HC Deb 17 May 1946 vol 422 cc2275-89

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 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 authorise the payment out of moneys provided by Parliament of contributions towards the cost of benefit payable under the said Act and any other payments to be made out of the National Insurance Fund established thereunder, being contributions not exceeding in the aggregate sums computed in accordance with the following provisions, that is to say:ߞ for each contribution as a self-employed person paid under the said Act by a person over the age of eighteen there may be paid the sum (hereinafter referred to as the."Exchequer supplement") in the case of a contribution paid by a man, of one shilling and one penny and, in the case of a contribution paid by a woman, of elevenpence: Provided that, if the Treasury by order under the said 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 to be expedient for convenience of calculation) the proportion which the rate of the supplement bears to that of the contribution."—(King's Recommendation signified.)—[Mr. James Griffiths.]

11.7 a.m.

The Minister of National Insurance (Mr. James Griffiths )

Perhaps I ought to say a word or two to the Committee about this new Financial Resolution. It is required in order to authorise the inclusion in the Bill of certain Amendments which I will propose on the Report stage. They will create payments out of the Exchequer by way of Exchequer supplements to the National Insurance Fund over and above those authorised by the original Financial Resolution to which the Committee has given its approval. I shall move Amendments to Clause II of the Bill, which are already on the Order Paper, to provide that self-employed persons shall be granted sickness benefit on the same terms as are already provided in the Bill for employed persons; that is, payment from the fourth day of incapacity or from the first day if the incapacity lasts 12 days. We had a long discussion on this in Committee. I promised to consider it and I have come to the conclusion that this is the right thing to do. I shall have more to say about the problems involved next week on the Report stage.

This will be an entirely new class who have not hitherto been covered by insurance unless they were voluntary contributors. There will be an initial period to pay contributions before they qualify for benefit. After that period, it is estimated by the Government Actuary that the cost will be about £3,250,000 a year. This new proposal involves an increase in the rate of contributions of 5d. per week for the self-employed man over 18 and 3d. a week for the self-employed woman over 18, with lesser contributions for boys and girls also in this class. It will involve a contribution of £1 million a year extra from the Exchequer. I do not think I need at this stage enter into the merits or demerits of the proposals, but I propose to say a great deal next week about the administrative problems involved. Therefore, I will content myself now by moving this further Financial Resolution that will enable us to make the Amendment which I think will meet with approval in all sections of the Committee. I hope, therefore, that the Committee will approve it this morning.

11.11 a.m.

Mr. Sydney Silverman () Nelson and Colne

I would like to thank my right hon. Friend for moving this Financial Resolution in order to cover a point which gave a good deal of anxiety to many hon. Members, but I did not get up for that purpose. I got up to inquire of you, Major Milner, and of my right hon. Friend about a point concerning the joint effect of the two Money Resolutions. I regret not to have had the opportunity of giving notice of this, but I think it is a point I must raise. You will perhaps remember, Major Milner, that when Financial Resolution No. I was before the Committee and was agreed to, I raised certain questions as to whether it was so drawn as to permit of Amendments in Committee relating to the period of benefit of unemployment and of other matters. I also had on the Order Paper that day, after the Second Reading of this Bill and before the Financial Resolution, Motions to instruct the Committee that they should have power to amend the Bill in certain ways. Those Motions were held not to be necessary because the Financial Resolution was wide enough to cover them but, in order to be quite certain on the point, I raised the matter in the Debate on Financial Resolution No. I and received certain assurances from my right hon. Friend and from the Chancellor of the Exchequer. There was a general Debate and I think the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) was concerned in that discussion.

In Committee that undertaking was duly honoured except in one particular. When I say "except in one particular" I do not wish to be interpreted as implying any lack of good faith on the part of my right hon. Friend or any error of judgment on the part of the Chair, but one Amendment that I moved in pursuance of that undertaking was ruled out of Order by the Chair—I confess to you, Major Milner, quite correctly—on the ground that it was not covered by the Financial Resolution in spite of the understandings that have been reached. I think everybody felt that there had been some kind of slip up and that an Amendment was out of Order which nobody in any part of the Committee, or the Chair either, had ever intended should be out of Order.

