home service can be valuable. I know that it can also be a nuisance— it all depends on how it is administered. Visits to a working-class home are a blessing or a curse, depending upon who makes the visit and on the spirit in which the visit is made. Therefore, we shall provide the wisest possible administration, including a discriminating, humane home service, because that is essential.

The hon. and gallant Member for North Portsmouth (Major Bruce) asked me one or two questions. I am not going to argue with him as to whether the present cost-of-living index figure is good or bad. That has been discussed for a long time and has been the subject of an examination by the Ministry of Labour. Let me, however, give him the under taking for which he asks. If, by the time I come to make my review in five years, the Ministry of Labour has adopted, with the approval of the House, a new cost-of-living index figure, I shall accept that fully as a basis upon which I can make my review.

Let me make two points on the questions asked me about the non-contributory pensioners—the old Lloyd George pensioners. There is a provision by which those over 55 when the new scheme begins—who, therefore, will not be able to put in the 10 years' qualification before they are 65—will come under the old Lloyd George Act, if I may use that phrase. The Beveridge Report and the Coalition White Paper suggested that when the new scheme came in, the old Act should cease, and all people outside the scheme who could not qualify should get assistance pensions from the Assistance Board. I took the view myself, and the Chancellor of the Exchequer joined me in that view, that we ought to continue the old Act for those who could not come within the 10 years' qualifying period of the new scheme. The position, therefore, will be that those who are over 55 when the scheme starts will retain the old provision for ten years. There is a lot of sentiment attached to this.

9.0 p.m.

As to the non-contributory pensions for the over 70's, if persons now 70 and over are receiving the full 10s. under the non contributory scheme, they will receive the full new benefit—that is if they receive 1os., now they will get 26s. The non contributory pension differs from the contributory pension in one respect. Under the contributory pension schemes a person qualifies for 1os. or does not qualify, there is no sliding scale. There is a sliding scale under the old Act. What we propose to do is to modify that to a new scale and therefore those who get 1os. now will get 26s. and a couple getting 1os. each will get 42s. and those who get less under the old Lloyd George Act, will get a modified amount. I hope I have made that clear.

Mr. Popplewell (Newcastle-upon-Tyne, West)

Could the right hon. Gentleman.explain that point? Under the non-contributory scheme there was an income allowance of£49 1os. before the sliding scale. Will there be any difference in that allowance of income?

Mr. Griffiths

What we propose to do is to use that income and apply it to the new scale of pensions. That has been applied now to a scale which begins at 1os. and goes down.

Mr. R. A. Butler

Could the Minister make clear to the Committee whether, when we get upstairs—no doubt we will be meeting each other upstairs and I do not want any misunderstanding—the Opposition and hon. Members on all sides will be able to consider this matter freely, or will they find when they propose alternative benefits on contributions that they will be tied to the Financial Resolution, and their liberty of action thereby removed? If that happens the taking of this Bill upstairs is a mockery.

Mr. Griffiths

Upstairs, we shall be bound by the Financial Resolution.

Mr. Butler

I must press the point. Will it mean that it will not be possible for independent Members of His Majesty's Opposition, in view of the fact of the manner in which the Government have drawn the Resolution, to propose any alteration?

The Chancellor of the Exchequer (Mr. Dalton)

The right hon. Gentleman is an old hand at procedure, and he knows that the very nature and necessary purpose of a Financial Resolution is to circumscribe, to some extent, proceedings in Committee. Otherwise we should never put forward Financial Resolutions. Already a number of particular points have been made clear by the Minister. The hon Member for Nelson and Colne (Mr. S. Silverman), for instance, raised the matter of extension of non-covenanted benefits. It would be perfectly in Order to extend that, but the Financial Resolution means what it says, and is introduced for the purpose of preventing any runaway Amendment to the Bill in such a fashion as to defeat the purpose here set down.

Mr. Stanley

I do not quite understand that. Surely a Money Resolution either prevents any Amendment which adds even a pound or two to the sum set out or does not. It cannot be that it pre vents a big change but does not prevent a small one. I cannot see how, under this Financial Resolution, an extension of this uncovenanted benefit would be in Order.

