HC Deb 14 July 1948 vol 453 cc1351-63

11.41 p.m.

Sir Ian Fraser (Lonsdale)

I beg to move, That an humble Address be presented to His Majesty, praying that the Provisional Regulations, dated 10th June, 5948, entitled the National Insurance (Overlapping Benefits) Provisional Regulations, 1948 (S.I., 1948, No. 1244), a copy of which was presented on 15th June be annulled. There is a class of disabled ex-Service men who are unemployable. An ex-Service man in that class is not just unemployed, but is deemed to be unemployable; he is in such a state that he is never likely to find work again. In addition to the war pension, to which he is entitled by Royal Warrant, he is entitled to an extra £1 a week, and that is called the unemployability allowance. This person, under these regulations, is not able to draw the sickness benefit which other people can have in other circumstances for the whole of their lives. He is not able to draw this with full advantage because, immediately he draws it, the £1 a week from the Ministry of Pensions is taken from him. That is what is meant by "overlapping benefits."

Now, there are two solutions I would put forward for these people. One solution would be to allow this overlapping and agree to this disabled person being allowed to join the scheme and pay contributions so that when he becomes 65 years of age, he can take the full 26s. and continue to get the £1 a week. That, it may be considered, would be a fair arrangement. Another possibility would be to give him credits such as those given to students, and the House may well ask, "Is it possible to justify giving him credits?" Well, he cannot ever earn again, and that is implicit in the fact that he is classed as unemployable. He has had service in the Armed Forces, and has, as a result, suffered this severe handicap. He cannot be expected to come into a situation where he would be able to repay. Another reason why he might receive special consideration is that the benefit he is to get by his payment of 4s. 8d. a week is going to be less than that which other people obtain; so much less that it might well be that he would consider it an advantage to stay out of the scheme.

The crofter is to be left out, but there is a temptation to him to come in because though, as might be the case, he can ill afford it, he may say "What shall I get?—I shall get two guineas for myself and my wife in my old age, and if I die there will be a substantial pension for my widow." But under the present arrangement the temptation, or inducement, to the ex-Service man whose situation I have described is not very strong. He will pay 4s. 8d. a week to get 26s. and lose £1 or one could say that he would pay 4s. 8d. to get 6s., whereas the crofter will pay it to get two guineas. There is a great discrepancy that might well be looked into.

To try to meet this difficulty, the Government have said they will allow these ex-Service men to stay out altogether if they wish. What is the consequence of that? Their widows, along with the widows of gypsies and crofters, and a few other exceptionally poor people—and it follows also the widows of those disabled in industry who take the same option not to come in—will be the one group of widows who do not receive a widow's pension but have to go to the public assistance committee. We do not want to create, as the years go on, a pool of widows who are in an invidious position, and particularly we would not like that pool to be the widows of ex-Service men. That, again, seems to me to be a reason for special consideration.

I will turn to Regulation 3 of Part II. There is a small point there that is worth mentioning. What is the justification for the delay of 13 weeks before certain disabled ex-Service men may draw full benefit? Contributions were paid on behalf of most of them while they were in the Forces, presumably they will have been to some training place where they will still have been kept in contribution, and then they go out to a job where they have to wait 13 weeks before they receive full benefit. Why? Can the Minister justify that, or explain it?

May I now direct attention to Regulation 5? Here we have another aspect of this question of overlapping benefits. The previous Government decided, in connection with ex-Service men's children and children's allowances, that an ex-Service man could draw both the children's allowance paid by the Ministry of Pensions and the 5s. a week general children's allowance payable to all persons, so that a duplication of benefits is there allowed. I think the decision was made by the Caretaker Government, but was implemented by the present Government. As a result, a disabled ex-Service man in the 100 per cent. category receives 7s. 6d. for his first child and 7s. 6d. plus 5s. for his second and all subsequent children.

If he comes into this scheme, whether he be an employed person, a self-employed person, or one of the unemployables to whom I have referred, he will have to pay the same contribution as anyone else, but he will not receive any children's allowance out of this fund. He will be paying the premium but receiving no benefit. As a matter of ordinary, plain equity it seems to me that one should receive what one pays for, and that the principle that he who pays the full premium should receive the full benefit is a sufficiently sound one to justify my argument, without any other argument. But I bring in support of the argument the fact that duplication of benefit has already been allowed. Why should it not be allowed for the first child, the one now left out, in this instance?