I hoped, therefore, that if my right hon. Friend had the opportunity, as he has this morning, of moving an additional Financial Resolution, he might have taken the opportunity of so drawing his Resolution as to cover that point. If he had done so it would not necessarily have committed him to accepting any such Amendment when it was moved, but it would have removed the feeling that an Amendment which everybody wanted to discuss had been excluded from discussion by inadvertence: Therefore, I would ask my right hon. Friend whether he has drawn Financial Resolution No. 2 in such a way as to cover that point also. If not, I think I am entitled to ask him why he did not do so. I do not think this is a matter of Order, but I think it affects the question as to whether the Committee ought to pass the Financial Resolution No. 2 in the form in which it is now before the Committee. We might have preferred it in another form and wide enough to enable such an Amendment that we wished to discuss to be moved and, if selected by the Chair, to be discussed on the Report stage. If, in his opinion, it does not, or if there is any doubt about it, would he consent to an Amendment now to enable such an Amendment to be moved on the Report stage with the permission of Mr. Speaker when the proper time comes?

The Chairman

The matter raised by the hon. Member for Nelson and Colne (Mr. Silverman) would appear to be one for the Minister and not for the Chair.

11.15 a.m.

Mr. R. A. Butler (Saffron Walden)

I will not attempt to interfere between the hon. Member and the Minister upon this point. The hon. Member called me in aid, but I am afraid I shall not rise on this occasion. I sympathise with him to this extent, that any Money Resolution gives rise always to a certain amount of heated debate in this Committee and is usually misunderstood. As far as I understand the hon. Member, his desire is to extend the Money Resolution so as to cover an Amendment which he wants to move. If I agreed with his Amend- ment, then I would support him, but I must honestly say that we have no Amendments on this side of the Committee that we want to move which necessitate a more widely drawn Money Resolution.

Mr. Silverman

Will the right hon. Gentleman allow me? When I invited him to support me in this, it was not with any intention of misleading him to support an Amendment giving more money to the unemployed. I know he would never want to do that, and would not have the support of his party if he did. What I thought he might have given me some support in doing, especially in view of the recent discussions on Financial Resolutions in Committee, was in having them so drawn that important questions might be discussed and decided, whichever side of those questions the different sides of the Committee supported. I would have invited him to support me in enabling questions to be discussed so that his party's opposition to extended unemployment benefit could be suitably recorded in the Lobby and on the records of the House.

Mr. Butler

I am afraid I am still not to be drawn even on that point. Normally I would have supported the hon. Gentleman if I had thought it necessary, but it so happened that after our experience on the original Money Resolution, we were satisfied that we had complete liberty in Committee to take what action we desired, and this is, I think, the only major case in which it is necessary for the Government to place a new Money Resolution on the Paper.

I have certain observations to make upon this, which is a very important concession made by the Government in view of the representations made particularly from this side of the Committee, although there were others who have supported this on all sides, upstairs and originally. We have made a special point of trying to help the self-employed man and we have always drawn attention to the great inequity which the self-employed man and woman suffer owing to the fact that they have a very long waiting period. In the original Debate the Parliamentary Secretary set out with great clarity all the difficulties in the way of granting this concession, and if hon. Gentlemen will study HANSARD on this matter in columns 2011 and 2012 of 8th February last, they will see that the hon. Gentleman had an even more difficult passage on this matter than he had on other matters, that he was continually interrupted in a friendly but persistent manner asking him whether he could not make some concession. On that occasion, in answer to the hon. Member for Hornsey (Mr. Gammans) and others, the hon. Gentleman said that he thought it might be possible to make a concession on this point. We then discussed it at great length upstairs, and the result is that the Government have seen wisdom.

We would like to thank the Government for accepting suggestions put forward from this side of the Committee. The Government are learning every day and they are making their Bill better and better. We have been very glad to fulfil the undertaking which we gave originally that the Opposition would take a constructive view of the National Insurance Bill as a whole, and would attempt to make it a better Bill, and the country will be grateful to us for the constructive part we have taken in moving the Government at last to a rather wiser course than they might previously have adopted.

