HC Deb 11 May 1956 vol 552 cc1567-91

As amended (in the Standing Committee), considered.

11.36 a.m.

Mr. J. K. Vaughan-Morgan (Reigate)

I beg to move, That the Bill be now read the Third time.

I hope the House will bear with me if I address some remarks to it on this occasion, since I have had much to do with the conception of this Bill, though, owing to illness, I was not present for its Second Reading.

I regret very much that my hon. Friend the Member for Somerset, North (Mr. Leather) cannot be in his place today. It was due to his initiative, and to his generosity in giving up to my Bill his place in the Private Members' Ballot, that we have been able to reach the stage we are now discussing. With his energy and enthusiasm he has been a pillar of strength throughout. It is quite right and proper that if the Bill reaches the Statute Book it should carry his name.

I must also thank the National Insurance Advisory Committee—that body of wise men and women—the main considerations and recommendations of whose Report are now embodied in this Bill. It was an outstanding Report, and adds yet another to the many Reports which have earned the respect and thanks of all those who are interested in these subjects.

I should like also to thank my right hon. Friend the Minister. He has been most helpful, particularly in the later stages. Even when we have had our differences, namely, on matters of timing, he has always been sympathetic, courteous and helpful.

Perhaps I might now refer to a leader which appeared in the Manchester Guardian on Wednesday, and which many hon. Members may have read. It referred, first, to the Government using a Private Member's Bill to implement policy, and, secondly, to the recommendations of the Advisory Committee having been introduced into the Bill at this stage—"spatchcocked" was the curious word used. On the point of the Government using a Private Member's Bill, I want to make it quite clear to the House that this is a Conservative Private Member's Bill. It is promoted by us, drafted by us, carried through by us, and we alone are responsible for its virtues and for its faults.

It is true that in his statement last Monday my right hon. Friend stated that the Government accepted the recommendations of the Report. But the position of the promoters of the Bill is an odd one. Having made our position clear, having tabled our Amendments and having given due warning of our intention, if necessary, to rebel, we find that just as we are about to unfurl the standard of revolt the potential foe has quietly joined our ranks. All I can say is, "All's well that ends well."

On the second point—the "spatchcocking"—this is a misunderstanding on the part of the leader writer due to a failure to read and understand the original Bill. Also, I do not think that I made clear in Committee the point that I am now making. Anyone who carefully read the Bill unamended, and who has read the Report, will realise that every single recommendation of the Advisory Committee which falls within the scope of this Bill could have been carried out under the original Clause 2.

Why, then, did we find it necessary to amend the Bill? Because there was one snag. To carry out the recommendations would have involved making use of the regulation-making powers given to the Minister under Clause 2, and that, in turn, would have involved invoking the machinery devised in the National Insurance Act, 1946.

What would have happened is this. The Bill having become law, draft regulations could have been laid, based on the recommendations of the Advisory Committee, and they would all then have had to be referred back to the Advisory Committee for its consideration—consideration, in fact, of regulations based on its own recommendations. Obviously, this would have meant considerable delay. It would also have involved an interim period when there would have been more than one rate of earnings limit in operation. I think that, apart from anything else, that was quite sufficient justification for the Amendment which was ultimately accepted by the Committee.

On the Bill as it now comes before the House, I would say that this is not a Bill of major importance, of earth-shaking importance, but it will affect the lives of many thousands in this country. I believe that it will bring a much welcome relaxation of the earnings rule, which has never really been understood by those whom it most affects. I do not propose to enlarge on all the detailed provisions of the Bill, but I would say that we are proud and glad at having achieved that relaxation.

Let me repeat that we, the promoters of the Bill, stand firmly by the principle of a pension given for retirement from full-time work, defended, as it must be, my an earnings rule. That was the original proposal in the Beveridge Report, and that principle has been endorsed by every subsequent Government. But the earnings rule, the limit on what can be earned, must be kept in step with changing conditions, with rising wage rates.

The one feature to which I would like to draw attention in the Bill is that the method over a certain range has been changed. It is now provided that over a range of 20s. in the case of all benefits, instead of there being a total reduction of 1s. in 1s., a sliding scale is now to come into force under which 6d. in 1s. will be deducted.

I would point out that this is, in fact, the original scheme that Lord Beveridge put forward in his Report. Let me quote his words. He wrote: First, the proposal to increase pensions if retirement is postponed and contributions continue to be made, will give all classes alike an economic motive not to claim pensions, while they are still able to work with any regularity. The Report goes on to say that …retirement means giving up regular earnings, not being idle 100 per cent. of one's time. His proposal for meeting that point was this: Every person receiving pension will be required to sign a periodic declaration as to his earnings; and then he used these words: From one-half to two-thirds of the excess above £3 a month will be deducted from his pension… That was the first reference to the partial deduction which we have introduced in the Bill. This idea was dropped in the 1946 Measure in favour of a flat earnings limit of 20s. and thereafter 1s. for 1s. deduction. That 20s., as the House will recall, was raised to 40s. in the National Insurance Act, 1951, an important and courageous step forward that the right hon. Lady the Member for Warrington (Dr. Summerskill), as Minister of National Insurance, then took. I believe that although it was popular in many quarters, it was unpopular in others.

