§ Mr. J. Griffiths
I beg to move, in page 1, line 12, to leave out from "employment,"To the end of the Subsection.
It might be convenient to deal at the same time with two later Amendments—in page 11, to leave out line 30, and also in page 11, line 42, to leave out from the beginning to the end of line 45. These Amendments would enable me to carry out the changes which I indicated when we took the second Money Resolution on Friday last. Their effect will be to put the self-employed person on the same level and on the same terms as persons in Class 1, so far as sickness benefit is concerned. I indicated to the Committee during the consideration of the Money Resolution last Friday that I would like to say a few words on this problem at the present stage. I begin by giving briefly the history of this matter. For the first time we are bringing self-employed persons in this country within the ambit of our insurance schemes. Hitherto, these schemes have been confined to those under a contract of service, and, in the case of non-manual workers, even they were included only 351 when the income was below a certain limit laid down by this House. We are now bringing in self-employed persons generally into insurance, with the exception of unemployment benefit for reasons which are obvious. I have said before that there are, according to our estimation, about 2,800,000 in this class, and their economic circumstances vary enormously.
The question of the administration of sickness benefit is one of great importance and complexity with this section of the community. Sir William Beveridge in his Report dealt fairly exhaustively with this problem and, having regard to the difficulties of check, control and administration, he recommended that the desirable thing in making provision for sickness benefit for the self-employed was that there should be a waiting period of 13 weeks. I understand the reason why he recommended that proposal. Later on, however, we had a Coalition White Paper which suggested that the period should be reduced to a month and that the self-employed should wait 24 days before drawing sickness benefit. During the Second Reading of the present Bill there was a great deal of criticism of this, and some attempt was made then, and has been made since, to make party capital out of the matter. I do not think there is any question of party because it was a Member of the Liberal Party who made the original proposal, and a Coalition Government, representing all parties, which modified it. I cannot understand why anybody should describe it, as I saw it described in a newspaper the other day, as an example of the class prejudice of the Labour Party and the Labour Government.
I was urged horn all sides during the Second Reading and the Committee stage to reduce the four weeks to some shorter period and to put the self-employed on exactly the same terms as the employed class. I promised during the Committee stage to make investigations and I invited hon. Members in the Commitee—and also members of the public outside—to indicate to me what was the desire of the self-employed in this matter. It is very difficult to secure the opinion of many members of this section of the community. Nevertheless I had a good deal of help from some Members of the 352 Committee who discussed the matter with their constituents and afterwards told me their views I also had the advantage of meeting a very representative deputation representing the retail traders in the country, and I should like to pay my tribute to the members of that deputation for the fairness with which they discussed the whole problem and appreciated the difficulties and complexities. They urged me to include them and offered to cooperate in every possible way to discover some method of check and control.
I have come to the conclusion that the right thing to do in all the circumstances is to place the self-employed on exactly the same terms as an employed person with regard to sickness benefit, which will be paid after three days of incapacity. One major reason for my decision is that it makes the scheme a unified one, and I am very glad to be able to do that. When we were discussing the National Insurance (Industrial Injuries) Bill some hon. Members urged me to bring the self-employed in then, but the self-employed indicated that they did not want to come into that Bill for reasons which I need not enter into now. They felt they would get adequate cover if I did what I am doing now. I feel certain that the Amendment will be accepted by the Committee this afternoon—I hope unanimously—and will become part of the Bill.
Two things have concerned me very deeply and continue to worry me now. The first is still the problem of check and control. If a person in Class I is sick and claims benefit we have a check. If he has lost work we can confirm it. But in the case under discussion the man or woman is his or her own employer so that there is not the check which we get in Class I. That is a very difficult problem and when we come to administer the scheme I shall seek—and I am sure I shall obtain—the cooperation of the organisations representing self-employed persons as to how best we can effect the administration. The fact that we shall have a comprehensive net work of offices all over the country will assist us in this, and we shall also have local committees, representative of this section of the community, to advise us on these problems. In that way we hope to be able to meet and overcome the difficulties and complexities.