However, there are certain important points to raise upon this. I agree, Major Milner—and I am sure I shall have your aid in this matter—that most of them would be more suitably raised on the Report stage next week, but the fact is that we are asked in Parliament to grant an extra —1 million of public money for the purpose of helping the self-employed in the Exchequer supplement. Hitherto the self-employed have been treated very hardly in the matter of Exchequer supplement. I raised this matter in my Second Reading speech and said: It is also the case that the self-employed man, with the Exchequer supplement, has to contribute towards unemployment benefit to the extent of 50 per cent., whereas in the case of other benefits it is to the extent of 20 per cent. of the contributions. The self-employed man gets no unemployment benefit, and to that extent he does not share in the Exchequer supplement provided for other sections of the population. [OFFICIAL REPORT, 6th February, 1946; Vol. 418, c. 1772.]

That is only one instance of the manner in which the self-employed man has been hardly treated in the matter of Exchequer supplement. I think the Committee is doing justice today in raising the contribution from the Exchequer to the self- employed man. We are trying in some ways to redress the balance. The matter is not so simple as that of merely voting an extra £1 million of public money. This scheme does not depend on public money alone. As a result of our actions and decisions today, the self-employed man and woman will have to pay a very considerable extra contribution. It is very important for the Committee and the country, as the Minister said in his opening remarks, for these figures to be fully understood by the self-employed person. The Minister's original concession was calculated, if the waiting period were reduced to the similar waiting period for the other people in the Bill, to be an extra contribution of 4½d. a week, which, added to 5s. 9d., amounted to 6s. 1½d. The position now is, worse, because under the Minister's suggestion the self-employed man will have to pay 6s. 2d. That is an extra 5d. instead of the 4½d. originally forecast by the Minister and the Parliamentary Secretary. This flows from the decision of the Government to put this Money Resolution on the Order Paper.

I should value an explanation of how in this period of time the amount has risen from 4½d. to 5d. I can, if the Minister does not feel inclined to answer, give some idea of the answer myself. I will proceed to do so. The position is not simple. The adult man under the concession of the Government, would have to pay an extra 5d., the adult woman an extra 3d. the boy under 18 an extra 3d., and the girl an extra 2d. The Exchequer contribution is increased by 1d. for adults and nothing for young persons. No doubt an absolutely exact apportionment of the cost is not possible where such small amounts are concerned, and on the whole the Minister seems to have done rough justice in the decision he has taken. I have calculated that the number of self-employed men is about three times the number of self-employed women. I do not know if the Minister can corroborate that fact. The average additional contribution amounts roughly to about 4½d. in the contribution the Minister originally suggested. That is the average contribution taken all over, after considering the facts I have stated.

The Committee's attention should be drawn to another aspect of the case. As I see it, the Minister's extra ½d. on the contribution is largely due to the fact that he has not been content only with doing away with the waiting period and restrict- ing it to the three days, but has to give to the self-employed the same concession about the linking up of days of unemployment over a 12 week period. That is a matter which will be more suitably discussed on the Report stage, but there is no doubt that while that concession is welcomed because it puts the self-employed on exactly the same basis as the others, at the same time it makes the administration of the scheme extremely complicated. The linking up periods are complicated enough for other persons, but for the self-employed—if one reads the massive evidence of Sir William Beveridge and the definite conclusions in paragraph 75 of the Coalition White Paper, which described the administrative difficulties of doing away with the waiting period—one finds all the evidence goes to show that the administration of sickness benefit to the self-employed person without a long waiting period is something which the Government machine up to this date has never been willing to envisage.

On the Report stage we shall want to hear from the Minister how he proposes to make this Bill work. This Bill is going to depend as much on good and efficient administration as upon anything else. It is through good and efficient administration that the people are going to retain confidence. We shall therefore want to hear—perhaps the Minister and his Parliamentary Secretary may prefer to delay this until next week—how far this is administratively possible. If we concede this I million today we shall want to know how the linking up period works in the case of the self-employed person; the position of the self-employed is very particular. There is the vast organisation of the retail traders who have put evidence before the Minister. They represent some 1,000,000 of the self-employed persons. But there are 1,500,000 or so more self-employed persons who are small men and who work, for example, in the country districts and have remote habitations.

