HC Deb 01 December 1954 vol 535 cc146-54
The Minister of Pensions and National Insurance (Mr. Osbert Peake)

I should like, with permission, to make a statement about benefits and pensions.

We have now received the Government Actuary's Report on the first five years' working of the National Insurance Scheme and the Report of the Phillips Committee and I am, consequently, in a position to announce the various improvements I have worked out with the help of my right hon. Friend the Chancellor of the Exchequer in insurance and war pensions and other benefits. The Actuary's Report will be in the Vote Office early this evening, and the Report of the Phillips Committee will be available on Friday.

I should like to express our gratitude both to the Government Actuary and to Sir Thomas Phillips and the members of his Committee for the way in which they have responded to our requests to let us have their Reports as soon as possible. We are greatly indebted to them.

As regards war pensions, we intend to raise the basic rate for 100 per cent. disablement pension from 55s. to 67s. 6d. Smaller assessments will be increased proportionately. The standard rate for war widows with children or for widows over 40 years of age will be raised from 42s. to 52s. 6d. with appropriate increases in the rates for their children. Orphans' rates will also be increased.

There will also be increases in the special allowances paid to seriously disabled men. For example, the constant attendance allowance will be increased from 25s. to 30s., and for the most serious cases from 50s. to 60s. The unemployability supplement payable to men whose war disability prevents them working will be increased from 35s. to 45s. The man who qualifies for this allowance in addition to a 100 per cent. pension will, therefore, get at least £5 12s. 6d. a week, compared with £4 10s. today. These new rates will come into force at the beginning of February and will cost the Exchequer an additional £15 million in a full year. I will circulate a list of all the principal changes in the OFFICIAL REPORT.

Now I turn to the National Insurance Schemes. The standard rate of industrial injury benefit and of the 100 per cent. industrial disablement pension will be raised from 55s. to 67s. 6d. The widow's rate, now 37s., will be raised to 45s. All the extra allowances payable with industrial disablement pensions will also be increased.

The standard rate of retirement pension at minimum pension age under the National Insurance Scheme, as well as of unemployment benefit and sickness benefit will be increased from 32s. 6d. for a single person to 40s. and from 54s. for a married couple to 65s. The new rate for widow's pension will be 40s., and the widow's allowance for the first 13 weeks will go up to 55s. There will be appropriate increases under both schemes in the allowances for children and other dependants.

Now a word about finance, contributions and the time-table. The increase I have described will add about £120 million in the first full year to the amount at present being paid out in National Insurance and industrial injury benefit and pensions. To help finance these higher benefits under the two insurance schemes the contribution payable by the employed person and his employer will each be increased by 1s. The contribution for the self-employed will be increased by the same amount; for the non-employed it will be somewhat less. These increases in contribution will carry with them an increase of over £20 million a year in the supplement from the Exchequer.

The Exchequer will also assume a liability to pay into the National Insurance Fund a sum not exceeding £325 million in the aggregate, over the next five years, to meet deficiencies which would in any case have arisen from the increasing number of retirement pensioners; deficiencies which will be increased by the higher rates of pensions and other benefits now proposed.

As regards the time-table, all the increased rates will be made effective as soon as possible but, in view of the vast number of beneficiaries whose benefits and pensions have to be adjusted, the work will have to be spread if breakdown is to be avoided. The new rates of retirement and widows' pensions will come into operation during the last week in April and all the other changes will be effected by the end of May. The new rates of contribution will be payable in June.

Full details of the changes in National Insurance are given in the White Paper on the Bill. Copies of this White Paper, and of the Bill and other documents will be available in the Vote Office after 5 o'clock today. As my right hon. Friend the Foreign Secretary announced yesterday, we hope that the Bill will become law before Christmas. If this cannot be done we may find it impossible to keep to the time-table which I have announced. We do, however, realise that there are important matters of long-term policy arising out of the Phillips Report which we shall all need time to consider. It is accordingly proposed to provide a day after the Christmas Recess for a discussion of this Report.

Finally, I come to National Assistance. The increased benefits and pensions which I have announced will, of course, have to be taken into account in calculating assistance grants to those who are drawing supplementary assistance. I have, however, received proposals from the National Assistance Board for increases in the assistance scales. These are 2s. 6d. for a single adult and 4s. for a married couple, with appropriate increases in the other rates. These proposals have been accepted, and the necessary draft regulations have already been laid. If the regulations are approved, payment of assistance at the higher rates will start on the first Monday in February.

The proposals which I have announced in this statement will cost the Exchequer, in all, about £25 million in the first full year and the cost will increase rapidly year by year. I trust that the whole House will rejoice that it has been found possible to announce these increased payments of pension, benefit and assistance, which will bring additional comfort to some 7 or 8 million of our fellow citizens.