Perhaps I may be allowed to recall that on that Measure my hon. Friend the Member for Aylesbury (Mr. Summers) and I proposed an Amendment to introduce a sliding scale for certain classes of pension, and I refer to that now for one reason. We must face it that these new arrangements will not be very easy to administer or to explain. I should like my hon. Friend the Joint Parliamentary Secretary to deal with this point when she replies.

This was the comment on my proposal by the hon. Member for Mansfield (Mr. B. Taylor) on 9th May, 1951, when he described the proposal as "very novel." He went on to say: …the Amendment…with its sliding scale arrangement, is so full of complications that it would be confusing to the pensioners, and…from the Department's point of view, because of the complications and the confusion it was likely to create, it would be almost impossible to administer."—[OFFICIAL REPORT. 9th May, 1951; Vol. 487, c. 2081.] I want the Joint Parliamentary Secretary to give the House, if she will, an assurance, amplifying what my right hon. Friend said when he accepted the recommendations, her Department having five years and two days after those remarks changed its mind completely and accepted the point of view expressed by two Opposition back benchers. Is the Department certain that it can administer and explain these proposals, for if it fails to explain this to the public we shall be in considerable difficulties?

The whole trouble with the retirement principle and the earnings rule is that when we made the complete and total change in 1946 we did not really try to educate the public to what it involved. It is an extraordinary fact, that one may discern if one studies the debates on the then National Insurance Bill, that this major change was so little discussed. Apart from one speech in Committee by my hon. Friend the Member for The High Peak (Mr. Molson), one gets the impression that scarcely any hon. Members even realised the change that was being made. The hon. Member for Ince (Mr. T. Brown), who is not in his place but who designs to be an inveterate opponent of the earnings rule, never even referred to it in the admirable and moving speech which he made on the Second Reading of that Measure. So I think I am now entitled to ask the Joint Parliamentary Secretary what steps her Department will take to ensure that this principle is understood and accepted by the people as a whole.

I conclude with a word about some of the principles of National Insurance which are involved. The retirement pensions, the earnings rule, and all the other features of National Insurance are not immutable. We have tinkered with the original Bill and amended it—not only the provisions relating to rates and benefits—but in details as well. To those in this House who still oppose the earnings rule I would say that, although I oppose them now, we can and we must be open-minded and on the alert for new solutions to the problem which we are trying to solve, but do not let us ever make any change in the basic principles in too much of a hurry. There is far too much at stake in these matters. I believe that the Bill is a change for the better which will be welcomed by many thousands of people throughout the country.

11.54 a.m.

Sir Lancelot Joynson-Hicks (Chichester)

I have very great pleasure in supporting my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan). He said he did not claim that this was an epoch-making Measure. My hon. Friend certainly does not exaggerate at any time, and one must in strictness agree with him in that estimation, but, nevertheless, this is a Measure which will bring a tremendous amount of relief and a tremendous amount of mental comfort to a very large body of people. I myself, representing a constituency in which a considerable number of people of retirement age live, know how hardly the present system has pressed upon them and how greatly they will be able to add to their comforts and to their pleasures in life by the operation of the measures which are contained in the Bill.

11.56 a.m.

Mr. A. E. Hunter (Feltham)

I shall not detain the House for very long, but I should like to congratulate the hon. Member for Reigate (Mr. Vaughan-Morgan) upon the interest which he has shown in this question. I differ from him because of the fact that the Bill does not go far enough. I have received, as other hon. Members have received, many letters from old-age pensioners who complain bitterly about the limitation upon their possible income if they continue to work after the age of 65 or accept work after they have retired on pension. We on this side of the House believe in the principle of retirement on pension, but at the same time we recognise that in a period of full employment there is opportunity for old-age pensioners who want to work to go on giving some service in their districts, perhaps to small employers, perhaps to big employers, perhaps even in some cases to local authorities, who can employ them for two or three days a week.

I differ from the hon. Member for Reigate about his acceptance of the limit of 50s., which is too low. I should have liked to see a much higher figure to encourage those old-age pensioners who want to continue in employment. We are in a period of full employment, and I hope we shall always be, but if there were unemployment again, old-age pensioners would have very little opportunity of working and would have to exist on their basic pensions and supplementary pensions. I should like to see those improved, but we are not discussing that principle today.

The hon. Member for Reigate said that this was not an important Bill but that it was a human Bill. We would all agree with that latter sentiment. In my opinion, there is nothing in the world more human than helping the old people who have devoted their lives to industry. My regret is that the Bill, which originally contained a figure of 60s. week, has been amended to make the figure 50s. because the promoters accepted a Government Amendment to that end. That is my regret. While supporting the Bill, I hope that in the near future we shall allow old-age pensioners to earn more than 50s. a week without deductions from their pensions, allowing, instead of that amount, a much higher figure.

11.59 a.m.

Mr. Albert Evans (Islington, South-West)

I. too, should like to congratulate the promoter and supporters of the Bill, and in particular I sincerely say that the hon. Member for Reigate (Mr. Vaughan-Morgan) has performed a notable service in framing the Bill and in guiding it through its various stages. Ever since he came to the House he has taken a close interest in this and kindred subjects, and it is to his credit that finally, when opportunity came to him, he used it to bring forward a Private Member's Bill to raise the amount of money which a retirement pensioner may earn before his pension is reduced. The hon. Member has done that with not very much encouragement from the Government formed by his own party.