One word about the wives. The wife's allowance is not allowed to be doubled either. I claim that on the same principle that the man should get what he pays for, the wife's allowance should be allowed to be paid. If the Minister says that, on some ground of equity or public policy, he cannot do that, then I submit that he ought to charge less premium for those people. It cannot be right to compel one man to pay the same premium as another, and to take away from him some part of the benefit. If the Minister says that some part of the benefit comes out of the taxpayers' pockets and not out of the contributions, that will still leave an inequity in that proportion of the benefit which is contributed to.

I want to say a word about the question of option. All this problem for the unemployable person comes because the option is given to him to stay out. I repeat what I have said before, that while it would be hard to say that I object to the option, I do not think it is the best way of dealing with the matter. I do not want the disabled men to be out of the insurance scheme. There are great advantages for them in it. On the other hand, the benefits which they get are so much less than the benefits other people get. But it seems wrong to put in their way that temptation to opt out. Therefore, I want to register almost an objection to the option.

I hope that I have shown that some, at any rate, of the provisions of this set of regulations are obnoxious to disabled ex-Service men, because they treat them in a manner which is less generous than that accorded to ordinary persons who enter the scheme. I should like the ex-Service men who are disabled to enter the scheme gladly and willingly. I shall do everything in my power to persuade them to enter the scheme, but I think the terms on which they enter ought to be the same terms as those of other people and not less advantageous than those terms.

11.54 p.m.

Mr. Turton (Thirsk and Malton)

I beg to second the Motion.

In my view, these regulations relating to overlapping benefits are peculiarly—and, because of my view of the Minister and the Parliamentary Secretary,—surprisingly harsh and unfair to the disabled ex-Service men.

The Minister of National Insurance (Mr. James Griffiths)

There is a very big improvement on the Coalition Government's White Paper.

Mr. Turton

They are certainly disappointing to the disabled ex-Service men, and will mean that those men will get less than they are getting at present in many cases. Let me, first, take the point in Regulation 3, which disallows the disabled ex-Service man for 13 weeks from getting more than the 100 per cent. disability pension plus the 20s. unemployability benefit. That, for the reasons given by my hon. Friend the Member for Lonsdale (Sir I. Fraser) is unfair because in many cases those ex-Service men will have many contributions to their credit, from the time prior to their service in the Army, and also from the crediting of contributions when they were in the Service.

However, there is an additional inequality I want to bring out. As the regulation is drafted, the 100 per cent. disability pensioner will be at a disadvantage, whereas the man who has an 80 per cent. or less disability will not be at the same disadvantage. It seems to me to be quite wrong that this particular proviso should hit with special hardship the man whose disability pension is 80 per cent. or 100 per cent.; in other words, the 100 per cent. pensioner will be 6s. worse off and the 80 per cent. pensioner 1s. 6d. worse off. I should have thought that the Minister would not have wished to penalise this particular disabled ex-Service man, the man who has got this high rate of disability pension because of his service during the war. I hope that whatever else he does, he will review the proviso. I believe he would be well advised to cut it out completely, because I think that it is based on a misconception, the misconception that these men were not in insurance before, whereas they were. If he will not remove it entirely, then let him alter it so that it will not put this extra burden on those who have been grievously disabled.

May I now turn to the general question of the widows' and children's benefits? I take the view—and I may be in the minority—that the war pension schemes are not in the nature of an insurance scheme, but are the nation's compensation for the lack of earning power caused by injuries during the war. After all, I listened to the hon. Member for Aberavon (Mr. Cove) only half an hour ago saying with pride that the teacher who earned a breakdown pension under the teachers' scheme would draw that in full, in addition to his benefits under the insurance scheme; but when we come to the disabled ex-Service men, we find that they are treated in quite a different way. It is true that after the 13 weeks a man will get both his disability pension and his personal benefit, but look at the position of his wife and children. They will not draw anything more than the National Insurance benefit. Of course, the National Insurance benefit will be greater than the benefit under the war pensions. Therefore, they will be restricted to that National Insurance benefit. I think that is an inequality which neither side of the House should tolerate at the present time.