Mr. S. Silverman

On a point of Order. It is perfectly obvious that everything the right hon. Gentleman is saying now will have to be said again when the Minister moves his Amendment, if he ever does move his Amendment. This cannot have anything to do with the question of the Financial Resolution enabling him to move the Amendment.

The Chairman

I thought the right hon. Gentleman was going rather wide, but he did drag in "self-employed persons" at appropriate intervals, and I therefore assume that he is endeavouring to keep to the Rules of Order.

Mr. Butler

I must accept your description of my speech as "dragging in" I am always submissive to the Rules of the Chair, however much I may be wounded by them sometimes. I hope to illustrate that my argument is flowing logically from the fact that we are about to vote £1 million of public money, and the consequences of this decision are very considerable. However, I would not wish to deprive the House on the Report stage of the full wisdom I should like to put before it, and will, to the extent that you desire me, curtail my remarks and make them all the more expansive and, I hope, in better form, on the next occasion.

I was illustrating the fact that the self-employed are of many different types and it will eventually be much more difficult to operate the scheme for certain types than for others who are represented in the big organisation with which the Minister has been in touch. As far as I know from contact with that organisation of self-employed persons, they desire to pay the extra contribution which flows from the decision we take today. To a large extent, we are aware of the fact that these self-employed persons, numbering about 1,000,000 out of 2,500,000, are ready to accept the decision of the Government. It would be very valuable if we could have further evidence on the next occasion of the views of the other more lonely, more isolated, self-employed persons, many of whom have small means, as to whether they will be equally grateful to us for asking them in return for the Exchequer supplement we are voting today to pay these extra contributions imposed upon them. This point flows absolutely logically from the decision we are taking today and perhaps on this, or a future occasion, the Minister can give some evidence in regard to it.

Those are the points which I wanted to make about this Money Resolution. If I may sum up, I think it does justice to the self-employed man because it gives him a greater share of the Exchequer contribution than he got before. Before, I think he was badly treated. In the second place, I think it does away with an anomaly that the self-employed man was not doing nearly so well out of this scheme and he now gets a great deal better benefit if he is sick. Therefore, this scheme is more worthwhile for him. The last point is that I hope the Minister, when we get to the details of this, will explain the impact of it upon not only those represented in a large organisation but the other types of self-employed. It is indeed fortunate that the Opposition contributions to these Debates have been so enlightened and that we have been able to help a section of the population who have always looked to us for succour and help in their need.

11.32 a.m.

Major Leǵǵe-Bourke () Isle of Ely

I rise to support what has been said by the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler). We on this side of the Committee have done our best to protect the interest of the self-employed. It must have been clear to all hon. Members that the self-employed were far from being satisfied with the original provisions of the Bill. As my right hon. Friend has said, there are still some self-employed who will feel that this increase is rather beyond their means. I hope that by the time we reach the Report stage the Minister will, at least, have produced some figures to show the various proportions of the self-employed who live in remote districts and those who live in more populated districts, and also those who are voluntary contributors under the present scheme. I have previously asked the Minister a question to that effect which he was unable to answer. I hope, now that some time has elapsed, he will be able to give me a reply. A further point is that it seems to me that the most important sentence in the Financial Resolution is contained in lines 16 and 17. It includes the words: …the said Act made with a view to maintaining a stable level of employment… I wonder very much whether the right hon. Gentleman is not perhaps missing a golden opportunity to cover the various interests affected in Clause 20, Subsections (4) and (5). I believe that, particularly in Subsection (5), there are some people who will get a great deal of benefit to the great chagrin of others who will not. I think that will upset the future labour problem a great deal. In this Financial Resolution we have a proviso which says: …if the Treasury by order under the said Act made with a view to maintaining a stable level of employment, increase the rate of any contribution… If that is the case I should like to see the right hon. Gentleman perhaps putting the figure a little higher to meet the great need for old people to carry on working at present. I hope that by the Report stage of this Bill we shall have some further information from the Government to show what they propose to do in order to encourage old people to carry on working. I do not think Clause 20 of the Bill is satisfactory. I welcome this decision by the Minister, but I ask him very seriously to consider before the Report stage whether or not he should make this compulsory, and whether or not he should leave it open to some of the self-employed to opt out altogether or perhaps to remain on the original rates proposed under the Bill.

