§ Amendments made: In line 5, leave out from "Act," to "for," in line 6.
§
In line 14, after "earnings," insert:
for relaxing the conditions for an increase of sickness benefit or a retirement pension under the said Act in respect of a wife engaged in gainful occupation."—[Dr. Summerskill.]
§ Motion made, and Question proposed, "That the Bill be now read the Third time."
§ 6.50 p.m.
§ Mr. HoughtonI shall not detain the House for more than a few minutes, but before the Bill passes to another place some comment should, I think, be made from these benches about the part which the Front Bench opposite has or has not played in the discussion of the Bill. Hon. Gentlemen opposite claim to be the joint architects of our National Insurance scheme. I have been wondering during today's debate, as I did during the Committee stage, whether right hon. and hon. Gentlemen opposite have resigned from that position. I am sure that we all expected this afternoon to hear from the right hon. Member for Leeds, North (Mr. Peake), what the attitude of His Majesty's Opposition is towards the Bill.
§ Mr. SpeakerThat matter has nothing to do with the Third Reading of the Bill. We are now concerned with what is in the Bill and not with anything outside the Bill. We are not concerned with what the attitude of any party is to the Bill. The Third Reading discussion must be related to what is in the Bill and to nothing else.
§ Mr. HoughtonIf I cannot pursue that point, I wish to draw attention to one or two aspects of the Bill which should receive the attention of His Majesty's Government.
In its original form the Bill proposed to differentiate in the amount of pensions between men who had reached the age of 70 and women who had reached the age of 65. In the Bill as now amended that differentiation, while not affecting those who reach or have reached pensionable age by the appointed day, will apply to those who reach it after the appointed day. Therefore, instead of the perpendicular line of demarcation which the original Clause 4 proposed to draw 283 between retirement pensions present and future, we have a horizontal line drawn straight across at the appointed day, dividing those who reach pensionable age into two distinct categories. They are those who reach that age before the appointed day and those who reach it after the appointed day. To those who reach it before, a higher rate of pension becomes payable, if they satisfy the other conditions of the Act. Those who reach pensionable age after the appointed day are to get only the rate of pension prescribed in the parent Act, except that the Bill proposes to give more liberal increases of pension to those who postpone their retirement.
I wish to emphasise the problems to which this differentiation is bound to give rise, and to urge my right hon. Friend to consider what should be done to meet them. It is not enough merely to leave the Bill as it stands without considering the consequences, and the anomalies and difficulties to which it will give rise, and to let the Bill go to another place without any supplementary action. I desire to stress once more the need for looking at all the social and industrial conditions which must now be linked with an entirely new principle in the application of our National Insurance scheme. I am not dissenting from the principle of differentiation. I supported it—I will be quite honest with the House—from the very outset. I believe there is an imperative need to combine two things: first, to meet the greater needs of older persons; second, to encourage the younger who reach pensionable age to continue at work for as long as they can.
With an ageing population, the future holds grave anxieties for Chancellors of the Exchequer, whosoever they may be. It contains serious anxieties for the standard of life of our people, because the number of people reaching pensionable age will steadily but surely increase. We may reach the position where we have a largely increasing number of retirement pensioners and either a static or even a diminishing number of productive workers. That is something which we cannot ignore in looking to the future of the National Insurance scheme. Therefore, I think that the principles of the Bill were really sound to begin with, although we are bound to admit that many persons 284 who had actually retired from work would find it difficult to re-enter employment. There was great strength in the argument that those who have retired, in the expectation that they would get whatever benefits were to accrue to those entitled to them under the National Insurance scheme, were entitled also to complain that something had been sprung upon them.
Their position has been met, but I am sure that the House will fully appreciate that we have only postponed the impact of the anomalies and difficulties between those who will get the lower rate of pension later and those who are to get the higher rate of pension now. Therefore, this new principle, for which I think there is strong need in present circumstances and will be necessary for years to come, a far as we can foresee, is designed to encourage people to remain at work for as long as they can. We have to adjust our insurance scheme, our vocational and superannuation schemes, and the conditions of retirement The whole structure of industrial employment must take into account the need for allowing people to work longer, not necessarily in the job in which they have been trained all their lives, but perhaps in a new job.