Congratulations are due to the hon. Member for Reigate, because I think there are few people on either side of the House who would not agree that he in particular deserves the thanks of the House and the thanks of those working pensioners who will benefit from the Bill when it becomes an Act. I am sorry that the hon. Member is not supported by their presence in the Chamber today by many of those who put their names to the Bill. Most of the backers of this Bill are absent this morning, which is rather surprising. I do not wish to add a note of discord while congratulating the hon. Gentleman, but I think it is a great pity that so many of his hon. Friends who put their names to the Bill are not here this morning to see it through its final stage.

On this occasion we should also extend our congratulations a little wider. Indeed, I think I can venture to congratulate myself, for I remember putting down a number of Questions to the then Minister of National Insurance on this very point, more than three years ago, and all of us can recollect occasions within the last three years on which Members in all parts of the House have questioned the Minister of the day and urged him to do something about raising the earnings limit.

The pressure that has been exerted on the Government in this matter has come from all sides of the House, and has not been confined to those fortunate back bench Members who happened to have the opportunity of introducing this Private Member's Bill. The back bencher has been responsible for pressing the Government to agree to this Measure, and I view this Bill as a victory for the private Member over the Executive. The Executive has finally been forced to give way, and I personally like to find the hon. Member for Reigate in the position of a rebel. I think he does exceptionally well as a rebel against his own Government. I hope that he will on other occasions take his courage into his hands and rebel against his Government, because we can see that it yields dividends.

Mr. Vaughan-Morgan

My difficulty as a rebel is that the Government always follow me.

Mr. Evans

if the hon. Member continues to act as a rebel on subjects such as this, which is of particular interest to hon. Members on this side of the House, he may be assured that we shall be behind him and give him all the support we can. If he could take the matter so far as to defeat his own Government, let me assure him that he would have the full support of hon. Members on these benches.

The House is at its best when private Members are deciding that something should be done and urging the Executive to take the necessary action. We are entitled to congratulate the House of Commons on having gained this victory over the Government of the day. We know that this Bill is necessary, because all of us have on some occasion or other received evidence of the need for an increase in the amount that may be earned by a retired pensioner before a deduction is made from the pension. We have all had such cases, and we know that many of those who are retired but are still doing a part-time job feel real dissatisfaction and discontent when having by some means or other earned 10s. or £1 a week, they have found that their pension has been reduced by a like amount. That is most unfair, and their discontent is quite genuine.

We also know that the fact of the earnings rule being so low has resulted in some evasion taking place. In fact, the Minister had an Advisory Committee which mentioned this very point. I think that that Committee stated that the evidence suggested that such evasion was widespread. It is always a matter of concern to us when persons attempt genuinely to take action to evade the law, and it is a matter of concern to this House. We know that evasion has gone on, and that employers and retired workers have collaborated one with another in order to hide the true amount of earnings received by the pensioners. We hope the Bill will tend to diminish the amount of evasion that has unduobtedly been going on in the past.

There is an underlying cause of all the discontent and the consequent pressure which hon. Members of this House have exerted on the Government to agree to this Bill, which is necessary, and to which the House will give a Third Reading today. That underlying cause is surely the constant decline in the value of money over recent years, which fact has been the main economic factor which has forced hon. Members to stir the Government to action and force them to agree that this Bill is necessary.

More and more, every month we see the value of money going down, and that is a serious matter, with which we cannot deal today. I am sure that that has been the cause of the pressure in this direction, and that it is the reason why the Government have finally given way and have agreed that the amount that can be earned without deduction of pension must be raised.

We know as a matter of hard fact that the value of money has diminished considerably, because the cost of essential items has gone up by over 50 per cent. since the pension was first introduced. We know that this considerable rise in the cost of essential items means very much more to retired persons than it does to people who are still able to earn a full income. As a result of the constant increases in the cost of these essential items, many of these pensioners have been obliged to do extra work, and have been brought up sharply against the earnings rule, to find that the amount which they could earn without deduction from their pension was very small.

We ought to be clear about the number of people affected by the Bill. The hon. Member for Chichester (Sir L. Joynson-Hicks) seemed to suggest that very large numbers were involved, but, in fact, that is not so. We know that, of the 4½ million retirement pensioners, only about 136,000 will actually be affected by the Bill and the provision concerning the amount that may be earned, and the majority of them are women. Only one in every thirty-three or thirty-four retired pensioners will be affected, so that it is a very limited Bill.

I am not saying that the Bill is not valuable because it is so limited, but certainly its scope is limited because it affects a very small proportion of the total number of retired people receiving pensions under the National Insurance Act. Even the position of this small number will not be altered by the Bill. Many of the 136,000 are already earning beyond the limit, and will continue to do so, and therefore will not receive any benefit.

Mr. Vaughan-Morgan

I do not think that that is quite correct. They must receive the amount of relaxation that is given in the Bill.

Mr. Evans

If their earnings are already beyond 50s. plus the sixpence calculation for each shilling up to 70s.—in other words, if they are earning 126s.—

Mr. Vaughan-Morgan

They are getting 40s. now and they will get 60s. under the Bill.

