Clause 2.—(HIGHER RATES, ETC., OF CONTRIBUTIONS AND BENEFITS UNDER NATIONAL INSURANCE ACT, 1946.)

HC Deb 18 November 1957 vol 578 cc88-161

Mr. Finch

I beg to move, in page 2, line 6, at the beginning to insert: (1) As from the appointed day, subsection (2) of section seventy-two of the National Insurance Act, 1946 (which in certain cases substitutes a death grant of ten pounds for the death grant of twenty pounds otherwise provided by that Act) shall be amended by substituting for the words "ten pounds" the words "fifteen pounds". This Amendment seeks to increase the death grant in certain cases. It is a simple Amendment. It has not much complexity about it. I hope, therefore, we may dispose of it in a very short time.

At the present time there are two classes of case under the National Insurance (Industrial Injuries) Act. Death grant is payable for men under 55 and for women under 50 at 5th July, 1947, which was the appointed day. In those cases the death grant payable is £20. The Bill seeks to increase that to £25. There is another class of death grant, for men who are between 55 and 65 and women who are between 50 and 60 at the appointed day. That death grant is £10. There is nothing in the Bill which seeks to increase that amount.

6.15 p.m.

I would specially draw the right hon. Gentleman's attention to this. I cannot understand this disparity of treatment. It seems to me not to be justified. I cannot imagine the Government are serious in raising the amount of grant to the one set of persons and not to the other. I think this must be due to an oversight. If it is not, I cannot understand it.

Miss Pitt

Perhaps I may be allowed to answer the hon. Gentleman straight away, for that may make any further discussion unnecessary. The hon. Gentleman has overlooked that we have provided for an increase for those people who were within ten years of retirement age in July, 1948. True, it is not in Part II of the Fourth Schedule, but if he will look at the Fifth Schedule, line 32 of page 16 of the Bill, he will find that we propose to amend Section 72 of the 1946 Act, which relates specifically to death grant payable to late-age entrants, and increase the grant from £10 to £12 10s.—in other words, exactly in proportion to the increase proposed for the full standard rate. I hope that in these circumstances the hon. Gentleman will agree to withdraw the Amendment.

Mr. B. Taylor

I think my hon. Friend will agree to withdraw the Amendment. We could not understand the Clause as it stood. After all, this Bill has been a hurried job. It was first debated only last week, and it is possible we have not caught up all the points yet. We are grateful for what the hon. Lady has said, and I should think that on the assurance she has given us my hon. Friend would withdraw his Amendment.

Mr. Finch

I beg to ask leave to with- draw the Amendment.

Amendment, by leave, withdrawn.

Mr. Dingle Foot (Ipswich)

I beg to move, in page 2, line 21, at the end to insert: Provided that—

1. (a) where it appears to the Minister expedient to do so in order to maintain the purchasing power of benefit he may by order direct that for a period to be specified in the order the rates and amounts of benefit specified in the Fourth Schedule to this Act shall be increased to such extent as may be set out in the said order;
2. (b) any order made by the Minister as aforesaid shall be laid before Parliament as soon as may be after it is made;
3. (c) the power conferred by this subsection to make orders shall be exercisable by statutory instrument, and no such order shall have effect until it is approved by a resolution of each House of Parliament.

This Amendment is really self- explanatory. Our aim is to protect old- age pensioners and the other recipients of benefits enumerated in the Fourth Schedule from the effects of continuing inflation. I think hon. Members in all parts of the House realise that the real victims of inflation are not so much those who are in work but those who are living on fixed incomes, and particularly the pensioners.

I have the advantage of being the hon. Member who has most recently had contact with the electorate, although hon. Members in all parts of the Committee, I am sure, from their experience of their constituencies will know perfectly well what a tremendous burden has been thrown on those in retirement by the perpetual depreciation in the value of money. We all hope that the Government's plans for arresting inflation will succeed, but lest they should fail, we seek by this Amendment to provide machinery whereby the level of benefits can be kept abreast of the level of prices without the need for further legislation.

I see one or two hon. Members present who I know can recall the debates we had in the House of Commons many years ago on the Beveridge Report. It was emphasised in that Report, and it was accepted by hon. Members in all parts of the House at that time, that the Beveridge proposals were based on a subsistence level. They could operate only on the supposition that prices remained reasonably steady. It was accepted, either expressly or implied, on both sides of the House in those days that the benefits which were then envisaged should be tied to the cost of living in one way or another. We are asking that the same principle should be accepted today, and we seek to provide through the Amendment the most suitable machinery that we can devise.

The last occasion when I had the privilege of moving an Amendment touching the old-age pensioners was on Sunday, 3rd September, 1939. It was about an hour after the declaration of war. I then moved an Amendment designed to protect the position of old-age pensioners who might also qualify for dependant's pension due to the loss of a son in the war. On that occasion, I am happy to recollect, rather to my surprise the Amendment was accepted. I hope that the Minister now in charge of these matters will show himself no less forthcoming than his predecessor in 1939.

Mr. Raymond Gower (Barry)

Can the hon. and learned Member say whether this would need some modification of the existing scheme of the National Insurance Acts, in the sense that it would need provision for variation of contributions or of Exchequer contribution or something of that nature?

Mr. Foot

It might involve some variation in contributions and, possibly, some increase in Exchequer contribution, but that is not a matter with which we can deal in the Amendment. All that I seek to do in the Amendment is to establish the principle that benefit should be linked with the cost of living.

Mr. R. H. S. Crossman (Coventry, East)

I beg to second the Amendment.

I think that the case for the Amendment is well known to both sides of the Committee. I am sure the Minister would agree that since the pension was last raised its value has fallen by about 4s. in the £ and that part of the proposed 10s. is designed to bring back the purchasing power of the pension. We on this side of the Committee feel that it is cumbersome and improper that every time the value of pension is reduced by inflation we have to go through an elaborate procedure in a Bill of this kind. We believe that provision for automatic adjustment should be made in the Bill by which pension value can be permanently maintained. That is why, in the Amendment, we are concerned to find a mechanism to raise automatically the value of pensions in the event of purchasing power being reduced by inflation.

We appreciate that the Government may not be willing to accept our longer-term schemes, but we find it difficult to believe that they would not be prepared to accept this kind of automatic adjustment to the pension. We cannot see why it was not done some time ago. We think that this is one of the Amendments which the Minister can accept with relative ease.

I am sure we all agree that one of the things that is undesirable is that this question should be one of argument and of politics. If we can write into the Bill an understanding by which pension is automatically adjusted in this way, it is not fair for hon. Members opposite to ask on this Clause questions about contributions. We can raise that point on the next Clause. We are concerned solely here with the principle that this provision should be written into the Bill and that the Governement should be able to carry it out by Order in Council, provided that it is approved by both Houses. That is our sole intention in moving the Amendment.

Mr. A. E. Hunter (Feltham)

I support the Amendment and hope that the Minister will accept it.

During the past two-and-a-half years the old-age pensioners have been the worst victims of inflation. In 1955 the pension was raised to £2 a week, and during that period, on the Minister's own admission in this Chamber just before the Recess, the pension was worth in purchasing power only £1 15s. 10d. To people on a pension of £2 a week, a loss of 4s. 2d. a week is considerable. A person earning £30 or £20, or even £15 or £12, may not miss so much 4s. 2d. a week, but this is a big loss to a pensioner on £2 per week.

I agree with my hon. Friend the Member for Coventry, East (Mr. Crossman) that if the Minister accepts the Amendment it will protect the old-age pensioner from inflation. It will stop the hardship to old-age pensioners on the benefit rates when they lose purchasing power and will lead to a good deal of satisfaction among the people. If the cost of food and clothing and of rent and electricity increases, the new rate will lose its value. The Amendment would provide against that, and I am sure that it would be acceptable to many hon. Members on both sides of the Committee, for should the cost of living continue to rise, the new benefits would be increased automatically to give them full purchasing power. This amendment will protect old-age pensioners from inflation.

Dame Irene Ward (Tynemouth)

I am extremely interested in the Amendment because, for a very long time, I have tried to do my best to cope with this difficult problem about which all of us feel very strongly in relation to those who draw old-age pensions and those who are living on small fixed incomes. Whether the method proposed in the Amendment is an appropriate way of dealing with the problem is, of course, quite another matter, but there is a point which I must put, particularly after hearing the hon. and learned Member for Ipswich (Mr. Foot) moving the Amendment. I was not surprised to find that it was not moved by the right hon. Member for Middlesbrough, East (Mr. Marquand) although his name heads it on the Order Paper.

I, too, very well remember the events of 1939. In view of what has been said, I want to ask why in 1951, after a very heavy rise in the cost of living, it was found impossible by hon. and right hon. Members opposite to give even a modest increase of pension to people who drew retirement pensions after 1st October, 1951. It is very easy to put forward a proposal of this kind from the Opposition benches, but it is quite contrary to the attitude of hon. and right hon. Members opposite when they were sitting on the Government benches. That must be borne in mind.

I have tried to attend every debate that has been held in this Chamber on old-age pensions, on retirement pensions, and on the condition of those who are living on small fixed incomes. I am thrilled, of course, that hon. and right hon. Members opposite should now take a view entirely different from that which they took in 1951. I do not know how far I am in order, but as my hon. Friend the Member for Barry (Mr. Gower) was allowed to interrupt and ask a question, perhaps I might be allowed to ask how it is intended to finance this proposal. That is very pertinent to the Amendment.

6.30 p.m.

I want to have this on the record; indeed, I have been longing to have it on the record for a long time. In the Budget of 1951, presumably because there was no money in the kitty and also presumably because right hon. Gentlemen opposite, who were responsible at the time for the finance of the country, were not prepared to ask the rest of the community to finance the aged by increased contributions, far from making this all-embracing recommendation, the proposal was that there should be a differentiation between the two sections of the community in respect of retirement pensions. In other words, those who were already drawing retirement pensions were to have their pensions increased by a very modest sum having regard to the heavy rise in the cost of living. If I remember rightly, it was 4s., raising the original basic pension from 26s. to 30s. On the other hand, all old people who would become due for retirement pensions after 1st October, 1951, had to remain on the old basic pension.