The Minister of Labour must soon begin to consider whether he should employ all the methods and experience which has been gained in connection with the rehabilitation of disabled persons as a means of encouraging or facilitating the continued employment of persons who otherwise would retire. It is a very big social and economic problem. It is the background to the Bill, the Third Reading of which we are about to pass. I hope that the aspects of the matter to which I have referred will be borne in mind, and that no time will be lost before considering all the implications of the Bill which we are now sending to another place.
§ 7.0 p.m.
§ Dr. SummerskillI have no intention of making a long speech on the Third Reading. I believe that the Bill has been debated exhaustively. The business has been expedited because I have been conscious of the good will which has exuded from both sides of the House—perhaps sometimes it was only comparative good will. I only want to say a word or two to my hon. Friend the Member for 285 Sowerby (Mr. Houghton), who has been very helpful during these discussions.
I am sure that he and all hon. Members realise that this is an interim Measure and that I have only attempted to improve certain benefits. I believe that it is agreed that I have not attempted to alter the main principles of the Bill, but the time must come when we shall have to look at the whole thing again. I should like to be the one who looks at it, but politics being what it is I do not suppose I shall be. Whenever that time comes, all the suggestions which I have received from both sides, and which I have been unable to accept, will be carefully examined.
We have, during the passage of the Bill manifested that common sense which is a British characteristic, and have arrived at a compromise which I think has been accepted by both sides. It will be necessary to introduce certain regulations, but these will for the most part be regulations of detail and I do not believe that they will for one moment cause any controversy. I am sure that all hon. Members want the Bill to come into operation as soon as possible, and therefore I ask them to exercise some forbearance in respect of these regulations.
We shall follow the negative Resolution procedure. I hope I shall not be misunderstood when I say that Prayers have no terrors for me. I am not asking hon. Members not to put down a Prayer if they have desires to do so. If they think it is necessary, let them pray and I will answer them; but if we are to bring the Bill into operation quickly—some of the provisions will come into operation soon after the Royal Assent, other important provisions on 1st September, and, I can assure the hon. Members, the rest on 1st October—well before the General Election—we must adhere to our timetable.
For that reason I ask both sides of the House to co-operate with me in that matter as they have co-operated in the passage of the Bill. We want the people who will benefit under the Bill to have that benefit as soon as possible.
§ 7.2 p.m.
Miss WardI am glad the Bill is on its way towards the Statute Book because I know that a great many of the additional benefits which it brings will give 286 a measure of real relief and satisfaction. I noticed with very great interest that the right hon. Lady said that she is delighted to answer prayers. That is rather tempting fate—
§ Dr. SummerskillThe hon. Lady must not misinterpret me. I am not "delighted" to answer Prayers. I do not like sitting up late at night; but Prayers hold no terrors for me.
Miss WardI thought that the right hon. Lady meant to say that she answered prayers in the proper sense. I was thinking of something quite different from what she had in her mind. In any event, I am sure that we should all like to congratulate her on the competent way in which she has conducted the Bill. She has been very helpful and very efficient, and I am sure that she will be very glad to have some of the concessions embodied in the Bill and secure from the Chancellor.
I should like one outstanding point to be clarified. We have heard that the benefits in this service are actuarially calculated. That is a principle of sound insurance with which none of us would disagree, but I am puzzled about it because, if that is so, I cannot understand why the right hon. Lady did offer these concessions when the original provisions for old age pensioners were introduced. If the fund is able at any time to carry increased benefits to people who need them, those increases ought to be given. I am a little surprised that, earlier, the right hon. Lady withheld the benefits which are now being given under the Bill, because they must now be actuarially possible or she would not be embodying them.
