§ 3.40 p.m.
§ The Minister of National Insurance (Mr. Osbert Peake)
I beg to move, in page 7, line 35, at the end, to insert:
§ Amendment proposes to increase the existing rate of benefit by about 25 per cent. We are very grateful for the favourable consideration of the right hon. Gentleman, and we certainly accept this Amendment.
§ Mr. Tom Brown (Ince)
I am concerned about this Amendment, as are my mining colleagues on this side of the House, as it refers to industrial hardship. Is this the result of the promise given by the Minister during the Committee stage? If so, has he consulted the T.U.C., as he promised? He will recall that, in trying to obtain some improvement of the hardship benefit, we attempted to extract from the Minister a promise then. He said it was a complicated matter and he did not wish to interfere without further consultation with the T.U.C. I asked him on 20th May if he would be able to consult the joint council of the T.U.C. between then and Report stage.
Are we to take it that this Amendment, about which I am not complaining, has the approval of the Social Insurance Committee of the T.U.C. General Council? If the Minister has not consulted them will he say why he has not done so, so that we can reach common agreement on whether it should be 55s. or 60s., as the case may be?
§ 3.45 p.m.
§ Mr. James Griffiths (Llanelly)
I fully support, as do my right hon. and hon. Friends, the proposal put forward by the Minister. But I wish to put one point to him, which, I hope, is in order. Does this mean that the only benefit which is not now equated to the other increases is the hardship allocation allowance? First it was 11s. 3d. and then 20s., and, as I understand, it still remains at 20s. Will the Minister reconsider that?
1673 Since 1948, were it not for the hardship allowance and the increase which was made, the scheme would undoubtedly have broken down, to the sorrow of the Minister who produced the White Paper and of myself who piloted the Bill. It would have been a calamity, and therefore I would ask if the hardship allowance is the only allowance which has not increased proportionately and whether it would be considered wise to increase it?
§ Mr. Peake
This Amendment has not been the subject of discussion with the T.U.C. and I gave no undertaking in relation to this matter that I would have further consultations with the T.U.C. But I should be very surprised to hear that there could possibly be anything in this Amendment to which they could take the slightest objection.
The undertaking which I gave about consultation with the T.U.C. referred to a different matter, the special hardship allowance to which the right hon. Member for Llanelly (Mr. J. Griffiths) has referred. This allowance is not covered by the Bill. The right hon. Gentleman was the author of a Bill brought in in 1948 which increased the allowance considerably above the rate at which it has been fixed in 1946. There are further complications connected with the question of special hardship which I express the desire to discuss with the T.U.C. I shall carry out those discussions and I hope that we shall arrive at some satisfactory conclusion. Hon. Members know that there is to be a further Bill dealing with industrial injuries as soon as Parliamentary time permits.
§ Mr. J. Griffiths
I am glad the right hon. Gentleman is to have discussions on this problem. I produced a Bill because I was satisfied that if I did not this scheme would break down, because it would leave too big a gap which was not covered. My present concern is that when this Bill becomes an Act that will immediately show itself again, and I am anxious to see the scheme a success. I believe that there would be great difficulties if the Minister does not do what I have suggested, and I am sure that the T.U.C. will represent that to him.
Amendment agreed to.
§ 3.50 p.m.
§ Mr. Peake
I beg to move, "That the Bill be now read the Third time."
Very little remains to be said on the Third Reading of this Bill. I should like immediately to express my gratitude to hon. Members on both sides of the House for their response to my appeal that we should conclude our proceedings before the Whitsun Recess, and thereby enable the improved benefits contained in the Bill to become operative on the dates at which we have aimed.
The Bill has limited but important objectives. We deliberately set out to maintain the structure of social security as it was originally embodied in the three great Acts of 1945 and 1946—the Family Allowances Act, the National Insurance (Industrial Injuries) Act and the National Insurance Act. The Bill makes no change in their structure; indeed, in one important respect, by re-establishing uniformity for the main rates under the National Insurance Act, it restores the original structure adopted in 1946.
The improvement in the family allowance rate has been very generally welcomed. It will do something to protect the larger families against the steady rise in the cost of living which has gone on since the original Act was introduced. So far as industrial injuries and National Insurance are concerned, the purpose of the Bill is to raise by approximately 25 per cent. the main rates embodied in the principal Acts which came into full operation in July, 1948.
I claimed on Second Reading, and I quite unrepentently adhere to my claim, that the Bill restores those benefit rates and gives them the purchasing power which they commanded in 1948. In the Standing Committee upstairs the right hon. Lady the Member for Fulham, West (Dr. Summerskill) who, I am sorry to say, is unable to be here today, suggested, and adduced in her support a leading article in "The Times," that the rates of benefit for National Insurance should have been raised by a percentage more nearly equal to the rise in the Assistance scales which has taken place since 1948.
I do not intend to embark now upon a long disquisition on this interesting question. It was argued by the right hon. Lady, with some support from "The Times," that, in fixing insurance benefits and pension rates at minimum retirement 1675 age, we should have regard to some special cost-of-living index, not yet devised, which should take account only of the bare necessities of existence. It would also have to take into account the question of rent, which is made the subject of a separate allowance under National Assistance. It is material to remember that rent is one of the most variable factors in our economy. In the older cottages in the rural areas, it may be only 2s. or 3s. a week, and in the newer blocks of flats, and so on, in the densely populated areas, it may be 35s. or even 40s. a week.
I shall content myself at this stage by saying that in comparing the insurance benefits provided by this Bill with the rates enforced in 1948, and in using the Ministry of Labour cost-of-living index for that purpose. I have followed the example set by two of my predecessors, the right hon. Gentleman the Member for Llanelly (Mr. J. Griffiths) and the right hon. Lady the Member for Fulham, West. When the right hon. Gentleman the Member for Llanelly, whom we are glad to see here today, was moving the Second Reading of the Bill in 1946, he referred to the announcement by the then Chancellor of the Exchequer, the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) that he intended to hold the cost of living at 31 per cent. above the 1939 level.
The right hon. Gentleman the Member for Llanelly said:We decided, therefore, to review the leading rates proposed in the White Paper and in the Beveridge Report on the basis of an overall addition of 31 per cent. instead of 25 per cent."—[OFFICIAL REPORT, 6th February, 1946; Vol. 418, c. 1742.]The right hon. Gentleman was there making use of the "all-items index" prepared by the Ministry of Labour. When we discussed the Money Resolution to that Bill on 11th February, 1946, the right hon. Gentleman said, in reference to the quinquennial review which is to take place following the close of the financial year, 1954:If by the time I come to make my review in five years. …The right hon. Gentleman assumed that he would be making the review.
§ Mr. Peake
We shall have to see whose duty it is to make that review. The right hon. Gentleman, assuming that it would be his duty, said:If by the time I come to make my review in five years, the Ministry of Labour has adopted, with the approval of the House, a new cost-of-living index figure, I shall accept that fully as a basis upon which I can make my review."—[OFFICIAL REPORT, 11th February, 1946: Vol. 419, c. 134–51.]As right hon. and hon. Gentlemen know, the Ministry of Labour have prepared a new index since the right hon. Gentleman made that speech and it is by that index that I have made the calculations which I gave to the House during the Second Reading debate. The right hon. Lady the Member for Fulham, West was asked a Question about the basis of calculation of the social insurance benefits, by the hon. and gallant Member for Renfrew, East (Major Lloyd) on 4th April, 1950. In reply, she referred the hon. Member to the explanations given by her predecessor on the dates which I have mentioned, to which she said that she did not think she could usefully add.
Therefore, I have only followed the example of my two predecessors in comparing the scale of benefit which I proposed with previous rates in relationship to the "all-items" cost-of-living index figure. It is an open question what basis should be adopted for the quinquennial review contemplated by Section 40 of the Act.
§ Mr. Harold Finch (Bedwellty)
The right hon. Gentleman has mentioned figures in connection with the National Insurance (Industrial Injuries) Act which came into operation in 1948, but the rates of benefit were fixed in 1946.
§ Mr. Peake
Everybody appreciates that the Acts were passed in 1946 and came into full operation in July, 1948. In relation to this interesting question about the cost-of-living index it is an open question still as to what basis should be 1677 adopted for the quinquennial review of benefits contemplated by Section 40 of the National Insurance Act which will commence in 1954. It would, however, be wrong for me to prejudge that issue now and, in making the comparison upon the basis which I have done I have followed the example set by my two predecessors at the Ministry of National Insurance.
I do not want to repeat today what I said on Second Reading about the immensity of the burden we have undertaken by the commitments we have entered into under the National Insurance Scheme in connection with the aged.
There have been many signs in our debates that hon. Members appreciate how great this burden is going to be, but I am afraid that it is not at all understood or appreciated by the public at large. Columns of figures, especially when expressed in millions, mean very little to the man in the street, and I have, therefore, had the figures translated into graphic or pictorial form and will incorporate them in this way in our next Annual Report. As it may be some months before it is ready, I should be happy to provide any hon. Member with an advance copy which illustrates vividly the weight of the burden that we have Scheme in connection with the aged. There have been many signs in our tory review, some hard thinking will be necessary. Our debates on this Bill have shown that all parties can and will make their contribution in a helpful and constructive way. The insurance principle is dear to the hearts of the British people. and I know that it is the desire of all of us here to maintain and strengthen it. This Bill is a step, and, in my opinion, a considerable step, in the right direction. It fulfils the pledge which we gave to the people at the time of the Election, and I commend it whole-heartedly to the House.
§ 4.1 p.m.
Mr. B. Taylor
I appreciate the comments which the Minister has made about the co-operation which he has received from both sides of the House. We have endeavoured, and, from what the right hon. Gentleman has said, it appears that he is satisfied that we have succeeded, to reciprocate what he said during the Second Reading debate, when he expressed the hope that it would be possible to get this Bill through all its stages by 1678 today, so that the time-table concerning the appointed days could be carried out by his Department.
The right hon. Gentleman has made some reference to the cost of living. For this purpose, I prefer to go back to the time when the index came into operation in January, 1947. As I said on Second Reading, there was no dispute about the percentage increases, and it was only the question of the dates upon which we did not secure unanimity. The Minister takes July, 1948, and, for my own purpose, I take January, 1947, and it is the case that, on the same basis as that upon which the Minister has based his remarks, the increase in the cost of living from that date until January of this year is one-third.
There is, however, another important factor in this connection. There are many things which people go without when they fall into adversity, but there are three things that are absolutely essential. The three basic commodities that I want to mention, and they are included in the index to which we have referred, are food, clothes, and fuel. Those are the three things which everybody requires, whether in prosperity or in adversity.