Mr. Dalton

I do not think the Committee will wish me. continually to. be riposting on these points, which have been explained by my. right hon. Friend, but I will repeat what has been said. So far as the period of unemployment benefit is concerned, it will be in Order—and this answer is with the authority of the Law Officers; I was asked that, and I am giving a reply in the terms in which I was asked—for an Amendment to be moved to extend that period, the effect of which Amendment would be to throw a certain cost upon the Fund, and remove it from the Exchequer. It is no use for hon. Members opposite to suppose having passed the Money Resolution as it is that it means nothing. It means what such Resolutions always mean. It means that it limits the field of debate with a view to limiting the field of the extension of the burden falling on the Exchequer.

Mr. Butler

This is really an impossible position. The Government take the view that it is possible, under concessions, given, in a Minister's speech, to his supporters, to extend the period of un-covenanted benefit which will impose an unknown charge on the Exchequer. [Hon. Members: "No."] I am asking, If the period under the method of Clause 61 is to be extended—and reading Para graph 10 on page iii of the Explanatory Memorandum of the Bill, where the charge on the Exchequer is unknown— I want to know whether the words of the Minister mean that an unknown charge will be placed on the Exchequer. In fact, the charge on the Exchequer is un known. The charge on the Exchequer is inside paragraph 10 on page iii. The Minister is nodding his head. In the Chancellor's own words the operation of that benefit is to be extended.

Those of us who tried to guard the Unemployment Fund in the old days know that the great danger is the placing of unknown charges on the Unemployment Insurance Fund. We have replaced that Fund by another Fund. It will be dangerous if the Money Resolution is so drawn that an unknown charge can be placed on the Fund, by an extension of the period of benefit, which were the words used by the Chancellor. I would like a clear answer from the Government on what they mean by that. If we are to have an unknown charge, in the words of the Financial Memorandum, for an unknown period placed upon the Exchequer, and the Financial Resolution does not safeguard that position, why should it limit the Opposition and other Members in Committee upstairs from suggesting for example that the rates for a widow with three children, to which I drew attention in my Second Reading speech, should not also be extended? Why should it be possible to extend the period of unemployment benefit in certain circumstances, but not the rates for the widow in certain circumstances? If the answer is clear, my right hon. and hon. Friends on this side will be perfectly satisfied. If there is a leak in this Financial Resolution we shall not be satisfied, and we shall continue to discuss it.

Mr. Dalton

I will have one more shot at trying to make it clear. I have done my best but my best cannot have been good enough to make it clear. My hon. Friend was developing the argument not as to what was in Order but what was acceptable, and the right hon. Gentleman was seeking to develop not the argument with which I was dealing, as to whether certain Amendments would be in Order if moved in Committee, but whether, if moved, they would be accepted. I have not committed the Government, and I shall not commit the Government, to accept any Amendments of any. character. What 1 was seeking to indicate was that certain Amendments would be in Order to be moved in Committee. It would then be for the Committee to consider whether or not they should be accepted. What I was trying to indicate was that the proposal to extend the period of unemployment benefit would be in Order. I did not say it would be accepted, neither "Yes" nor "No." I say it would be in Order to move it, to debate it, and in Order to vote upon it in Committee. It would have the effect, if it were carried, of placing to that extent a charge which, as the Bill is now drawn, falls upon the Exchequer, and it is, of course, an uncertain sum which falls upon the Exchequer in the sense that we do not know how many people are going to be unemployed. Therefore, it is an unknown charge and it would be in Order to move that Amendment in Committee.

With regard to other Amendments, it will be in Order to move Amendments relating to rates of benefit. That will be quite in Order.

Mr. Butler

Under the Financial Resolution?

Mr. Dalton

It will be in Order. In the last resort it is for the Chairman of the Standing Committee to say what is in Order, and it is perhaps rather presumptuous for me to be too dogmatic in the matter. The final interpretation of Order rests with the Chair, but that is my understanding of the matter, and the intention of the Government, in bringing the Financial Resolution, is to exclude from consideration in the Committee changes which would alter the Exchequer contribution in the two Schedules to the Bill. That is my view. It is perfectly in Order, as I understand it, in Committee for Amendments to be moved and debated relating to rates of benefit. If the results of Amendments moved in Committee should make it appear to the Government that there should be some change in the rates of Exchequer contribution then, greatly daring in the light of the little discussion we had the other night, I am advised it would be perfectly proper and possible to introduce a new Financial Resolution and to recommit the Bill in order to adjust the position. I hope I have succeeded in making the position clear. I have done my best.

Mr. Butler

I should like to express my appreciation of the Chancellor on this occasion. I think he has acquitted himself well. As far as I am concerned, I have no further points.

Mr. Dalton

Won on points.

Question put, and agreed to.

Resolution to be reported Tomorrow.