Why did not the right hon. Lady introduce these provisions in the first place? Is she holding money up her sleeve in order to give concessions when pressure is applied? If not, why could not these provisions have been embodied in the original Bill? I have no doubt that there is a very good answer. The right hon. Lady has made her speech, and I shall not press her to answer that point, but I want her to know that it has not escaped my examination of the Bill. Whenever an investigation is undertaken in the future I shall be watchful to see what improvements can be effected. I do not want to be unduly controversial. 287 and I congratulate the right hon. Lady, and I hope that those who will benefit under the Bill will feel that, in getting a stable fund, we have gone a little way along the road towards meeting some of the problems of those who draw benefits.
§ Dr. Summerskill rose—
§ Mr. SpeakerThe right hon. Lady has already spoken. She can only speak again by leave of the House.
§ Dr. SummerskillI beg to ask the leave of the House to speak again to answer the hon. Lady's question, which was a rather pointed one. I have a good answer to it. When the fund was originally established, it was assumed that there would be 8 per cent. of unemployment in this country. Fortunately for the country we have had a Labour Government, with the result that 8 per cent. of unemployment has not been realised. We have had only 2 per cent. of unemployment—sometimes less than 2 per cent.—with the result that the fund is in a healthy condition and we can now give the extra benefits.
§ Mr. SpeakerThe hon. Lady has already spoken. She can only speak again by leave of the House.
Miss WardSurely the procedure of saying "Before an hon. Member sits down" is very often adopted in the House?
§ Mr. SpeakerNo. I have objected before. I do not like this cross-examination on the Report stage or the Third Reading. One can only rise to speak again by leave of the House, and not by any other means.
Miss WardMight I, as the right hon. Lady did, ask the permission of the House to ask a question? [HON. MEMBERS: "No!"] May I ask—[HON. MEMBERS: "No!"]
§ Mr. SpeakerApparently, leave is not given. Mr. Shurmer.
§ 7.9 p.m.
§ Mr. ShurmerI congratulate my right hon. Friend and thank her for the concessions, but I still believe, as my hon. Friend the Member for Sowerby (Mr. Houghton) has said, that when the Bill 288 comes into operation there will be many difficulties and anomalies. I should like to express my sorrow that it has not been possible to fix the appointed day much earlier. Many of us have been in touch with the old age pensioners during the Recess. In some areas there are means of getting in touch with them. In Birmingham we have a number of homes of rest where I have met some of them. I have found that they have been delighted that we have been able to increase the benefit, but, rather strangely—no party and no Government could have prevented it—since the introduction of the Bill the cost of living has risen very rapidly.
Increases of ½d., 1d., 2d. and 3d. on things have come along, but the old age pensioners have to wait until the "appointed day." These old people are already finding things very hard. On the other hand, people in employment are asking for increases in wages, and in some cases are getting them, to cope with the increased cost of living. I wish that my right hon. Friend could set the appointed day much earlier, because the old age pensioners will suffer very badly in the interval before 1st September.
There is as yet no increase in Assistance Board scales. It will be of no use, therefore, to tell a pensioner to go to them when their scales are laid down for the interval until any increase is effective in the old age pension. The extra pennies and twopences, and even more, on the cost of commodities which they need to purchase will debar old age pensioners from many things.
Many of the old age pensioners to whom I have talked are, however, thankful and realise that they are far better off today under a Labour Government, even if the cost of living has gone up since 1938. I doubt whether they would be getting as much as they are now receiving if the party opposite were in power. Nevertheless, they are still suffering. I do not altogether blame the right hon. Lady and her Department, for I appreciate the difficulties which have to be overcome. I must, however, express my sorrow that the old folk must wait another three months, still continuing to pay the extra pennies and twopences for the things they purchase, until they get the increased pension.
§ 7.12 p.m.
§ Mr. J. Enoch Powell (Wolverhampton, South-West)I was glad that the right hon. Lady, at this last stage of the Bill, re-emphasised what she said on Second Reading—that it was of the nature of an interim Measure—and I believe that a consideration of the changes of principle which the Bill introduces into the insurance scheme reinforces that view. The Bill, for the first time within the framework of the National Insurance scheme, recognises the fact that the retirement pensions now being paid are already below the minimum which is necessary to maintain a possible standard of living. There has, of course, already been a recognition of that fact indirectly through the alteration in the assistance rates.