It is the case that, in these three commodities, from June, 1947, to January, 1952, there has been an increase of no less than 46 per cent. Food has increased more than clothing and fuel, but, putting all these together, the average increase is 46 per cent. With that thought in mind, I have felt, ever since I saw the Bill in print, that the proposals of the Minister respecting the improvements in the benefits only went some of the way, and not all the way, to meet the increase in the cost of living which has taken place.
Having now reached the Third Reading of this Bill, I must confess that I have a feeling of disappointment that we have not been successful in obtaining further improvements in these rates of benefit concerning both the benefits under the main scheme and those under the Industrial Injuries Act as well.
I have known the right hon. Gentleman a long time. My first happy experience of him was as far back as 1943, when we were discussing increasing the rates of workmen's compensation and introducing the new benefits scheme for pneumoconiosis, and. from that time until 1679 now, the right hon. Gentleman has not been unresponsive. I do not think, however, that on this occasion he has been master in his own house, but that there has been behind him all the time what I may call the dead hand of the Treasury. We still believe that the proposals which we put forward for improvements in the rates of benefit could have been made, and I regret that the right hon. Gentleman was unable to accept them.
I want to say a word or two on the constant attendance allowance. It will be within the recollection of the House that this is the only concession which the Minister made. There was a saying when I was a boy, which I commend to the Minister for his consideration, which ran, "Be thankful for small mercies, but take big ones if you can get them." We are glad that the Minister has found it possible to make this 25 per cent. increase in the constant attendance allowance. The people who need attendance by a diligent wife or mother or by a very close friend are all bad cases, and I am expressing not only my own pleasure, but I think the pleasure of hon. Members in all parts of the House, that the constant attendance allowance has been favourably reviewed and improved.
I share the regret of my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) that it has not been possible to increase in the same ratio as the other benefits, poor as that may be, the hardship allowance which means so much to those people who cannot return to their pre-accident work or to work of equivalent standing. We had a long discussion about this during the Committee stage. We shall have to leave it at that, but I hope that the Trades Union Congress, when the Minister meets them, will have something very significant to say on this particular point, and that, in the not too distant future, it will be possible for this special benefit to be reviewed more favourably than has been the case on this occasion.
There are only two other observations I wish to make. One concerns Clause 5 (2), dealing with what I would call the forgotten class for old age pensioners—the non-contributories. This situation has been in existence for more than 40 years; in fact, since 1908, and these people have 1680 been subject to great fluctuations so far as the rates are concerned. During the Committee stage, the right hon. Gentleman said that the new rates embodied in this Bill are part of a balanced scheme for the improvement of almost every class of pensioner.
As far as I can see, in the light of that statement—and I leave it at this—the noncontributory pensioners have been left out in the cold. In 1946, their rates were increased two and a half times. Their benefit might be anything from a few shillings up to the maximum, and I could have wished that the Minister had included them. There are only 420,000 of them, and the cost, which I know falls directly on the Exchequer, is about—
§ Mr. Speaker
The House must remember that we are now on Third Reading and that the rules of order governing what one can refer to rather restrict the debate. I think the hon. Member is going rather wide of those rules.
I shall not pursue the matter any further, Mr. Speaker, but I was anxious to include in this great human problem, so far as old-age pensions are concerned, this very small number of people.
Just a word about the administration. I can quite understand the anxiety of the Minister to get this Bill through in order to keep to his time-table. It is a big job. Those of us who have been at the Department know that this sort of thing cannot be done overnight. It is not done by batting the eye or rubbing the hand. It is a herculean task, and I wish the Minister and all members of his staff the best of good fortune and luck in this colossal undertaking.
The Ministry has an excellent staff both at headquarters and in the regions. I have visited all of them myself. There is an excellent body of people at the Record Office at Newcastle and in the nearly 1,000 local offices, and I am sure that the Minister, in his desire to keep to the time-table, will have their loyal co-operation. The passing of this Bill will be the signal for administrative action so that the improved benefits, as poor as we think they are, can be paid on the appointed days.
§ Mr. Raymond Gower (Barry)
The principal Act of 1946 was one of which the then Minister the right hon. Member for Llanelly (Mr. J. Griffiths) and his Government could be proud. In the same way I think that today, even after making allowance for certain criticisms and the desire that there always is for more, the present Minister and his Government may justly be proud of this Bill. When we consider that, whether we like it or not, we are at present in a position of extreme financial stringency and peril the fact that almost £50 million is being devoted to increased benefits under the Bill is something very considerable.
The Minister quite rightly drew attention to the dangerous possibilities for the future, and I think that the simplified illustration drawn by him might, to some degree, serve a good purpose if it could be brought to the attention of every beneficiary under this Bill, and, indeed, to every citizen in this country. The effect would be even greater were it accompanied by a copy of the opening remarks of the hon. Member for Sowerby (Mr. Houghton) in a speech he made on the Committee stage of the Bill.
It is in that light that we can understand why the Minister was unable in some respects to concede additional benefits to certain classes whose cause we pleaded both on Second Reading and in Committee. As I said during those stages, I am an inveterate supporter of the class popularly known as the "10s. widows." Therefore, while I accept what the Minister has told us, and while I fully realise the dangerous position facing us, I hope that the Minister will bring that particular class of people to the notice of his right hon. Friend the Chancellor, because I believe that they, possibly above all others, are entitled to some special consideration, not under this legislation, but from the Treasury. I think we should cordially support the Third Reading of the Bill.
§ 4.17 p.m.
§ Mr. Thomas Hubbard (Kirkcaldy Burghs)
I do not wish to be in any way ungenerous to the Minister—indeed, I am very happy that this Bill has been brought to its present stage at this time—but I would remind the hon. Member for Barry (Mr. Gower) that it not only provides for 1682 increased benefits, but also for increased payments, and that when we speak in terms of money approximately only one-seventh of the sum involved will be a contribution from the Treasury.
I was dealing, of course, with the figures given by the Minister's hon. Friend.
This Bill, like al1 other Bills, is not perfect. Bearing in mind the position that is rapidly developing in the country, it can only be regarded as a stop-gap Measure to carry us over until 1954. Therefore, it is limited in its scope, and the time must come when some Government or other must consider the whole question of benefits and superannuation payments in relation to the increasing longevity of the people of this country.
Because of this fact, the figure mentioned by the Minister will become an ever increasing figure, and at some time or other the whole basis of insurance benefits and pensions will have to be altered. Therefore, although I welcome this Bill, and particularly its timing, I think that a great deal of serious thinking will have to be done in the interval so that we may ultimately have a pension scheme which will meet the needs of the future.
There are some features of the Bill which I like very much. I recall that I, together with my hon. Friend the Member for Ince (Mr. T. Brown), and some other hon. Members, led a deputation of old-age pensioners to the Minister of National Insurance, in March last, when we stressed the differential rates of pensions paid to old-age pensioners. We pointed out that some of them who reached pensionable age after October, 1950, continued to receive only 26s. One of the good features of this Bill is that old-age pensioners no longer suffer these differential rates.
On the other hand, I suggest that it is not entirely equitable to say that an old-age pensioner or a person permanently unable to earn his livelihood is in the 1683 same position as those temporarily incapacitated through sickness or those temporarily unemployed. Obviously, a person who has the benefit even of only this figure given in the Bill for a short period can rub along fairly well, but he will find it increasingly difficult to do so as month after month and year after year goes by, and I regret very much that something has not been done to see that those not in gainful occupation have a considerably increased allowance
. On Third Reading it would be wrong of me to suggest any alteration in the figure, but I think I am entitled to call attention to the lowness of the figure as it applies in certain cases. I think that that must engage the attention of the Minister in the near future.
As to the assessment of the cost of living, not by any stretch of the imagination can it be said that an old age pensioners' cost of living scales are the same as those of someone in gainful occupation. The amount of things an old-age pensioner spends his money on—can spend his money on—is very limited. The cost of those commodities ought to be taken into account in assessing the cost of living of that type of person. The figure here does not differ very much from that which the right hon. Gentleman gave recently, and it is calculated that it is necessary to add 34s. 4d. to give to the pension the purchasing power it had in 1946.
The principle of insurance, of course, is one with the continuation of which we agree. It is a step forward. It must be that the strong must have some responsibility for the weak, that the healthy must have some responsibility for the unhealthy, and the young for the old. I say, looking back many years ago now to when the Poor Law system was in operation, as this Measure, consequent upon others, helps to dispel into the distance the ugly shadow of the Poor Law, that this is an occasion to rejoice.
When we think of the kind of life of the people this Bill is intended to benefit we must give praise to the Government for carrying on the good work started in 1946 by my right hon. Friend the Member for Llanelly (Mr. J. Griffiths). The principle of his work is being carried on, and to that extent we feel very grateful indeed.
1684 It has brought a new feature into everyday life and one that we must see is continued for as long as possible.
As time goes on there may—of course, there may not—be a further increase in the cost of living. I know it is very difficult to foretell the future, but we all realise that these figures are not high enough—certainly will not be high enough if the cost of living increases. So while I give praise for the Bill, I say emphatically that the figure mentioned here, particularly for those permanently unable to earn their livelihood in gainful occupation, is far too low. This causes considerable worry. Even though the Assistance Board can supplement even those payments, it does cause serious worry to see these figures fixed as they are at a time when things may become more difficult
. Therefore I say bluntly that I am more than disappointed at the smallness of the figures as they apply particularly to people permanently unable to earn their incomes, but I am glad that, at least, something has been done, and I should like to congratulate the Minister on having got this Bill through quickly so that people should receive its benefits. They are already suffering from the effects of the Budget. This Measure will catch up with them in the very near future. The quicker the better. I join with the rest of the House in thanking the Minister for the Bill so far as it goes, with the reservation that I regret that the figure is not higher.
§ 4.26 p.m.
§ Mr. Spencer Summers (Aylesbury)
The hon. Gentleman the Member for Mansfield (Mr. B. Taylor) said what a good time was had on the Committee. I could not help reflecting that that immediately followed after congratulations on our trying to restrict the time of the Committee to the time originally intended. It seemed to me something of a paradox.
My right hon. Friend drew attention once again to the growing burdens in the years that lie ahead on the capacity to pay pensions consequent upon changes in the proportion of old people then to be found as compared with now. I very much welcome the announcement that a simple, graphic presentation of these facts will be given wide publicity in order that those whose duty is not normally to study 1685 these matters may have them brought to their attention.
