§ Order for Second Reading, read
§ 5.32 p.m.
§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
I beg to move, "That the Bill be now read a Second time."
Northern Ireland, as part of the United Kingdom, pays the same taxes and has to maintain her social and other services on the same standards as Great Britain, but owing to her social and industrial conditions, the cost of these services is, in general, proportionately higher in Northern Ireland than in the rest of the United Kingdom. Parliament has recognised this fact for over 20 years. It has accepted the principle that the Imperial Exchequer should meet part of this extra cost. Agreements for this purpose have been made between the two governments from time to time since 1926. They are known as "re-insurance agreements" and they have to be ratified in short Acts of Parliament. One of these is now before the House.
The last agreement was made in September, 1946, and provided that the 1739 United Kingdom Exchequer should share in the excess cost of unemployment insurance, unemployment assistance, and family allowances in Northern Ireland. It was then recognised, as those who remember the Debate will know, that the agreement was only temporary, because the National Health Act, the National Insursance Act, and the National Insurance (Industrial Injuries) Act, all of 1946, were not to come into operation until 5th July, 1948. So, paragraph 7 (2) of the agreement of 1946 provided that the Treasury and the Ministry of Finance in Northern Ireland should consult together in order to make a further agreement when the full social security scheme had come into operation.
As hon. Members will observe from the Schedule, the general basis of the new agreement does not differ substantially from the agreement embodied in the Act of 1946. It does not, however, include national insurance or national insurance industrial injuries. Under Sections 63 and 84 respectively of the National Insurance and National Insurance (Industrial Injuries) Acts, provision was made for reciprocal arrangements for what was called "unified system" on the widest possible basis to be implemented between the two countries if, on examination, it was discovered that that was the better way of handling the matter. The matter has been considered by the two Governments, and it has been decided that it would be better to keep both these schemes outside the agreement now to be ratified.
The parity proportion mentioned in the old agreement was 2.2 per cent. This represented the estimated ratio of the total employed population in Northern Ireland to the same population in Great Britain and Northern Ireland together. In the new agreement the parity proportion has been fixed at 2.5 per cent., on a slightly different basis. The House will readily recognise that the benefits re-insured under this agreement cover the whole of the population and not just the employed part of the population, as was the case in the agreement to which I have referred. Therefore, the new ratio is calculated by reference to the ratio of the whole population of Northern Ireland to that of the United Kingdom.
One final word on the financial effect of this agreement. The payments that 1740 will be made by the United Kingdom Exchequer for the year 1948–49 are provisionally estimated, as is seen in the Explanatory and Financial Memorandum, at £2.4 million. I should perhaps remind the House that that only covers a period from 5th July, 1948, to 31st March, 1949—not a full year. I think it is only fair that I should indicate—because it is not in the Explanatory and Financial Memorandum—just how this £2.4 million is made up. As we estimate it, there will be about £540,000 towards national assistance, £758,000 towards non-contributory old age pensions, £658,000 towards family allowances, £ 292,000 towards the National Health Service, and £144,000 towards unemployment extended benefits. Those figures add up to £2,392,000—not much short of the £2.4 million.
I do not think I need say any more at this juncture in commending the Bill to the House. It is a short Measure. I hope the House will feel that it is non-controversial, and that we shall have its Second Reading without a Division.
§ 5.40 p.m.
§ Mr. Osbert Peake (Leeds, North)
This Bill, as the right hon. Gentleman explained, is a natural and inevitable sequel to the temporary agreement of 1946 that was embodied in the Act of that year and the coming into force on 5th July last of the additional or extended social services, such as the National Health Services, to which the right hon. Gentleman has referred. As he said, the 1946 Act was supported in all quarters of the House, and I hope that this Bill will be accepted in the same way. The right hon. Gentleman left one point a little vague, however, and as this is a Bill to embody an agreement and is therefore not susceptible to amendment on Committee stage, perhaps he will clear it up before we conclude this Debate. If the right hon. Gentleman will look at the Schedule, he will see that paragraph (ii) (b) provides for ascertainment of what is called "the net Exchequer cost" of the five services. Paragraph 2 (ii) provides that:If in respect of any financial year the total net Exchequer cost in Northern Ireland under Article 1 hereof exceeds 2.5 per cent. of the total net Exchequer cost in Great Britain and Northern Ireland there shall be paid to the Exchequer of Northern Ireland from the Exchequer of the United Kingdom 80 per cent. of the amount by which the said Exchequer cost in Northern Ireland exceeds the said 2.5 per cent.1741 There is a corresponding provision for payment from Northern Ireland if the cost of the services in Northern Ireland is less than 2.5 per cent. of the total cost throughout the United Kingdom.