The effect of this recognition within the insurance scheme is that there will henceforth be three types of retirement pension. In putting these three types forward, I am ignoring as purely transitional the effect of the Amendment which was made to the Bill upon the Minister's Motion this afternoon on Report stage. There will be a retirement pension, subject to means test, between 65 and 66½ years of age, because no person wishing to retire at 65 or before 66½ and having no other means will be able to do so without proving need to the Assistance Board and obtaining a supplement. That is the first type of retirement pension which results: between the ages of 65 and 66½, subject to means test.
§ Mr. Ellis Smith (Stoke-on-Trent, South)Needs test.
§ Mr. PowellSubject to needs test. Then, between 66½ and 70, there will be a retirement pension conditional upon retirement, composed of the old basic rate plus the increment. Finally, there will be the retirement pension, without condition, after 70 years of age at the new basic rate.
That effect which the Bill has is a change of principle, and an important one. For the first time it brings the principle of the needs test, or the means test, into the retirement pension. A little while ago, great distaste was being expressed upon both sides of the House to the idea of the means test being brought 290 into the Bill in a very minor matter; but the means test is already in the Bill in an essential matter.
§ Mr. Ellis SmithI hope that the hon. Member will use the correct expression of "needs test," because those of us who have had many years' experience—this applies also to the hon. Member—know that there is a fundamental difference between a means test and a needs test.
§ Mr. PowellI do not want to enter into the many meanings which "means test" or "needs test" can have—whether it means the "household means test" or the "personal means test" and so on. I was naturally using the expression in the sense of the personal means test, and if the hon. Member will accept it in that way, perhaps he will forgive me for any slip of the tongue which there may have been.
In introducing the means test into the principle of the retirement pension, if only between the ages of 65 and 66½, we are making a most important change. It is a change which is likely to go further, because—and make no mistake about this—as the value of money continues to fall, in so far as it continues to fall, that age band, which at present is between 65 and 66½, will broaden, and the principle of the means test, having made this narrow intrusion, having inserted this thin end of the wedge, will thereafter broaden. We shall thereby be blurring two quite different principles which, I am sure, most hon. Members on both sides want to keep quite separate: the principle of insurance and the principle of assistance. By the Bill, we are bringing those two principles nearer together, and that is a dangerous position into which to be forced.
A second result of this change of principle—for such I believe it to be—is that it reflects, and will increasingly reflect, upon the principle of compulsory contributions. It is one thing to say to every citizen, "You shall contribute to our insurance scheme, for that insurance scheme is going to provide you unconditionally with a certain pension at a certain age." It is a very different thing to say to him, "You must subscribe to this scheme, but of course when you come to need it you will then have to go to the Assistance Board and prove need before you can get the minimum sum 291 which you require." So we are breaking into the insurance principle and we are breaking into the compulsory principle by this apparently small shift which we are making by means of the Bill.
The conclusion which I draw is that the urgency of the review of the National Insurance scheme, which is due at present in 1954, is greatly increased by the fact that we have passed this Bill. I hope that steps will be taken to bring that review forward, so that it can be carried out as soon as possible.
§ 7.18 p.m.
§ Mr. John McKay (Wallsend)I did not intend to speak until I heard the speech of the hon. Member for Wolverhampton, South-West (Mr. Powell), who emphasised that the Bill introduces a new principle relating to the needs test. The hon. Member is entirely wrong, and I should like him to tell me of any part of the Bill which introduces a needs test or a means test of any kind. As far as this principle is concerned, the Bill in no way changes the existing position. Any number of old pensioners previously receiving a pension had to go to the National Assistance Board and undergo the so-called needs test. Therefore, if, in future, a pensioner finds mat his pension is not sufficient, he merely has to do the same as was done under earlier legislation.