Dr. Summerskill

I am very pleased that the right hon. Gentleman has lost no time in announcing these new rates, following our very recent debate on National Insurance. I also welcome the fact that he has accepted the proposals of the Trades Union Congress. I believe that many of the benefits recommended by the T.U.C. are similar to those which the Minister has announced today. I am not quite clear on one or two points, but I do not press the right hon. Gentleman to answer my questions now because I realise how complicated the position is.

I should like to ask about the pre-1946 widow, the widow who still receives only 10s. a week and who feels that she has a permanent grievance. I do not press that question, because I know that a debate is coming soon and that these matters can be raised.

My other question is about contributions for industrial injuries. The right hon. Gentleman did not mention the question of contributions for that benefit. He may like to answer that question. However, I know that the debate will take place, I think, next week.

As the right hon. Gentleman has said, the relevant documents are to be in the Vote Office this evening and without the Actuary's Report it is extremely difficult to analyse the figures and relate the benefits to contributions; but between now and next week we shall have an opportunity to do that and, of course, we shall be able to have a full and exhaustive debate.

Mr. Peake

I am obliged to the right hon. Lady for the way in which she has received my statement. I am afraid that I have nothing to add to the many previous statements which I have made on the topic of the 10s. widow. On the question of contributions, I want to make it clear that the extra 1s. includes the extra contribution for the Industrial Injuries Fund as well as for the National Insurance Fund. For the employed man there is 11d. to go to the National Insurance Fund and 1d. to the Industrial Injuries Fund. As the right hon. Lady has said, very full documentation will be available in the Vote Office this evening on all aspects of this question.

Sir I. Fraser

Is my right hon. Friend aware that the British Legion and other ex-Service societies such as B.L.E.S.M.A. and St. Dunstan's will want to consider the statement that he has made and the papers that are to be made available? In doing that they will take into account their own requests; and, of course, his figures are less than some of theirs However, they will also take into account the needs of others and the general economic situation in the country.

Meantime, is my right hon. Friend o aware that the proposals he has made for war pensioners and war widows are the best that have been made since the war and, indeed, the best that have been made at any time in our history? I offer my right hon. Friend the thanks of the ex-Service community for having met, so far as he has done, the requests that have been put before him. Will he lay a Royal Warrant in draft—a course for which there are precedents—so that we may have a brief discussion upon this matter before the warrant is signed by Her Majesty?

I thank my right hon. Friend for having brought these proposals forward as quickly as he could and for having given the ex-Service community such priority in the matter of date as he found possible.

Mr. Peake

I am grateful to my hon. Friend for what he has said, but I am sorry to disappoint him on the subject of the possibility of a debate upon the Royal Warrant in draft form. It was explained to my hon. Friend, I think in 1943, that it would be quite unconstitutional for us to debate a Royal Warrant in draft form, but it is always possible for the House to discuss the subject of war pensions by arrangements made through the usual channels.

Mr. Blyton

Can the Minister give an assurance that the proposed Bill will be a temporary Bill and will not, when we discuss the quinquennial valuation, preclude the making of Amendments to the National Insurance Acts?

Mr. Peake

Certainly, Sir. I thought I made clear in my statement that there would be matters for consideration arising out of the Report of the Phillips Committee. There is also, of course, a number of questions still before the National Insurance Advisory Committee and further legislation may well be called for at a later date.

Mr. J. Griffiths

Will the Minister consider presenting to the House, in addition to the documents to which he has referred, the advice which he received from local insurance committees, which were asked for their experience of the working of the National Insurance Acts and which have made certain recommendations? Would the Minister consider publishing those recommendations, not necessarily before next week, but before we discuss the Report?

Mr. Peake

I will consider the point, but I cannot make any promise about it, since some of the advice may have been tendered in a confidential form.

Mr. Griffiths

Will the Minister ask the committees for permission for their evidence and advice to be published?

Mr. Peake

I will certainly look into that point and communicate with the right hon. Gentleman.

Mr. G. Longden

While thanking my right hon. Friend and his colleagues for what they have been able to do, may I ask whether it is contemplated that anything can be done for civil servants who retired some time ago and officers who retired before 1950?

Mr. Peake

My hon. Friend must realise that that is beyond the scope of my Department. Questions on that point must be addressed to the Chancellor of the Exchequer.

Mr. H. Morrison

I was not clear whether there is included in these proposals anything to better the condition of the First World War widows, that is, widows of the 1914–18 war. I gather that many of them are having a very difficult time, and I was not clear about what was to happen to them.

Mr. Peake

Yes, Sir. War widows of both world wars can benefit under these proposals. Some widows of the First World War on what is called alternative pension will have the option of going on to the rates which I have just announced.

Mr. McKibbin

On behalf of the war disabled and war widows in Northern Ireland, I thank the Minister for the very satisfactory increases that he has proposed. The old-age pension and other pensions are matters for the Government of Northern Ireland who, at their meeting this afternoon, will doubtless move step by step with the increases given here.