353 The second matter that worried me was, as I indicated from the very beginning, that if I made this change in the Bill it would mean a fairly substantial increase in the contribution, and the new rate of 6s. 2d. a week is going to be a very serious expense for large sections of the self-+ employed people of this country. For some, of course, it will not be a great burden, but for others it will, and I am afraid we may increase what I was very anxious to keep down—the number of people who, because of the high contribution, seek to be released from the obligation under the Bill. I refer to the Clause which allows those with incomes of less than £2 a week to claim exemption. I should be very sorry if that was one of the consequences of trying to do what I think to be right and fair. All the opinion I have sounded in the House and outside has urged me to do this. I have no desire to be unfair in any way, and in fact I am very glad to he the first Minister to bring the self-employed into a national insurance scheme. We are taking a risk, but with cooperation all round, I hope that we shall he able to minimise it.
Mr. Beeehman (St. Ives)
As the mover in Committee of an Amendment proposing that the waiting period be abolished or reduced I would express my appreciation of the great trouble which the Minister has taken to deal with the representations which have been made to him. Of course, I am glad, as are all of us, that the waiting period is now to be abolished. Like the right hon. Gentleman, I am much concerned at the size of the proposed contribution. I would like to remind him that I put forward the Amendment on the footing that it would be unwise, and indeed impracticable, to put up the contribution to anything like the height which is now proposed.
I did put forward some suggestions on how the money could be found. As I understand the situation, what has to be found in order to pay for doing away with the waiting period, is about £3,500,000 a year. I know that that is quite, a large sum, but in relation to what it achieves it is not unduly great. Suggestions I made were objected to by the Minister, because he thought that they were actuarially unsound. I am hound to tell him that, on reflection, I was impressed by what he said, but at the same time I agree with what is stated in a leading article in "The 354 Times "Today, that the principle upon which the proposed contribution by the self-employed person is based is erroneous.
I understand that the so-called self-employed person is looked at by the officials as though he were really two people, an employer and an employee, and they say that he must therefore make, as it were, a double contribution. I think that is an entirely fallacious way of looking at the self-employed person. The right hon. Gentleman says that he and his party have sympathy for the sell-employed person, and I accept what he says, but we are dealing here not only with some people who are well off but with a large number of humble folk such as smallholders, shopkeepers, carpenters, fishermen and others. It is wrong to look upon those people as standing in that dual capacity. I hope the Minister will give consideration to this point that the contribution which is proposed has been thought out upon an entirely erroneous principle. The sum involved is only £3,500,000.
§ 4.45 p.m.
§ Mr. R. A. Butler
As I said in discussing the Money Resolution, we are very grateful to the Minister for learning so quickly how to make his Bill better. This is an example of how the Committee has been able to engage in constructive work, and we all welcome it in the spirit which the Minister has indicated. There are various points about which I wish to ask questions of the Minister. I am disappointed that he has not been able to give us any indication of the manner in which this part of the scheme will be administered He has referred to the self-employed person represented by the retail traders' organisation, and amounting, we are told, to about 1,000,000 persons. No doubt that representation is close and exact That body has declared that it can not only administer the scheme in such a way as to make it fair to the Fund in general; they have also said that their members are ready and willing to pay the large contribution of 6s. 2d. a week. We must, therefore, accept what they say as being representative of a very large and able body of people, as the Minister has said. A far larger number of the self-employed—about.1,800,000—are not capable of being represented by any single body.
I would ask the Minister what information he has received from the retail traders 355 as to the manner in which the scheme can be administered by their members, shopkeepers and others, upon whom it is comparatively easy to check-up, and what information he has about the possibility of administering the scheme for the other 1,800,000 self-employed, such as those in more lonely parts of the country. Some of these people live in remote districts, perhaps at a great distance from any kind of social security office.
As I mentioned in Committee, unless the Bill works properly it will be disappointing. We have the very definite evidence of Sir William Beveridge, who said in no uncertain terms that it would be impossible to administer this sort of scheme without a longer waiting period. We also have the evidence of the Coalition Government to the same effect. I, personally, think that, in the case of the retail traders, it might be possible for the Minister to give the Committee a little more information about some system. For example, the self-employed person might sign a paper when sick, and thereby indicate to the authorities the days on which he was sick. That would have to be done in a way which would satisfy the authorities. Did the Minister obtain from the retailers' organisation any undertaking that the scheme could be administered by them, with the aid of their members? It is very disappointing not to have been told by the Minister in his opening speech anything about these matters, and I hope that he will remedy that defect. Can he give us any assurance how he proposes to administer the scheme? For example, take the case of a lonely farrier in a remote village, perhaps in some of the more mountainous parts of the country. He is sick for a certain period. He will be attempting, poor man, to understand and honestly to carry out the terms of Clause 11.