Mr. Evans

Surely a pensioner can be earning so much that his entire pension is wiped out. The hon. Member will find that quite a number of those who have retired on pension have had their pensions extinguished because of their earnings.

Mr. Vaughan-Morgan

1 am afraid that I do not quite follow what the hon. Member means, but that point is covered in the Report of the National Insurance Advisory Committee by the recommendation on going back to work, and is outside the scope of the Bill.

Mr. Evans

I agree that that is not covered by the Bill, but 29,000 of the 136,000 whom I have mentioned are people who are earning so much that they would receive no benefit from the Bill. Therefore, we reach a final figure that no more than 100,000 people will benefit, which is a comparatively small figure.

Mr. Ede (South Shields)

Can my hon. Friend say where he gets that figure of 100,000. The Parliamentary Secretary to the Ministry of Pensions and National Insurance said on Second Reading: About 130,000—that is 47,000 men and 83,000 women—are believed to be working, and of these about 20,000 men and 15,000 women have their pensions adjusted because their earnings exceed the limit of £2…"—[OFFICIAL REPORT, 3rd February, 1956; Vol. 548, c. 1260.] It seems to me, therefore, that 35,000 and not 100,000 are affected by the existing law.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Edith Pitt)

There are in fact about 100,000 who are earning less than £2. That is the total figure to which the hon. Member for Islington, South-West (Mr. A. Evans) referred.

Mr. Evans

I am afraid that I am not much clearer as a result of these figures being bandied round the Chamber. The Advisory Committee puts the matter on record, and states quite clearly that 29,000 men and women have had their pensions entirely extinguished because their earnings were well above the limit. We know that those people will benefit from the Bill.

I think that possibly the Joint Parliamentary Secretary gave misleading figures in Committee. According to the Advisory Committee's Report, the number of men on reduced pension was not 20,000 but 2,000 and the number of women not 15,000 but 5,000. However, perhaps I have laboured the point too long and I will move on. I am glad that the hon. Member for Reigate has taken my point, and that the misunderstanding has now been cleared up.

I am sure that the 100,000 will be very pleased to be able to earn another £1 a week, and I am sure that we agree that they will be very much in need of that additional amount of earnings. I am sure that the House will pass the Bill today. We all agree that it is necessary, but we should be mindful of what we are doing. We wish to help the people who will be affected, but we should realise that every time we raise the amount that may be earned by the retired pensioner before his pension is reduced we weaken the principle that retirement goes with pension, which was implicit in Lord Beveridge's proposals and has been adhered to by the two great 'parties In the State.

If we take this matter too far, the principle of retirement will disappear. I cannot go into that subject within the confines of the Bill. It raises wide issues and a matter which some day the House will have to go into very closely, but for the present we can be glad that we are patching up the insurance scheme in one little respect, and giving assistance to a few pensioners. The whole principle of retirement pensions is in jeopardy when we raise the amount that can be earned, although today I am sure that we are glad to give a Third Reading to the Bill.

12.16 p.m.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Edith Pitt)

We have come today a stage further with a Private Member's Bill which is designed to help certain National Insurance beneficiaries. It is perhaps something of a record, because when the Bill goes through its final stages, it will be the first time that the National Insurance Scheme has been amended by a Private Member's Bill.

Congratulations seem to be the order of the day, and I should like to join with other hon. Members in congratulating my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan) and his colleague, my hon. Friend the Member for Somerset. North (Mr. Leather) on their luck in the Ballot, which enabled them to present the Bill. I hope that they will be equally lucky in any future investment in which they may indulge.

Luck, or perhaps foresight is the better word, was involved in choosing this subject, which we are well aware is of considerable public interest and commands widespread sympathy. I feel, however, that it was not just awareness of public sympathy which promoted my hon. Friends to choose the earnings rule as a matter for their Bill. Over the years, they have given considerable care and thought to the position of pensioners. This especially applies to my hon. Friend the Member for Reigate, who has many times spoken in the House on the matter. The fact that their thoughts were on the right lines, is confirmed by the Report of the National Insurance Advisory Committee whose recommendations, though not identical with the proposals now contained in this Bill were, in the main, acceptable to the Government.

I believe that the promoters were wise in deferring the Committee stage, as they agreed to do on Second Reading on 3rd February, until the Report on Earnings Limits had been received from the National Insurance Advisory Committee. Not all the recommendations of that Committee have been included in the Bill, because they are not within its scope. Indeed, two of them have been altered although included in the Bill.

I think it is most fortunate, however, that the Bill was available as a vehicle to enable the Government quickly to give effect to a large part of the Committee's Report. I noticed, as did my hon. Friend the Member for Reigate who has already commented upon it, the report in a provincial newspaper which questioned the propriety of recommendations of a statutory advisory committee being spatchcocked into a Bill before the House could pronounce upon them.

Surely it was fortunate for the promoters, and—much more important—for the people affected by the recommendations of the National Insurance Advisory Committee that this useful Bill was available. In fact, it will probably create another record, because I believe this is the shortest time between presentation of a Report from the National Insurance Advisory Committee and its translation into a Bill. That is something which I hope will please the members of that Committee, who have given considerable time and thought to the preparation of the Report.