I want a definite guarantee from the Front Bench opposite. I am not interested in back benchers—[An HON. MEMBER: "So say all of us."] I know what a lot of trouble I give my own Front Bench. When it comes down to a matter of this kind, I think that an Amendment of this importance should have been moved, but by a Front Bench speaker opposite. The hon. and learned Member for Ipswich, who is an old friend of mine and against whom I have nothing personal, is not sitting on the Front Bench. Neither is the hon. Member for Coventry, East (Mr. Crossman). Though I would not mind prophesying that at some time in the future the hon. and learned Member for Ipswich may sit on the Front Bench, I am not so sure about the hon. Member for Coventry, East. But if this Amendment is a serious one, why was it not moved by the right hon. Gentleman the Member for Middlesbrough, East, whose name is at the head of the Amendment?

If this suggestion is to be seriously discussed, it must be discussed between Front Benchers. Of course, when the next General Election comes along. I may not be back here. Yet if I am back here, and if by any unfortunate chance those on the Front Opposition Bench were sitting on the Treasury Bench, I would not have any faith either in their ability or in their promises to implement the kind of argument they are putting forward today. I have never thought it fair to play politics with the lives of old people—[HON. MEMBERS: "Oh."]—so I want to have this on the record.

I want to know specifically what proposals there are to finance this suggestion. I happened to notice that the right hon. Gentleman the Leader of the Opposition now seems to think that the cost of living will fall. I presume he thinks that if he were in power the cost of living would fall further, so he would be giving nothing to the old-age pensioners by proposing this Amendment.

However I want a great deal more information. I shall be glad if my right hon. Friend, speaking from our Front Bench on this side of the Committee, will confirm the mean treatment handed out by right hon. and hon. Gentlemen opposite in 1951 just before the General Election.

Mr. George Thomas (Cardiff, West)

That was why we did it.

Dame Irene Ward

That is exactly the point. Hon. and right hon. Gentlemen opposite knew that the General Election was coming along, so they carefully provided a small increase of pension for those who were drawing retirement pensions, and they hoped that nobody would notice that they had excluded everybody else. That was what happened. Then the Leader of the Opposition chose to go to the country because there was no money in the kitty. I am not suggesting that hon. Gentlemen opposite are inhuman, but that was the reason why they could not meet the case for the retirement pensioners.

I do not always agree with my Minister, and certainly I do not agree with my Government's treatment of those living on small fixed incomes. What I do know is that when they produce a scheme the money is in the kitty to meet it. Therefore, I would much rather have the retirement pensioners in the hands of my Minister than in the hands of right hon. Gentlemen opposite, who could not do a single thing to meet the unfortunate and unhappy position of retirement pensioners when they were sitting on the Treasury Bench and forming the Government.

Mr. G. Thomas

The hon. Lady the Member for Tynemouth (Dame Irene Ward) is never at her best when she pulls her punches, and she has been spending the time of the Committee in making a lot of noise but contributing very little that was constructive to this Amendment. She talked about playing politics. The hon. Lady was playing politics with the old people throughout her speech. She was hoping to be able to create a little prejudice outside, and I do not propose to follow her along those lines. I wish to answer only one of her arguments, which was that it is easy for somebody in opposition to produce an argument of this kind. It is significant that no such proposal came forward when her party was in opposition.

Dame Irene Ward

It will be within the recollection of the Committee that supplementary pensions, now embodied in National Assistance, which provided helpful assistance to those on the lowest level of incomes, came about by the setting up of a committee at the suggestion and under the direction and guidance of the late Neville Chamberlain, and that supplementary pensions stemmed from the action taken by the Government over which he presided.

Mr. Thomas

The more opportunity the hon. Lady gets, the more she puts her foot in it. She is referring to that part of our social welfare service which rests entirely upon a means test—

Dame Irene Ward

No, no.

Mr. Thomas

Yes, it does. Nobody in this country gets supplementary assistance without first proving their poverty, and, in certain circumstances, applicants have to produce their insurance papers.

Now, Sir William, if I may turn to the argument and bring the Committee back to the Amendment, I suggest that there are two good reasons why it should be accepted. Number one: plenty of people pay lip-service to taking the question of retirement pensions out of party politics, and this Amendment could well be a means of so doing. After all, if the pension were automatically linked to the cost of living, there would be automatic attention to the needs of the old folk, and there would be less opportunity for people to press their claims, and less need for them so to do in this House. I believe that until retirement pensions are pegged to the cost of living they are bound to be a matter of major controversy. There is a great gap between us on our approach to the social welfare service.

The second reason why I believe this Amendment should be carried is the human consideration of the old folk. Obviously they are tied to the tail of inflationary movement. They are bound to be the last people to receive an increase in income. It is clear that unless a Measure of this sort is accepted by the Government, then the old folk will be faced in the next twelve months with the serious crisis of seeing their pension dwindle away. I am confident that the motives of hon. and right hon. Members on both sides of the House are the same. We all want to protect our old folk from the harshness of inflation. But is there anyone on either side who can say to the old-age pensioners, "The increase which you will receive in January next is guaranteed to hold its value through the years"? If we cannot say that, it is hard lines for the old people and we are in honour bound to do something to protect them, because the new figures will give them not even a bare subsistence level.

No Minister of National Insurance has ever pretended that the retirement pension rate is enough for a person to live on. We say that it is not even a basic amount on which they can live. I believe that the hon. Lady has said the same. There are millions of old-age people who have to live on it. There are millions who have only the gifts—I will not say charity—of their children along with the basic retirement pension. These people are faced with a major crisis every time a basic commodity increases in price. Now that the House is giving its time and attention to this question, we should do the job properly and protect the old people. We should ensure that the pension increase shall be maintained so that a year from today we shall be able to say that the increase has not lost ground in any way, however much the rest of the economy is being strained or dealt with by those in employment. We should ensure that we are strong enough and able enough to protect the weaker members of our community from the blizzards which have affected our economy in recent years.

Mr. Philip Bell (Bolton, East)

The hon. Member for Cardiff, West (Mr. G. Thomas) has done his best to keep politics out of the debate. He always speaks with great eloquence and has a very good platform, but it is not quite good enough to leave politics and economics out.

This is a very serious Amendment indeed. It is impossible for us, without the advantage of studied comment, figures and statistics from the Opposition benches, to accept the Amendment on the ground that we are all very fond of our parents. When the hon. and learned Member for Ipswich (Mr. Foot) talked about the Beveridge Report he missed out economy. He knows as well as anybody that when that Report was issued it was thought that the value of money would be stabilised. Why did he not tell us at the time that it was supposed to be a funded scheme and that it was not supposed to carry late entrants who would receive the full pension but not make actuarial contributions? It was that step which put this Fund in an unstable position.

It is easy enough to say, "Let us link the pension with the rise in the cost of living." The rise in the cost of living will not be an inflation that 2s. here or 1s. there will put right. It may smash us. We have seen inflation reach the stage in Europe where it cannot be put right by a contribution here or a contribution there. The battle is against inflation, and it is a defeatist policy to submit an Amendment which is of deep and serious consequence without having calculated what the cost of it will be and to bring it forward on the basis that inflation is with us for ever. If inflation is with us for ever, we need not bother about 2s. or 3s. in extra contributions. We will be facing a number of difficulties worse than that.

6.45 p.m.

Mr. Crossman

Would the hon. and learned Gentleman agree with this? We want to conquer inflation, but this Amendment seeks to do something much more modest, and that is to ensure that, while we are conquering inflation, old people do not suffer as a result. I do not follow the hon. and learned Gentleman's argument. Does he not agree that the responsibility for conquering inflation is on those who can earn their living? While we are conquering inflation, decency demands that we should protect the old people from the consequences of our acts.

Mr. Bell

"We" is the fallacy behind the argument. It is not the present generation, but future generations who will do it. It is easy enough to pay money out when we are not footing the bill, but we have to remember the cumulative effect in the future of late entrants. The increase which is proposed now will be at the expense of a future generation. The Amendment, standing isolated like this, never takes the reverse side of the penny and says, "If the cost of living should fall, then the pension should fall." It is not a well-balanced Amendment. It is not part of a comprehensive scheme such as we all want the Government to bring in. We do not want a tinkering Amendment which, except for the observations of the hon. Member, I would have had suspicions had a political content, but in view of his speech I will not vent those suspicions.

Dr. King

I should have thought that, in spite of what the hon. and learned Member for Bolton, East (Mr. Philip Bell) has said, this was an Amendment which the Government might have accepted, or that, at any rate, the principle behind it might have been accepted by every member of the Committee except the hon. and learned Member.

Many people are saying that we should leave old-age pensions out of politics. I do not believe that that is possible. There are two aspects to the old-age pension question. One is the amount of the pension and the other the financing of it. On those questions, there is likely to be for quite a long time great differences of opinion between the two major political parties. While that is true, it is the agreed view of both sides of the Committee that whatever pensions we agree on should be adjusted as quickly as possible to the rise in the cost of living. The Government from time to time work towards that end.

I do not think that we should take a defeatist view about inflation. I am willing to agree with the hon. and learned Gentleman that if we have a raging, tearing inflation then the country is ruined; but I think the hon. and learned Gentleman would be the last to say that if we were faced with the ruin of inflation, the first people we should put into the battle should be the old folk who should be the first to suffer. We are trying in this Committee to devise the best and swiftest way of adjusting the pensions to the rise in the cost of living. I must confess that I have never understood why it takes so long. Even though we have made provision in this Bill, it will take us nearly three months. I have never understood why we could not give new values to the vouchers which already exist in the pensions scheme.

However, we are assured by the Minister that it does take all this time, that the utmost that the Amendment would do would be to save the time between a Statutory Instrument and a Bill—I reckon that time as three or four weeks—and that if we proceeded by means of a Statutory Instrument instead of the long process of a Bill, we should lose the luxury of being able to amend the Bill. From our previous experience of Bills and of the present Minister, the chances of our amending this Bill are very small.