Pensions introduced in this Bill do not meet the minimum needs of pensioners. That is shown by the fact that the National Assistance Act and the National Assistance regulations go far beyond the pensions. When the Bill is implemented an aged pensioner can draw 50s. for himself and his wife, but if the National Assistance scales are amended on the lines suggested, that couple can apply for assistance and, in addition to the 50s. pension, they can get rent and many other things. As a Government we are recognising that the pension as such is not sufficient to meet the needs of the aged people. That is why, behind it, there is the National Assistance Act, which gives them a much higher income if they need it. All they have to do is to apply for it. What we want to publicise is that there is no change in the principle of the Bill compared with that of the regulations.
§ 7.22 p.m.
§ Mr. TurtonI find this Bill very disturbing because I believe it offends against an important principle of insurance. The right hon. Lady, in a short intervention, talked of the concessions she had won from the Chancellor of the Exchequer, but surely what the Bill does is to take the surplus in the Insurance Fund, now running at about £140 million a year, and the Chancellor is getting out—
§ Dr. SummerskillI would like the hon. Member to withdraw that, because I made no such statement.
§ Mr. TurtonIf the right hon. Lady did not make it, I withdraw, but I have it on my note. I am sure she would not contradict that she said that the reason why she could make this general provision was that thanks to a Socialist Government, unemployment was 2 per cent. instead of 8 per cent. Therefore, although she could not give the concession when the Bill was first introduced, she is able to give it now. Be that as it may, other hon. Members have spoken of concessions from the Chancellor of the Exchequer whereas the surplus which is running at £140 million a year is being dispersed at the order of the Chancellor; £46 million a year of that is to go back to the contributors to the Insurance Fund and the remainder is to go to the benefit of the Exchequer. That seems to offend the whole principle of the Beveridge Plan and the Insurance Act of 1946.
There may be two conceptions of National Insurance. I remember how actively in the Middle East we discussed the Beveridge Plan when it came out. There was an idea that the State should give assistance to those in misfortune and that assistance was to be aided by a contribution from those in a more fortunate position, namely, from contributors in work. That always seemed entirely wrong to me. It was the old system of the dole. The other conception, in which I believe, is that this social insurance is a solemn contract entered into by three parties, the State, the employer and the employee. It is a compulsory insurance and for that reason Parliament should be very chary about altering those proportions and certainly should only do so for sound insurance reasons. This is something quite different. The origin of this Bill is that the Chancellor of the 293 Exchequer wishes, for financial reasons, to have no surplus in that Fund.
It is all very well for hon. Members to talk, as I heard the hon. Member for the Scotland Division of Liverpool (Mr. Logan) talk, about it being the happiest moment of his life when the right hon. Lady made some concessions. The contributors were losing because the Chancellor of the Exchequer wanted to rearrange the country's finances. If we alter the contributions the Bill should scale down contributions all round or, alternatively, if the Government want to get rid of the surplus they should put up the benefits. That may well have certain inflationary effects which the Chancellor wants to avoid, but the fair and right thing, if £90 million a year is to come out of the Fund, is for the employer, the employee and the Exchequer each to have a rebate of contributions.
It has been laid down ever since 1946 that the contributions to the unemployment section of the Insurance Fund should be equal, an equal third from the Exchequer, an equal third from industry and an equal third from the employed man. As I read the figures and analyse this cutting down from 2s. 1d. to 1s. 4d., it means that in future half the contributions to unemployment insurance will come from the worker and half from the industry and the Chancellor will get off scot free.
This is a State Insurance scheme. If this had been done under a private insurance scheme—and we must remember there is a great number of contributors in this scheme who, before 1946, were voluntary contributors and had their remedy against an insurance company if it defaulted and tried to break a contract—the contributor could go to court and be paid damages for breach of contract or he would have other legal remedy. Under this scheme the only remedy is in Parliament and I am surprised that there have not been more hon. Members of all parties to object to the action taken by the Government in this Bill.
§ Question put, and agreed to.
§ Bill accordingly read the Third time, and passed.