Here, I want to join in the thanks already expressed to the members of the National Insurance Advisory Committee, for reporting so quickly and for giving priority to this work. I want also to thank all those organisations and individuals who made representations to that Committee, which enabled it to give us such a thoughtful Report. I imagine that hon. Members of this House who are present today will have read it in detail, but I commend that Report to everybody else who is interested in the welfare of the pensioners. It is worth study, because it is a well-reasoned Report.

The Bill, as now amended, receives the support of the Government because it coincides with Government policy. This was announced by my right hon. Friend the Minister in his statement on Monday, 7th May. Contrary to what has been said by the hon. Gentleman the Member for Islington, South-West (Mr. A. Evans), that the Executive has been forced to come into line, I want to stress that this is Government policy. I dealt with the history and the reasons for the retirement principle in the Second Reading debate and I do not want to cover that ground again. I am aware that the need for an earnings rule is still questioned, but successive Governments have accepted the retirement principle, and if we accept that, then we must also accept the earnings rule which is a necessary complement to it.

These are the facts, whatever we may think about the earnings rule. What the Bill will do is to ease the operation of the earnings rule. It is not a question of pensioners being allowed—or not allowed to earn. Here again, I want to take up a point made by the hon. Member for Islington, South-West. Although perhaps it was not his intention, the hon. Gentleman fell into the common trap of stating that pensioners should be allowed to earn more. Pensioners may earn as much as they wish, but when earnings are above a certain figure then retirement pension is reduced because of the operation of the earnings rule. However, there has never been any restriction on the amount of money which a pensioner may earn.

Mr. A. Evans

I am sure the hon. Lady will understand that, when I said that pensioners should be allowed to earn more, it was implied that they should be able to earn more without deduction from their pension.

Miss Pitt

That is very different. Quite commonly people, not necessarily hon. Members of this House, who are interested in the welfare of pensioners say that pensioners are only allowed to earn so much. I want to try to get that clear.

Mr. Douglas Houghton (Sowerby)

That is because we talk colloquially about the earnings limit. As my hon. Friend has said, we all understand what that means, but many people have the impression that there is an over-riding limit on the amount which can be earned.

Miss Pitt

Yes, I am aware of that, and the more we can say to dispel that impression, the better. Frequently, we use misleading terms. For instance, pensioners are frequently referred to as old-age pensioners instead of as retirement pensioners, which is the correct description.

To come back to this Bill, my hon. Friend has dealt with the details which are not part of my duty, but I ought briefly to state that retirement and widow pensioners will be able to earn up to 50s. before there is any deduction from pension. Thereafter, 6d. in the 1s. will be deducted for earnings between 50s. and 70s. About 100,000 retirement pensioners are now earning below £2 and I will try to get these figures clear. In the Second Reading debate on 3rd February, I stated that about 130,000 pensioners were able to work. I gave separate figures for men and women, but I will not weary the House with them today.

I said that of these, about 35,000 men and women together have their pension adjusted because their earnings exceed the limit of £2. That is still approximately the figure. It is repeated in the Report of the National Insurance Advisory Committee, as hon. Members will see if they will refer to paragraph 19, on page 10. There is a slight difference in the number of pensions completely extinguished but, in general, those figures agree with the ones I gave on 3rd February.

The number we ought to have in mind, particularly today, is that of the 100,000 retirement pensioners whose earnings, as we know in the Ministry, are now slightly below £2. They are the people, I hope, who will derive most benefit from this Bill, because they will be able to earn up to 50s. a week without any deduction. If they are able and willing to work more, they can go on to earn 100s. before their pension is extinguished.

A point often raised with us at the Ministry is that people on a part-time job, who find that their employers are prepared to give them an increase in pay or a bonus, even on the limited amount of work they do, find that this brings them above the present limit of £2. They are, therefore, no better off as a result of the increase or bonus. Under this Bill, they will be. That is why I particularly want to stress that it is, in the main, 100,000 people who will be affected.

When the limit is increased—now I have fallen into the trap and used the word "limit"—when the figure of earnings disregarded is increased, I hope that we shall find that more pensioners are willing to take on part-time work. It is good for them and for the nation's production. I believe, also, that the suggestion of tapering off—the 6d. in the 1s. sliding scale, recommended in this Bill—could help to remove some of the misunderstanding about the earnings rule which still exists, and which we have already mentioned in this debate.

The Bill also provides that, in the case of widowed mothers, earnings up to 60s. can be disregarded. Between 60s. and 80s., the sliding scale of 6d. in the Is. will operate. Here the Bill departs from the recommendations of the National Insurance Advisory Committee, but the Bill preserves the 20s. differential for widowed mothers and gives them the same range of 6d. in the 1s. deductions as widows and retirement pensioners are to get. I am certain that we all agree with that. We wish to maintain the preferential treatment given to widowed mothers.