By means of our Amendment, we should get a much quicker gearing up of the pension towards the value which the whole Committee wants it to approach. I hope the Minister will address himself to this proposal as a very serious attempt to do what all of us have very much in mind, to say to the old-age pensioner, "While you may fight about the amount of the pension, the one thing we shall not let you do in future is to go through the degrading, humiliating procedure of having time and time again to say to the House of Commons that the pension already conceded has shrunk in value and that you must ask for an increase."

Sir Patrick Spens (Kensington, South)

This is a very attractive idea put forward in a very attractive way, but it would be an absolute denial of the possibility of success by the Government in dealing with inflation if such a provision were put into an Act of Parliament. The proposal is based on the view that inflation is going on and that we shall have to have machinery to deal frequently and from time to time with increasing inflation. What is the good of the Government making every endeavour to defeat inflation if we put into an Act a provision which says that the position will be absolutely hopeless and we shall require machinery which will have to be used frequently and very quickly to deal with the pensions difficulty?

I hope the Government will have nothing whatever to do with the Amendment but will rely on the very firm hope that real measures will be able to defeat inflation. If inflation cannot be defeated, further legislation on behalf of pensioners will be necessary, but to insert a provision which amounts to an admission that inflation cannot be defeated would be an absolute contradiction of everything for which the Conservative Party stands.

Mr. E. L. Mallalieu (Brigg)

Right hon. and hon. Gentlemen opposite are always very keen to pay tributes to efforts to ease the lot of the unfortunate, particularly if they happen to be the elderly unfortunate, but when it comes to putting forward practical proposals they invariably say, "We hope the Government will have nothing whatever to do with this." We have had one or two such speeches today, together with a considerable voicing of the fear that our proposal would lead to further inflation.

I support the proposal because it is an anti-inflationary move. It is anti-inflationary from the only point of view that really matters in this House or outside, and that is the point of view of the old people themselves. Inflation comes along, and we seek to insulate them from it. It may be said that that is a ridiculous way to look at inflation, but I believe that we have no right morally to look at it from any other point of view. So long as it is possible for any other section of the community to insulate itself wholly or partially from inflation, so long as other people can by wage claims or by having their wages arranged on a sliding scale, coupled with the cost of living, insulate themselves from inflation, so long as there is anyone left in the country who can insulate himself to any extent at all from inflation, then the old people should also be put in that position. What is proposed would mean a very simple and quick method of doing it, and if inflation ended tomorrow, so would what we propose end tomorrow. There is no excuse for this scheme or a similar one not being seriously considered by the Government.

I believe—all who have studied the question do—that the burden of this proposal, like the burden of all pensions, falls on people who are in work, and not only upon people in the far distant future. It is true that the burden increases in the far distant future, but there is nevertheless some burden in the present. My hon. Friends and I believe—we are prepared, if need be, to tie ourselves to this wagon—that the people of this country will be prepared to bear the burden when the matter is put to them properly. All we ask is that the Government should provide some machinery capable of insulating the old people as far as possible from the ill effects of inflation. We believe this can be done by the machinery we have suggested, and we earnestly hope that the Government will consider it.

Mr. A. E. Cooper (Ilford, South)

As has been said by my right hon. and learned Friend the Member for. Kensington, South (Sir P. Spens), this is a most attractive proposal, and it is obviously something which would attract the admiration and support of old-age pensioners. However, in the House of Commons we have to do something more than secure support from any sectional interest. We have to think of proposals from the point of view of the interests of the country and whether the country can proceed with them without injuring itself.

The case which has been put forward by the Opposition is not strong enough, for the reasons which have been advanced by my right hon. and learned Friend and also my hon. and learned Friend the Member for Bolton, East (Mr. Philip Bell). However one argues, one cannot possibly argue an increase in pensions, wages or anything else unless it is matched by an increase in productivity. That is one of the fundamental facts which we have to face today. If one automatically increases pensions by a sum which will mean the printing of notes to the value of about £100 million a year and it is not matched by an increase in productivity, inflation will continue. There is no argument against that. It is one of the economic facts of life we have to face.

Mr. Maurice Orbach (Willesden, East)

Will the hon. Gentleman explain how productivity has been increased in relation to the measure of assistance which is to be given to old-age pensioners?

Mr. Cooper

It is obvious that the hon. Gentleman has not read the Bill. The Bill is in two parts. The first part provides for an increase in pension. Since any increase in pension which is not matched by an increase in production or savings or a withdrawal of purchasing power would be inflationary, there is another part to the Bill which provides for an increase in contribution. Thus we have a matching up. I should have thought that this was so elementary as to be beneath the hon. Gentleman—

Mr. E. G. Willis (Edinburgh, East)

How does the argument apply to war pensions, which are also being raised?

7.0 p.m.

Mr. Cooper

There are certain obligations the country has to bear—

Mr. Willis

That is precisely the point of this Amendment.

Mr. Cooper

War pensions and things of that description are not covered by any insurance scheme, but will have to be covered in due course by increases in taxation. If we could only rid our minds of the idea that anything in this country is free, we should do a lot better.

The hon. Member for Coventry, East (Mr. Crossman) said that we have to insulate the old-age pensioners against the effects of inflation while we are still fighting a battle against it. That is precisely the argument which trade union leaders have been advancing during the last 12 years. If during the fight against inflation the whole of the nation is to be insulated against the effects of inflation, what interest is it to anyone in the country to try to fight this enemy? This is a time when we have to exercise some restraint in our demands on the economy.

We should all like to see this matter taken out of party politics and pensions, as it were, pegged to the cost of living. But the idea put forward by hon. Members opposite is half-baked. They have not made a single suggestion on how this idea is to be financed. They have not even thought of the desirability of matching it with productivity. In fact, the more one listens to the arguments of right hon. and hon. Gentlemen opposite the more one is forced to the conclusion that all they wish to see is a continuance of inflation in this country.

Mr. John Diamond (Gloucester)

I hope the hon. Lady the Member for Tyne-mouth (Dame Irene Ward) will not mind a back-bencher from this side of the Committee contributing to the discussion or me saying that, although she was not interested in what is being said by hon. Members on the back benches on this side of the Committee, we are very interested indeed in what she said.

The hon. Lady made two important points. She thought that this matter ought to be taken out of party politics. So do I, and so, I think, do most of my hon. Friends. The hon. Lady thought the cost ought to be considered. So do I. I should have thought the Government would say that the figure they are at present suggesting is the correct one. I assume they would say it is neither too large nor too small. I assume, therefore, that it would be only right for them to say that this is the proportion of the national income which the economy can spare today for the old folk. If that be so, they would surely be deceiving themselves and misleading the Committee were they to refuse to accept the Amendment which has the effect of keeping that proportion constant.

What my hon. and learned Friend is anxious to do, and I am anxious to support him, is to see that this share, which by introducing the figure the Government are by implication calling a fair share, is maintained. If that fair share can be maintained by the Government accepting this Amendment, it would have the desirable effect of making it unnecessary for hon. Members on both sides of the Committee to draw the attention of the public from time to time to the fact that the proportion has altered and is therefore no longer right.

We are most anxious to have this matter withdrawn from political discussion, and I am sure that the Government are too. It is a short time since I found myself having to draw attention to it during the by-election at Gloucester. What did the Prime Minister do? He sent a message to the Conservative candidate at that by-election notifying him—and therefore the electors of Gloucester—that this very question of pensions was under review. The House was in recess at the time and the right hon. Gentleman did not wait to inform the House of Commons; he gave the information to the electors of Gloucester. That was very unfortunate for the right hon. Gentleman's supporters at Gloucester, because so many of them took the view that it was a wholly improper thing to do at a by-election, to make a vague suggestion—

Mr. John Hall (Wycombe)

I believe that an announcement was made on this point before the House rose for the Summer Recess.

Mr. William Ross (Kilmarnock)

No, not at all; that is absolutely wrong.

Mr. Diamond

I cannot speak at first hand about what may have been said in this House before the Recess. All I can say is that it was regarded as a most improper intervention by thousands of old-age pensioners all over the country and from all sorts of areas, many of whom took the opportunity of writing to me to say so.

We are all agreed that we want this matter taken out of the realm of party politics, and the way to do it is to prevent any hon. Member from being able to point to the cost-of-living index and saying, "That was a fair share, but it is no longer a fair share." I hope, therefore, that the Government will be anxious to accept this Amendment from that point of view.

I do not think the Government can refuse to accept the Amendment on the ground of cost. This is only a safeguarding Amendment. It will have an effect only if the cost of living goes up and inflation increases. During the short time I have been back as a Member of this House I have heard speech after speech from the Government about their determination to keep the cost of living stable and to introduce every measure they think necessary—including keeping down wages and interfering with negotiations for wage fixing—to keep the cost of living stationary. I hope that we shall be told how much it would cost were this Amendment introduced. If the Minister will tell us how much in his view the cost of living is going up and over what period, we shall be able to see whether there is anything involved.

I have been almost convinced by the Government that our cost of living is for all practical purposes under control—so long as we keep the same right hon. Gentlemen on the same Front Benches—so there is no need to worry on the score of cost. It has been well said that the Amendment provides for an increase but not for a decrease. I should be prepared to accept an Amendment if, as I am sure will prove to be the case, the Minister says, "We cannot accept the wording as it is, but if there is a variation to provide both up and down, we shall be only too glad to accept it." That is a minor variation which would satisfy many hon. Members on this side of the Committee.

Vice-Admiral John Hughes Hallett (Croydon, North-East)

Will the hon. Member answer this question before he leaves that point? Suppose this Amendment had been part of the law before the present Bill was brought forward. The hon. Member appreciates, does he not, that it would not have permitted the present proposed increases to take place, because those increases have gone beyond the rise in the cost of living?