When this aspect of the subject was discussed on the Committee stage I personally, much regretted that those who showed willingness to make a realistic approach to the matter were regarded by some hon. Gentlemen opposite as lacking in humanitarian considerations. Some of us welcomed the candour and courage manifested by the hon. Gentleman the Member for Sowerby (Mr. Houghton), who makes such notable contributions to this subject. I hope that no one who has had the courage to warn Committees of this House or the public of what will be the projected effect of any change made now will, solely on that account, be accused of unreasonably twisting the facts and indicating a lack of human understanding of those who seek to benefit from schemes of this kind.
Unless we are realistic we shall not carry out the responsibility to the beneficiaries which it is our duty to do. Therefore, I hope that the deterioration which appeared to me to follow at one stage of our discussions will not be repeated in the future.
My right hon. Friend spoke of the review that is to be held in three years' time of these affairs, and I hope that he will take plenty of preparatory time to do justice to this very complicated situation. I have in mind particularly the need for far more knowledge than is now possessed of the effects of the incentives to postpone retirement which are inherent in this insurance scheme. We are woefully ignorant of how far the increased pension made possible by postponement influences people in deciding whether or not to postpone their retirement.
I hope that some steps will be taken before that annual review to try further to discover what actuates people to decide upon postponement. Such facts may take some time to collect. It may be necessary to compare different times of the year or different occupations and even different parts of the country. Therefore, I hope that the collection of any added data which might be put at the disposal of those carrying out the review will not be started too late and that the Minister will bear in mind the need to obtain the information well ahead of the time when the review is to take place.
1686 The hon. Member for Kirkcaldy Burghs (Mr. Hubbard) seemed to regret that one of the consequences of this Bill was to restore uniformity between rates of payment for pensions, sickness and unemployment. He seemed to be arguing that, though he might regard the new rates as perhaps tolerable for those whom I might call short-term cases, they were by no means satisfactory for those approaching the end of their days who would have to live for a long time on those pensions with such additional resources as they might possess.
I thought the hon. Member left out one very important factor, namely, the willingness and ability of many pensioners to supplement their pensions by part-time work. The encouragement to do so was increased not long ago by allowing a weekly income larger than that which prevailed previously to be earned without affecting the pension rates
§ Mr. Hubbard
I thought I mentioned those who are permanently unable to earn their livelihood and those who through sickness cannot do part-time work. There should be a differentiation between those unable to earn any additional income and those who might be able to take up a part-time occupation.
§ Mr. Summers
I do not desire to put ideas into the mind of the hon. Member that were not there before, and if I misinterpreted him I stand corrected. But I thought that in the context of his words it was only reasonable to point out the desire of many to add to their pensions by earnings. Those who have a long period of retirement before them can foresee that future and prepare to supplement their pensions. That, of course, is not the case with those receiving short-term sickness or unemployment benefit.
Without wanting to raise the temperature of this discussion I should like to draw attention to the marked contrast between the treatment of beneficiaries under this Bill and the treatment of beneficiaries when this subject was dealt with by the former Government when they were concerned only with pensioners.
§ Mr. Summers
Despite the undoubtedly increased financial stringency which the present Government inherited from the former Government, it has been 1687 found possible not merely to increase benefits to pensioners but also to those who are casualties through sickness and unemployment. Many hon. Members will recall the first solution the former Government put before the House, namely, that increased pensions should only be given at age 70 and not at 65.
As a result of what one can only regard as a well-intentioned rebellion, the then Front Bench were induced to grant the pensions on a uniform basis, except for the material distinction that one had to be born before 1st October 65 years ago to benefit. If one was unfortunate enough to have been born a day later one could not receive the benefit for another five years. In view of the increased numbers who would have suffered from that anomaly it is very gratifying that the Minister has found it possible to make the system uniform.
§ Mr. J. Griffiths
If I may be allowed to say so, I was the creator of uniformity. When the Coalition Government brought forward their first scales there was no uniformity. They proposed a lower rate for old age pensioners than for sickness and unemployment benefit. The conversion of hon. Members opposite to uniformity did not take place so long ago.
§ Mr. Summers
The right hon. Gentleman is seeking to make amends for the shortcomings of his successor, the right hon. Lady the Member for Fulham, West (Dr. Summerskill).
I am talking about the predecessor of the present Minister and of the satisfaction many must have felt at the fact that the anomaly his predecessor created has now been abolished. I think we are entitled to remind all beneficiaries under this scheme that thanks to the humanitarian considerations that actuated this Government we have found it possible to restore uniformity of rates and, what is even more important, to restore the purchasing power of the pensions to what it was when the scheme was started in 1948.
§ 4.28 p.m.
§ Mr. T. Brown
I am delighted to have the opportunity of following the hon. Member for Aylesbury (Mr. Summers), who has always taken a keen interest in social welfare, particularly that of old 1688 people. His interest is always manifest when we are discussing their conditions. I am glad that he has referred to the rebellion which took place when there was a decision to alter the retirement age. I must say, with all modesty, that I was one of the rebels. I make no apology for the fact. I thank the Minister for restoring once again the uniform pension rates so far as age is concerned.
The hon. Member for Aylesbury also referred to the importance of old-age pensioners seeking part-time work to supplement their meagre incomes. I entirely agree with him, subject to certain reservations, subject for instance to the man or woman being physically capable of taking part-time work. I have discovered in this connection an astonishing thing, which will have to be thrashed out on the Floor of the House. Within recent weeks a number of nationalised industries have discharged men aged 65 who are physically fully capable of continuing work. It is manifestly unfair of us to say to old age pensioners. "You have an opportunity of supplementing your income" if employers do not help by allowing them to continue to work.
§ Mr. Summers
Would the hon. Member help the House by saying whether, in the cases he has in mind in the nationalised industries, the men concerned were operatives or employed on the staff?
§ Mr. Brown
No, I am not talking about staff, I am talking about men on the production side. I cannot talk about women because they do not work in the pits, but when a man reaches 65 and is physically capable of working and desires to continue to work and to produce a commodity so essential to the nation that man should be afforded the opportunity of doing so.
I agree with one or two of the opening remarks of the Minister. The first thing upon which I should like to congratulate him is the brevity of his speech. Such brevity gives ordinary back benchers the opportunity to have their little say whether they are odd fellows or in the "Army."
I agree with him that there is no change in the structure of this Bill as compared to the original Bill. He went on to say that the intention of the Bill was to restore the purchasing power to that of 1948. On that point, I entirely and most 1689 emphatically disagree with him. In my opinion, if there were a close analysis of the real cost-of-living figures from 1948 to 22nd April, 1952, the cost-of-living index figure would prove to be wrong. I have no patience with the present cost-of-living figure; not because it acts against me or my people but because I think it does not give a true picture of the rise in the cost of living since 1948.
The Minister went on to say that he was following the examples of his two predecessors. If I understand the evolution of progress correctly, we ought to go a lot further than those who have preceded us, otherwise we are not playing our part in this world.
There was another point which was mentioned by the right hon. Gentleman, upon which I wish to dwell for a moment because it is a matter of paramount importance to our people and to the whole scheme. He said there will have to be some hard thinking between now and 1954. I whole-heartedly agree with him, and I re-echo and reinforce the words of the hon. Member for Aylesbury (Mr. Summers) when he said that he hoped that the review would not be put off until 1954. The review ought to begin immediately, or as soon as possible, so that those who are charged with the responsibility of reviewing the social insurance schemes will not be hurried and frustrated by trying to get out the report too early.
I should like to make a suggestion. I say this with all respect to the administrative side, and to the Minister and his Parliamentary Secretary. Before it is decided what should or should not be done in connection with the rates of benefits, etc., in the social insurance scheme, I think there should be a survey taken and that it should be done by visiting the homes of some of our old and sick people.
It is a remarkable fact, as shown by the report entitled "Poverty and Progress" by Mr. Seebohm Rowntree in connection with the social survey which he made in York, that every case has moved in an upward direction except that of the old-age pensioner, which has stood still. That is a remarkable fact, and no hon. or right hon. Member can dispute the very close and minute work that was undertaken in that social survey.
1690 We shall never get a real picture of the conditions of our people—I am speaking about the industrial areas at the moment—unless we are prepared to visit the villages and homes in which they live and to understand the conditions under which they are existing. As I said in the House a few weeks ago, the only way that we can get to know what the people are going through is to sit where they are sitting. We need not live with them, but sit where they are sitting and, when we have done that, even for a week, we shall have a loftier conception of what those people require. I hope, therefore, that in the review between now and 1954 the Minister will give some consideration to that suggestion.
There is another thing about which I am very much disturbed. I am sorry that the hon. Member for Barry (Mr. Gower) has left the Chamber—perhaps he has some other business to attend to. He referred, both on Second Reading and in Committee to the widow's pension—what he called the 10s. pension. I think that the Minister ought to have responded to the pleas from his side of the House. In the Committee stage, as everybody who was on that Committee knows, we did our best to get him to move in the direction of improving the conditions of the non-contributory pensioner. That point was mentioned today by my hon. Friend the Member for Mansfield (Mr. B. Taylor), when he said that there were only about 420,000 of them. A number of those pensioners require some attention and I hope that they will not be overlooked within the next few months.
I think we are all agreed, as we were agreed in the Committee, that the Bill which is now before the House deals with the unfortunate section of our people. It deals with the sick, the aged, the infirm, the injured and the unemployed. Since the Bill was printed, on 22nd April, 1952, it has become out of date. Circumstances are changing rapidly, particularly so in the case of the cost of living, and the benefits that were fixed in April, 1952, will not meet the needs of our people.
It is not my intention to go over the points which I enumerated in Committee, but I ask the Department to consider, between now and the next time we deal with this subject, not only the increased cost of living as it is then presented but the potential increase, so that they may 1691 arrive at a rate of benefit which is satisfactory to all concerned.
Not only has the cost of living figure risen—and I am not blaming the right hon. Gentleman; as I said before, it was due to world conditions, over which the Government have no control—but another factor is looming up, particularly in the textile industry of Lancashire and the cotton and woollen mills of Yorkshire. There is a vast increase in the unemployment figures, week after week, and last week we felt the repercussions of unemployment in the cotton textile industry of Lancashire. Now we are faced with a vast number of unemployed, in other industries and they will not be satisfied with the rates of benefit which are contained in this Bill.
§ Mr. Summers
Is the hon. Gentleman seriously arguing that the rate of unemployment benefit should be higher if there is a great number of unemployed people than if there is only a modest number?