Mr. Leslie () Sedgefield

I am very glad indeed that this concession has been made to self-employed persons. I am particularly interested in this matter so far as it concerns small traders. We have to take into consideration the fact that a large number of ex-Service men on their return to civil life have become self-employed persons.

11.36 a.m.

Mr. J. Griffiths

In the few remarks I made at the beginning, I contented myself with moving the Financial Resolution and saying only a word or two about it. I am sure Members of the Committee will realise that in confining myself to the narrow financial aspect for the moment I was not in any way seeking to indicate that this was an unimportant problem with unimportant consequences. I was reserving what I shall have to say—and I shall have a good deal to say—for the Report stage. The right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) did the Government a great service. He paid us a great compliment when he said the Government are learning every day. That distinguishes us from previous Governments I have seen in this House. Other Governments never learned anything. I am proud to belong to the first Government who carry on learning every day. Not only are we learning but we are getting stronger every day. Efforts have been made to make into a party question what is to be done in this Bill and other Measures for the self-employed who are sometimes referred to as the "little men." I have not looked upon this as a party question.

Serious administrative problems are involved in this matter and I shall discuss them next week. No one knows this better than the right hon. Member for Saffron Walden. I am glad to be the first Minister to do something more than praise the "little men"; I am glad to be the first to help them. We are giving them tangible benefits, though in giving these benefits we face very serious administrative problems. I know the figure appears very high. I have had to bear that in mind. I have met representative organisations. I invited every hon. Member in this House to write to me or to see me and to tell me what the unorganised self-employed persons thought about this. I have done my very best to find out. As a result, I have come to the conclusion that in this scheme, for the sake of the unity of the scheme, as well as the self-employed themselves, the right thing was to put everybody on the same level. On more than one occasion there have been suggestions that the self-employed are getting a raw deal out of this. I have met representatives of the self-employed. They are very thankful for this scheme. It is the first one that brings them within the scope of National Health Insurance benefits. They are not getting a raw deal.

One of the reasons why I have put them on the same terms as everybody else is because they wanted to be on the same scale. I have explained before—this is a financial point—that the self-employed are covered for all the benefits except unemployment benefit. The Exchequer makes a contribution of exactly the same proportion towards the benefits to the self-employed as they do towards the benefits of the employed. The reason for what appears on the surface to be a difference is one which I have explained before. There is one benefit, the benefit for unemployment, for which, for obvious reasons, the self-employed are not covered. The cost of unemployment benefit is distributed between the contributors and the State so that one-third is paid by the worker, one-third by the employer and one-third by the State. That has always been the case and I thought it was desirable that that should be continued in the new Bill. For all the other benefits, sickness, retirement pension, and so on, the proportion paid by the State towards the self-employed man's benefit is exactly the same as the proportion paid by the State towards the benefit of the employed person. I hope that clears up the matter.

One further point. The Parliamentary Secretary indicated that the contribution was in the region of 6s. 1½d. Actually, the actuarial contribution under the provisions now before the Committee is 5s. 9.2d. If, therefore, we add what is required to meet these contributions, it will cost 6s. 2d. per week. I know that is a high contribution. I think I have dealt with most of the point raised, and, if there are any others, they must await the discussion we shall have next week, in which I will indicate the administrative steps we propose to take on what is a most important problem, that is, checking up on claims.