Mr. Diamond

That is hardly a question it is a statement of a point of view. I do not accept it, and I am sure that we shall be glad to listen to the hon. and gallant Member expounding it a little more fully after I have finished my speech and when he can give us the benefit of his views about this Amendment.

In my opinion, the dominant reason is not related to the financial side or the political aspect. It is a simple human consideration. I apologise for mentioning Gloucester once more and the by-election there. But what is brought home to one on entering the homes of old folk is the feeling of these old folk, not only that they are not getting sufficient to make ends meet, but, even more important, in many cases they are not getting a fair deal from the community to which they have given everything and the whole of their working lives.

As we know, there is almost a complete lack of ability on the part of the old people to make felt their point of view. Those who have read the report on loneliness know that that is the greatest hardship suffered by the old folk. They are often living alone and just putting up with it. It is bad enough having to put up with it and not being able to make ends meet, but it is much worse knowing one has done everything one can and the country has forgotten you, and you have become a discarded and unwanted person. There is no way in which that can be overcome more rapidly than by accepting an Amendment on these lines. I hope that, on all these considerations, the Government will say something encouraging to us.

Mr. Anthony Kershaw (Stroud)

It is with particular pleasure that I follow the hon. Member for Gloucester (Mr. Diamond), whose closest neighbour I am, not having had the opportunity of doing so before.

May I take up a point which he made about the increase in pensions? He did not entirely agree with my hon. and gallant Friend the Member for Croydon, North-East (Vice-Admiral Hughes Hallett) when he said that the present proposed increase in pension had gone beyond the increase in the cost of living. I should like to tell the hon. Gentleman that it has risen to the tune of about 12s. in real terms, so that old-age pensioners are to that extent better off than they would have been if this Amendment had been on the Statute Book before.

Mr. Hunter

The hon. Member has said that the value has gone up by 12s., but the pension increase is only 10s.

Mr. Kershaw

I should have added to make myself clear, and I apologise for not making it clear—since right hon. and hon. Gentlemen opposite were last responsible for the management of our affairs.

I have not yet heard any answer to the proposition put several times from this side of the Committee that if the cost of living is not to go up—and we have it on the authority of the Leader of the Opposition that it will not—then there is no point in the Amendment because it does nothing for the old people. If the cost of living is going up, then it is axiomatic that tying anything to the cost of living is the best way to ensure that it continues to rise at an ever-increasing pace, and if it does that the benefit the old people will receive by getting a few extra shillings will very soon disappear in the atomic explosion of inflation which will sweep this country to ruin very quickly.

Dr. King

Will the hon. Member explain to the House why, since for the last ten years we have not tied the old-age pension to any rise in the cost of living, that has not prevented any inflation?

Mr. Kershaw

I do not know whether the hon. Gentleman expects me to advance now into an economic argument. I should have thought that that argument was quite different from the one before us and was not a very difficult one to counter. I prefer to continue to discuss this Amendment rather than deploy too soon my Budget speech before the Committee.

I cannot agree either with the hon. Member for Cardiff, West (Mr. G. Thomas) that one would be able to take the old-age pension or retirement pension out of politics by adopting this Amendment. It was indeed implicit in his own speech, because at one time the hon. Gentleman was arguing that the pension we have today is insufficient. I think that is common ground in the arguments of hon. Members opposite, that it is only a subsistence pension and not enough, and that people are demanding something more. If that is so, there is still controversy between the two sides of the Committee, because clearly, whether the pension depends on the cost of living rising or whether it does not, the basis of the argument has not been altered at all, namely, whether it should be a pension of this size or whether it should be something basically different.

We have the experience of the building workers' trade at the present time. They have wages largely related to automatic cost-of-living rises, but that has not prevented very large demands for increased wages being put in. When the argument was put, "Ah, but you have got a cost-of-living adjustment built into it by the arrangement for wages in the building industry", the reply which Sir Richard Coppock gave was that that was only for small rises in the cost of living and that when we get a large rise in the cost of living we want a new arrangement altogether. Not on that basis, therefore, shall we take it out of political controversy; on the one hand, it will be said that the rise in pensions should be more in relation to the cost of living, and on the other hand we shall be quarrelling as to whether the basis for the old-age pension is correct or not. I join with hon. Members on this side of the Committee in saying that the cure for this anxiety about inflation is not to tie the pension to the cost of living but to cure inflation, which will give the old-age pensioners honest money and the basic value they ought to have.

7.15 p.m.

Mr. Ross

I am surprised at the amazing range of the arguments which we have had from hon. Members opposite in opposition to the Amendment. Indeed, I began to wonder whether the Amendment they have been discussing was the same Amendment that I had been looking at.

We had the historical reference of the hon. Lady the Member for Tynemouth (Dame Irene Ward), who succeeded in making a speech without mentioning the Amendment. Then we had, surprisingly enough, a reference to the whole breakdown of the national economy which would follow automatically if this Amendment were enacted. Do hon. Members opposite really think that is true? The right hon. and learned Member for Kensington, South (Sir P. Spens) said that psychologically it was wrong—that this was the best way to ensure that inflation would go on. Does he remember the National Assistance Act, under which power is given to the Minister by regulation to increase the rates of benefit? Does he tell us that inflation has continued because that power exists in that Act, as, indeed, it may in many others? I think that the arguments which we have had from hon. Members opposite—particularly that of the hon. Lady the Member for Tynemouth—are the most puerile we have heard for a very long time. Has the right hon. and learned Member really read the Amendment?

Sir P. Spens

Surely the hon. Gentleman can understand that when every Minister of Her Majesty's Government is taking every step possible to stop inflation—and that is the primary object of the Government—for the Government then to put into an Act of Parliament any Clause, no matter what it is, which presupposes that inflation will go on is an absolute admission on the part of the Government that their policy will fail.

Mr. Ross

The logic of that is that we should not have had the Bill at all. The right hon. and learned Gentleman has allowed himself to be led into such a bad case that he is going much further and deeper than he wants to. I want him and other hon. Members opposite to read the Amendment. I do not know whether hon. Members from England and Wales read Amendments, but we who sit on the Scottish Grand Committee usually do. It has been said, "This thing is automatically going to break the Government and the country." If I have an argument about this Amendment, it is this. It does not do what hon. Members opposite appear to think it does. It says: Where it appears to the Minister expedient to do so… It is entirely up to the Minister. It does not finish there; it says further: in order to maintain the purchasing power of benefits he may… There is nothing automatic about that. Finally, in regard to the rates and amounts of benefit, the Amendment says: shall be increased to such extent as may be set out in the said Order. Those are the actual words of the Amendment. Does any hon. Member suggest that they support the argument about the economy of the country being broken by inflation? If so, he shows very little confidence in the Minister.

What are the facts? The Minister will remember, if anyone does, that three years ago, almost to the very month, the last announcement was made of increases in the benefits of old-age pensions. That was at the end of 1954. The increases did not come into operation until about four months later, by which time part of the increased purchasing power had been swallowed up. That has gone on month by month. We now seek to give power to the Minister speedily to remedy hardship. That is all. He will be able to get round the necessity for a special Act of Parliament to increase the amount of pensions.

May I remind the right hon. and learned Member for Kensington, South that power already exists for the Minister, on the advice of the National Assistance Board, to take speedy action about National Assistance Regulations. We are asking that the same power of speedy action should be given to the Minister about retirement pensions. I hope that Government supporters will not try to think of further fantastic reasons for opposing the Amendment. Let them think of what the old-age pensioners have been suffering in the last twelve months. Let them give this power to the Minister speedily to remedy the position when the sense of the House of Commons is in favour of his doing so.

Mr. R. H. Turton (Thirsk and Malton)

I agree with the hon. Member for Kilmarnock (Mr. Ross) that this is not a very effective Amendment. If it had been included in the National Insurance Act, 1946, the benefits would not have been put up by our predecessors until 1951, because it would have depended entirely upon whether the Minister thought that the purchasing value of the benefits had fallen.

My personal view is that the House of Commons should not delegate legislation on important questions such as the purchasing power of benefits in the National Insurance Scheme. We have done it by introducing Bills, altering the purchasing value from the old 1948 standard, which was adopted by our predecessors in 1951, first to the 1946 standard and now to a standard higher than that of 1946. The Opposition now ask us to put the clock back and take away the power of Parliament to amend any proposal made by the Government in this matter. [HON. MEMBERS: "No."] Yes. It would be done by an Order, which cannot be amended.

Mr. Foot

That does not cut out further legislation. The Amendment proposes that a temporary increase can be brought in without legislation.

Mr. Turton

We are all glad to hear the hon. and learned Member for Ipswich (Mr. Foot) again presenting his legalistic arguments to us, but his argument does not help his case. We all want to help the pension scheme. It is not a matter which divides the parties. If we intend to rely on legislation, let us stick to it. We shall not do any good by having a Statutory Instrument, which some Government has to draft. Hon. Gentlemen opposite must realise the truth of that, from their own history from 1946 to 1951. It is not easy to get Governments to make Orders, and the process would not be any quicker by delegated legislation than by Act of Parliament. I would much rather we retained the power of Parliament to look at these matters, both sides co-operating to get the necessary Measures passed quickly.

The present Bill may take a week. Where I want the Government to cut down is in the time taken to bring an Act into operation. We are making tremendous advances in the speed of operating changes of benefits. When the benefits were changed in 1951 there was an announcement, if I remember rightly, in April. The benefits were not affected until 30th September, 1951. In the present case we have had an announcement in November, to be followed, I hope, by the change of benefits in the end of January, 1958. That is a tremendous improvement.

Mr. Ross

It was worse in 1954.

Mr. Turton

In 1954 we cut down very much on the time taken by the hon. Gentleman's own Government in 1951.

Mr. Ross

The right hon. Gentleman will remember that the announcement was made early in December and that the increases did not come into force until April, 1955.

Mr. Turton

The period in 1951 was from April to October, a whole six months. We have improved upon it every time.

I ask the Committee to agree to do this by legislation. I hope that the House of Commons will continue to improve the purchasing power of benefits as it has done in the Measures of 1951, 1955 and the present Bill. We must also have the opportunity of improving the National Insurance scheme. I am not at all convinced that everything that we accepted from Lord Beveridge will be all right for all time. We are asked in the Amendment to put the National Insurance scheme into a straitjacket. [HON. MEMBERS: "No."] Yes, because it will come into the realm of delegated legislation and we shall never be able to improve it. For this reason I hope that the Committee will reject the Amendment.

Mr. John Paton (Norwich, North)

There is an unavoidable tendency in such debates as this to forget that we are dealing with human beings and not simply social categories. This is the real centre of the debate: we are dealing with 4½ million human beings, human personalities. The great majority of them are living most circumscribed and narrow lives. A large number of them are on the verge of deprivation. We should never allow that fact to be driven out of our minds during the cut and thrust of debate across the Floor of the Committee.

This forgetfulness of the real nature of the debate was vividly illustrated by the speech of the hon. Member for Ilford, South (Mr. Cooper). I am sorry that he has left the Chamber. He said that we should not try to insulate the old-age pensioner against inflation. Does the hon. Member for Ilford, South have any kind of contact with old-age pensioners? Is he incapable of imaginatively understanding the kind of lives most of them lead? The reason why we must insulate the old-age pensioner against inflation is that the vast majority of them live on incomes which are on the verge of destitution, the verge of deprivation. They have no margin which allows them to absorb rises in the cost of living without actually being deprived of something essential to their material well-being. That is why it is an essential duty for us in this House to insulate the old-age pensioner against the effects of inflation, which is precisely what this Amendment tries to do.

7.30 p.m.

I have listened with great interest to the confusion among hon. Members opposite—it has been expressed by the right hon. and learned Member for Kensington, South (Sir P. Spens) and others—about this matter of inflation. The piece of machinery we are proposing in this Amendment would maintain the real value of a sum now decided by the Minister to be an appropriate sum in the circumstances of this time for the maintenance of the old-age pensioner. It is a piece of machinery to maintain that amount in real terms by ensuring that from time to time it will always buy the same amount of goods. How in the name of fortune can that be called inflationary?

The Amendment does not ask the Minister to increase the amount in real terms which the pensioner will get. What it asks him to do is to maintain the amount of the pension in real terms at the level at which this Bill now proposes to put it. There is no inflation whatsoever in that. It is merely a device for keeping the real terms of the old-age pension stable.

I was very interested and very sympathetic to appeals made from both sides by various hon. Members that we should try to take this matter out of party politics. My hon. Friend the Member for Coventry, East (Mr. Crossman) said he would like to see it taken out of argument and out of parties. I heartily agree with that. Just think what has happened this year and, at intervals of a year or eighteen months, ever since the insurance plan was put on the Statute Book. We have seen agitation and pressure building up over nine months or twelve months from old-age pensioners' associations. We have seen pressure building up and mounting in this Chamber. We have seen the issue discussed in party terms, inevitably, from both sides of the House, in spite of the human, social terms in which I should like to confine it.

I think that is an unfortunate process. What we are trying to do in this Amendment is to stop that process. We want if we can to get some kind of appropriate machinery to do so. We have said several times that we are not tied to the actual wording of the Amendment. If the Minister will indicate that he is prepared to accept its purpose, we are perfectly willing to leave it to him to evolve the correct form of words, but we are anxious to get rid of the constant party battle about old-age pensions and to put them on such a basis that the old-age pensioner will always be secure, and to know that he is secure. That is the intention and the purpose of our Amendment.

Mr. Godfrey Lagden (Hornchurch)

If that is the sincere wish of the hon. Member—to see this matter taken away from party battling—would he not agree it was most unfortunate that the Labour Party, whilst holding its annual conference at Brighton, thought fit to arrange for coach-loads of old-age pensioners to be taken to that town and paraded through the streets to the conference doors?

Mr. Paton

That is entirely untrue. The hon. Member should not make such assertions in this Committee unless he is in a position to prove them.

Mr. Lagden

I am absolutely in a position to prove it. The Labour Party, and the Trades Congress affiliated to the Labour Party in the constituency I represent, published in the local papers that they did that very thing.

Mr. Paton

I cannot accept it; anyhow, it is quite unimportant.

Mr. James Griffiths (Llanelly)

Probably the people concerned in the Horn-church constituency heard what was done by the Tory Party about the Housewives League.

Mr. Paton

The point I am making is that this Amendment is a piece of machinery designed to give the old-age pensioner, at whatever level we choose to fix it at a particular time, a stable basis in real terms. Indeed, the proof of the need for that was provided by the Minister of Pensions and National Insurance last Monday in his reply to a Question put to him. He produced in the OFFICIAL REPORT, where any hon. Member can study it—and I suggest it should be studied—a table of figures showing that since 1946, when the Labour Government of that time fixed an old-age pension of 26s., the real value of that 26s. was not exceeded in any single year in real value except one year, 1955, I think it was, although I am speaking from memory.

The actual excess in real values over the value of the 26s. in 1946 was exactly seven pennies, but the table went on to show that twelve months afterwards the value in real terms has fallen from seven pennies in excess of 26s. value to 1s. less than the 1946 value. Surely it is a matter of very great importance, central importance, in the whole of this discussion that, despite the money increases given under successive Governments in various years, the pension in all those years except one was actually less in real value than in 1946.

A great deal has been said from the benches opposite about 1946 and 1951. I think hon. Members opposite are very often extremely unfair and unjust to the Labour Government of that time. When we devised the pension of 26s. in 1946 it was to the best judgment of the Minister then concerned an amount sufficient for subsistence.

Mr. G. Thomas

Oh, no, not subsistence.

Mr. Paton

Yes, it was. We lifted the pension from 10s. to 26s., the biggest single advance ever made in the amount of the pension, and we did it two years before the National Insurance Act was brought in. For two years we threw the whole cost of that extra pension of 26s. on to the Exchequer. No hon. Member opposite has any really solid ground for taunting us for what we did in 1946. I am very proud of what we did. After 1946, for reasons that no Government have proved able to control, the real value of the pension given in 1946 was always less in real terms than when it was first given. That is what we seek to change.

Lord Beveridge, whose name inevitably has been invoked quite a lot in this debate, in the House of Lords quite recently pointed out something that has a very great and important bearing on this debate. Lord Beveridge does not accept that in his proposals, from which much of the existing legislation sprang, there was any intention of making the basis for pensions a subsistence basis. He denied that. Indeed, he said that in Section 4 of the original Act there is a duty laid on the Minister, not merely in his consideration of National Insurance to pay heed to the amount of contribution necessary to maintain a given sum, but a duty to see that the level of pension is such as would maintain the beneficiary and his family without any other resources at all. That is Lord Beveridge is interpretation of Section 4 of the main Act. Lord Beveridge is not likely to be wrong on such a matter, and I accept his point of view.

It is because we believe in this concept of subsistence rather than bare existence that we want to put this piece of machinery—the sliding scale provision—into the Bill. It is no use telling us that it would not work. This very principle works admirably over the great mass of industrial workers in this country, whose wages are determined by reference to the cost-of-living index. What can be done by the effective use of industrial machinery can be done just as well under the provisions of the National Insurance Act.

Mr. Sydney Silverman (Nelson and Colne)

Of course, my hon. Friend will not have overlooked that every civil servant has his salary determined from time to time by reference to this figure.

Mr. Paton

Except the minor ones against whom the Minister of Health may impose a veto.

Mr. Silverman

Hear, hear.

Mr. Paton

We believe that this principle of stability in the real value of a pension is absolutely essential unless we are going to make the pension itself largely a mockery. I do not think any hon. Gentleman opposite will challenge seriously the need for maintaining the real value of these pensions.

Today a great deal of fog has been artificially created which has obscured the only issue that lies between us. Do we on both sides of the Committee desire to maintain the real value of pensions, or do we by deliberate intention perpetuate a fraud upon the old-age pensioner by telling him that we will give him so many shillings and then see to it in the next month or two that he is robbed of several of those shillings by an increase in the cost of living? It is purely to that point that the object of this Amendment is directed.

I hope that the Minister, despite the obvious difficulties that I know he has in accepting a draft prepared by us, will tell us that he is sympathetic to the idea and is prepared to give it consideration at a later stage in the debate.

Mr. William Shepherd (Cheadle)

I do not propose to deal with the general question of the level of pensions. I think that is too wide a subject for the issue which is now before us. However, I disagree strongly with the proposed Amendment, and I want to give my reasons for doing so.

I disagree largely because it is defeatist, and if we have to accept this defeat we must do something on a much wider scale than is envisaged in the Amendment. By and large, those who are active members of the community safeguard themselves in an inflationary condition, whether they are workers or the rentier class. They all do well in an inflationary condition. But the man who does badly is the man who is trying to live on a fixed income which is largely the result of past saving or of a pension scheme.

If we were to accept defeat on this issue, it would be inadequate merely to safeguard the interests of the old-age pensioner. We should of necessity require to say to every person who has saved, either by his own individual saving or through a superannuation scheme or by means of the old-age pension, "You must have a national increment on your saving". That is what justice would demand. If we have to admit defeat in the end, which I hope we do not have to do, the proposal in the Amendment is futile because it does not do justice to the whole community.

7.45 p.m.

May I say a word on whether we should accept defeat? It may well be that if we are to maintain a level of employment of 98 per cent. or 99 per cent. we cannot do it if we have a large investment programme and maintain prices at an even level. I do not know whether we can or not. It is a matter for considerable discussion and dissension among learned economists. It is certainly possible that we shall not be able to maintain a high level of employment and of investment without having an increasing level of prices every year.

That may well be the position that we shall have to face. We cannot avoid that. But before we admit defeat, we should make the strongest possible endeavours to prevent ourselves from going that way. We must struggle to find some means whereby we combine a high level of investment with a high level of employment with stable prices. I do not want to see anything written into legislation at this stage before we have got to grips sternly with this problem of rising prices. Therefore, it would be unwise to introduce this legislation, because we must try to defeat the bogey of rising prices and inflation, and if we have to admit defeat in the end, which I hope we shall not, we must do something far more widespread than merely giving benefits to a limited section of the community.

Mr. Edward Short (Newcastle-upon-Tyne, Central)

I wish to say a word to the hon. Member for Tynemouth (Dame Irene Ward). She alleged that hon. Members on this side of the Committee made political capital out of the need of the old people, and then she proceeded to make the only wholly political speech in the whole of this debate—if I may say so, a rather unscrupulous speech. We on Tyneside know the hon. Lady. We have known her since 1931. She has been making political capital out of the needs of the old people. In fact, she makes political capital out of all sorts of things. In an article which she has written in a newspaper today she says that she is ashamed of her Government increasing the salaries of Members of Parliament. She did not go on to say whether she accepts the increase. We know her well on the Tyneside.

This Amendment, to which the hon. Lady did not refer in her speech, contains, as I understand it, a device which would enable the Minister to protect pensioners from the effects of rising prices—not necessarily from inflation, because inflation is not always the same as rising prices. Since 1946 we have lived in a situation of rising prices, and we can never entirely insulate ourselves from rising prices in this country because we are so dependent on what goes on in other countries upon whom we depend for most of our food and the greater part of the raw materials for our industry.

It is nonsense for hon. Members opposite to say that this is defeatist, because no Government of any complexion can give a 100 per cent. guarantee to insulate this country from rising prices.

Mr. Shepherd

Is it not a fact that of our total costs, only 25 per cent. represents imports, and therefore three-quarters of this rests with ourselves?

Mr. Short

That may be so, but nevertheless a good deal does depend on the prices we have to pay for our goods in other countries.

Mrs. Slater

is it not also true that prices continued to go up when, on the world market, food prices were going down? The Tories kept the prices up.

Mr. Short

That is another point. The only point that I am making now is that we can never say that in the future prices are not going to rise. In this situation, since 1946 pensioners have always lagged behind. It has taken the most intense lobbying by the National Federation of Old-Age Pensions Associations and all sorts of other bodies—and every Member knows it—even to keep the purchasing power of the benefits at the 1946 level, let alone to give them any share in any increased national productivity. It has taken the most intense lobbying to keep up the real level. Pensions related in some way or other to the cost of living would stop that process.

As my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) pointed out, there are hundreds of thousands of civil servants and, I believe, some millions of workers, whose wages are automatically related to the cost of living. The device provided for in the Amendment does not go nearly so far as that. All it does is to give the Government power to increase the pension to meet rising costs. That is all—nothing more. In that way, the pension could retain its real value. The proposal is not at all inflationary. It would not enable pensioners to consume any more; it would merely enable them to consume the same amount. How, by any stretch of the imagination, could that be said to be inflationary?

The hon. Member for Ilford, South (Mr. Cooper) asked how it was to be paid for. Of course it must be paid for, and it would have to be paid for as benefits are paid for now, by the three-pronged method by which social benefits have been paid for in this country since 1911.

Mr. Shepherd

It does not say so in the Amendment.

Mr. Short

No, of course not; but that would follow.

If anything were needed to prove that our present scheme had reached a dead end, it is this Bill, if proof were needed, the Bill provides it. The idea of making pensions dynamic and relating them to the cost of living is, of course, embodied in the Labour Party's superannuation plan. That, of course, is not a national insurance scheme like the present one with a flat-rate contribution earning a flat-rate pension; it is a plan for superannuation.

I believe that pensions should be reviewed in the light of rises in the cost of living, but not on the present Retail Prices Index. I have always believed that the present price index has little relevance to the spending pattern of old people. Even in one item, food, the spending pattern of old people is different from that of middle-aged couples. I am glad that in the Labour Party's national superannuation plan we undertake to introduce a new price index which will be directly related to the needs of old people. I cannot understand the opposition of hon. Gentlemen opposite to the simple, permissive power which the Amendment would give to the Government. The country will understand, whether it is written into the Bill or not, that it most certainly will appear in the Bill providing for a national superannuation scheme which will be introduced in 1960.

Mr. S. Silverman

I am really astonished that the proposal should be resisted. After all, what is the Bill about? The Bill is intended to deal with the results of the fact that some such provision as we are now pressing upon the Government was not previously made. I am not arguing about whose fault that was or which of the two sides is more meritorious in its treatment of old-age pensions, but it is perfectly clear that the purpose of the Government in introducing the Bill at all is to go some way towards making sure that the purchasing power of the old-age pension shall be related, by the increases now proposed, to the increase in the cost of living since the last date when any change was made. This we are doing by Act of Parliament because, whatever we may think about the rest of it, everybody in the Committee at this moment, on both sides, thinks that that is the right thing to do. The principle, therefore, is established by the existence of the Bill. It is designed to raise the pension because the cost of living has risen.

What is the proposal now being made from these benches? It is to leave the Government with power, which they can exercise or not exercise according to their discretion at the material time, to do this thing which we all know to be a right thing to do without having to depend upon passing an Act of Parliament with all the difficulties and loss of time that that involves. I give the Government this credit, that the very thing we are doing now would have been done six or eight months ago but for the exigencies of finding Parliamentary time to pass the necessary legislation. We are proposing that, in future, a Government wanting to do this act of elementary justice shall be able to do it without having to fit it into what might, by that time, have become a complex and complicated legislative programme.

Why is it resisted? One hon. Gentleman said, "Oh, but this is delegated legislation". Heaven knows, we have enough delegated legislation in other matters. I wish they were all as harmless as delegated legislation in respect of this one would be.

Mr. J. Paton

Including the N.A.B. scales.

Mr. Silverman

I do not want to embark upon a catalogue of them because I do not wish to take very long. If ever there were a case for having delegated legislation at all and one were to try to pick on the prime case in respect of which the principle of delegated legislation could be applied without political mischief of any kind, that case would surely be one wherein the principle has been time after time accepted with virtual unanimity in the House of Commons and all that is required is an administrative act to apply the principle in the new circumstances. If hon. Members are going to attack delegated legislation for a purpose like that, it is extremely difficult to see how they can defend any delegated legislation at all.

Another hon. Gentleman, who was obviously actuated by the best intentions in the world, said that our proposal is defeatist. In order to judge whether a proposal is or is not defeatist, one must ascertain what is the object one wishes to attain and then examine whether the proposal is more likely to attain or to defeat it. Since the object of this proposal is to achieve the object of the Bill whenever the circumstances which require the operation to take place occur, it is clearly not defeatist at all but represents the only way in which we can keep the thing moving most easily and with least delay.

I think I know what the hon. Gentleman really meant. He meant something quite different. What he was really intending to say to the Committee, I believe, was, "You cannot do this except by implicitly accepting that prices will continue to rise, and you ought not, even implicitly, to make such an assumption". That, I think, does reasonable justice to the hon. Gentleman's argument. As has been pointed out already, this is not a Bill about inflation. It is not a Bill about rising prices. It is a Bill about pensions, and I do not suppose that there would be a single vote cast in this Committee against the Government's Bill, amended or unamended, even if it were shown by the clearest and most convincing evidence that it was an inflationary Measure. We should still do it. We should still say that old-age pensions ought to be brought into better relation with the existing level of prices, even if the effect of so doing were to add a little inflationary twist to the economic screw. Surely, we should do that. It does not, of course, do any such thing. I say to the hon. Gentleman that if he has doubts about this on the score that if we were even to contemplate the possibility that prices would continue to rise this would be defeatism and for that reason we should not do it, I beg of him in all sincerity to think again.

8.0 p.m.

I do not know whether the Government are right or wrong, although I have a clear notion and suspicion that they are wrong, when they say that their efforts to control inflation and to make prices more stable will succeed. Let us give them the benefit of the doubt and suppose that they are right. Supposing as the result of raising the Bank Rate or whatever else the Government are doing to arrest inflation and the lowering of the value of money that has been going on progressively for about 500 years, the Government bring all this to a sudden stop next week. I do not know whether they really claim that, but let us suppose they do; let us suppose that they are right. In that case, the proposal that we are now presenting to the Committee will never cost the Government or anybody else one single farthing. Therefore, the real defeatism is not to support this proposal but to oppose it. That surely follows.

If prices are not to increase, a proposal to raise prices when they increase will never cost anything. It is only if we suppose that the prices will continue to increase that there will be any cost or that it will make any difference to the pensions that the Government have to pay, and that would be real defeatism. Surely, no question of defeatism is involved in this proposal one way or the other.

I wish the Government luck with their proposals. I do not think they are the best proposals. I think that our proposals to halt inflation—I do not say to stop it altogether; I do not think anything will ever do that—to put the brakes on, to hold it steady for a time and to retard the acceleration, are very much better than the Government's; but we may be wrong about that. It may be that the Government are right and that they will succeed. If they do, well and good; no harm will be done by the proposal that we are making.

Let us, however, concede the bare possibility that the Government may be mistaken. It may be because of our own fault. It may be because of movements in world prices, which no Government and no policy, with the best will in the world, are able to control. Is there any Member of the Committee who would say that in those circumstances we would not at a suitable time have to raise the pensions again? And if we do have to do it, is it not better to have a machine which prevents these continual arguments from side to side in Committee and the bus loads of old-age pensioners going down to party conferences? We can avoid all that if we accept the proposal contained in the Amendment. There would never be any more dispute.

There might be a dispute as to whether the pensioners were getting a fair share of the community's wealth considered in an absolute sense—that, indeed, we could argue; but as for accepting the principle of the present rate of pension and its purchasing power so that shall not change if prices move against the pensioner, this we can bring to an end once and for all. But I do not think that the Government want it to be brought to an end. I have been a long time here now. For nearly 20 years I have heard this cant and humbug about taking poverty out of politics. We cannot take poverty out of politics. Politics is about poverty. That is the division between the two sides of the House.

These questions about pensions, about wages and about conditions of labour and all the rest are quarrels about the division of the national cake. Until we have a system which is based upon the assumption that the cake really belongs to the nation and ought to be divided according to the needs of its various members, there will always be a conflict between classes about who is to get a bigger or a larger share of something. In present circumstances, people can go on talking from now until Doomsday about taking poverty out of politics, but they will never succeed in doing it. Indeed, if it had not been for that fact, there would never have been a Labour Party sitting in the House of Commons at all.

It seems to me that this proposal has everything to commend it and nothing at all to be said against it that makes any sense in relation to the general purposes of the Bill, and I hope that the Government will be able to think again.

Mr. Boyd-Carpenter

It is quite a time since the hon. and learned Member for Ipswich (Mr. Foot) moved the Amendment. I hope it may be possible for the Committee to make rather better progress on further Amendments because, as the Committee knows, both sides are anxious to get the changes in the Bill into operation. It is an essential part of that process which has been urged upon me even this afternoon, that the passage of the Bill should be as speedy as possible. I hope, therefore, that I am not being discourteous to the Committee—I have listened to every word of the debate—if I express the hope that on further Amendments we might get along a little quicker.

I should like to take the opportunity, too, of giving a belated welcome back to the House to the hon. and learned Member for Ipswich. I missed his quasi-maiden speech a few days ago; so if I may be allowed to say so personally, it was a great pleasure to hear him this afternoon. I have always entertained a high regard for the powers of discrimination of the hon. and learned Member since, as President of the Oxford Union, he gave me my first opportunity to speak "on the paper."

The hon. and learned Member began his speech this afternoon by saying that the Amendment was self-explanatory, and I agree with him. It did not, however, appear to be self-explanatory to a number of his hon. Friends. Quite a lot of speeches seemed to be made under the belief that the effect of the Amendment, if carried into law, would be to tie retirement pensions and other National Insurance benefits to the cost of living. Indeed, the hon. Member for Norwich, North (Mr. J. Paton) said quite a lot about the desirability of that, and several hon. Members suggested either that it was a good thing or a bad thing to insulate the retirement pensioner against inflation.

If, however, hon. Members look at the Amendment as it appears on the Order Paper, it is clear that it does nothing of the sort. It simply gives powers to the Minister, where it appears expedient to him, to make an order. These are the words: where it appears to the Minister expedient to do so in order to maintain the purchasing power of benefit he may by order direct…. It amounts, therefore, not to a great measure of social reform, as one or two hon. Members seemed to have thought, but simply to a proposed adaptation of the procedure of the House of Commons for dealing with certain changes under our National Insurance system. They would, I think, be changes for the worse.

It is an unusual position on the Amendment. Here is an Amendment bearing on it a number of nostalgically Liberal names urging a most illiberal concentration of power in a Minister, and here is the Minister doing his best to resist having this power given to him.

Mr. Ellis Smith (Stoke-on-Trent, South)

Who are the Liberal names?

Mr. Boyd-Carpenter

I rely on the hon. Member's clear and concise power of reading to form his own view. It is, of course, a procedure which, whatever other effect it had, would restrict the power of Parliament to deal legislatively with this problem—[HON. MEMBERS: "Why?"]—because, for the reasons I have already given, if a Minister decided to exercise this power, his proposals would come forward, not as this Bill has come forward, in the shape in which it has to go to Committee and be debated on Amendment, as it is at this moment, but in the shape of a Statutory Instrument which, though debatable and open to be voted upon, cannot be amended and has only one stage in this House and one stage in another place.

Mr. S. Silverman

Of course, it is perfectly clear what the right hon. Gentleman is saying. Under the Amendment, if it is carried, that procedure could be carried out, but why does he say that that excludes Parliamentary or legislative action? Plainly, if the Government of the day prefer to put a Bill before Parliament and Parliament is prepared to pass it, nothing could stop them.

Mr. Boyd-Carpenter

If the hon. Gentleman had been listening he would not have made that intervention. I said it would be open to the Minister to introduce the proceedings in this way; that is, by Statutory Instrument. Of course, I do not say—the hon. Gentleman must listen, and then he will be better able to understand—that it would be impossible to proceed by introducing a Bill, but I did say that we would be empowering a Minister to effect these changes without introducing a Bill, if he so wished.

It is very much a matter of judgment which are the measures the House of Commons thinks can safely be left to delegated legislation and which are the matters which ought to be left to be dealt with only by the full Parliamentary procedure of legislation. I am bound to say that I personally regard major changes in the National Insurance Scheme, in particular, the benefits and the contributions payable under it, as being matters of such major importance as to be matters which this House ought to keep in its control, to be debated in the ordinary way on a Parliamentary Bill. I think it is a general principle, though it may be possible to find exceptions, that matters of major importance, affecting very much numbers of our fellow-countrymen and the economy of the country, ought not to be left so that they can be dealt with, even at the choice of the Government, by the procedure of delegated legislation.

Let us take another difficulty that plainly arises on this Amendment. It provides, as one of my hon. Friends has pointed out, that this procedure of the Statutory Instrument can be used to raise the rates of benefit, but makes no provision for similar action in respect of contributions It makes no provision, as there is under the present system, for Parliament to consider the proposed benefits under this contributory scheme against the background of the need to impose higher contributions to pay for them. It does not provide, as at present, for considering the whole finances of the scheme when changes are proposed, with the submission of a report by the Government Actuary, so that Parliament can consider whether the proposals put forward are such, in the light also of the contributions being paid, as to jeopardise the National Insurance Fund or not. It simply takes an admittedly highly important but nevertheless one aspect—the benefits provided—and provides that they can be increased by Statutory Instrument, but makes no provision for increasing in this way either the contributions of the employed persons or employers or for legislating to alter the Exchequer contribution either.

This is not the way in which this House would want to deal with a matter of this importance. I think also that there is a little confusion of mind behind this, a confusion, perhaps, as between the different functions of National Insurance benefits and National Assistance. As has been pointed out, National Assistance scales can be changed in the way proposed by this Amendment. They involve no question of contributions, as National Assistance is paid for by the taxpayer, and that procedure was provided for in 1948—the right hon. Member for Llanelly (Mr. J. Griffiths) can correct me if I am wrong—in order to provide a speedy method of altering the National Assistance scales, because National Assistance, which is the long stop of the social services, is needed to prevent absolute hardship if prices change quickly. It has never been the view that National Insurance benefits should be changed quickly and frequently. Indeed, the Phillips Committee, in paragraph 311 of its Report, said the exact opposite. It said: There cannot be any stereotyped formula for fixing the level of benefits, and changes should be at infrequent intervals; I think there really is confusion between National Assistance, which we all agree needs to be possible to be moved quickly, and National Insurance benefits, involving as they do contributions as well as benefits, and payments made, without a means test, in many cases to people not in any real sense in need, which should be changed in the light of different factors, but not necessarily with great rapidity. And that is the distinction which has been a little blurred in the debate today.

8.15 p.m.

I think too that undue attention has been given, even from the point of view of speed in effecting these changes, to the Parliamentary process. In truth and in fact, however it may be done, whether by Statutory Instrument or by Bill, the actual change of benefits and contributions in our National Insurance system, as the right hon. Member for Llanelly knows very well, is a very considerable operation to undertake. It involves the bringing in of books for alteration into the National Insurance offices by 4¾ million retirement pensioners, and effecting that process without preventing the weekly payment of benefits through the post office, the alteration of a whole variety of incremented and sub-standard benefits, as well as wide varieties of other benefits, unemployment, sickness, and so on. The Committee will be deluding itself by believing that by adopting this system it could achieve very much acceleration than under the system which I propose if this Committee is prepared to deal speedily with the Bill.

With the good will and co-operation of the Committee, the time when we propose to bring these changes into effect is still within three months from the date of the announcement, and very considerably less than on any previous occasion. I very much doubt whether, whatever Parliamentary process we used, the time for the operation could be very much reduced. If that be so, and I say it with all responsibility to the House that it seems to me to be so, the case, even on the grounds of speed, for sacrificing the possibilities of detailed Parliamentary control over changes of this sort evaporates.

Therefore, I ask the Committee to come to its decision in the light of this fact. This is not the proposal contained in the Labour Party's own plan for automatic adjustment. It is merely an empowering provision for a Minister. It does not, as surely must be essential if we are to vary the benefits in a contributory scheme, contain ally provisions whatever for altering the contributions or improving the Exchequer contributions or taking any step whatever to pay for the increases authorised by Statutory Instrument. Even as a bit of procedure, and it purports to be no more, it is defective, and I hope the Committee will decide to reject it.

Mr. Marquand

I am in sympathy with the Minister's anxiety to get on with this Bill. I want to assure the hon. Lady the Member for Tynemouth (Dame Irene Ward) and hon. Members opposite generally that it is the settled policy of the Labour Party that the purchasing power of pensions should be reviewed annually and, if they are deficient in purchasing power, then the appropriate adjustments should be made. This is our definite policy, repeated many times during the last year or two and in our policy documents.

Of course, we are not necessarily wedded to the exact form of doing this which has been put forward in the Amendment. This was the only possible form of Amendment which would suit this particular Bill, but we had in mind a very different type of Bill when we come to legislate on these matters. Therefore, much of the argument about the actual machinery proposed in the Amendment is irrelevant to what has been the real debate on this subject today, and it has been an extraordinary good debate.

I must brush on one side, if I am to be brief, arguments about the procedure, to which the Minister devoted so much of his time. What we wish to emphasise by moving the Amendment is the need for speed in future in making the necessary adjustments and the need for real protection for the pensioner. There is no real protection for him against the effects of inflation if there are long gaps between the adjustments which have to be made. The pensioner certainly needs the protection.

As the hon. Member for Cheadle (Mr. Shepherd) quite rightly reminded us, almost every other class in the community has its way of protecting itself against the effects of inflation. The profit earners benefit automatically from the process of inflation; their profits go up. The wage earners—some of them—have the advantage of agreements which tie their wages to tile cost of living. All of them have the opportunity of collective bargaining and if necessary, resort to the ultimate weapon of the strike. Even the rentier classes nowadays can adjust themselves to the effects of inflation by adjusting their portfolios, and they are learning very rapidly how to do it. The State itself is a beneficiary, judged by money income, of the process of inflation. The State, year by year, while the process of inflation goes on, gains increased money income.