The right hon. Gentleman said that this figure of 2.5 per cent. is now related, not to the total insured population, which was the method by which the figure of 2.2 per cent. was ascertained under the old agreement, but was ascertained by reference to the whole population in Northern Ireland as compared with the population of the United Kingdom. I am not clear whether that is the case because paragraph 2 (iii) provides for a review of this figure of 2.5 per cent. at the end of three years, and says:The Commissioners of His Majesty's Treasury and the Ministry of Finance for Northern Ireland shall review the said proportion of 2.5 per cent.… and shall take into consideration that the said proportion was calculated by reference to the proportions which at the date of this Agreement the population and taxable capacity of Northern Ireland bore respectively to the total population and total taxable capacity of Great Britain and Northern Ireland.It goes on to provide that if these two factors, not the one factor mentioned by the right hon. Gentleman, but the population factor and the taxable capacity, should vary, then there will be a review either up or down of this percentage.
The right hon. Gentleman ought to inform the House how it is proposed to go about this review if the population has risen, on the one hand, and the taxable capacity has diminished, on the other. Either or both of these two factors may vary upwards or downwards, and it is a little difficult for me to understand how this figure of 2.5 per cent. can be related to two variable factors. I hope the right Gentleman will say a further word about this before we conclude the Debate. Subject to these observations, we welcome the Bill and hope it will find a speedy place on the Statute Book.
§ 5.46 p.m.
§ Mr. Bing (Hornchurch)
I quite see that the Opposition should welcome this Bill. After all, it was the provision of these services subsidised by the people of Great Britain, which was the great stock in trade of the party opposite in the recent elections in Northern Ireland. But we on this side of the House ought to make certain when we are voting a sum of about £2½ million for social services in 1742 Northern Ireland that it is to be properly administered. We cannot just pay out money without any control over administration. I hope that in the course of the Debate we shall have some assurance from Members who sit for Northern Ireland that the Government of Northern Ireland will follow the same principle as the Government in this country, namely, consulting with the trade union interests. There are a number of consultative committees. Therefore, can we have an assurance that the Northern Ireland committee of the T.U.C. will be consulted in the same way as the T.U.C. is consulted over here? I do not think that that is an unreasonable request, and it is something which should be answered by one of the representatives for Northern Ireland.
§ 5.48 p.m.
§ Lieut.-Colonel Sir Walter Smiles (Down)
We in Northern Ireland think that this is a most desirable Bill, and we welcome it. There have been many agreements such as those of 1926, 1929 and 1936, but this is a wider agreement in that it includes the National Health Service and non-contributory old age pensions. It is most desirable in these matters that our social services should go hand-in-hand. The right hon. Member for Dumbarton Burghs (Mr. Kirkwood) will remember that when he and I were boys, there was a tremendous movement of shipyard workers between Glasgow. Belfast and Barrow. That is not the case today, the reason being that housing accommodation is limited in all these
§ Mr. Gallacher (Fife, West)
Is not the hon. and gallant Member aware that when some of us in the Clyde were in difficulty and any question of providing us with assistance was raised, the Tories always said it would sap our sturdy independence? Is not the hon. and gallant Member afraid that this aid will sap the independence of the people in Northern Ireland?
§ Sir W. Smiles
This is news to me. I have never heard of anything that will sap the sturdy independence of Scotsmen. During the war, a great many Englishmen and Scotsmen were fortunate enough to be stationed in Northern Ireland, and many were even more fortunate in that they managed to marry 1743 Irish girls. Many of these people paid insurance contributions when they were in England. Some of those men, with their wives, have gone back to England again but others have settled in Northern Ireland, and it would certainly be unfair if they missed the privileges they had in England and Scotland. Also we have a great many technicians and specialists working in Northern Ireland who have mostly come from England. I would first allude to the great factory of Courtaulds which is being erected at Carrickfergus. There is also Short Bros., of Rochester, who have transferred to Short and Harlands in Belfast, where many of their specialists and technicians are working, and there are factories in Newtownards and other places.