§ Mr. Brown
I am not arguing any such thing. Whether there are thousands, or hundreds of thousands of unemployed, the point I am seeking to advance, with all sincerity—and I may be wrong, as I usually am—is that if people are thrown out of work, due to no fault of their own, the unemployment benefits which they receive should be adequate to meet the cost of living. That is my opinion, whether there are 1,000 or one million unemployed.
I want now to deal with the question of the injured workman. The Minister, during the Committee stage, referred to Command Paper 6551, which was published in 1944. I looked that up to see whether I could secure some advice or assistance because, to quite a large extent, the Minister played an important part in the presentation of that Command Paper. It says, about disablement pensions—and I quote with your permission, Mr. Speaker, and that of the House:Where the disablement is likely to he permanent or prolonged, the injury allowance will be replaced by an industrial pension based on the degree of disablement caused by the injury as assessed by the medical board. An industrial pension will, unless the workman's condition permits of a final assessment of the extent of the disablement, be awarded on a temporary basis until a final assessment can be made. If at any time a workman ceases to be incapacitated for work but still suffers some disablement on account of the injury, 1692 he will be entitled to apply for a pension to be assessed forthwith.It continues—and this is the salient point:The rate of pension proposed where the degree of disablement due to the injury is assessed at 100 per cent. will be 40s. weekly.That figure was fixed in 1944. This Bill fixes the figure at 55s.—an increase of 15s. in eight years. Surely the right hon. Gentleman sees the force of the argument which we advanced when we moved our Amendment in Committee, when we desired to raise the rate to 60s. Had he accepted our Amendment it would have gone a long way to eliminate the dissatisfaction which is now permeating the minds of hon. Members on this side of the House, and particularly those who represent mining areas because after all, the incidence of accidents in the mines is higher than in other industries.
That is why we are so anxious that when the rates are fixed for personal injuries they should be the highest possible that can be afforded by the Personal Injuries Fund. From my own observations, I think the right hon. Gentleman could have increased the disablement benefits and hardship allowance benefits without encroaching on the fund to any large extent, because there is sufficient in the fund without impairing its solvency.
A number of us advocated in Committee that he should take a risk by accepting the Amendment which stood in the names of some of my right hon. and hon. Friends so that these people should not be in dire need between now and the date upon which the review will take place. He could have done that without upsetting the financial solvency of the fund, in my view. There are two funds in connection with the insurance scheme—there is the National Insurance Fund and there is the National Insurance Reserve Fund. To the credit of the first fund, on 31st March, 1951—not 1952—there was £479,490,497. In the Reserve Fund there was £786,570,640. If we tot the two together, it amounts to the largest sum ever accumulated in any insurance fund in the history of this country—£1,266,001,141. The interest alone on these two sums amounts to £31,990,382. I say, therefore, that the Minister could have made some of the concessions which we requested during the Committee stage and still not have impaired the solvency for a period of two years, between now and 1954.
1693 It is a crime, in my view, for any fund to be reaching bursting point while, at the same time, people are living in dire need and dire poverty. I think that by careful administration we could have taken something from the fund and given it to the people who have paid into the fund.
I am convinced that the slight advancement which is conceded by an increase in the basic rate for old-age pensioners will not bring contentment into their lives. We tried in our humble way, and very reasonable way, to improve the position. We responded to the appeal made by the right hon. Gentleman and his Parliamentary Secretary to assist in every conceivable way to help the passing of the Bill this week. He has said, "Thank you," but I am very much afraid that if a similar appeal is made on a subsequent occasion, in view of the meagre concessions which he has made we shall not respond quite so readily as we did during the four Sittings on the 13th, 15th, 20th and 22nd of May.
It is all very well for Ministers of Departments and Parliamentary Secretaries to plead with us to help them in every possible way. We are not unreasonable. But we have to pay due regard to the essential needs of the people we represent and, as long as I remain in the House and have an opportunity to raise my voice, I shall raise it if I think that some of the benefits which are to be conceded do not meet the needs of our people.
§ 4.57 p.m.
§ Mr. C. J M. Alport (Colchester)
I join with hon. Members on both sides in congratulating the Minister on reaching this final stage of the Bill in this Chamber. The Bill is welcome because it will bring help to those who are in need at present and who are perhaps hardest hit of all by the continuing rise in the cost of living. I use the word "continuing" because it has become almost a habit over the last six years, but the truth of the matter is that at present we are in the process of seeing what we believe and hope may be a gradual levelling out of that long process. We must consider the Bill against that background.
I want to make two points. First, this is a very considerable Bill which makes 1694 a great advance for a number of categories of pensioners, and those in receipt of benefits, who have not been assisted in this way since 1948. We must not in any way under-estimate the important social advance which this piece of legislation represents. I realise that hon. Members opposite, including the hon. Member for Ince (Mr. T. Brown), are bound to use certain adjectives about the Bill which appear ungenerous in themselves, but I am sure they realise, as we do on this side of the House, that this is a very considerable contribution, in view of the economic circumstances of the country, to deal with the problem of need.
I think hon. Members on both sides will agree that it would be wrong if we allowed the Bill to go forward giving the impression, particularly to the old-age pensioners who are to benefit from it, that we consider the benefit which they will receive provides, at the present cost of living, a minimum standard of living such as was envisaged in 1946, when the new schemes were first discussed.
The hon. Member for Ince said he thought that it was time we had a survey of need. I, in a small way, in my own constituency, in March, with the assistance of nine old-age pensioners, took a survey which, although I do not claim that it represents with deadly accuracy the problem, at any rate gave me an idea of the situation with which we are faced. I came to the conclusion as a result of the figures given to me, and which, I know, were given in good faith by those who collaborated in the scheme, that the absolute minimum for the single old-age pensioner is something like 46s. a week and for a married couple 68s. 6d., assuming the rent, which is included, to be 9s. or 10s. a week.
Mr. B. Taylor
What would be the average rent in the particular area to which the hon. Gentleman referred?
§ Mr. Alport
I said that it is about 9s. or 10s. a week. I do not claim that these figures give more than an indication to me of the problem with which we are dealing.
Therefore, we have reached a point where there is a divergence from the conception of National Insurance as it was at the time of the Beveridge Report and at the time of the initiation of the original scheme. It is a divergence in that the 1695 benefits received now by the old-age pensioners are not providing a minimum standard of living in accordance with the minimum standard which we conceive to be reasonable at the present stage of our economy.
That means that the benefit must be supplemented in one of three ways: either by additional earnings, or out of savings, or as a result of National Assistance. I would say that the conditions proposed in the Amendment which was put forward in Committee by the party opposite would scarcely go any further in meeting the gap which undoubtedly exists; and, therefore, I do not consider that the proposals that came from the party opposite—and I am not putting this in any controversial way—were more than a part of the inevitable Dutch auction which so often takes place in these cases. There may be some statistical basis which could be advanced for the proposals, but I do not think that they would meet the gap at all effectively. Under the proposals which they advanced on the Committee stage, the old-age pensioner would still have to supplement the income he derived from his benefit in one of the three ways I have mentioned.
We are determined, I think, on both sides of the House, to ensure a minimum standard of living for all pensioners in this country, but we have to face the fact that the present way in which that is done, so far as the old people are concerned, is either by extra earnings, or out of savings, or by resort to National Assistance. The argument which the hon. Member for Ince and many of his colleagues have advanced is that by raiding the funds it should be possible to bridge the gap between the benefit and the minimum requirement.
The level of benefit has a direct effect on the cost of living. This is not the place to argue that in detail, but I think that the further we put the level of benefit up the more unlikely it is that we will be able to bring the cost of living down so far as one would like to see it brought down.
I believe that we have to take a very responsible decision at the moment in the hope and belief, as we do hope and believe on this side of the House, that the cost of living will slowly start to come 1696 down during the months ahead of us. We have to rely on the three means which I have mentioned to bridge the gap between benefit and need until we can bring the cost of living down, so that the gap no longer exists.
I believe that, in the long run, that will be more satisfactory and more in the interests of the old people generally and indeed in the interests of those in receipt of benefits generally or who are dependent on fixed income of various sorts than by suddenly trying to chase the rising cost of living, with the result that we gradually push it further out of our reach. That is an argument which I believe fully justifies the Minister and the Government in the decisions which they have reached on the level of benefit.
It is quite clear to me that on both sides of the House we sympathise with the problem which I have called the gap, but I think it is in the interest of those in receipt of benefit that we should not take a step which will react upon the level of the cost of living and prevent us from doing what we have wanted to do since 1945, and that is to ensure that as a result of payments made into the Insurance Fund, the person who falls into need through age, unemployment or sickness can look forward to being able to derive as a result of those payments, as a right, the minimum standard of living which we believe to be so necessary for the people of this country.
We on this side of the House believe—and I hope that view is shared by hon. Members opposite who have contributed to this debate—that this is a fine, constructive piece of social legislation which will do much to meet the difficulties of those of our fellow citizens who stand in need at the present moment, and we believe that it stands to the greatest credit of the Minister and the Government which we support.
§ 5.8 p.m.
§ Mr. Harold Finch (Bedwellty)
I do not intend to keep the House for more than a few minutes, because this Bill was debated very thoroughly on Second Reading and on the Report stage.
I would, at the outset, thank the right hon. Gentleman for at least making one concession by way of constant attendance allowance. It is, of course, appreciated that those who will become 1697 entitled to constant attendance allowance are the seriously incapacitated men, who come under the Industrial Injuries Act. That concession will perhaps lessen the hardship suffered by those men, particularly in the mining areas, who have received substantial injuries and who are bedridden as a result of accidents sustained in the course of their employment.
At the same time, I do not want the House to be under any misapprehension about the disappointment which will be felt by industrially disabled men at this Bill. As I said on Second Reading, and I regret that I have to say it now, despite all our efforts in Committee, the 10s. a week increase in the basic benefit for the industrially disabled will not mean much to the vast majority of disabled. It is a very small minority of permanently disabled men who will get the 10s. a week increase. It is only those who have lost two limbs or who are otherwise seriously disabled who will be entitled to the increase of 10s. The bulk of those pensioners who have been receiving 20 per cent. or 30 per cent. disablement pensions will receive an incerase of only 2s. or 3s. a week. Miners, in particular, will be very disappointed with these proposals, in view of the hardship which is suffered from the loss of their employment.
The right hon. Gentleman could have increased the basic pension to allow more for the partially disabled or he could have increased the hardship allowance. I still fail to understand why he has not made a concession by way of an increase in the hardship allowance. If it had been increased even to 10s. it would have been some compensation to those receiving a pension for less than 100 per cent. disablement.
We met the right hon. Gentleman in 1943 when we discussed the increase in wages and in the cost of living which had taken place as a result of the war. Under the old Workmen's Compensation Act a man was tied to his pre-accident wages. Before the war a man might have been earning only £3 or £4 per week and he might, following an accident, be doing a light job at £5 a week found for him by his employer, but he would still be tied to his pre-accident wages. When this was put to the right hon. Gentleman in 1943 he said that he would have a Section inserted in the 1943 Act to ensure that an injured man would be able to have a 1698 review of his pre-accident wages and to say, for example, "I was earning £4 a week in 1939. If it had not been for my accident I should now be getting £7 a week." If this pre-accident salary was then regarded as £7 and he had a light job which brought him in £5 a week, he would become entitled to half the difference between the two figures.
The hardship allowance was put into the industrial injuries scheme to compensate a man for the loss of earning capacity. It was fixed at a maximum of £1 a week. I regret that the right hon. Gentleman has not seen fit to increase it. If he had done so he would have put the partially disabled man more on a par with men coming under the old workmen's compensation scheme.
The right hon. Gentleman referred to the fact that the Industrial Injuries Act came into operation in 1948, but the rates were fixed in 1946, and the cost of living has risen by 40 per cent. since then and his proposals do not meet that rise. The hon. Member for Colchester (Mr. Alport) said that the Government had increased unemployment and sickness benefits and retirement pensions to a greater extent than the Labour Government did, but I understood that the Chancellor's proposals were to compensate people on pensions and low income rates for the reduction in food subsidies. I can say from my experience that in many respects the Chancellor's proposals do not do so.
The National Insurance scheme is losing its significance and effectiveness because the benefit rates will be lower under this Bill than are the National Assistance rates. It discourages people from contributing when they see that their contributions will bring them benefits which are less than the National Assistance benefits. When we embarked upon the scheme in 1948 the National Assistance rates were slightly lower than the National Insurance benefits, and I hope that the Government will bear in mind in any review of the matter that insurance benefits should be equal to the National Assistance rate, particularly when men are called upon to contribute towards the National Insurance scheme.
§ Mr. A. Edward Davies (Stoke-on-Trent, North)
I take it that my hon. Friend is not arguing that the National Assistance scales are too high. Is he 1699 arguing that, as this is an insurance fund, unless bigger contributions are paid, greater financial assistance must come from the Exchequer?
§ Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew)
On Third Reading we can discuss only what is in the Bill, and not what we should like to have in it.
§ 5.17 p.m.
§ Mr. John McKay (Wallsend)
I am surprised that in estimating the increased benefits required to meet the rise in the cost of living the 1948 basis has been taken for purposes of comparison. It is strange that that should be so. The family allowances were fixed in 1945, old-age pensions were increased in 1946 and the National Insurance Act was passed in 1946. The fact that a large portion of the National Insurance Act was implemented in 1948 does not imply that we should make a comparison with 1948 when considering benefits arising out of the Act of 1946.
In our discussions on the National Insurance Bill in 1945 and 1946, we related the benefits to the conditions which existed then, and thus they were conditioned and influenced by the cost of living and the wages of the workers in 1946. It is amazing that, in reviewing the benefits, we should take as our basis for comparison 1948 instead of 1946.
The cost of living has risen by 44 per cent. since 1946. Bearing that in mind, we must consider what we are doing in relation to the real cost of living. While cost of living indexes indicate the cost of living on a given basis, very few hon. Members believe that they indicate the actual cost of living. In the trade union movement or in politics, when we cannot get the increased benefits which it is considered fairly meet the circumstances we take what we can get. When we do so we do not want to create the impression that, because we are not dividing against the Bill, we are satisfied in any respect with it. We are dissatisfied, and we 1700 must represent to this House the feelings, desires and reactions of our people to it. That is why we must register our protest.
Let us analyse the position. Pensions are now being increased to 54s., and, taking 1946 as the year of real comparison, the amount should be 60s. 6d. instead of 54s. In other words, the new rate is 6s. 6d. below the level of the cost of living today. A single man is to get 32s. but if we add the 44 per cent. he should be getting 37s. 6d., so that the amount is 5s. 6d. less than the cost of living level.
I want now to deal with the question of the men who are injured while at their work. The men and women in the country who are producing its wealth by their labour are doing a national service, and when they are injured at work we expect them to be compensated on a level which corresponds somewhere near to the cost of living and bears a relationship to the wages which they can make. We have not made much progress from the past in this direction.
Let us take 1938, a pre-war year, and compare it with today. Then a single man got 30s. compensation. He paid no contribution towards that, nor did the Exchequer make any substantial grant. Since 1938 the cost of living has advanced 120 per cent., so that instead of the 30s. she should now be getting 66s. What are we offering him in this Bill? He is to be given 66s. which is 11s. less purchasing power than he was getting in 1938 when the State did not help at all.
§ Brigadier O. L. Prior-Palmer (Worthing)
Is the hon. Member suggesting that the contribution should be equally increased?
§ Mr. McKay
The main point we have to decide is: should we give these men and women, who are producing the wealth of the country and who have been disabled in discharging that task, a sufficient sum to enable them to live properly? Are they not entitled to a reasonable amount to enable them to 1701 live properly during the time of their disablement? Whatever differences there may be in politics generally, this is a matter which we should approach on the basis of the greatest good for those who are disabled, and they should be guaranteed an income that is sufficient to keep them and their families in reasonable decency.
Since 1938 there have been great changes in the organisation of this scheme. Money from the State is going into the fund and there are other sources of contribution, yet we are not bringing the amount given to the single man into line with what, in purchasing power, was its equivalent in 1938. A single man got 30s. in 1938, and today he should be getting 66s., but instead we are giving him 11 s. less. In 1943, a single man got 40s. compensation. Since then the cost of living has advanced by at least 54 per cent.
If hon. Members do not accept that figure, they can take the figure published in any of the indexes, including that for London, the Institution Index or the Ministry of Labour Index. I think they will find that the cost of living has gone up 54 per cent. To have a sum equivalent to the purchasing power of 40s. in 1943, the injured man should be receiving 61s. 6d. What he is offered under this Bill is 55s., or 6s. 6d. short.
I want to turn now to the question of the earning capacity of our people, and I will take an average figure. We can only take averages in a matter of this kind. Last October the Ministry of Labour stated that the average wage for a man in this country was £8 6s. a week. It is safe to say that since then it has gone up 4s., and the sum today is at least £8 10s. I would emphasise that that is an average for the workers from all over the country. We are telling the average workman that while he is earning that money at work, if he should be injured and is a single man, the most we are prepared to give him to enable him to live is £2 15s. instead of £8 10s. Is that reasonable? To me it is not. I do not think it is anything to be proud of in these difficult days.
In spite of the fact that these people are contributing towards the compensation, and also that there are contributions from employers and the Exchequer, we are telling the workers that we are not 1702 prepared to offer more than 55s. a week on an average wage of £8 10s. To me that is not a fair crack of the whip for the people who are doing such a magnificent job in the country, and who are going all out to increase our exports so that this country can get on its feet. When the people have time to analyse the new rates of benefit contained in this Bill, they will see that they come far short of what is needed in these days when the cost of living is rising, and the T.U.C. on their behalf will have every right to show their dissatisfaction with the Measure.
Since I came to this House I have heard a great deal about what one party did when in power and then what the other did. It is not a good argument in a matter of this kind to play the game of party politics. There has been reference today to the fact that the Labour Government differentiated between rates of pension. To my mind the Labour Party were wrong when they agreed to that, and I am glad that the Conservative Party have had a bit of sense and have restored the rate to what it was so that all are now alike. We should discuss this problem as it is related to the world in which we are now living. A pension of 55s. to a single man and £3 6s. to a married man is not helping these people very much at a time when they need money most.
Whatever side of the House we are on, I do not see that we can take any pride or satisfaction in this Measure. It is not a satisfactory Bill for the times in which we live. The Conservative Party said they would take off food subsidies and put something on to the family allowance so that people would get the benefit, but they leave the position where it is in respect of the first child, while increasing the 5s. to 8s. for the other children.
§ Mr. McKay
All right, Sir Charles. I will keep that out of the argument. We must deal with the cost of living. The Bill is framed to meet the so-called cost of living, by means of increased family allowances. What the Government said sounded reasonable, but it would have been more reasonable to deviate from the principle followed in the past.
1703 The Government know that removal of the food subsidies places a penalty upon the family with one child as well as upon the family with more than one child. When increasing the family allowances in order to meet the cost of living arising out of the removal of food subsidies, it would have been logical for them to recognise that, according to the Chancellor's own statement, the married man with only one child suffers a penalty of at least 4s. 6d. but they gave nothing to that family.
The family with one child has as much right to recognition as the family with two or more children. To deal justly and fairly the Government ought to have given something for the first child. We have been told that that would have increased the cost of the Bill.
§ Mr. Deputy-Speaker
I am very reluctant to stop the hon. Gentleman, but I must remind him that he can only deal with what is in the Bill. The debate on Third Reading is very narrow and is limited to matters contained in the Bill.
§ Mr. McKay
I do not quite understand what the limit is, so perhaps you will keep me within the limit as I go on. I shall not be very long.
A good deal of interest has been shown in this House in the position of the one-child family. I have analysed the position as best I can by figures obtained from the annual Inland Revenue returns. I find that there are more than 3 million families with only one child, 3 million families who have had their cost of living increased and are getting no help at all. Their purchasing power has been reduced by 4s. 6d.
I do not want to prolong this speech, but I emphasise the point that the amount of family allowance should have been arranged so that the one-child family would get something. How could it have been done? If we had given the first child 3s., the second child 5s., and subsequent children 8s., families with two or more children would have got exactly the same as is provided by the Bill, but 1704 we should be giving 3s. in respect of the first child.
We are not prepared to divide on this matter, but we do not want to get the word spread that we are satisfied with the Bill. It is not satisfactory to people injured or to aged pensioners. However big that problem may be—and it is a big problem, as most people realise—we have to get together. Perhaps in the future we can co-operate in some united solution and present it to the public at large. Probably the only way we can deal with it is by united effort by both parts of this House.
§ 5.38 p.m.
§ Mr. R. W. Sorensen (Leyton)
One remarkable thing about the Bill is that everybody agrees with it, but we go on talking about it. Nevertheless, it is just as well that, we thus testify whatever our politics and political outlook, that we now accept the principle of mutual responsibility for those who are stricken, ailing or aged or who in any way need our support.