Here, as I said, the Bill differs from the Committee's recommendation, because the Committee recommended that the 6d. in the 1s. should operate over a smaller range of 10s.—that is, earnings between 60s. and 70s. This proposal is, therefore, more generous, and I am glad about that. I feel that the widowed mother who has children to care for deserves our very special consideration, and I have never found a phrase which more adequately describes the position of such women than that used by the right hon. Lady the Member for Warrington (Dr. Summerskill) in a debate in the House—a phrase repeated in the Report of the National Insurance Advisory Committee. Referring to the widowed mother, the right hon. Lady said: Overnight, she suddenly becomes the wage earner, the home maker and the protector of her children."—[OFFICIAL REPORT, 9th May, 1951; Vol. 487, c. 1984.] I think that that is a very apt description. It is a point which we must always have in mind. I am glad that, in this direction, my hon. Friend the Member for Reigate has improved on the recommendation of the National Insurance Advisory Committee. The Government agree with him.

Another point arising from the provisions of the Bill is the recommendation for the use of the calendar week instead of the pension week, which is the practice at present. When a pensioner has casual earnings, as hon. Members will be well aware, the deduction is made from the pension week which runs from Thursday to Wednesday. It therefore sometimes happens that two calendar weeks' work affect three weeks' pension because of the application of the pension week.

Not unnaturally, there has been a certain amount of resentment about that. It is true that when the new recommendation comes into operation it may not always be favourable to the pensioner. We do not know, at the Ministry, in how many cases the present rule of applying pension weeks has worked in favour of the pensioners, but there must have been many cases. Because it does not cause discontent, we have not heard of them. But we do hear of those instances where the pensioner does a fortnight's work and finds that deductions are made over three weeks' pension.

Perhaps a simple illustration—one which I have found fairly often in my correspondence at the Ministry—is the common case of a retirement pensioner doing a couple of weeks' Christmas work at the Post Office. Because he earned over three pension weeks, he often found that his pension was extinguished or re-reduced for those three weeks. Naturally, he felt that he was not being treated fairly. The new recommendation will remove that difficulty. I believe that, on balance, it will benefit the great majority of pensioners who do casual work.

On Second Reading, on 3rd February, I said that on receipt of the Report the Government will quickly reach and announce decisions in this matter. I think I can claim today that the Government have carried out that promise. I also said—and this was quoted in Committee on the Bill by the hon. Member for Ince (Mr. T. Brown), whom I am sorry not to see here today because he is very constant in his attention to the welfare of pensioners: We all want to help—perhaps 'encourage' would be a better word—older people to lead the fullest life possible and in as much comfort as possible."—[OFFICIAL REPORT, 3rd February, 1956; Vol. 548, c. 1263.] I believe that this Bill is a measure of improvement which will help to fulfil our ambition of providing as much comfort as possible to pensioners. It assists the retirement pensioners and the widowed pensioners.

I want to take up one or two points made by my hon. Friend the Member for Reigate about the operation of the Bill. The Minister will make the appointed day as soon as possible after the Bill receives the Royal Assent. My hon. Friend asked what steps we were taking to make the effects of the Bill known. We propose to use publicity to the maximum extent. We shall issue leaflets and advertise the change in the local offices of the Ministry and post offices. We hope to enlist the help of broadcasters and those who write newspaper articles. We also hope that hon. Members will assist us by advising their constituents of the change.

My hon. Friend asked me to give an assurance that there will be no administrative difficulties in the operation of the sliding scale earnings rule and that pensioners will understand it easily. I can only say that although the sliding scale has never been tried before, we can foresee no difficulties. When my hon. Friend raised this matter five years ago his recommendation, if I remember correctly, was for a deduction of 3d, in the 1s. I can understand that that might be a little more difficult to operate and a little less easy to understand. On the other hand, 50 per cent. is something which most of us can grasp, whereas 3d. in the Is. is a little more difficult. In any event, there has been a change since then, as my hon. Friend is well aware, and the Ministry believe that we can manage this job.

Whether pensioners will understand only time will tell. I think that perhaps they may not easily understand the new rule, although most of them now accept the present earnings rule and that if they earn above £2 a week they should declare their earnings. Some of them, I suspect, will have a pleasant surprise, when this Bill comes into operation, to find that they may earn up to 50s. without deduction of pension.

We will try, as we always do, to be as lucid and clear as we can in our leaflets and the instructions in the pensions order book. As at present we shall put in plenty of examples of how the rule works. Indeed, we are prepared to see whether a simple table is possible so that the pensioner can read off the pension he draws against wages he earns.

We shall be very glad to have ideas from hon. Members if they wish to help us, and I think hon. Members could help us by making the new rules known in their constituencies, perhaps by putting up notices at the advice bureaux which they run and by talking about this change, which we hope will come into force very shortly, whenever they are in their constituencies.

I am glad to support the Third Reading of the Bill, which I personally welcome and which is acceptable to the Government.

12.39 p.m.

Mr. H. A. Marquand (Middlesbrough, East)

At the very outset of her speech I felt that the hon. Lady the Member for Birmingham, Edgbaston was speaking rather as Member for Edgbaston than as Parliamentary Secretary. At any rate, I could construe her reference to the Manchester Guardian as "a provincial newspaper" only as a piece of Birmingham patriotism. If she travels abroad I doubt whether she will find it as easy to put her hand on a copy of the Birmingham Post as on a copy of the Manchester Guardian.

With the rest of her speech I find no reason to quarrel, and I particularly welcome the thanks which she extended to the National Insurance Advisory Committee for the skill, speed and ingenuity with which it examined the problem and presented its Report. I thought that in extending congratulations to the Committee on the speed with which the job was done, she might, although she would naturally not want to throw bouquets to this side of the House, have tossed a couple of flowers in this direction, because I doubt whether the Bill would have reached the Statute Book so quickly, had we not co-operated a great deal.

I join in the congratulations to the hon. Member for Reigate (Mr. Vaughan-Morgan). It is always a great source of pleasure to an hon. Member who has promoted a Bill to see it nearing its haven, and I hope that the Bill will reach its haven before very long. I can understand that the hon. Member for Reigate feels a great debt of gratitude to his hon. Friend the Member for Somerset. North (Mr. Leather). However, he did not do very much to remind us how different from the original Bill, which the hon. Member for Somerset, North introduced, the Bill now is.

Mr. Vaughan-Morgan

indicated dissent.

Mr. Marquand

The hon. Member shakes his head, but the Bill is substantially different and the difference is not only in form. The hon. Member indicated that the form of the Bill was somewhat different from the original, but the content is also substantially different.

Mr. Vaughan-Morgan

I do not want that statement to continue to be repeated. I tried to explain in Committee that I knew that the Advisory Committee would have two alternatives. There is a fence, and the Committee could have come down on either side. I wanted to provide a happy landing on either side.

Mr. Marquand

I fully accept that. I was not thinking of what the hon. Member for Reigate intended—unfortunately, because of illness, he did not have the opportunity of explaining—but more of the very eloquent speech made by the hon. Member for Somerset, North in the Second Reading debate.

The hon. Member for Reigate almost suggested that the Government capitulated to him and to his hon. Friend in accepting a Bill of this nature. It seemed to us in Committee that the capitulation was the other way round. We witnessed the hon. Member for Somerset, North, who had put a figure of 60s. into his Bill, voting against an Amendment put by my right hon. Friend the Member for South Shields (Mr. Ede) to maintain that figure. The capitulation was almost without a word said.

I am sorry to have to say this sort of thing in the absence of the hon. Member for Somerset, North, but, of course, I am not responsible for that. I understand that he may have undertaken a journey to a distant part of the country to take part tonight in a session of "Any Questions". If that be so, I feel sure that if any old-age pensioners are present, the session will be a good deal more lively than some of the sessions are. It is a pity that we are denied today the opportunity of hearing the explanation which the hon. Member for Somerset, North certainly did not give us in Committee.

Mr. Vaughan-Morgan

The right hon. Member will not forget that he himself did not vote.

Mr. Marquand

I have taken a perfectly consistent attitude throughout. I have accepted the Bill with same modified enthusiasm and I have never indicated that I was a supporter of the 60s. figure which the hon. Member for Somerset. North introduced.

Mr. Vaughan-Morgan

Why did not the right hon. Gentleman vote against it? He did not even sit on the fence. He lay on it, prone, inert and silent.

Mr. Marquand

I did not vote against it and I did not vote for it. I regarded this little controversy as a domestic affair which it was amusing to watch, and I took up a position in which I could best watch it.

I was about to say that the Bill has been accepted by us with modified enthusiasm. We recognise that the Bill is necessary, particularly because throughout the period of office of the present Government prices have been rising, the value of money has been falling, and it has been necessary again and again at many points to adjust sums of money which are mentioned in various Bills to take account of that fact. It was therefore entirely proper to say that in this case we should, for the figure of 40s., substitute 50s. We have never had any doubts about that.

In Committee we expressed some misgivings about the possible danger which might have arisen about the earnings rule. I was very glad to hear the hon. Member for Reigate say that he wanted to make it clear that he stood behind the retirement principle and the earnings rule which must inevitably and always go with it. It was good to have that assurance because, as I have said already, we had some fears that there might be a temptation to some hon. Members opposite and other people in the country from time to time to say, "Pensioners can earn; many of them are earning fairly decent amounts of money, as well as receiving a pension. Why should they grumble about the rate of pension? We might as well leave the rate of pension as it is and increase the permitted amount of earnings".

We do not wish to see that kind of thing develop. We want to ensure that the rate of pension is satisfactory to cover basic subsistence needs. We have been told today that the number of people who may benefit from the Bill is small. Whatever the figures—and there has been some dispute about them—they are very small indeed, and only a very small proportion of the total number of pensioners covered by the National Insurance Act, 1946, will benefit from the Bill. It follows all the more, therefore, that an argument based on the belief that pensioners can work and supplement their pensions to a substantial extent and that therefore their pensions can remain at a more or less nominal figure, is entirely unjustified.

There is one respect in which the Bill does not follow the recommendations of the Advisory Committee. As hon. Members who have followed the discussions know very well, it is that whereas the Advisory Committee thought that the deduction range for a widowed mother could be the same as that for other pensioners, the Bill provides a different range. It permits a widowed mother to earn up to 80s. before deductions begin, whereas for widows and other pensioners the deductions begin after 70s.