Several Hon. Membersrose—

Mr. Speaker

Order. This is the time for questions on this statement, and I hope that they will be reduced so far as possible, because there are a great number of papers to be read before the matter can be properly understood. We shall have plenty of opportunity later for discussion.

Mr. T. Brown

In view of the statement which he has just made, which indicates that there will be an increase in the amount of the contributions of the workers, can the Minister tell the House what will be the annual block grant from the Exchequer year by year? He has spread it over five years, but can he say what will be the annual block grant towards the National Insurance Fund?

Mr. Peake

For those detailed figures the hon. Gentleman had better refer to one of the documents which will be available this evening, that is, the Report of the Government Actuary.

Lieut.-Colonel Bromley-Davenport

May I say that my right hon. Friend's proposals will be received throughout the country with joy which will be as great as the amount of gloom with which they have been received by Her Majesty's Opposition.

Mr. Speaker

Order. That is not a question.

Mr. Mellish

Is the right hon. Gentleman aware that, because of the high cost of living, the vast majority of my constituents are receiving National Assistance to supplement their pensions? Is he further aware that what he has said this afternoon means—at any rate, in constituencies such as mine—that all a married couple will receive is 4s. a week, some time in February?

Mr. Peake

As I have explained to the House on many occasions, the National Assistance scales have been increased from time to time to keep pace with and even to go ahead of the rise in the cost of living. The scales now proposed will give persons receiving National Assistance a higher standard of living than they have ever enjoyed before.

Mr. Gower

Is my right hon. Friend aware that most reasonable people, both in this House and outside, will regard his statement as excellent?

Several Hon. Membersrose—

Mr. Speaker

Order. We cannot now debate the merits of these proposals. That can only be done later when we have seen all the papers.

Sir I. Fraser

May I ask your guidance, Mr. Speaker? My right hon. Friend said, quite properly, that arrangements may be made through the usual channels to debate the subject of war pensions while the proposals are known, but before the Royal Warrant is signed by Her Majesty, May I ask whether that excludes the possibility of this matter being discussed today? In the absence of any other arrangements for today, is there any reason why it should not be

Present rate Proposed rate
Disablement pensions* (100 per cent. assessment):
ex-private or equivalent 55s. a week 67s. 6d. a week
ex-non-commissioned officers Increase of 12s. 6d. a week
ex-officers Increase of £34 a year
ex-Regular Officers—disablement addition Increase of £34 a year
Constant Attendance Allowance:
Normal maximum 25s. a week 30s. a week
Exceptional maximum 50s. a week 60s. a week
Allowance for wear and tear of clothing £5 and £8 a year £6 and £10 a year
Unemployability supplement† 35s. a week 45s. a week
Allowance for Lowered Standard of Occupation up to 20s. a week up to 27s. 6d. a week
Widows' pensions:‡
Widow of ex-private or equivalent 42s. a week 52s. 6d. a week
Widows of ex-non-commissioned officers Increase of 10s. 6d. a week
Widows of ex-officers Increase of £28 a year
Allowance for each child:
Other ranks 11s. a week 16s. 6d. a week
Officers £36 a year £50 10s. a year
Pensions for unmarried dependants who have been living as wives of men deceased:
Other ranks 34s. 6d. a week 45s. a week
Officers £113 a year £141 a year
Orphans' pensions:
Other ranks:
under 15 years 15s. a week 20s. a week
15 years or over 21s. 6d. a week 30s. a week
up to 18 years £64 a year £86 10s. a year
Adult orphan incapable of self-support 32s. 6d. a week 40s. a week
* It is also proposed to increase proportionately the amounts of weekly allowances and terminal gratuities for assessments of less than 20 per cent.
† It is also proposed to increase the special additional allowances for wife or other adult dependant and first child payable with this supplement (and with treatment allowances) from 21s. 6d. and 10s. 6d. a week to 25s. and 11s. 6d. respectively. It is also proposed to increase the additional treatment allowance payable to a war pensioner who is not eligible for sickness benefit from 32s. 6d. to 40s. a week. These changes are in line with impending changes in the corresponding National Insurance benefits and will come into operation by the end of May, 1955.
‡ The opportunity is being taken to provide broadly that the widow of an officer or soldier shall retain her higher scale award and not be transferred to the lower rate of pension when the allowance for her only or youngest child ceases because the child reaches the age limit before the widow becomes 40 years of age. Widows in this class receiving the lower rate of pension on 31st January, 1955, will have the higher pension restored automatically from that date.

discussed, at any time on the Motion for the Address?

Mr. Speaker

As a matter of order the Motion for the Address will be before the House, and any subject, such as war pensions, which is not, I understand, included in the proposed legislation, but depends on an alteration of the Royal Warrant, would be in order. But not discussion on these pension increases, which depend on future legislation.

Following is the list: