HC Deb 14 December 1954 vol 535 cc1667-86
Mr. Houghton

I beg to move, in page 11, lines 20 to 26, to leave out columns 2 to 5 and add:

1 3½ 1 3½ 3 6 2 7
1 0½ 1 0½ 3 0½ 2 1
8½ 8½ 2 0½ 1 6
7 7 1 9 1 2½
We move for a short time from the benefits under the Bill where, as we have just heard from my hon. Friend the Member for Wallsend (Mr. McKay), hearts are stirred, emotions are roused, and all the human side of the Bill's provisions engage our attention. We must now come back to the counting house where we talk in millions, although we begin with pence.

The purpose of this Amendment is to restore the Exchequer supplement to its original proportion of one-fifth of the global contributions. The arithmetic is quite simple—probably too simple. I have added two-fifths to the amount shown in Part V of the Third Schedule. This simple method may not give precisely accurate results, but if the Minister is willing to restore the Exchequer supplement to the original 1946 proportions he will have plenty of people at hand to advise him as to what the figure should be.

As regards self-employed and non-employed persons, I realise that to add two-fifths to the amounts of the Exchequer supplement in the Bill is to increase still further a somewhat higher Exchequer supplement in those two categories than there has been in the past but, as I say, the principle of the thing is what we should now adopt. It is the principle to which the Minister himself attached considerable importance in our discussions in 1951.

Another point of explanation is that, if the proposed Exchequer supplements are substituted for those in the Bill, there will be a necessary adjustment of the contributions of both employers and employees which are dealt with earlier in the Schedule—unless, of course, the total contribution was further increased, which is not our intention, nor is it necessary. I will now pass to what may be in dispute between the Minister, my right hon. Friends, and myself.

The Exchequer supplement, or, as we often call it, the proportionate grant, is that part of the triple contribution which is paid by the Exchequer. The other two parts, in the case of employed persons, are paid by the employer and by the employee. There is nothing in the principal Act of 1946 which lays down permanently what these proportions should be, but the contribution rates and the Exchequer supplement set out in the First Schedule to the 1946 Act plainly showed that, originally, employers and employees together were to pay four-fifths of the total contribution, and the Exchequer the remaining one-fifth of the total amount.

The one-fifth proportion adopted at that time for the Exchequer supplement was, as the Minister explained in the Second Reading debate … an amalgam of the proportions previously contributed for the purposes of health and unemployment insurance. He went on to say: There was no sort of Law of the Medes and Persians about it, but it was arbitrarily fixed—fairly fixed, I think—at one-fifth. The result was a Class I supplement from the Exchequer of 2s. 1d. per employed worker."—[OFFICIAL REPORT, 8th December, 1954; Vol. 535, c. 977–8.] The first thing which the Committee will notice is that, in Part V of the Third Schedule as it stands, the Exchequer supplement for a man is now only 1s. 10d. as compared with 2s. 1d. in 1946, notwithstanding the fact that the contributions from employers and employees are now so much higher than they were then.

The proportionate grant of one-fifth was altered in the Act of 1951. The Minister, in the speech from which I have quoted, gave some account—in my opinion, an unfair account—of the events of 1951. My speech, which followed that of the right hon. Gentleman, contained some criticisms of his handling of the facts and events of that time. Since the change was made in 1951—and we have not yet got back to the pre-1951 Exchequer supplement—I think it is important to pause for a few moments to see exactly what did happen in 1951.

In addition to the proportionate grant—that is, the Exchequer's share of current contributions—Section 2 (3, b) of the 1946 Act provided for an additional sum—usually called the block grant—to be paid into the National Insurance Fund to meet the uncovered liabilities for retirement pensions for those who had not contributed to the Fund, or who had entered it late. This amount, provided for in the 1946 Act, was to begin at £36 million a year, and was to be increased by 4 million a year until it reached £60 million a year after which—this year—it was to be reviewed in the light of the quinquennial report of the Government Actuary.

That meant that, in 1951, the proportionate grant—which was then running at about £92 million a year—added to the block grant of between £40 million and £50 million a year, was building up the National Insurance Fund far beyond its immediate needs. There was about £140 million more going into the National Insurance Fund each year than was required to pay out benefits. In 1951, the Government Actuary drew attention to this, and recommended that £300 million of the surplus in the Fund—which was not needed and would never be needed—should be transferred to the reserve fund.

The question here arises—when is a reserve fund not a reserve fund? My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) yesterday explained very lucidly the difference between a reserve fund which is of dimensions actuarially necessary to guarantee the payment of benefits throughout the term of a person's insurance, and a fund of this kind which is, in reality, a phantom reserve fund. I call it so, because it is quite clear that the benefits payable out of the National Insurance Scheme can be paid only out of current incomes and not out of reserves. If it were ever thought to be necessary to draw on the reserve fund of the National Insurance Fund it would obviously be necessary for the Government to replace in that fund any money taken out of it because the reserve fund is invested in Government securities and in large holdings of stock in the nationalised industries of amounts so vast that it would be quite impossible for any Government to think of realising them without a grave disturbance of the market value of those holdings.

8.30 p.m.

Contrary to what has been alleged in political debate at one time or another, there was no raid on the fund in 1951. Nothing, in fact, was taken out of the reserve fund in 1951. Nobody was deprived of anything as a result of the decision which was then taken by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) when he was Chancellor of the Exchequer. This is not an insurance scheme. It is a contributory scheme. It is a scheme in which the State undertakes to pay certain benefits in return for specified contributions, and that is the long and the short of it. The State, in exacting certain contributions from insured persons and from employers, undertakes to add to those amounts to provide year by year a total sum adequate to pay the benefits under the scheme.

On all this I carry the Minister with me, although he does not happen to be in his place at the moment. I am confident in saying that, because on the Second Reading of the National Insurance Bill, in 1951, he said: It was never intended that the reserve fund should grow, as, in fact, it has done, and it was not intended to build up the reserves in earlier years to meet the great bulge in retirement benefits which will have to be met in 20 or 30 years' time. To build up the fund in that way would be both dangerous and liable to abuse. A fund of this sort is so big that it has to be under the control of the Chancellor of the Exchequer, but to give the Chancellor the power to inject £140 million of new money every year into the gilt-edged market, places temptations in the way of a Chancellor which I think are too great for him to resist."—[OFFICIAL REPORT, 26th April, 1951; Vol. 487, c. 600.] That is a quotation from the speech of the right hon. Gentleman, who, I am glad to say, has now returned to his place. So the right hon. Gentleman was in agreement with the general purpose behind the proposals of my right hon. Friend the then Chancellor of the Exchequer.

Now we will see what my right hon. Friend, in fact, proposed. He proposed that the proportionate grant—that is, the matter we are now discussing, the Exchequer share of current contributions—should be reduced from over £90 million a year to £27 million a year. That meant a reduction in the proportion of the Exchequer supplement from one-fifth to one-sixteenth. Reference to that proposal was made in what I thought were rather contemptuous terms by the right hon. Gentleman on the Second Reading of this Bill.

My right hon. Friend the then Chancellor also proposed that the additional sum—that is, the block grant—then running at between £40 million and £50 million a year, should be reduced to nothing in the second half of 1951, but should then begin again to rise sharply to £10 million, then to £30 million, then to £60 million in the three succeeding years, and then be reviewed by Parliament when the quinquennial review was complete.

The combination of those two proposals would have meant that the income of the fund would have been just about equal to the claims upon it. In other words, the National Insurance Fund would have kept in balance, having neither surplus nor deficiency, and that, I may add, was precisely the state of the Fund contemplated under the 1946 Act. It was made clear at the time by two of my right hon. Friends that these were temporary measures which would certainly have to be reviewed a few years afterwards when the so-called bulge of retirement pensions began a heavier claim upon the National Insurance Fund.

My right hon. Friend the Member for Battersea, North (Mr. Jay) stressed the need to restore the block grant about this time when it would be so badly needed to meet the current liabilities of the National Insurance Fund. The present Minister, in the course of his speech on that Bill, agreed that the block grant could be terminated for a few years until it was necessary once more to use it to meet the growing cost of retirement pensions. He made that clear in column 601 of the OFFICIAL REPORT of 26th April, 1951. What he did do was to take the strongest possible objection to … the reduction to a mere token figure of the proportionate and contractual part of the Exchequer contribution."—[OFFICIAL REPORT, 26th April, 1951; Vol. 487, c. 601.] That was his sole point of disagreement with what was done in 1951. He objected to the reduction in the proportional grant from one-fifth to one-sixteenth, and both he and I had some comments to make on that in the debate on the Bill.

Then my right hon. Friend the Member for Leeds, South devised a new proposal. I think it is important that this should go on the record, in view of all the mischief which has been made in different quarters on what is alleged to have happened in 1951, in view of the allegations of raiding the Fund or cutting down the grants in some way so that, it is suggested, the interest of beneficiaries was prejudiced. This new proposal by my right hon. Friend was to terminate the block grant altogether until it would be needed again, and that was precisely what the present Minister thought could be done with the block grant at that time. My right hon. Friend also proposed to increase the Exchequer supplement from his original proposal, which was one-sixteenth, to one-seventh.

The net result of what was done in 1951, therefore, was a reduction in the Exchequer supplement from one-fifth to one-seventh, and the present Minister reluctantly accepted that alternative. His comment, as reported in column 979 of the OFFICIAL REPORT of 8th December. 1954, and referring to my right hon. Friend the Member for Battersea, North was: I saw the right hon. Member and got a settlement … Like a good trade unionist —I should like to see the Minister's trade union card, but I will not press that matter now— who is offered three-quarters of his demand, I settled for one-seventh. When I asked the Minister, in the debate on 8th December, why he had not restored the Exchequer supplement from one-seventh to one-fifth in 1952, when he had the opportunity, he replied, as reported in column 1011: The answer is that I struck a bargain with hon. and right hon. Gentlemen opposite, and I adhered to it."—[OFFICIAL REPORT, 8th December, 1954; Vol. 535, c. 979–1011.] So the Minister adopted the elegant posture of a man of his word. "A gentleman's word is his bond," he said "I made my bargain and stuck to it."

But in the circumstances of 1952 there was no need for the right hon. Gentleman to think that he was still chained to the Labour Party—none whatever. He could have done whatever he thought fit to do in 1952. Even if we grant him some excuses for not having done anything in 1952, he can surely make no excuses for not having done it in 1954. Surely after the quinquennial review, when all these matters had to come up again for review, he could have claimed his freedom and asked to be released from his pledges to the late Labour Government.

So we come to this very moment in time, when the right hon. Gentleman has not restored the Exchequer supplement to the one-fifth at which it stood before the Act of 1951. The purpose of the Amendment is to appeal to him once more to restore the supplement to one-fifth. Why has he not done it? I thought over that question and I wondered whether he had been influenced by paragraph 171 of the Phillips Report, where, incidentally, no explanation or argument is used in support of the Committee's suggestion that the Exchequer supplement should remain at one-seventh. I presume that the right hon. Gentleman had time to scan through the Phillips Report before he came to the House to move the Second Reading of the Bill. He certainly had not much time for any close study of it.

The Phillips Committee Report is singularly lacking in any explanation of why it still talks of one-seventh without examining the possibilities of restoring the Exchequer supplement to one-fifth. The situation is further confused by the reservation which was made by two persons appointed to the Phillips Committee by the Trades Union Congress. They made a stipulation about increased contributions which they wished to be conditional only on restoring the Exchequer grant to one-sixth. There appears to have been some confusion as to what was the pre-1951 figure.

Since the Minister is now putting up contributions over and above the actuarial needs of the present situation there seems very strong ground for pressing him to restore the Exchequer supplement to its original amount. The triple contribution should be brought into its 1946 proportion. Although the Minister may argue that there is nothing of the Law of the Medes and Persians about this, he will remember how strongly he objected to what was done in 1951. One would have thought that if only to vindicate himself he would have taken care to restore it this time.

It may be argued that when the one-fifth was agreed to in 1946 the expected rate of unemployment was higher than was proved by experience. But if there is to be any readjustment of contributions by reference to the anticipated level of unemployment the Exchequer supplement should not be the only one to reap advantage. It should be spread over the three parties to the contribution. As a matter of fact, there is a huge hidden reserve in the contributions and the Minister said in April, 1951, that for every 1 per cent. drop in unemployment there was a saving to the National Insurance Fund of about £15 million a year.

As long as unemployment is provided for in the contribution by 4 per cent.—and in actual experience it is only 2½ per cent.—there will be a saving of £30 million a year to the National Insurance Fund. This hidden reserve, this surplus for unemployment provision, when the time comes will be converted into a subsidy for retirement pensions just as it has been up to now. The Minister has refused to take out of the proposed contribution the extra load for the merging cost of retirement pensions but, if the additional contribution is to be put on insured persons to meet those merging costs, the Exchequer supplement should be restored to its original level. This Amendment will give the Minister, or whoever replies to the debate for the Government, an opportunity to explain why they have not done so.

I wish to conclude by drawing attention to what I believe to be a very important tendency in the National Insurance Scheme. Much of what the Government are proposing and doing in this Bill is to turn the National Insurance Scheme finances very largely into a flat rate wages tax. The mere fact of depending higher contributions by reference to the proportion which contributions bear to earnings now compared with 1946—as the Minister has done—is a clear indication that the Minister regards himself free to levy contributions, not by reference to the principles or needs of the Scheme, but according to what he thinks he can justify as a form of taxation.

In my opinion, the Bill levies an additional tax before the Budget and it is made higher by the Minister's failure to lift the Exchequer supplement now being paid from one-seventh to one-fifth in accordance with the original intentions of the 1946 Act.

8.45 p.m.

The Financial Secretary to the Treasury (Mr. Henry Brooke)

The hon. Member for Sowerby (Mr. Houghton) has argued the principle of the one-fifth contribution with a wealth of historical knowledge. I hope that the hon. Member and the Committee will forgive me if I do not go in detail over the whole of the past eight years. I think that the most helpful course I could pursue this evening would be to show to the Committee precisely what would be the effect if this Amendment were adopted.

The Phillips Committee recommended an Exchequer contribution equal to one-seventh rather than to one-fifth. I grant at once to the hon. Member that the Phillips Committee did not embark on any long argument in support of its statement. It may be that that Committee gave to the position the same kind of practical and up-to-date thought as I am proposing to give to it and that it felt that in the present circumstances, whatever may have been the case in the past, a proportion of one-seventh was the most suitable.

Early in his speech, the hon. Member made it clear that what he was arguing for was the principle. He agreed, I think, that the figures which his Amendment proposes do not represent precisely one-fifth. I do not quarrel with him about that—on the contrary, I agree with the hon. Member; if one were precisely adopting the principle, these figures would have to be somewhat altered.

There is one further point, which I should like to make before coming on to the financial figures, as to the future load on the Exchequer. On the whole, I have gained the impression during these debates that hon. Members opposite were suspicious of increasing the combined contribution—that is to say, the contribution from the insured person, from the employer and from the Exchequer—above what is actuarially required.

It is only fair to point out that if the Amendment were accepted, the Bill would be even more open to that kind of criticism from the Opposition; for the excess of the proposed contribution over the actuarial contribution at age 16, which, under the Bill, we know to be approximately 1s. 5¾d. for an employed male person, would be increased by the Amendment to no less than 2s. 2¾d.

Mr. R. Williams

Would that not put the hon. Gentleman and the Government in the position that they could be more forthcoming in relation to those Amendments from this side of the Committee which call for increases in the benefits?

Mr. Brooke

It is difficult for me to go over what might have happened in this Committee if certain Amendments which were not moved had been moved or if other Amendments which were moved had been carried. I have to address myself to the Bill as it has proceeded through Committee up to date, and to see what would happen if the Bill were amended as the Amendment proposes.

The effect of the Amendment would be to increase the Exchequer supplement by about £38 million a year. Of course, it would be rather less next year, in 1955–56, because the new scale of contributions is not to operate before June. For all years after that, however, the Exchequer supplement would be increased by £38 million a year, and for 1957–58 and all subsequent years the deficiency payment from the Exchequer would be reduced by the same amount of £38 million a year. So, in practical terms, it would make no difference whatever to the total Exchequer contribution to the Fund except in the years 1955 to 1956 and 1956 to 1957. Therefore, the point which is at issue is a comparatively narrow one in financial terms. What the hon. Member wishes to establish, I can see, is that the Exchequer shall be contributing at least one-fifth of the total.

Mr. Houghton

I attach importance to the principle because the Minister attached importance to the principle, and when my right hon. Friend who was then Chancellor of the Exchequer told him that what he was proposing to do made no real difference in financial terms he still objected on the principle, and that is what I am doing.

Mr. Brooke

I think that we have to decide what principles and what figures are suitable now in 1954—[HON. MEMBERS: "Ah."]—and I am arguing in support of what the Phillips Committee, an independent body, has recommended, and am pointing out how little practical difference this Amendment would make.

The Committee is perfectly entitled to know how much the Exchequer is going to contribute. On the figures that we have in front of us, the total Exchequer payment to the Fund over the next five years is not going to be 20 per cent., which is the minimum that the Amendment demands, but more like 23 per cent., and, indeed, it is going to be over 20 per cent. in every year except the one year 1956 to 1957. My calculation is that if this Amendment were carried an additional load of £31 million in 1955 to 1956 and of £33 million in 1956 to 1957 would fall upon the Exchequer. That sum of £64 million would be added to the Fund and would stay there. It would not go back, but would stay there, and there is no reason why the British nation should tax itself to the extent of an extra £64 million in these coming two years for that purpose.

Mr. Douglas Jay (Battersea, North)

The Financial Secretary will realise, I hope, that the figures were put down in conjunction with other Amendments reducing the employees' contributions. I know we cannot discuss those Amendments now, but it is unreal to ignore them.

Mr. Brooke

Those Amendments have been disposed of and have been argued, and I think that I must address myself to the cogent case that the hon. Member for Sowerby put forward.

The hon. Member suggested that the Exchequer might, under the Bill's proposals, get out of its obligations, as it were, if, as we all hope, unemployment remained below 4 per cent. and did not rise to the 4 per cent. which was taken for the actuarial purpose by both this Government and the previous Government. Let me assure him that that is not the case. Even if in future years there were no rise in unemployment at all—and that is what we all earnestly hope for—what I have said would still be true. In the next quinquennium and even more so after that the Exchequer will be contributing more than one-fifth to the Fund. What we must look at is what the total Exchequer contribution will be. The effect of this Amendment would be that whoever should be Chancellor of the Exchequer in the next two years would have to impose additional taxation amounting to about £30 million a year.

No one can tell from which side of the House of Commons the Chancellor of the Exchequer in those years will come, though I presume that hon. Members opposite hope that he will be one of themselves. He will not be precisely grateful to them if he finds his Budget prospects are worsened by £30 million through the acceptance of an Amendment which he will then see was completely unnecessary.

I submit that nothing would be gained by means of the Amendment, except that we should be subjecting British people to an additional taxation of £60 million in the next two years; and for all the rest of the time after 1957 there is no shadow of doubt that the Exchequer will be contributing more than 20 per cent. to the Fund. On those grounds I must advise the Committee not to accept the Amendment.

Mr. Jay

I find the hon. Gentleman's argument totally unconvincing. In the first place, he said that if the Exchequer supplement were raised it would he necessary to impose additional taxation. That, of course, was on the assumption that the employee's contribution was not correspondingly reduced. But I explained on Second Reading and in moving the other main Amendment on employee's contribution yesterday, and so did my hon. Friend the Member for Sowerby (Mr. Houghton) today, that all these three Amendments must be taken together. If the Financial Secretary proposes under the rules of order to ignore them all, it makes our debate unreal. We never conduct the Committee stage of a Finance Bill on that principle. It would make the whole Committee procedure artificial if we did.

The Financial Secretary said that it was partly due to the recommendation of the Phillips Committee that the Government are perpetuating this proposal of a one-seventh contribution. This makes the Government's conduct curiouser and curiouser throughout this affair. They follow the recommendations of the Phillips Committee in some important respects and ignore the recommendations of the Actuary's Report—

Mr. J. Griffiths

They said that they had not seen the Phillips Report before they put these things forward.

Mr. Jay

Yes, only yesterday the Minister of Health told us that it was on the Actuary's Report that they based these contributions and that they had not seen the Phillips Committee's Report before they did so. We have had at least five versions of the story and all contradict each other.

The Financial Secretary told us that he understood that we did not want the contributions to exceed the actuarial figure, and he said that if the Amendment were accepted the Exchequer contribution would exceed that figure. We have never argued that the Exchequer contribution should not go above that figure. We have argued that it is unfair that the individual contributor should have to pay a sum above the actuarial figure. It is obvious that, owing to the emerging costs, the Exchequer contribution is bound to be above the actuarial figure. Therefore, that argument on the part of the Financial Secretary seems to show ignorance of the fundamental basis of the Scheme.

The Financial Secretary's other argument was in effect to say that it does not really matter how much the Exchequer pays by way of supplements and how much by way of block grants. The only thing that really mattered was the total, and the hon. Gentleman gave us some figures. But that is exactly the opposite of the argument which was put forward by the present Minister in 1951. On that argument, therefore, the Financial Secretary is out of step with the Minister.

It seems to me that, by claiming to stick to the one-seventh principle, so far from sticking to the bargain which was made in 1951, the Minister is departing from the bargain which we made jointly in the House of Commons with the contributor. The bargain made with the contributor, as a temporary scheme, was that the proportions should alter from one-fifth to one-seventh whilst there were surpluses piling up in the Fund.

9.0 p.m.

I only draw the attention of the Committee to these points of fact. First of all, the change to one-seventh in 1951 was because of the temporary piling up of the Fund. Secondly, the present Minister agreed to that policy and, as my hon. Friend said, agreed with the main reason given for it. Thirdly, the Fund is no longer piling up owing to the emergence of what has been called the additional old people. It is apparent from the Actuary's Memorandum that 1955–56 is the first year in which the expenditure of the Fund will exceed its income. Therefore, that problem of piling up will have disappeared.

Just because the expenditure is going to exceed the income, we are told that the proportion has got to stay at one-seventh. That seems to me to be almost breaking faith with the contributors. They were told, in effect, in 1951 when the Fund was piling up that the Exchequer supplement had to go down to one-seventh, and now in 1954 when it is no longer piling up it is still to remain at one-seventh. So the Treasury is saying to the contributors, "Heads I win, tails you lose." For that reason, it seems to me that, so far from preserving a bargain, that is breaking it, and I hope my hon. Friends will press this Amendment.

Mr. R. Williams

The finances and economics of cloud-cuckoo land have been explained in some detail by the Financial Secretary and he must pardon hon. Members on this side of the Committee if they do not appear to be convinced by his arguments. As I understand them, he asks us to say that there was a good reason for retaining the one-seventh contribution because of a report which the Government have never seen, which published conclusions which coincided with the submissions which the Financial Secretary was making this evening, and which gave no reasons at all for coming to those conclusions. The Financial Secretary should find a stronger reason than that to submit to us if he expects us to accept the Government's case on this point which, speaking for myself, I most emphatically say we cannot.

Let me put to the Financial Secretary one point which perhaps he has not considered, and which is this. It is one thing to say that the contributory principle has a place in the National Insurance Scheme; it is another thing to say that we know enough about the administration of the Scheme and its financial implications to freeze for all time the proportions which have been fixed at this or that time in its past history. He is saying that we should, under present circumstances which are vastly different from the 1951 position, retain the proportion of one-seventh, and he is not saying a word to suggest that there could be any conceivable circumstances in which that proportion could be altered, say, to one-fifth, one-quarter or one-third.

The obligation rests squarely upon his shoulders, because, quite obviously, if the financial position in relation to them materially improves the contributors must, in some conceivable circumstances, be entitled to some relief; but the Financial Secretary has come before this Committee this evening and has had the effrontery to suggest that whatever the circumstances may be this one-seventh is sacrosanct and in no circumstances will the Treasury alter it unless it is forced to, and if it did alter it then presumably it would alter it to the extent of making an even smaller Exchequer proportion.

What would the consequence be then? The immediate consequence of this line of thought would be to throw a much greater burden upon the contributors, and, in my view, in the end the consequence would be to discredit the contributory principle altogether. The contributory principle serves up to a point a most useful purpose. I say that if the Treasury, in its blindness and with its terrific resources, which it so smugly tells us it can now dispose of, cannot make the additional contributions which we suggest, then there is no hope for the contributor ever getting any relief at all. In future, there is not much point in our having any debates.

Why should we discuss the question of what benefits and what contributions are to be paid if all that one has to do is to match particular benefits against what can simply be stated to be the automatic increase in contributions which would be necessary? And what virtue is there in going to the electors and saying. "In future, as production rises, you

will get much greater benefits but you will have to pay through the nose for them because, in no conceivable circumstances, will the Treasury increase its proportion of the Fund, however prosperous the budgetary position might be."

If ever anyone wanted to frame an indictment on the financial part of this Bill, the Financial Secretary, without intent, has certainly provided material for it. I put this point as strongly as I can to him: it is nonsense for the hon. Gentleman to try to isolate this Amendment and say that all this would mean would be that in the course of the next two years £60 million in taxation would fall upon the British public. Because he is taking the line he is, £120 million in that time is falling upon the contributors. If the hon. Gentleman had these additional resources through the acceptance of this Amendment, his colleague, the Minister, would be in a position to do something even between now and the remaining stages of this Bill, because the Minister must obviously feel that he is hamstrung by the fact that this contribution remains where it is.

I am very depressed by the contribution which the Financial Secretary has made to this debate, a contribution which is about as useless in its effect as that part of the contribution which the Exchequer itself is not making in relation to the Insurance Scheme.

Question put, That columns 2 to 5 stand part of the Schedule: —

The Committee divided: Ayes 285, Noes 252.

Division No. 8.] AYES [9.8 p.m.
Aitken, W. T. Bevins, J. R. (Toxteth) Cary, Sir Robert
Allan, B. A. (Paddington, S.) Birch, Nigel Channon, H.
Alport, C. J. M. Bishop, F. P. Clarke, Col. Ralph (East Grinstead)
Amery, Julian (Preston, N.) Black, C. W. Clarke, Brig. Terence (Portsmouth, W.)
Anstruther-Gray, Major W. J. Bossom, Sir A. C. Clyde, Rt. Hon. J. L
Arbuthnot, John Bowen, E. R. Cole, Norman
Ashton, H. (Chelmsford) Boyd-Carpenter, Rt. Hon. J. A. Colegate, W. A.
Assheton, Rt. Hon. R. (Blackburn, W.) Boyle, Sir Edward Conant, Maj. Sir Roger
Astor, Hon. J. J. Braine, B. R. Cooper, Sqn. Ldr. Albert
Armstrong, C. W. Braithwaite, Sir Albert (Harrow, W.) Cooper-Key, E. M.
Baldock, Lt.-Cmdr. J. M. Braithwaite, Sir Gurney Craddock, Beresford (Spelthorne)
Baldwin, A. E. Bromley-Davenport, Lt.-Col. W. H. Crookshank, Capt. Rt. Hon. H. F. C.
Banks, Col. C. Brooke, Henry (Hampstead) Crosthwaite-Eyre, Col. O. E.
Barber, Anthony Brooman-White, R. C. Crouch, R. F.
Barlow, Sir John Browne, Jack (Govan) Crowder, Sir John (Finchley)
Baxter, Sir Beverley Buchan-Hepburn, Rt. Hon. P. G. T. Crowder, Petre (Ruislip—Northwood)
Beach, Maj. Hicks Bullard, D. G. Darling, Sir William (Edinburgh, S.)
Bell, Philip (Bolton, E.) Bullus, Wing Commander E. E. Davidson, Viscountess
Bell, Ronald (Bucks, S.) Burden, F. F. A. Deedes, W. F.
Bennett, F. M. (Reading, N.) Butcher, Sir Herbert Digby, S. Wingfield
Bennett, Dr. Reginald (Gosport) Campbell, Sir David Dodds-Parker, A. D.
Bennett, William (Woodside) Carr, Robert Donaldson, Cmdr. C. E. McA
Donner, Sir P. W. Lancaster, Col. C. G. Rees-Davies, W. R
Doughty, C. J. A Langford-Holt, J. A. Remnant, Hon. P
Drayton, G. B. Leather, E. H. C. Renton, D. L. M.
Drewe, Sir C. Legge-Bourke, Maj. E. A. H Ridsdale, J. E.
Dugdale, Rt. Hon. Sir T. (Richmond) Legh, Hon. Peter (Petersfield) Roberts, Peter (Heeley)
Duncan, Capt. J. A. L. Lennox-Boyd, Rt. Hon. A. T. Robertson, Sir David
Duthie, W. S. Lindsay, Martin Robson-Brown, W.
Eden, J. B. (Bournemouth, Walt) Llewellyn, D. T. Rodgers, John (Sevenoaks)
Elliot, Rt. Hon. W. E. Lloyd-George, Maj. Rt. Hon. G. Roper, Sir Harold
Errington, Sir Eric Lloyd, Rt. Hon. G. (King's Norton) Russell, R. S.
Erroll, F. J. Lloyd, Maj. Sir Guy (Renfrew, E.) Ryder, Capt. R. E. D.
Fell, A. Lloyd, Rt. Hon. Selwyn (Wirral) Sandys, Rt. Hon. D.
Finlay, Graeme Lockwood, Lt.-Col. J. C Savory, Prof. Sir Douglas
Fisher, Nigel Longden, Gilbert Schofield, Lt.-Col. W.
Fleetwood-Hesketh, R Low, Rt. Hon. A. R. W. Scott, R. Donald
Fletcher-Cooke, C Lucas, Sir Jocelyn (Portsmouth, S) Scott-Miller, Cmdr. R.
Ford, Mrs. Patricia Sharples, Maj. R. C
Fort, R. Lucas, P. B. (Brentford) Shepherd, William
Foster, John Lucas-Tooth, Sir Hugh Simon, J. E. S. (Middlesbrough, W.)
Fraser, Hon. Hugh (Stone) McAdden, S. J. Smithers, Peter (Winchester)
Galbraith, Rt. Hon T. O. (Poltok) McCorquodale, Rt. Hon. M. S Smyth, Brig. J. G. (Norwood)
Galbraith, T. G. D. (Hillhead) Mackeson, Brig. Sir Harry Snadden, W. McN.
Gammans, L. D. McKibbin, A. J. Soames, Capt. C.
Gamer-Evans, E. H Mackie, J. H. (Galloway) Spearman, A. C. M.
Glover, D. Maclay, Rt. Hon. John Speir, R. M.
Godber, J. B. Maclean, Fitzroy Spens, Rt. Hon. Sir P. (Kensington, S.)
Gomme-Duncan, Col A Macleod, Rt. Hon. Iain (Enfield, W.) Stanley, Capt. Hon. Richard
Gough, C. F. H. MacLeod, John (Ross and Cromarty) Stevens, Geoffrey
Gower, H. R. Macmillan, Rt. Hon. Harold (Bromley) Steward, W. A. (Woolwich, W.)
Graham, Sir Fergus Maitland, Cmdr. J. F. W. (Horncastle) Stewart, Henderson (Fife, E.)
Gridley, Sir Arnold Maitland, Patrick (Lanark) Stoddart-Scott, Col. M.
Grimond, J. Manningham-Buller, Rt. Hn. Sir Reginald Storey, S.
Grimston, Hon. John (St. Albans) Markham, Major Sir Frank Strauss, Henry (Norwich, S.)
Grimston, Sir Robert (Westbury) Marlowe, A. A. H. Stuart, Rt. Hon. James (Moray)
Hall, John (Wycombe) Marples, A. E. Summers, G. S.
Hare, Hon. J. H. Marshall, Douglas (Bodmin) Sutcliffe, Sir Harold
Harris, Reader (Heston) Maude, Angus Taylor, Sir Charles (Eastbourne)
Harrison, Col. J. H. (Eye) Maudling, R. Taylor, William (Bradford, N.)
Harvey, Air Cdre. A. V. (Macclesfield) Maydon, Lt.-Comdr. S. L. C Teeling, W.
Harvey, Ian (Harrow, E.) Medlicott, Brig. F. Thomas, Rt. Hon. J. P. L. (Hereford)
Harvie-Watt, Sir George Mellor, Sir John Thomas, Leslie (Canterbury)
Hay, John Molson, A. H. E. Thomas, P. J M. (Conway)
Head, Rt. Hon. A. H. Monckton, Rt. Hon. Sir Walter Thompson, Kenneth (Walton)
Heald, Rt. Hon. Sir Lionel Moore, Sir Thomas Thompson, Lt.-Cdr. R. (Croydon, W)
Heath, Edward Morrison, John (Salisbury) Thorneycroft, Rt. Hn. Peter (Monmouth)
Henderson, John (Cathcart) Mott-Radclyffe, C. E. Thornton-Kemsley, C. N.
Higgs, J. M. C. Nabarro, G. D. N. Tilney, John
Hill, Mrs. E. (Wythenshawe) Neave, Alrey Touche, Sir Gordon
Hinchingbrooke, Viscount Nicholls, Harmar Turner, H. F. L.
Holland-Martin, C. J. Nicolson, Nigel (Bournemouth, E.) Turton, R. H.
Hollis, M. C. Nield, Basil (Chester) Tweedsmuir, Lady
Holt, A. F. Noble, Comdr. A. H. P. Vane, W. M. F.
Hope, Lord John Nugent, G. R. H. Vaughan-Morgan, J. K
Hopkinson, Rt. Hon. Henry Oakshott, H. D. Vosper, D. F.
Howard, Gerald (Cambridgeshire) Odey, G. W. Wade, D. W.
Howard, Hon. Greville (St. Ives) O'Neill, Hon. Phelim (Co. Antrim, N.) Wakefield, Sir Wavell (St. Marylebone)
Hudson, Sir Austin (Lewisham, N.) Ormsby-Gore, Hon. W. D. Walker-Smith, D. C.
Hudson, W. R. A. (Hull, N.) Orr, Capt. L. P. S. Wall, Major Patrick
Hughes Hallett, Vice-Admiral J. Orr-Ewing, Charles Ian (Hendon, N.) Ward, Miss I. (Tynemouth)
Hulbert, Wing Cmdr. N. J. Osborne, C. Waterhouse, Capt. Rt. Hon. C
Hurd, A. R. Page, R. G. Watkinson, H. A.
Hutchison, Sir Ian Clark (E'b'rgh, W.) Peake, Rt. Hon. O. Webbe, Sir H. (London & Westminster)
Hutchison, James (Scotstoun) Perkins, Sir Robert Wellwood, W.
Hyde, Lt.-Col. H. M. Peto, Brig. C. H. M. Williams, Rt. Hon. Charles (Torquay)
Hylton-Foster, Sir H. B. H Peyton, J. W. W. Williams, Paul (Sunderland, S.)
Iremonger, T. L. Pilkington, Capt. R. A Williams, R. Dudley (Exeter)
Jennings, Sir Roland Pitman, I. J. Wills, G.
Johnson, Eric (Blackley) Pitt, Miss E. M. Wilson, Geoffrey (Truro)
Johnson, Howard (Kemptown) Powell, J. Enoch Wood, Hon. R.
Jones, A. (Hall Green) Price, Henry (Lewisham, W) Woollam, John Victor
Joynson-Hicks, Hon. L. W Prior-Palmer, Brig. O. L.
Kerby, Capt. H. B. Profumo, J. D. TELLERS FOR THE AYES
Ken, H. W. Raikes, Sir Victor Mr. Kaberry and
Lambert, Hon. G. Ramsden, J. E. Mr. Edward Wakefield
Lambton, Viscount Redmayne, M.
NOES
Acland, Sir Richard Bacon, Miss Alice Benson, G.
Albu, A. H. Baird, J. Beswick, F.
Allen, Scholefield (Crows) Balfour, A. Bevan, Rt. Hon. A. (Ebbw Vale)
Anderson, Frank (Whitehaven) Bartley, P Bins, G. H. C.
Attlee, Rt. Hon. C. R. Bence, C. R. Blenkinsop, A.
Awbery, S. S. Benn, Hon. Wedgwood Blyton, W. R.
Boardman, H. Hughes, Cledwyn (Anglesey) Probert, A. R.
Bottomley, Rt. Hon. A. G. Hughes, Emrys (S. Ayrshire) Proctor, W. T
Bowden, H. W. Hughes, Hector (Aberdeen, N.) Pryde, D. J.
Braddock, Mrs. Elizabeth Hynd, H. (Accrington) Rankin, John
Brockway, A. F. Hynd, J. B. (Attercliffe) Reeves, J.
Brook, Dryden (Halifax) Irvine, A. J. (Edge Hill) Reid, Thomas (Swindon)
Broughton, Dr. A. D. D. Irving, W. J. (Wood Green) Reid, William (Camlachie)
Brown, Rt. Hon. George (Belper) Isaacs, Rt. Hon. G. A. Rhodes, H.
Brown, Thomas (Ince) Jay, Rt. Hon. D. P. T. Richards, R.
Robens, Rt. Hon. A.
Burke, W. A. Jeger, George (Goole) Roberts, Albert (Narmanton)
Burton, Miss F. E. Jeger, Mrs. Lena Roberts, Goronwy (Caernarvon)
Butler, Herbert (Hackney, S.) Jenkins, R. H. (Stechford) Robinson, Kenneth (St. Pancras, N.)
Callaghan, L. J. Johnson, James (Rugby) Rogers, George (Kensington, N.)
Carmichael, J. Jones, Rt. Hon. A. Creech Ross, William
Champion, A. J. Jones, David (Hartlepool) Royle, C.
Chapman, W. D. Jones, Frederick Elwyn (West Ham, S.) Shackleton, E. A. A.
Chetwynd, G. R. Jones, Jack (Rotherham) Shawcross, Rt. Hon. Sir Hartley
Clunie, J. Jones, T. W. (Merioneth) Shinwell, Rt. Hon. E.
Coldrick, W. Keenan, W. Short, E. W.
Collins, V. J. Kenyan, C. Shurmer, P. L. E.
Cove, W. G. Key, Rt. Hon. C. W. Silverman, Julius (Erdington)
Craddock, George (Bradford, S.) King, Dr. H. M. Silverman, Sydney (Nelson)
Crossman, R. H. S. Kinley, J. Simmons, C. J. (Brierley Hill)
Cullen, Mrs. A. Lawson, G. M. Skeffington, A. M.
Daines, P. Lee, Frederick (Newton) Slater, Mrs. H. (Stoke-on-Trent)
Darling, George (Hillsborough) Lever, Harold (Cheetham) Slater, J. (Durham, Sedgefield)
Davies, Ernest (Enfield, E.) Lewis, Arthur Smith, Ellis (Stoke, S.)
Davies, Harold (Leek) Lindgren, G. S. Smith, Norman (Nottingham, S.)
Davies, Stephen (Merthyr) Linton, Lt.-Col. M. Sorensen, R. W.
de Freitas, Geoffrey Logan, D. G. Soskice, Rt. Hon. Sir Frank
Deer, G. MacColl, J. E. Sparks, J. A.
Delargy, H. J. McGhee, H. G. Steele, T.
Dodds, N. N. McGovern, J. Stewart, Michael (Fulham, E.)
Donnelly, D. L. McInnes, J. Stokes, Rt. Hon. R. R.
Dugdale, Rt. Hon. John (W. Bromwich) McKay, John (Wallsend) Summerskill, Rt. Hon. E.
Ede, Rt. Hon. J. C. McLeavy, F. Swingler, S. T.
Edelman, M. MacMillan, M. K. (Western Isles) Sylvester, G. O.
Edwards, Rt. Hon. Ness (Caerphilly) McNeil, Rt. Hon. H. Taylor, Bernard (Mansfield)
Edwards, W. J. (Stepney) MacPherson, Malcolm (Stirling) Taylor, John (West Lothian)
Evans, Albert (Islington, S.W.) Mallalieu, E. L. (Brigg) Thomas, lorwerth (Rhondda, W.)
Evans, Stanley (Wednesbury) Mallalieu, J. P. W. (Huddersfield, E.) Thomas, Ivor Owen (Wrekin)
Fernyhough, E. Mann, Mrs. Jean Thomson, George (Dundee, E.)
Fienburgh, W. Manuel, A. C. Thornton, E.
Finch, H. J. Marquand, Rt. Hon. H. A. Timmons, J.
Follick, M. Mason, Roy Turner-Samuels, M.
Foot, M. M. Mayhew, C. P. Ungoed-Thomas, Sir Lynn
Forman, J. C. Mellish, R. J. Usborne, H. C.
Fraser, Thomas (Hamilton) Mitchison, G. R. Viant, S. P.
Freeman, Peter (Newport) Monslow, W. Wallace, H. W.
Gaitskell, Rt. Hon. H. T. N. Moody, A. S. Warbey, W. N.
Gibson, C. W. Morgan, Dr. H. B. W. Watkins, T. E.
Glanville, James Morley, R. Webb, Rt. Hon. M. (Bradford, C.)
Gooch, E. G. Morris, Percy (Swansea, W.) Weitzman, D.
Gordon Walker, Rt. Hon. P. C. Mort, D. L. Wells, Percy (Faversham)
Greenwood, Anthony Moyle, A. Wells, William (Walsall)
Grenfell, Rt. Hon. D. R. Mulley, F. W. West, D. G.
Grey, C. F. Murray, J. D. Wheeldon, W. E.
Griffiths, Rt. Hon. James (Llanelly) Nally, W. White, Mrs. Eirene (E. Flint)
Griffiths, William (Exchange) Neal, Harold (Bolsover) White, Henry (Derbyshire, N.E.)
Hall, Rt. Hon. Glenvil (Colne Valley) Oldfield, W. H. Whiteley, Rt. Hon. W.
Hall, John T. (Gateshead, W.) Oliver, G. H. Wigg, George
Hamilton, W. W. Orbach, M. Wilcock, Group Capt. C. A. B.
Hannan, W. Oswald, T. Wilkins, W. A.
Hardy, E. A. Owen, W. J. Willey, F. T.
Hargreaves, A. Padley, W. E. Williams, David (Neath)
Harrison, J. (Nottingham, E.) Paget, R. T. Williams, Rev. Llywelyn (Abertillery)
Hastings, S. Paling, Rt. Hon. W. (Dearne Valley) Williams, Ronald (Wigan)
Hayman, F. H. Paling, Will T. (Dewsbury) Williams, W. R. (Droylsden)
Healey, Denis (Leeds, S.E.) Palmer, A. M. F. Wilson, Rt. Hon. Harold (Huyton)
Henderson, Rt. Hon. A. (Rowley Regis) Pannell, Charles Winterbottom, Ian (Nottingham, C.)
Herbison, Miss M. Pargiter, G. A. Winterbottom, Richard (Brightside)
Hewitson, Capt. M. Parker, J. Woodburn, Rt. Hon. A.
Hobson, C. R. Parkin, B. T. Wyatt, W. L.
Holman, P. Paton, J. Yates, V. F.
Holmes, Horace Peart, T. F. Younger, Rt. Hon. K.
Houghton, Douglas Plummer, Sir Leslie
Hoy, J. H. Popplewell, E. TELLERS FOR THE NOES:
Hubbard, T. F. Price, J. T. (Westhoughton) Mr. Pearson and Mr. Arthur Allen.
Hudson, James (Ealing, N.) Price, Philips (Gloucestershire, W.)

Schedule agreed to.