I have already referred to misgivings about the danger of using actual earnings by pensioners as an argument for suggesting that their basic pension is sufficient and need not be increased. The Joint Parliamentary Secretary quoted what my right hon. Friend the Member for Warrington (Dr. Summerskill) said some time ago when she introduced a provision to make a difference between that figure and other pensions. I do not at all dissent from anything which she then said. I firmly and entirely agree with her description of the position of the mother who becomes a widow and suddenly finds herself confronted with the difficulty of maintaining a family.

I hate to be personal in my speeches in the House of Commons, but nobody knows better than I do what it is to be the son of a widow. Fortunately, I was not very young when that happened, but I do know about it and because I have had personal experience of this matter, I want to ensure that the widowed mother with children to bring up has a basic pension and allowance adequate to maintain them without her having to go out to work.

During the Committee stage the Minister said, "Ah, the circumstances vary. Children grow up: mothers remain fit and able and can go out to work, and it is not unreasonable to permit them this more generous "—that was the phrase used by the hon. Lady today—" earnings limit." If that is so, well and good, but do not let the comparatively favourable circumstances of certain widows lead us to disregard the great hardship that falls upon the younger widow with a young family. Do not let her have to rely upon the necessity of going out to work.

Do not let us, in increasing the incentive for widows to go to work, forget the necessity to ensure that through the children's allowance—and that is the only way it can be done without altering the basic pension—the widow has enough money with which to keep her young family without having to go out to work. If I go ally further I may be trespassing outside the realms of the Bill, but I want to make that point very clearly today.

We recognise that this Bill is appropriate at the present time for various reasons, particularly because of the rise in prices. We do not—

Mr. Vaughan-Morgan

I really do not think that the right hon. Gentleman should bring that in.

Mr. Marquand

We will not now enter into the economic application of the argument about which comes first, the chicken or the egg.

Mr. Vaughan-Morgan

As regards the retirement principle and the earnings rule, wages are the most important factor.

Mr. Marquand

Wages are the most important factor precisely because the purchasing power of wages makes them worth having, and it is by their purchasing power that we must test the adequacy of wages, pensions and earnings. The hon. Gentleman is very touchy on these points. He wants his Bill to go through and yet he does not want me to say why we think the Bill should go through. I have given way to him a great deal, but I suggest to him that it is sometimes a good idea to keep a still tongue in a wise head. If he angers me very much, we might continue for much longer this morning.

We recognise the necessity for the Bill, and hope that it will reach the Statute Book. Nevertheless, we want to draw the attention of the House and the country to the necessity for watching all the time the adequacy of the basic pension and of never allowing that to escape attention.

12.54 p.m.

Mr. Douglas Houghton (Sowerby)

I shall not detain the House for more than a few minutes, and I apologise for not being able to be here when the hon. Member for Reigate (Mr. Vaughan-Morgan) moved the Third Reading of his Bill. I am not going to allow anything said by the hon. Member for Somerset. North (Mr. Leather) on 3rd February to cloud my judgment of the Bill or to detract from the welcome to the changes contained in it. We must not hold the hon. Member for Reigate responsible for anything that was said by his hon. Friend the Member for Somerset, North a few months ago. The hon. Member for Somerset, North threatened the Government, intimidated the Advisory Committee and defied the T.U.C. in as many sentences. I said at the time that it was not perhaps the best beginning for his advocacy of the proposals of the Bill. Still, here it is.

The Committee stage was postponed until we received the Report of the Advisory Committee, and I think the Committee made a good job of its reference. Had the Bill gone to the vote in its original form on 3rd February I should have voted against it, whatever my hon. Friends on this side of the House might have done. I expressed my point of view quite definitely at the time, as I did in the Standing Committee a few days ago. It is a difficult problem to get this matter about right, but I think that the Advisory Committee has done so, and we should thank it for its work and accept its recommendations.

I have only one further thing to say. In principle, this earnings rule is a troublesome matter in the minds of many old-age pensioners and of the public at large. Recently a spokesman on behalf of the National Federation of Old-Age Pensions Association declared himself against the retention of any earnings limit whatever. He wanted to sweep the whole thing away. I say with great emphasis that the retention of the earnings rule, which is an essential condition of the retirement principle, is also a condition of a claim to an adequate pension for those who retire. If we confuse the two things we shall get into an awful mess.

It is important, I think, that the old-age pensioners should recognise that this rule is not a vexatious thing to stop them earning a reasonable amount of money or to interfere in any way with all the reasonable requirements of their lives or desires. It is there because the claim for an adequate pension is conditional upon retirement, and the provision of an adequate pension on retirement is conditional on the State being willing to make an increasingly large contribution to the National Insurance Fund in order to provide it.

There is a mistaken impression that if one has paid pension contributions for many years one must necessarily have paid for the pension one gets. We know that that is not so, and as the years go by more and more money will have to be poured by the Exchequer into the National Insurance Fund in order to maintain the existing level of pensions at existing contributions. The amount will become greater still if the level of pensions increases and if the numbers of retirement pensioners grow, as they will.

I hope that these comments and other contributions to the debates on the Bill during its various stages will enable old-age pensioners—retirement pensioners is the proper term—and the public to understand what this earnings rule is about, and to regard it as an essential feature of the scheme as now constructed. If we had a scheme without such a rule and with no retirement conditions it would necessarily be a national scheme very different from the present one.

Question put and agreed to.

Bill read the Third time and passed.