Look at the other position, that of the man who was probably ordered by the Ministry of National Service not to go into the Forces, but served the country in a civilian capacity. He earned during the war and saved from his earnings. That man will be able to draw the income from his savings, and, in addition, will draw his personal benefit and benefit in respect of his wife and children. There will be no reduction, in spite of the fact that he has the income from his savings. Why is it that when we turn to the disabled ex-Service man who has not got that income from savings during the war, but, quite the reverse, has lost earning capacity by loss of a leg or arm, we say it would he quite wrong to allow him to get 6s. a week in respect of his wife and in addition the wife's benefit under National Insurance? Surely, we are being mean and parsimonious in adopting that attitude towards disabled ex-Service men of the last war.

I hope that the Government will reconsider this matter. After all, these men who are to be at this great disadvantage are to pay the same contribution. We are asking a certain number of men to pay their contribution knowing that if they fall out of employment or if they get sick, they are not to get the same advantage as the rest of the community. They are to get for their contribution less benefit when the risk eventuates. I thought this scheme was a universal scheme of National Insurance.

I have always taken the view—and everybody in the House takes the view—that it is highly undesirable to have any party warfare on this question of National Insurance. It is a joint effort. I am rather sorry that the Minister tried to make some party capital when I began to speak on this matter. I really want to adopt a common viewpoint on this problem, and I hope the Minister will help us to avoid having to press this Prayer to a Division. I am fortified in that because I notice that these regulations are only provisional regulations, and not like the last, which have been sealed and stamped with the approval of the Advisory Committee. This is a tentative effort by the Minister, I understand, and I hope that when he sends that tentative effort for the consideration of the Advisory Committee, he will add to it his observations on the points we have made here tonight, and that he will suggest to the Advisory Committee that the position of disabled ex-Service men has not been treated adequately in these regulations and requires revision.

12.3 a.m.

The Parliamentary Secretary to the Ministry of National Insurance (Mr. Steele)

First, I should like to say that we recognise the great interest which the hon. Member for Lonsdale (Sir I. Fraser) always shows in these matters particularly relating to ex-Service men, and I should like to pay tribute to the knowledge he has shown in connection with these Regulations, because, frankly, of all the regulations that have come before me in the Department, these are the most complicated and the most difficult. They are difficult and complicated because of the past history of the social services in this country. Each Department has been responsible for its own part of the social services, and these have grown up more or less without any great relation to one another.

Now, when we are bringing in this great, comprehensive scheme, and are trying to relate all the various benefits and social services, it is natural that we should want to look at all these things afresh. If we had started with a clean slate, all this would have been very easy indeed, but unfortunately we had to try to fit all the other schemes into the new scheme. The majority of the difficult problems we have had have arisen in trying to fit the old into the new. It is with that background and within this framework that we have to consider these Overlapping Benefits Regulations, with the idea and conception which has motivated this Government in all the social legislation which has been passed since 1945. However, I think that it should be noted that in the Report of Sir William—now Lord—Beveridge attention was drawn to the fact that some provision would be required so far as overlapping was concerned, and that the Coalition Government White Paper also envisaged quite clearly that some provision would be necessary in regard to the overlapping of benefit.

When the National Insurance Act itself was being considered it is quite clear that, so far as the contributions are concerned, which, of course, are laid down in the Act, due account was taken of this principle of the non-duplication of benefits. At the same time, I ought to say that so far as the disablement pensions are concerned, both for industrial disablement and for war disablement, they are, of course, partly based, as the hon. Member said, on certain other factors which bring in different principles. Therefore, so far as the disablement pensioner is concerned—both for industrial and war disablement—obviously some special treatment is required.

My right hon. Friend recognised very early that this was a very difficult problem, and quite a number of meetings have been held at Carlton House Terrace with the British Legion and the Trades Union Congress, both separately and jointly. A great deal of consultation has taken place with these bodies, and it was after that consultation that these draft regulations were drawn up. Indeed, these draft regulations, which are provisional regulations so far as this House is concerned, are now before the National Insurance Advisory Committee. I understand that the British Legion and other interested bodies have put forward certain points of view there which no doubt will be considered by that body.