Although the Bill goes some way to meet the increased cost of living it does not go far enough. I entirely agree with previous speakers, who have suggested that whatever may be the indices upon which these increased allowances are based they are out of true relationship to the actual increases being experienced today. For instance, we all know that fares have gone up substantially. Quite a number of old-age pensioners will be hard hit by that fact alone. The old-age pensioners in my district complain very bitterly that in spite of the anticipated increase in pension rates, they will be unable adequately to meet all their daily needs. We should therefore take the Bill mainly as an instalment of what is, after all, social justice to a large section of our community.
We are involved in far more than we know. We are involved in the steady transformation of moral and social responsibility. There was a time when the family was looked upon as the unit of moral responsibility. It is so in many parts of the world, in India and other areas, where no Bills of this kind exist, where there is no insurance system, and where whoever is ailing is assisted by the rest of the family. So it was in this country at one time. but that has steadily 1705 changed, and in place of family responsibility we are establishing the principle of social responsibility. Whether it is good or not, we cannot stop it, and both sides of the House are involved in the process.
Logically, therefore, there will be ever increasing communal responsibility for all human beings. For instance, if we recognise the principle of equal pay it is bound to have an effect upon the Clauses of a Bill of this character. This Bill does not suggest that there shall be increases in rates so that men and women receive the same amount of benefit. Yet I would not mind prophesying that the day will come, whatever Government is in power, when we shall recognise, in regard to rates of benefit, the same principle which has now been accepted by the Government in regard to rates of pay for those employed in education and in the Civil Service.
I mention this to show that this Bill is only one small part of a new social relationship which we are all engaged in building. Some progress has been made. At one time many members of the party opposite would have criticised what is now taking place. So we can now rejoice that we all learn by experience and have come to the same conclusion, namely, that both sides of the House have now accepted this Socialist principle of responsibility for each other. All that remains to be done—I wish the hon. Member for Croydon, East (Sir H. Williams), would be quiet, or speak up so that we can hear.
§ Sir Herbert Williams (Croydon, East)
I was only talking about what happened in the days of Queen Elizabeth. [Laughter.]
§ Mr. Sorensen
Hon. Members may laugh, but that is a fairly sensible criterion of behaviour. I apologise, Mr. Speaker, for being distracted from what I was trying to say.
I was saying that we are now involved in building up a new social relationship which inevitably will involve us in much more than we have recognised up to the present. I have mentioned the principle of equality of benefit, and I venture again to suggest that in time that will be embodied in a statute as, apparently, we are to embody it in regard to payment for services rendered.
There is another aspect which deserves attention and which is involved in what 1706 we are discussing. I refer to the ever-increasing financial burden on the community which this insurance responsibility, is bound to impose. We are living longer today than our ancestors. As we plan our society more and more sanely, so inevitably the proportion of those who will come under such a Bill as this, and who will receive benefit, will be much greater than it is today.
That cannot go on unless at the same time the productive power of the community increases to the same extent, for, otherwise, we shall have a top-heavy society. I believe that we can get that increase if we can induce in our people a recognition that, as we alter society to accept responsibility for the well-being of each other, equally we have to pour more into society to counterbalance what we take out.
I believe that this extension of the existing principle will go some way not only towards giving more benefits to those who need them, but also towards increasing the sense of obligation to render more to society. Unless that is done, there will come a time when we shall expect to take more and more out of the common till without any obligation to put more in. The principle implemented in this Bill is one way by which we can induce a deeper sense of deeper responsibility on the part of all members of society. If we can make each one feel that we are now so organised, morally and socially, that, no matter who is sick or aged, the rest of us will see that he does not suffer, it will give a greater sense of dignity to every member of the community, a deeper sense of belonging to it, which will induce every member of the community to render still greater service than he may have done hitherto.
There are about 2,000 elderly people in my constituency who belong to the Old Age Pensioners' Association. I see they are demanding a payment of 50s. for every single person, male or female, and £5 for a married couple. We may have some way to go before that is achieved. It may seem extravagant, although I do not think so. It may or may not be the case that today it cannot be afforded. In view of so much other expenditure. I would say that argument is hardly tenable, and in view of what an hon. Member opposite said earlier this afternoon, his figures indicated that £5 a week in none too much for an elderly married couple
1707 Logically, this Bill involves us in going Forward to the time when full responsibility for the aged will be recognised. That may be some time ahead, but let us hasten the day because, in so doing, we shall be able to complete the weaving of this new moral pattern which will take the place of the old domestic or family pattern, by which we recognise that we are all truly members one of another. Thereby it will be left not to the segregated family, but to all members of society, to decide how best to meet the pressing needs of all who belong to society.
§ 5.48 p.m.
§ Mr. J. Griffiths
Perhaps I should explain why I am intervening in this debate, although I did not take part in the Second Reading debate, nor was I privileged to serve on the Committee. During the Committee stage my hon. Friends co-operated with the Minister in getting this Bill through as quickly as possible so that administrative action can be taken quickly to bring these benefits into operation. My hon. Friends today have put the case of the inadequacy of these benefits as strongly as they did before, and I only want to add that they have made out their case fully today as I am sure they did in Committee.
I want to comment on what the Minister said in his opening speech this afternoon. Within a few months it will be 10 years since the Beveridge Report was published, for it was published in November, 1942. So this is the tenth year in which we have discussed proposals and reports and White Papers and Bills and amending Bills upon this problem of National Insurance.
It fell to the right hon. Gentleman to play a notable part in the preparation of the early White Papers in 1944, particularly the one called "Social Insurance Part II," outlining the new scheme which eventually became the Industrial Injuries Act. Later it was my great privilege to pilot through the House the Industrial Injuries Bill and the National Insurance Bill and to bring into operation the payments under the Family Allowances Act.
Since 1946 we have had two interim Measures. It is quite clear that the Bill which was passed by my own Government last year and the Bill which is now before the House to which we shall today give 1708 a unanimous Third Reading, are interim Measures. We are all at one in that the purpose of all the various schemes is to establish and make operative the principle of a national minimum payment.
The subject has a longer history even than the Beveridge Report. The first time the idea was put forward that the nation should accept it as an obligation and a responsibility to lay down a national minimum below which no one in adversity would be allowed to fall. was as far back as 1909, by the Webbs—Sidney and Beatrice Webb—in the Poor Law Commission Report. Later Sir William, now Lord, Beveridge brought, his scheme before us, and now the Bill amends the rates of benefit and contributions.
The fact that the various Bills have been interim Measures is borne out by the provision which was made in the 1946 Act for a quinquennial review. After a period of five years, a review is obligatory. The right hon. Gentleman will know, however, that the Minister and the Government are at liberty to call for an earlier review. The report of the actuary on the Bill indicates that we shall obtain a good deal of information from last year's census when time is available to extract information about population, occupations and various other aspects.
I do not know how soon that information will be forthcoming, but I urge upon the Minister that there is a good case for having a review now, otherwise we shall be having a series of interim Measures. You have ruled, quite rightly, Mr. Deputy-Speaker, that we cannot argue now about food subsidies and the rest, but let me say that if the cost of living continues to rise we shall in a very short time be faced inevitably with another interim Measure. Therefore, since we have already had two interim Measures and may yet have another, the time has come for us now to hold the review which normally would be due after five years' working of the scheme. When the census information is available the Minister will have all the information that he wants to enable him to conduct the review.
There are, of course, many problems. There is the problem of the relationship of benefit rates to assistance scales, to which my hon. Friends have referred. 1709 There is the problem of old age. When we began the scheme we realised that to make provision for the aged was one of the most difficult problems of all.
When Sir William Beveridge, as he was, made his proposals to the Government, he suggested, and, indeed, recommended, that benefits should be at a given rate during sickness and unemployment, and he spoke in favour of eventual uniformity for all benefits, including old age pensions. He suggested that because of the burden of old age, the new scheme should provide for an increase in the old rate of 10s. a week to 24s. and 40s. by instalments over a period of 20 years. He made that suggestion because he was concerned about the burden of the increasing number of people at the existing pensionable ages upon the fund.
In 1946, however, we decided to establish the principle of uniformity and to put the pensions at the same rates as sickness and unemployment benefits. That step was in conformity with the opinion both of the House and of the country. We not only raised the pension rates and put them on the same scale as sickness and unemployment benefit, but we began to pay the new pension rates to the old people only two years before the new scheme came into operation in 1948. The conscience of the country had been stirred, and we felt that something should be done quickly for the aged people.
Lord Beveridge had recommended that there should be an inducement to people who reach retiring age—65 for men and 60 for women—to continue at work. Lord Beveridge suggested the increment system. I doubled that increment in the 1946 Bill, and my right hon. Friend the Member for Fulham, West (Dr. Summerskill) doubled it again last year. The rate of increment has been increased, as have the figures for permissible earnings. Until we have any further precise information on the whole problem, it is clearly in the interests of everybody concerned that these inducements should be as effective as possible.
I join with the hon. Member for Aylesbury (Mr. Summers) in saying that it is most desirable that the Minister and his Department should consider the matter of inducements. The information which the census should make available will be necessary for the Minister when next the House reviews this matter. The 1710 House will need that information on the effectiveness of the inducements, both by way of increments and by the operation of the earnings rule.
I ask the Minister whether he is yet in a position to give any further information of the proportion of people who remain at work when they reach retirement age. Is the experience of four year's working of the Act sufficient to show that the increment is a successful inducement?
§ Mr. Summers
I am glad to have the right hon. Member's support for more data. The point I wanted to make was that the figures gained from the working of the scheme would not reveal whether any effective results which might have been obtained were due to the scheme itself, or to the desires of the people. It was in that connection that I wanted further details.
§ Mr. Griffiths
We have available the service of the social survey, which could be of immense help, and I ask the Minister whether there should not be a comprehensive examination of the problem by those who are skilled in the technique of the social survey in order to find out from actual experience, of a wide and comprehensive nature, exactly how effective the inducements to remain at work are proving.
I would suggest that the local advisory committees which have been set up all over the country should be asked by the Minister to study this problem in the light of their local experience. On those committees are representatives of the employers, trade unions and friendly societies, and I am sure that their contribution would be of value.