The most interesting part of the Minister's speech was that in which he said he had decided to bring the self-employed up to the same level as the other contributors, not only by reducing the waiting period to the same period as for the others, but also by submitting the self-employed to the intricacies of what are known as the linking-up days of unemployment. The scheme has to be administered—let us face the fact—according to the exact terms of Clause 11, of which Subsection (2, c) says: 356subject in the case of a self-employed person to regulations, any two days of interruption of employment, whether consecutive or not, within a period of six consecutive days shall be treated as a period of interruption of employment.That is defined in the previous paragraph (b). It goes on:and any two such periods separated by a period of not more than thirteen weeks shall be treated as one period of interruption of employment.That means that it will be necessary for the authorities to be perfectly satisfied that in a period of 13 weeks, it may be either by the linking up of the two days and the six days, or by the fact that excluding the Sunday the lonely farrier is in fact sick through no fault of his own and absent from his forge on one day per week in eight consecutive weeks. We are excluding the Sunday, and taking into consideration the two days within the six days. If the scheme is to be properly administered the Minister must satisfy himself that his Department can satisfy other members of the Fund that the farrier is indeed carrying out the exact terms of the law.
On good administration this Bill depends. I am right in putting this matter fairly before the Committee. The Minister gave us no indication how he hopes the scheme will be administered. I hope he will give us a little more reassurance, so that we may feel that it can be done. I should have preferred the Minister to give this concession, in so far as he is giving it, but not to include the linking-up period for the self-employed. That is far too complicated. Perhaps he will explain what animated him in giving the concession.
Had he given the rest of the concession, we would still have had the whole substance, but we would not have had this odious complication which makes administration in the lonely districts almost impossible. We should have had the three days but not this complication of the linking up period. There would have been one other advantage. If my actuarial calculations are correct, if the Minister had not gone quite so far as the linking up period, he would have relieved the contributor of paying a halfpenny a week. The increase would have been 4½d., because it is the intense complication, partly of the linking up period, which makes the increase 5d. This may be a detail, but it is important for us to draw the attention of the Committee 357 and those outside to the manner of administering this scheme, and I think that in this particular detail the Minister would have a headache.
I now follow the Minister and the hon. Member for St. Ives (Mr. Beechman) on the question of contributions. We understand that one million of these self-employed are ready to pay this contribution. All honour to them and good luck to them, in undertaking these contributions and joining the scheme. I should like to hear from the Minister whether he has any indication that all our other friends—hedgers, ditchers, mole-catchers, farriers and other rural craftsmen, the backbone of the country, who work on their own in the very remote country districts—are ready to pay this extra contribution. I have a letter from one of them who tells me that at present he pays out 6s. 6d. weekly in various contributions, of which 2s. 2d. weekly is for the National Health Insurance stamp. Presumably threepence or so may go weekly to the hospital scheme, which, thanks to the new health scheme, he soon will not have to pay, though will probably have to pay contributions in some other way. Part of that 6s. 6d. is for voluntary insurance which the man wishes to continue and which the Minister said he would encourage. If one takes away the present health insurance contribution, 4s. 4d. is left. Fourpence of that is for the hospital scheme and that leaves 4s. which the man wishes to continue paying towards private policies in which he is interested. There is no reason why this Bill should discourage those who have taken out private policies in the past and wish to continue them. There will be this 6s. 2d. added to the 4s. that remains for the man's own private policies and other schemes which there is no reason for him not to continue. He will have to put aside some 10s. 2d. a week out of his modest earnings to face the problem of insurance. The Committee must realise that this is a great problem in the successful carrying out of the scheme.