The hon. Member for Nelson and Colne (Mr. S. Silverman) referred to the discussion we had earlier on in connection with the first Financial Resolution and to questions which he addressed to myself, the Chancellor of the Exchequer and the Chair. On the Committee stage which followed, the hon. Member will recollect, an Amendment to Clause 12 was moved in the form of extending the period beyond 180 days, I think, to three years. That was accepted as being in order by the chair and was debated, though I forget whether it was voted upon.

The Amendment that was out of order was one moved by the hon. Member for Nelson and Colne to delete the period of five years from Clause 62. I indicated to the Committee that, when we discussed this matter—and it will be discussed again next week—the Government had decided, as a matter of policy, to make this provision in Clause 62 for five years. I indicated, at the same time, that there was a provision in the Bill by which, before that period ended, the Government could review the whole situation. I indicated what our policy was, and said that we wanted the House to accept the Bill as it was, get it to work and see how the provisions of Clauses 12 and 62 had worked out. We would then bring our recommendations to the House, and would review and examine the matter at that time. The view of the Government is exactly the same now as then. With regard to the other Amendment, it was accepted by the Chair and there was a Debate on the question of the limit to unemployment benefit. Speaking for the Government, I say that that is our intention, and I ask that the Resolution shall be passed.

11.42 a.m.

Mr. S. Silverman

I hope my right hon. Friend will not mind if I press him further upon this. I think we all appreciate that what distinguishes this Government from others is that they learn from day to day, and that is what encourages those of us who are anxious to continue their education. The point involved is really quite simple, and I do not want the Minister to say a word to prejudice the Government's policy or tie their hands when the time comes to discuss the merits of the proposal. I am not discussing the merits of the proposal at all; I am talking about the question whether the proposal, and its merits or demerits, can ever be discussed at all. Clause 12 prescribes a limit beyond which unemployment benefit cannot be paid. Clause 62 gives the Minister the discretion—not the right, but the discretion—to continue payments beyond that period. The point was whether, if the right hon. Gentleman is to have discretion to continue benefits to people who are still unemployed but who cannot get benefit, there, is any reason why that should be limited to five years. We were assured by the Minister, the Chancellor of the Exchequer and the Chair that such an Amendment would be in Order. When we came to Financial Resolution No. 2, we understood that it would have been possible to include words in the Resolution that would have enabled the merits of that proposal, on a very important aspect of all-inclusive comprehensive insurance, to be discussed. It does not do that. and, if the Chair maintains the Ruling in Committee, which differs from the Ruling given on the Floor of the House, that question can never be discussed at all.

Mr. Griffiths

I do not blame the hon. Member for this, but he did not give me notice that he was going to raise it, and I have not looked up the report of the Debate in Committee. I do not think it concerns Clause 62 so much. The actual point was whether it would be in order, on the Committee stage, to move an Amendment to Clause 12, and, after consultation with the Chancellor of the Exchequer, I said that it would be in order and I was right. It was in order, and it was moved, but I do not think that I gave any kind of undertaking, because the hon. Member will recollect that it was the Chancellor who answered this point in the Debate. I do not think it was the point concerning the five years which was at issue, but whether it was desired to move such an Amendment in Committee.

Mr. Silverman

My right hon. Friend is accurate, so far as he goes, but the matter goes further than that. The point was that he should have power to extend the period and the effect of that on subsequent Amendments. Obviously, if we extend the period of 180 days in Clause 12, that involves consequences in Clause 62. Question put, and agreed to Resolved: That for the purposes of any Act of the present Session 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 authorise the payment out of moneys provided by Parliament of contributions towards the cost of benefit payable under the said Act and any other payments to be made out of the National Insurance Fund established thereunder, being contributions not exceeding in the aggregate sums computed in accordance with the following provisions, that is to say:— for each contribution as a self-employed person paid under the said Act by a person over the age of eighteen there may be paid the sum (hereinafter referred to as the Exchequer supplement') in the case of a contribution paid by a man, of one shilling and one penny and, in the case of a contribution paid by a woman, of elevenpence: Provided that, if the Treasury by order under the said Act may 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 to be expedient for convenience of calculation) the proportion which the rate of the supplement bears to that of the contribution.

Resolution to be reported upon Monday next.