There is the question of the amount which pensioners are permitted to earn. One thing has been represented strongly to us. What we have done up till now to encourage old people to work part-time and earn up to £2 a week is being nullified by the way in which the 12-hour rule is being operated, and I would ask the Minister to examine this. I understand that constituents of my hon. and right hon. Friends have urged on them that we are not getting the best and most effective help from these pensioners, because of the operation of the rule that if a man may work for 12 hours or less a week, but that if he works 12¼ hours it is all wrong. 1711 I am told that that rule is being rigidly applied, and it is defeating what was the intention of this House.
This Bill deals almost entirely with contributions and benefits, and I would direct the attention of the House to a major problem which will arise when we come to the review. In his report Lord Beveridge considered the best way to finance the system. He accepted—and everyone has accepted since the insurance system began in the first decade of the century—that this is the kind of scheme which appeals to the people of this country. They like to get a benefit as a right because they pay contributions. We therefore accepted the contributory system, but if we want to retain that system we must examine—and this is one of the reasons why I ask that the time of the review be brought forward—the necessity of bringing the insurance rates to which a man contributes above the scale of assistance. Otherwise the whole basis of the system may be destroyed.
I have been brought up on the contributory system in all my trade union work. I think it is worth retaining. But I am sure that it cannot be retained unless we carefully examine assistance and insurance scales and bring them into the right relationship. I do not think we can do that adequately by interim Measures such as this. Therefore it is all the more urgent that the review should take place fairly soon. We should not wait for the five years to expire. I do not think we can wait so long.
Having decided on the contributory scheme and examined variants of assistance and contributions, Lord Beveridge recommended a flat rate, which I accepted. The scheme was based on a flat rate of contribution, with a flat rate of benefits as well. The contributions in this Bill also are on a flat rate. Let me remind the House of the changes and increases in the contribution during the 10 years. The Beveridge Report recommended that contributions to the insurance scheme by adults of 21 years should be 4s. 3d. a week.
After careful consideration, I reduced the age to 18 and the contributions were fixed at 4s. 7d., with 2d. to be added a few years afterwards, bringing it up to 4s. 9d. as from October, 1951. When this Bill is placed on the Statute Book 1712 the contribution at a flat rate will be 5s. 5d. The Beveridge Report recommended 4s. 3d.; it was 4s. 7d. in 1946 4s. 9d. in 1951, and 5s. 5d. now.
Then there is the case of the self-employed person. There was the old health insurance scheme with contributions and cards, but one of the main features of the 1946 Act, and of the Beveridge Report, was the bringing in of self-employed people into this scheme for the first time.
§ Mr. J. Griffiths
They came in as compulsory contributors. The Beveridge Report recommended a contribution of 4s. 3d. The right hon. Gentleman will know that there was not exactly the same scale of benefits for the self-employed as for the employed person; and because of changes made at the request of self-employed people and their organisations, in the 1946 Bill the contribution was increased to 6s. 2d. Last year it was increased to 6s. 6d. It is now 7s. 5d. For the employed contributor the contribution is 5s. 5d. whether the contributor be a labourer earning £6 a week or a piece worker earning £12. For the self-employed person it is 7s. 5d. whether he be a crofter in Scotland, a marginal farmer in Wales. or a Member of Parliament.
Here we have a system whereby so long as we accept the flat rate contribution the contributor pays 7s. 5d., whether he be a Member of Parliament earning £1,000 a year—and may I say that the salary of Members of Parliament is not too lavish—or whether he be a person with a far bigger salary. This is one of the problems which must be examined, and I do not think we can sustain the flate rate contribution system much longer.
We had considerable discussion about this in the Committee stage. I was apprehensive about what would be the effect of accepting the view put forward by the self-employed that they ought to be brought into the scheme on the same terms as the employed contributor, notwithstanding recommendations to the contrary in the Beveridge Report. The consequence was that, instead of 4s. 3d. as the Beveridge Report recommended, the contribution became 6s. 2d., 6s. 6d., and now it becomes 7s. 5d.
1713 This problem must be considered. We must find some other way. Other ways have been adopted in other countries. It would be out of order for me to go into this question in more detail, but I am satisfied that we must find some way of financing the contributory scheme other than the method of a flat rate contribution which means that the employed contributor who is lowly paid has to pay the same as the higher paid man.
The fact is that under the self-employed scheme many of those concerned cannot pay. Crofters, farmers and perhaps small business people will not be able to pay. We as Members of Parliament are a privileged class of self-employed people. Deductions are made from our salary. I do not think there are many other self-employed people who enjoy that advantage. I am assuming that hon. Members accept that it is an advantage. It is an advantage to the Ministry. They have our self-employed contributions collected for them. But others have to pay them. I think this scheme will break down. The matter must be considered very carefully.
The right hon. Gentleman the Minister of National Insurance was largely the author of the industrial injuries scheme. I adopted it. Therefore, we have joint responsibility. This was the most revolutionary change of all in our insurance scheme. I am most anxious that it should work well. I have spoken already of the hardship allowance. Unless the Minister does something about this, the system will not work successfully.
We had a short discussion on a Supplementary Estimate recently. I speak as one who is most anxious that the scheme should succeed. One of the big contributions we have made is to take contention about industrial injuries out of the industrial field. But we have still not forgotten the bitterness in the mining industry. We can buy Meco-Moores for the coal mines; we cannot buy a new spirit. It is not on sale. It cannot be bought. It must be created. Part of that bitterness was caused by what happened to injured people.
The hon. Member for Wallsend (Mr. McKay) spoke about the single man getting 30s. in 1938. I know that he will not mind if I correct him. The single 1714 man did not get that. That was the maximum which he could get. In 1936 the average compensation for everyone, single or married, was 23s. 8d. a week, with nothing for the wife or child. Indeed, disablement lasting for more than two months in 1936, 1937 or 1938 in South Wales meant public assistance.
Because of all this I am anxious that this scheme should succeed as a great social service. We are the only country in the world which has adopted this method of making payment to those who are injured in industry. I am glad to have been able to take part in the initiation of this scheme. I am anxious that it shall succeed and, because of that, I wish to ask the Minister to look at a problem which I have mentioned previously to the Parliamentary Secretary. It is one which must be examined quickly.
§ Mr. Griffiths
I said that not of necessity would a man get 30s. That was the maximum. I indicated the average for single and married men.
The point I wish to make is that the assessments made by the medical boards are too low. This is the biggest venture in this field of insurance, and it will succeed or fail on this point. The Act provides for a list of specified injuries. The only experience we had had in this connection was with war pensioners. But war injuries are confined to a much more limited field than industrial injuries. The experience was too limited to enable us to be sure that we could work the scheme successfully over the wide range of industrial injuries.
The result is that the bulk of cases cannot be assessed according to the book, with a list of specified injuries, so that an official can put a finger here or there. In a wide variety of cases the assessments are too low. I sent details of one case to the Ministry recently, and I have had others. Is it a fact that 50 per cent. of the appeals made to the medical appeal tribunals against assessments by the medical board have succeeded. The Parliamentary Secretary said that he was not unduly worried, but I am. These figures mean that in half the cases which went 1715 to the medical boards people were not assessed high enough.
I appeal to the Minister to look at this matter. We want to remove the bitterness which is felt among some workers. Part of the bitterness under the old workmen's compensation system was due to the fact that a great deal of money was spent in lawyers' and doctors' fees, in the county court and the appeal court, the House of Lords and all the rest of it.
Recently I asked the Parliamentary Secretary if he could tell me the cost of administration of the National Insurance (Industrial Injuries) Act and compare it with the cost of the old workmen's compensation scheme. The figures are most interesting. The administrative expenses of the industrial injuries scheme for the year ended 31st March, 1951, were approximately £2,700,000–7½ per cent. of income. The hon. Gentleman pointed out that included in this £2,700,000 were expenses totalling £468,000 in respect of the cost of medical boards and medical appeal tribunals.
That £468,000 was not a cost upon the fund or upon the employer under the old scheme. It was met by the State. Therefore, the cost of administering the National Insurance (Industrial Injuries) Act, when we delete that sum, is just over £2 million or, I should think, somewhere about 5 per cent. or 6 per cent. of income. The Parliamentary Secretary was good enough to remind me in his letter that the Home Office, in a Memorandum to the Beveridge Committee, estimated that, out of the total that workmen's compensation cost the employers in 1938—£13,500,000—at least £3,500,000, or 26 per cent., represented expenses.
There is the contrast, and there is one of the justifications for this scheme. Now we are spending 6 per cent. at most of the income of the scheme on administration, or 7½ per cent. including all the costs of the court, the tribunals and the medical appeal tribunals, whereas in 1938, under the workmen's compensation scheme, the figure was 26 per cent., and that, with other reasons, provides the justification for this scheme.
With my hon. Friends who worked on the Committee, I join in giving a welcome to this Bill. My hon. Friends brought their knowledge and experience to bear 1716 upon this problem, and I regret that I did not share their company and experience on the Committee stage, but I join them in giving the Bill a welcome and in saying that we shall certainly cordially agree to the Third Reading. This Bill, as was the Bill last year, is an interim Measure. Having had these four years' experience of the scheme, it is of the greatest importance that this review into the whole structure of the scheme should take place quickly, and I hope that after this debate the Minister will take what steps are necessary in order that we may be able to engage very quickly in that comprehensive review.
All of us are agreed on one thing—that this Bill and this scheme, in providing a system of social security, sets a pattern to the whole world. When I was privileged to be Minister of National Insurance, I was proud when, very often, representatives came from other countries to examine our scheme, and I am also proud that other countries are increasingly using this scheme as their model.
I hope we shall all feel proud that, as a country and under successive Governments, and, generally speaking, with a unanimous House of Commons, we have indeed set an example to the whole democratic world in the provision of a social security scheme. During the four years in which the scheme has been working, it could not have had more devoted or skilled service than has been given it by the staff, with whom I was privileged to work and to whom I should like to pay another tribute.
§ 6.23 p.m.
§ The Parliamentary Secretary to the Ministry of National Insurance (Mr. R. H. Turton)
On behalf of my right hon. Friend, I should like to thank hon. and right hon. Gentlemen of all parties in the House for the way in which they have received this Bill, not only today but during its earlier stages, and especially for the valuable contributions which they have made to today's debate.
Quite clearly, I would not have the time to deal with all the points which have been raised, even if I were in order to do so, but I can assure hon. Members that all their remarks will be very carefully considered, and that we shall also see what other views we can obtain from them. Perhaps I should say, as the special hardship allowance is not in this 1717 Bill, and it would not therefore be proper for me to refer to it, that my right hon. Friend is to discuss that matter with the Trades Union Congress in the reasonably near future. That is all that it would be appropriate for me to say now in that connection.