It would be wrong of us not to acknowledge that the Minister has been progressive and forward-looking in this matter, and we should thank the Minister for having listened to the representations made, not only from this side but from all parties. But, before we leave this matter, we deserve from the Minister 358 these two assurances, first, that he knows how to administer this scheme in respect of the linking-up period for those self-employed persons who are not members of the retail traders' organisation and live in lonely districts carrying on their lonely crafts; second, an assurance on how many non-members of the retail traders' organisation have accepted and are likely to be acquiescent in the payment of this contribution, over and above their private insurance schemes.
§ Mr. Rhys Davies (Westhoughton)
The Minister has, in this matter yielded to argument and pressure. He has done well to unify the scheme in relation to the payment of sickness benefit but, let us be clear, this is not a new problem. There are tens of thousands of self-employed persons already within the present National Health Insurance Scheme—those who were once compulsorily insured and later entered into business on their own account. The Minister has, in this connection, been faced with a simple problem of what is called actuarial calculation. Hon. Members must not complain about the increased contributions if they accept the actuarial basis of the Bill. An hon. Member opposite shakes his head; he seems to know more about finance than I do, but hon. Members must not at this stage complain about the increased contributions. The basis the Minister has to work on all the time is what is the experience of the actual administrator. It is of course, a very difficult task to administer sickness benefit for those who are self-employed.
§ Mr. Beechman
The hon. Member seems to refer to me. I am not disputing that there are difficulties in the way of actuarial computation. I quite agree. But I say that the contribution is based on an erroneous principle in that there is an under-estimation of what could be contributed by the State for the reasons which I explained in my speech.
§ Mr. Rhys Davies
The hon. Gentleman is a member of the Liberal Party. I think he was in the House when the present Leader of the Opposition as Chancellor of the Exchequer reduced the annual State grant by £2¼ million to the Health Insurance scheme. The present contributions by the way, of the self-employed person equals the total contribution of both employer and employed. If the right hon. Gentleman the Member for Saffron 359 Walden (Mr. Butler) works out the figures, I am not so sure that he will find that the self-employed person, from the point of view of contributions and benefits will be any better off proportionately under the present than under the original proposal.
What are the difficulties? As Members of Parliament they must face this issue. If we do not face it now we shall have to later on. When State sickness benefit is paid the recipient must be totally incapacitated from following any employment. That is one test, but when the insured is an employed person, and does not return to work when he recovers his health, he may be dismissed his employment. But that latter leverage does not apply to the self-employed. Who, therefore, is going to decide when the self-employed person is totally incapacitated from following any employment? The trouble about the present administration—and we must face up to it—is that a self-employed person really incapable of a full day's work may be able at the same time to do just a little for his own business. That is the issue. Whatever Members of Parliament may say today, when this scheme comes into operation that is the problem they will have to face in letters from their constituents.
The Minister has done very well in bringing this proposal forward, and I am glad of one thing which he has not done. A suggestion was made by some Members that the financial burden of this improvement for the self-employed should fall on the compulsorily insured. The self-employed person ought, after all, to stand up to his own financial responsibilities. I am sure that the Minister's staff know already the actuarial considerations in respect of the tens of thousands of self-employed persons who are now voluntary contributors. I am glad, in a way, that the Minister has done this, but I am not so certain that the self-employed person will be as satisfied as he would have been under the original proposal.
§ 5.0 p.m.
§ Mr. Oliver Poole (Oswestry)
I congratulate the Minister on facing up to this problem with the very bold provision that he is now bringing into this Bill. In all the discussions on Second Reading and in Committee it was clear that there was no dispute as to the necessity for 360 doing this; it was purely a matter of practical administration, Everybody knows the difficulty of administering sickness benefit, and the Committee must remember that the Minister is faced with a very difficult task because he is proposing to sweep away the whole of the existing machinery for administering sickness benefit and to introduce a new machinery of his own. It is a great problem and it comes down to this, that the success or otherwise of this scheme bringing in the self-employed person, will depend a great deal on the self-employed person himself. I have no fear that the Minister will be disappointed. If he will refer to Subsection (2, c) of this Clause, he will find that it is extremely difficult to understand, and I think that people in the villages, the self-employed, will have difficulty in understanding it—