The hon. Member for Lonsdale (Sir I. Fraser) dealt particularly with the disablement pensioner, and he started by speaking of the position of the disablement pensioner who is unemployed; but I would like, first of all, to deal with the question of sickness benefit and then later I will come to the dependency provisions. The position here is a great improvement on the position before 5th July. There is a tremendous improvement in the position of the disablement pensioner who was disabled during war service. The position formerly was that a disablement pensioner was entitled to half sickness benefit for six months, and afterwards was not entitled to draw sickness benefit until he had made 104 insurance contributions. The position now is that a 100 per cent. disablement pensioner can, having had no work since his discharge, draw 20s. sickness benefit indefinitely. That is, I think, a great improvement on the previous position. If the disablement pensioner has less than 90 per cent. disablement, then there is no reduction in the sickness benefit, and the full 26s. is paid. That is assuming, of course, that he is an insured person. That point must always be borne in mind when discussing these matters.

There is a provision for unemployment similar to that which I have outlined for sickness benefit. In both cases the 100 per cent. disablement pensioner gets full benefit after 13 weeks' contributions have been paid. There is then a change from 104 weeks to 13 weeks for sickness benefit, although the provision is a new one for unemployment benefit. The reason we have put in this provision for unemployment is quite simple. First, we want to assimilate the conditions for unemployment benefit and for sickness benefit for a very good social reason. In the past men have been tempted to get a doctor's certificate certifying them fit for work merely so as to ensure that they got unemployment benefit at the higher rate rather than sickness benefit. We want to remove that temptation. The hon. Member for Lonsdale asked why 13 weeks at all? That is merely to restrict the rate until the man is really capable of work, because I am sure the hon. Member would recognise that it would be wrong for one disablement pensioner to receive more than another merely by getting a certificate of fitness from his doctor, which that other person was unable to obtain because he was in a worse position. That provision, therefore, is perfectly fair.

Sir I. Fraser

Will the hon. Gentleman now deal with the question of unemployability allowance, which is a different thing altogether?

Mr. Steele

I know that the hon. Member dealt very fully with that matter, but I am leaving it until a little later.

Mr. Turton

Would the hon. Gentleman deal with the point which I raised about the 100 per cent. pensioner losing 6s. a week, and the 90 per cent. pensioner—I said 80 per cent. but it should be go per cent.—losing 1s. 6d. per week? That is a great disparity.

Mr. Steele

All in good time. I want to deal with the matters in some sequence. So far as dependency is concerned, my first point is that we must recognise that the increase is for dependency. The principle is clear. For instance, under the National Insurance Act, if a dependant is earning then the person receiving the personal benefit does not get the dependency benefit, and so one might say, why not charge a lower rate of contribution in his case? The fact is, of course, that there is an average rate contribution, although the benefits may vary according to individual need. Take the bachelor for instance. He is paying a flat rate contribution at the same rate as the others, but he does not have dependants.

Mr. Turton

He is always hoping to.

Mr. Steele

And we would certainly not want to take that hope from him. If a man has a dependant and that dependant is working, he does not attract the dependency benefit. The pensioner is in exactly the same position.

I would now like to deal with the question of the unemployability supplement. The first thing that I would like to try to make clear is that this supplement is only provided where for some reason sickness benefit and unemployment benefit is not provided and it is, therefore, an alternative social provision to these other benefits, and the question of duplication does not arise.

Many of the persons receiving unemployability supplement of 20s. a week will have a latent right to sickness benefit from their past contributions or from the credits they have received during military service. If a person is receiving 100 per cent. or 90 per cent. pension, and has re-qualified under the old conditions before 5th July, he can forgo the unemployability supplement and receive 26s. a week sickness benefit. Therefore, so far as he is concerned, he can now get an increase of 6s. As he is also getting credits, he is not required to pay at all. For the person whose pension is less than 90 per cent., and who is insured, irrespective of whether he has re-qualified or not, the sickness benefit will not be affected, but he can get either sickness benefit or the unemployability supplement. A man who has not re-qualified for full benefit can continue on the unemployability supplement.

In all these cases where a man receives sickness benefit or where he continues to receive the supplement, there is no requirement for him to pay. He will be receiving credits under the scheme and these credits will qualify him for the retirement pension of 26s. a week with 16s. for his wife; then, of course, the unemployability supplement is withdrawn. So far as concerns the people who receive the supplement and who were not insured, they have come into the scheme as new entrants. Obviously, if people opt out of the scheme they cannot be entitled to the benefits and people with no insurance record cannot possibly get benefits in this case. I am sure that hon. Gentlemen will appreciate that at the moment there are between 8,000 and 9,000 war pensioners who are receiving an unemployability supplement. Out of that number I cannot say what proportion will fall into this uninsured group, but it is unlikely to be a high proportion, for many as I say, have insurance rights.