This debate has really centred upon three main issues. There has been criticism by hon. Members on both sides of the House of the method we have used in fixing the increases which we have found necessary over the previous scales. All that we have done in this matter is to use the method that had been used by our predecessors, taking the all-items index of the cost of living and working on that basis from 5th July, 1948.
I quite understand the hon. Member for Ince (Mr. T. Brown), and also the hon. Member for Wallsend (Mr. McKay), who attempted to disagree with his party in some of the things they had done in this scheme. I quite appreciate that he would criticise, quite rightly, what was done, and that he would criticise us for following what was done, but where I found it really difficult to follow the argument was when the hon. Member for Mansfield (Mr. B. Taylor), my predecessor in office, tried to criticise us for taking the all-items index and working on the basis of 1948 figures.
He told us that he thought we ought to work on an index which covered in the main the three important items of food, clothing and fuel, which are the three basic commodities. The hon. Gentleman pointed out that the cost of these three items had increased by 46 per cent. I would ask him what he was doing only last year, when he was trying to readjust the retirement pensions in view of the increasing cost of living. What happened then? If he takes the three basic commodities of food, clothing and fuel, he will find that at the time when he was introducing his Measure last year, food had risen to 139.7, clothing to 142.7 and fuel to 127.8. Yet the hon. Gentleman's Bill last year provided an increase of only 15 per cent.
I think it would be much wiser if we can agree that what we can do at present is to work on the basis of getting back to July, 1948, on an all-items index. It may well be that when we come to the review, other cost of living indices may have been devised for this purpose, but, 1718 for the present, that is what all parties have done in the past and what we are trying to do today.
The answer to the hon. Member for Kirkcaldy Burghs (Mr. Hubbard), who suggested a special rate for retirement pensions, was, I think, given by my hon. Friend the Member for Aylesbury (Mr. Summers). The hon. Gentleman must remember that, in addition to their pensions, those who have retired are able to earn up to 40s. a week without suffering any deduction from their pensions, and that, in addition, these retirement pensioners have, in many cases, the opportunity of delaying their retirement and so increasing their pensions up to what will be, as a result of this Bill, 47s. 6d. for a single person at 70, or 79s. for a married couple. That is the justification for keeping sickness benefit and retirement and widows' pensions on a uniform scale, as our predecessors have done.
§ Mr. McKay
May I put a question to the hon. Gentleman? It concerns the point about retirement pensioners who can earn money by various means. Has he any figures to show how many pensioners who have actually retired from general work have other occupations in which they earn money? I think there is a tremendous percentage who have no opportunity to earn other money.
§ Mr. Hubbard
I am quite sure that the Parliamentary Secretary realises that the people to whom I am referring are the very large number who have no option but to retire for health reasons, particularly those engaged in heavy industry, and who have no other occupation. It is all very well to say that they could do other work, but that would depend on their being qualified to do it and if such work were available to them. Therefore, when we discuss this matter, we are referring to things as they are and not as they might be.
§ Mr. Turton
I was dealing with the point whether we should use the all-items cost-of-living index for the benefits provided under our social insurance scheme, and I hope I have persuaded the majority of hon. Members that that is the only practical thing to do. It is quite true that there are some old people who are so incapacitated that they cannot work, but we have to look at the broad picture. 1719 In this connection, the right hon. Member for Llanelly (Mr. J. Griffiths) asked how many people were actually postponing their retirement in order to earn increments. I would repeat to him the figures I gave on Second Reading in answer to a similar question asked by the right hon. Lady the Member for Fulham, West (Dr. Summerskill). The figures show that 60 per cent. of the men are still in employment one month after reaching the age of 65 and that in the case of women the figure is 50 per cent. In the case of women between the ages of 60 and 65 and of men between the ages of 65 and 70 figures show that two out of every seven women and three out of every seven men are still in employment.
§ Mr. J. Griffiths
I am much obliged to the Parliamentary Secretary for repeating those figures, but, quite frankly, I do not think they show a very big increase over the pre-1948 figures, because one of the things that surprised me was the large number of men and women who did not retire at the respective ages of 65 and 60 prior to 1948. I think it is worth having a survey to find out what influence the increments have in postponing retirement.
§ Mr. Turton
I think that that is quite right. All the indications we have show that the proportion has not increased in recent months or years. In fact, the Bill last year did not appear to us to persuade many people to accept the inducements contained in it.
I come now to what I think is rather a dangerous misconception on the part of the right hon. Member for Llanelly concerning the earnings rule and the effect of the rule as to 12 hours' work a week. I am sure the right hon. Gentleman will remember that the hours of work have no effect at all on the amount of money a man is allowed to earn. The hours of work rule is solely a test to see whether a man or woman is or is not retired.
To retire, an insured person must not have any considerable employment, and so the Commissioner, as a test whether the employment is considerable or not, has regard to whether it is either 12 hours in the week or one-quarter of the normal working week, whichever is the greater. But, having retired, a man can work for 1720 as long as he likes without suffering deduction provided his earnings do not exceed 40s. a week. I think that puts the position quite clearly.
§ Mr. Griffiths
It is quite true that the 12-hours rule made by the Commissioner when I was Minister was the criterion of whether a man was retired or not, but this is how I think it is working out. If a man works 11½ hours, then, by the criterion of retirement—12 hours being 25 per cent.—he is retired and can earn up to £2 a week. But, by the same criterion, if he works 12½ hours he is not retired and cannot qualify for the provision. All I say is that I would like the matter examined. That was the decision of the Commissioner and it may require legislation to change it.
§ Mr. Turton
I only wanted to correct what was a slight inaccuracy. After all, the right hon. Gentleman has been round the world since he was at the Ministry of National Insurance and it is possible that some of the phraseology used might mislead some people.
I come now to the question of uniformity. The hon. Member for Wallsend said that he had never liked the legislation passed last year; it provided two different rates of pensions for those who had a birthday before 1st October, 1951, and those whose birthdays came after. I wish to pay my tribute to the deputation which came to see me in March, and which put that view very strongly. It was led by the hon. Member for Ince accompanied by the hon. Member for Kirkcaldy Burghs and a number of other hon. Members. I conveyed to my right hon. Friend the views expressed by that deputation, and no doubt he took those views into full consideration before coming to a decision.
We have had a certain amount of criticism today about the uniform rates on the ground that they are still below the National Assistance scale. In that connection, I think it would be wise for the House to remember what my right hon. Friend is actually doing in this Bill. We are closing the gap as regards sickness and unemployment from 4s. at the present time to 2s. 6d. in the case of a single person, and from 8s. at present to 5s. for a married couple. We are making every effort to diminish that gap, but we have to remember what we can afford to pay out of the fund.
1721 Hon. Members on all sides of the House have talked in terms which excite a great deal of sympathy about the needs of the insured population. But our responsibility in this matter is tofix a rate of benefit which, while providing a reasonable insurance against want, at the same time takes account of the maximum contributions which the great body of contributors can properly be asked to bear.That is a quotation from the Coalition White Paper on the social insurance scheme, and that must remain our responsibility.
In that connection, I would assure my hon. Friend the Member for Colchester (Mr. Alport) that I found his contribution on the needs of his constituents extremely valuable and that it will have our close consideration. However, he must not complain, as he did, because there is a divergence between the Beveridge scales and our present proposals. Our present proposals have diverged from those of Lord Beveridge. Hon. Gentlemen will remember that Sir William Beveridge, as he then was, proposed that the full rate of retirement pensions should not come into effect until 20 years after the scheme had been in operation for the reason that the insurance fund and the population could not shoulder the full cost at once. That gives us an added responsibility at the present time.
This is an insurance scheme, and we must not do anything to damage the insurance principle. I regret very much that in an otherwise excellent speech the hon. Gentleman the Member for Ince made suggestions about raiding the funds. It was a suggestion made by the right hon. Lady the Member for Fulham, West at an earlier stage. I believe that such suggestions do irreparable damage to the confidence of the insured population in the Funds. I think that those who have reflected on the figures in the Government Actuary's Report on this Bill must see how, if we are to have an insurance system that is sound for the future, it is vital that we should not steal from it at the present time.
§ Mr. T. Brown
I am much obliged to the hon. Gentleman for giving way. I stand rebuked, but I just want to qualify what has been said. I suggested that the reserve funds should be dug into for a period of two years pending review of the National Insurance scheme—which, 1722 in my opinion, would meet the needs of those who stand in need and not do any great harm to the surplus funds.
§ Mr. Turton
I must adhere to my view—although merely a little one. We must stand quite firm against any suggestion of stealing from the reserve fund. Let hon. Gentlemen reflect that this fund is from 1955, as my right hon. Friend said, going to be losing up to a rate of £50 million a year, and that on 5th July, 1958, we shall get the sudden change of the late entrants ceasing contributions and being entitled to pensions; and we shall find in a very short time, in 15 years, that we shall get to a deficit of £275 million a year. I am quite sure that the hon. Gentleman the Member for Ince will regret that he made any suggestion about a raid.
However, that does bring me to what many hon. Gentlemen asked about, and that is the quinquennial review that is to take place after the Actuary has made his Report on the expenditure to 31st March, 1954. My hon. Friend the Member for Aylesbury and the right hon. Member for Llanelly and others were asking us to expedite this review and to bring it on earlier. I would remind them of what was said by the Government Actuary in his Report on this Bill—that at the present time, in his view, it was premature to attempt any review of the fundamental structure of the finances of the scheme.
The Government will certainly take into account the representations that have been made from all parts of the House, but they must also take into account the wise advice that is tendered to them by the Government Actuary, because a premature review, without our having got full, detailed knowledge, would not be so valuable as a timely review. Hon. Gentlemen must remember that at the end of each financial year we get an Actuary's Report—a very valuable Actuary's Report—on the finances of that year.
We have in this Bill attempted, as we were pledged to do by what we said at the Election, to review the position of those who are on pension, and, in particular, to see that the hardest cases are met first. I believe that in this Bill we are carrying out that undertaking, and that the position of the old, the sick, the children, and the disabled will be brought 1723 back, at least, to the level it was in July, 1948; and when the country considers how great is the economic struggle in which the country is engaged, and the great deficiencies looming up in the funds, I believe it will give to the Government its congratulations upon the boldness and the justice of the Measure to which I now ask the House to give the Third Reading.
§ Mr. T. Brown
Would the hon. Gentleman be prepared to consider the advisability of a social survey into the lives and conditions of the old people before he finally decides upon the complete review?
§ Question put, and agreed to.
§ Bill accordingly read the Third time, and passed.