The hon. Member for Hornchurch (Mr. Bing) mentioned the cost of this but I am sure that he knows very well that the total contribution of Northern Ireland to the Exchequer here since partition is about £237 million and on the other side of the account is the sum of only £42 million. The hon. Member for Horn-church also mentioned the trade unions. I saw in my newspaper this morning that there is a bitter fight between the trade unions of Northern Ireland whether they are to be assimilated into and work with Eire or to work with the T.U.C. on this side. I have sat on bodies which consulted the trade unions in Northern Ireland. I admit that that was during the war, but I have always heard and found that the Northern Ireland Government are very willing to work hand-in-hand with the trade unions. Indeed, Mr. William Grant, the Minister of Health, is a shipwright and a prominent trade unionist himself. However, it is not a case of mere money. We may have given an Imperial contribution of £200 million to the Treasury here; we are glad and proud to do that, we are grateful for the social services we have in Northern Ireland, and we appreciate to the full the protection and privileges we enjoy under the Union Jack and as a part of the United Kingdom.
§ Mr. Bing
Is the hon. and gallant Gentleman the Member for Down (Sir W. Smiles) prepared to urge on the Northern Ireland Government that in each case where consultation takes place 1744 with the appropriate trade union in regard to social services in this country, the same consultation shall take place in Northern Ireland?
§ Sir W. Smiles
It would be unnecessary for me to do that, but I will certainly bring this Debate to the notice of the Prime Minister of Northern Ireland. However, I have never found him backward in consulting the trade unions.
§ 5.52 p.m.
§ Mr. Glenvil Hall
With the leave of the House, I will reply briefly to the few points which have been made. It is true that, in my very brief speech, I did not mention the fact that taxable capacity had also to be taken into account; but then I did not refer to the fact that a review would take place at the end of three years. I did not pretend to cover everything. The right hon. Gentleman the Member for North Leeds (Mr. Peake) is right in saying that such a review will take place and that the taxable capacity as well as the population will be taken into account in deciding whether a percentage of 2.5 is correct. He also asked how it would be possible to decide what the percentage would be, if both these factors varied independently. The resources of Government are fairly substantial and it is not beyond the wit of Government actuaries on both sides of the Irish Channel to, take these variable factors into account.
§ Mr. Glenvil Hall
Oh, yes. I should perhaps add that, even when the calculation comes to be made, it may not be exact. The final figure will be determined by agreement. I have no reason to doubt that this will be done amicably, without recourse to the machinery for referring difficulties which may arise to the Joint Exchequer Board.
I never expected to get through this Debate without a contribution from my hon. Friend the Member for Hornchurch (Mr. Bing). He asks a question which I am sure he does not expect me to answer; it would surprise him if I 1745 attempted to do so. His question was no more than trailing of his coat in true Irish fashion in front of hon. Gentlemen opposite. I leave it at that.
The hon. and gallant Gentleman the Member for Down (Sir W. Smiles) drew attention to the considerable contributions which have been and are being made by Northern Ireland towards the Imperial Exchequer. What he says is quite true. As I said when I began, Northern Ireland pays taxes like the rest of Great Britain and has never attempted to get out of its obligations. That should be noted because it is a definite fact.
§ Professor Savory (Queen's University of Belfast)
Will the right hon. Gentleman kindly confirm the statement of the hon. and gallant Member for Down (Sir W. Smiles) that the net contribution from Northern Ireland to the end of the last financial year was £195 million?
§ Mr. Glenvil Hall
It might well be. I can neither confirm nor deny it without having had time to add up the figures which I have here. If the hon. and gallant Member for Down has added up the figures, which are published and are accessible to anybody his answer is likely to be correct. His arithmetic is probably as good as mine.
It is only fair to Northern Ireland that I should say that there is no question of Northern Ireland's getting something to which she is not entitled. It is a fact that, under some of our insurance Acts, certain localities in England receive more than the citizens there actually contribute. We have to take one area with another in Great Britain and deal with the whole thing in global fashion. No one ever says that, because in Manchester at certain times when other Governments were in office more was drawn out in unemployment pay than was contributed by those who drew it, they were therefore getting something to which they were not entitled. All we are doing here is to apply the same principle to Northern Ireland because, at the moment, owing to 1746 the population and her social and industrial situation, it so happens that we have a lack of balance. We must remember that Northern Ireland is part of the British Isles and was loyal to this country during the war years. She is not getting something for nothing. We are simply readjusting as between two Parliaments and two areas what we do automatically between two areas in England.
§ Mr. Gallacher
As to the difference between Lancashire and Yorkshire and this country and Northern Ireland, is it not the case that in Northern Ireland we have a Tory Government which is very anxious to get financial assistance—
§ Mr. Deputy-Speaker (Major Milner)
That question has little or nothing to do with the Bill before the House.
§ Question put, and agreed to.
§ Bill read a Second time.
§ Bill committed to a Committee of the whole House for Monday next.—[Mr. Hannan.]