Therefore, I would say that the problem is not as great as one would imagine, and as far as widows are concerned it is true that if the death is attributable to war service, then the widow's pension is paid, but also if it is hastened by war service it can be paid as well. But there are likely to be only a few people, perhaps, involved in this particular case. To put the question as 6s. for 4s. 8d. is, I think, rather wrong, for quite frankly, as I see it, the majority—the vast majority—of those receiving unemployability supplement will not require to pay at all, because they will be getting either sickness benefit or credits under the scheme; but those who are not in this insured class, and especially those who are nearing pensionable age, will be wise to consider this question as far as their payment is concerned, for while it is true they would get 6s. extra because of the unemployability supplement, it is also true that, if married, it will mean not an extra 6s. but an extra 16s.

I have tried to indicate in this complicated subject just how these matters stand, but I may say one word in conclusion—that the whole question of non-duplication is inherent in the Act itself and what these regulations try to do is to ensure that the principle shall be reasonably applied. I think that it has been reasonably applied, and I think in many cases, we have been fairly generous. The National Insurance Advisory Committee, of course, are discussing these regulations at the present time and we will see that what has been said tonight is put before them, and I can assure hon. Members that, when the report is received from the Advisory Committee, the points which have been raised will be noted.

Mr. Turton

Will the hon. Gentleman deal with the points we made as to whether the 100 per cent. disability pension is only 6s. and the 80 per cent. nothing?

Mr. Steele

I will deal with it in this way. It is linked up with the 13 weeks. So far as the re-qualifying period is concerned, once the 90 per cent. to 100 per cent. disability pensioner has had his 13 weeks requalifying period—many of these people will have had the re-qualifying period under the old scheme—once that has been obtained, then, naturally, of course, full re-qualification is also obtained.

12.24 a.m.

Major Legge-Bourke (Isle of Ely)

I do not want to detain the House very long, but I think it is right that hon. Members should bear in mind that, under Section 30 of the Act, these regulations regarding overlapping benefits are not compulsory; in other words, the Minister may make regulations dealing with overlapping benefits. So far as I understand it, this means that where there is a justifiable case it is not necessary for the Minister definitely to introduce regulations which avoid overlapping. In fact, there is a permissive Section in the Act. My hon. Friend the Member for Lonsdale (Sir I. Fraser) has convinced the House that in these particular cases—the unemployable type of man—there is power for him to be excluded from the regulation altogether. I put this plea very strongly because I think there is nothing more tragic than the unemployable man.

Mr. Steele

So far as that is concerned, there are hardly any cases where this could apply.

Major Legge-Bourke

I am very glad to hear that, but even if there is one case, surely we should consider it. It is for this unfortunate man that I ask the Minister to make an effort to see whether he cannot find a way to let him out altogether.

12.26 a.m.

Sir I. Fraser

I would like to thank the Minister and the Parliamentary Secretary for the steps they have taken to ascertain the views and contributions which the British Legion and other organisations can make in this matter. I am aware that discussions are going on between the Advisory Committee and the British Legion, and I am very glad that what has been said in the House tonight will be brought to the notice of the Advisory Committee so that the facts may be taken into account. That is satisfactory so far as it goes, but I cannot say that the Parliamentary Secretary's answer was as satisfactory in some respects. He did not seem, if I may say so, to deny the points which we have made from this side of the House. The hon. Gentleman affirmed and confirmed them, and rather left us with the feeling that there is a small pocket of men who are not going to be well treated, but that there is nothing that can be done about them.

But is it only a small pocket? I think it is not. There is a substantial number of these men who have never attained the position of being voluntary contributors—a right they could have got over the last 15 years. But it took considerable will and some measure or education to know that these rights were available, and of the examples which I have taken, about half have allowed the voluntary contributions to lapse. If it is such a very small number, is not that a very good reason and argument why an exception should be made? I cannot say that I am altogether satisfied with the answer we have been given, but in view of the fact that the matter will come before the Advisory Committee for further consideration, I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.