So it is the pensioner who is the chief victim of inflation and who suffers more severely than anybody, and he alone has no remedy whatever. What we are proposing is that a remedy be taken for dealing rapidly with his predicament.

As my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) said, when he completely demolished the argument of the hon. Member for Cheadle, the hest remedy for the pensioner is to concentrate on the ending of inflation. If inflation is ended by general and appropriate fiscal and economic measures, the need for protecting the pensioner simply does not arise. We have to consider what happens if Government policy fails, as it has certainly failed in the past, to check the process of inflation. It is not to say that we expect inflation to continue for ever if we try to devise ways and means for protecting the most unfortunate class in our community from its effects. It is not to say that at all.

What we need is a method of accelerating the process whereby the pensioner's money income can be adjusted to the rise in prices. It is not only, as the right hon. Gentleman the Member for Thirsk and Malton (Mr. Turton) suggested, a matter of speeding up the business of printing books. My hon. Friend the Member for Nelson and Colne put his finger right on the spot. That is not the major difficulty. The major difficulty is the difficulty of getting the necessary legislation—not putting it through the House of Commons, but getting it on the timetable of the House of Commons. The difficulty arises even for the Minister who may want to do this. After he has studied the matter for a month or two and come to the conclusion that something ought to be done, he has no opportunity of doing it for another twelve months. While he is considering the need he loses the place for his Bill in the timetable of the Bills coming before Parliament. He is told, "Bring it in the next Session." He waits for the next Session and then it takes months to get the Bill through. The method as we have it at the moment is not sufficiently rapid.

We believe that what we can do for National Assistance ought to be possible for pensions as well. I think the Minister's real answer to the nub of the case, as it was certainly the answer of many of his hon. Friends, was that it was sufficient to raise the National Assistance level. We have streamlined the method of doing that. We do not say that that is sufficient. We must have a means of maintaining whatever is thought to be what the right hon. Gentleman called the other day the appropriate "lead" between pension and National Assistance levels. We must have for the time being power to raise the pension, the pension to be supplemented later by the necessary legislation.

The Amendment does not say that once an increase has been made by this emergency method there should be no increases in contributions. There is nothing in the Amendment to prevent an increase in contributions. Indeed, we think it ought to be possible to devise a method of raising the money for pensions, for a graduated rate of pension, which would make that adjustment automatic. The way to do it is to have a rate of contribution which is graduated, which rises and falls with the rise of incomes of the contributors. In that way, when inflation occurs, contributions will automatically rise in proportion to the rise in money incomes and there will be no difficulty whatever in financing the necessary increase in the pension itself.

I promised to be brief. I have compressed my remarks into a very short space. I hope the Committee, in spite of the Minister's opinion, will accept the Amendment.

Mr. E. Fernyhough (Jarrow)

I am sorry to prolong the debate, but I rose to speak before and I am sure that the Minister and my right hon. Friend must have seen me, but, if I am in any way annoying anyone by continuing the debate, I hope that it will be understood that I am the victim of circumstances over which I had no control. We have had a very wide debate on this Amendment, and many things have been said during it, some of them relevant, some of them rather irrelevant, and some of them somewhat irreverent. As my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) said, in a debate on an Amendment like this we show our sense of values.

I agree with my hon. Friend that we cannot take pensions out of politics, because it is a question of values. It is a question of what one puts first. I make no bones about it. Any decent, sensible society puts the very old and the young as the first claimants upon its resources. What is it we are asking? We are merely asking that the old people of today should retain their present standard of living in the future. Is it too much?

When I see self-satisfied people who have never known poverty, never known hunger, never known misery, never known anxiety, always arguing how difficult it is to do anything for the people right at the bottom, I get sick and tired. It makes me sick and tired of a country professing to be Christian. We are asking that the people with whom the Amendment is concerned should be protected from poverty in future. Poverty kills people just as guns do, and death from poverty is usually more prolonged and agonising.

I want to protect the old people from the poverty that they are likely to endure the longer this Government survive, and I am not worried about the cost. Hon. Members are not worried about the cost of defence. If the Minister of Defence said tomorrow that our scientists had designed a super-bomb that would cost £2,000 million, not a voice would be raised against our having it. We should find the money for that, but when it comes to finding the money for the sensible things of life it is not to be found.

The Amendment is modest. I should have thought that a party whose spokesman not long ago was talking about doubling the standard of living in 25 years would see to it that pensioners would have the right to look forward not to doubling their standard of living but to at least maintaining their present standard. That is what the Amendment seeks to do. It is not as hopeful as the Lord Privy Seal. It is not thinking in terms of doubling the standard of living but merely of maintaining it. The Minister talks about the administrative difficulties of printing 4 million pension books in a matter of three or four months, and he thinks that because it is intended to do it in three months we are doing a marvellous job.

Mr. Cooper

Better than the hon. Member's party did.

Mr. Fernyhough

The hon. Member never raised his voice when the Surtax-payers received a relief of £35 million. I am sure that if he had spoken he would not have said that was inflationary. Furthermore, there was no protest and not a single voice was raised when the Minister of Defence announced last June that in order to compensate certain redundant Army officers we had to find £50 million. It is remarkable that when we have to find something for those who have the least, the loudest voices claiming that it cannot be done are the voices of those who have the most.

The Minister says that it will take three months to print the pension books

A new White Paper on Civil Defence has just been published and we are told in it that in certain circumstances we should evacuate 12 million people. What a situation when we can move 12 million people, in a matter of hours presumably, but cannot print 4 million pension books under three months. [An HON. MEMBER: "Sack the Minister"]

On Friday night I was in a house where a man was putting the noughts and crosses on a football pool coupon. My friends tell me that Littlewood's receive millions of these coupons every Saturday and that though it is not until 5 o'clock on a Saturday night that they know who has been successful, yet by Tuesday everybody has received what is due to them. If Littlewood's can do that with their limited resources, surely with the Government's resources, if there were the will and determination, a way would be found in this case. I believe that we are entitled to ask the Minister to think again about the Amendment.

We are even more entitled to ask the Minister to see whether he cannot possibly bring forward the day for payment of these increases, and thus bring immediate relief to many thousands of those who desperately need it.

Question put, That those words be there inserted:

The Committee divided: Ayes 199, Noes 226.

Division No. 5.]	AYES	[8.35 p.m.
Ainsley, J. W.	Chapman, W. D.	Gibson, C. W.
Albu, A. H.	Clunie, J.	Greenwood, Anthony
Allaun, Frank (Salford, E.)	Coldrick, W.	Crenfell, Rt. Hon. D. R.
Allen, Arthur (Bosworth)	Collick, P. H. (Birkenhead)	Grey, C. F.
Allen, Scholefield (Crewe)	Collins, V. J. (Shoreditch & Finsbury)	Griffiths, David (Rother, Valley)
Awbery, S. S.	Cove, W. G.	Griffiths, Rt. Hon. James (Llanelly)
Bacon, Miss Alice	Craddock, George (Bradford, S.)	Grimond, J.
Balfour, A.	Cullen, Mrs. A.	Hale, Leslie
Besin, Hn. Wedgwood (Bristol, S. E.)	Dalton, Rt. Hon. H.	Hall, Rt. Hn. Glenvil (Colne Valley)
Benson, G.	Darling, George (Hillsborough)	Hannan, W.
Blackburn, F.	Davies, Ernest (Enfield, E.)	Harrison, J. (Nottingham, N.)
Blenkinsop, A.	Davies, Stephen (Merthyr)	Hastings, S.
Blyton, W. R.	Deer, C.	Hayman, F. H.
Boardman, H.	Delargy, H. J.	Henderson, Rt. Hn. A. (Rwly Regis)
Bottomley, Rt. Hon. A. G.	Diamond, John	Herbison, Miss M.
Bowden, H. W. (Leicester, S. W.)	Dodds, N. N.	Hewitson, Capt. M.
Bowen, E. R. (Cardigan)	Donnelly, D. L.	Holman, P.
Bowles, F. G.	Dugdale, Hn. John (W. Brmwch)	Holmes, Horace
Boyd, T. C.	Ede, Rt. Hon. J. C.	Howell, Charles (Perry Barr)
Braddock, Mrs. Elizabeth	Edelman, M.	Hoy, J. H.
Brockway, A. F.	Edwards, Robert (Bilston)	Hubbard, T. F.
Broughton, Dr. A. D. D.	Edwards, W. J. (Stepney)	Hughes, Emrys (S. Ayrshire)
Brown, Thomas (Ince)	Evans, Albert (Islington, S. W.)	Hunter, A. E.
Burke, W. A.	Evans, Edward (Lowestoft)	Irving, Sydney (Dartford)
Burton, Miss F. E.	Fernyhough, E.	Isaacs, Rt. Hon. G. A.
Butler, Herbert (Hackney, C.)	Finch, H. J.	Jay, Rt. Hon. D. P. T.
Callaghan, L. J.	Foot, D. M.	Jeger, George (Goole)
Castle, Mrs. B. A.	Fraser, Thomas (Hamilton)	Johnson, James (Rugby)
Champion, A. J.	George, Lady Megan Lloyd(Car'then)	Johnston, Douglas (Paisley)
Jones, Rt. Hon. A. Creech (Wakefield)	Oram, A. E.	Slater, J. (Sedgefield)
Jones, J. Idwal (Wrexham)	Orbach, M.	Smith, Ellis (Stoke, S.)
Jones, T. W. (Merioneth)	Oswald, T.	Snow, J. W.
Kenyon, C.	Owen, W. J.	Soskice, Rt. Hon. Sir Frank
Key, Rt. Hon. C. W.	Padley, W. E.	Stonehouse, John
King, Dr. H. M.	Paling, Rt. Hon. W. (Dearne Valley)	Stones, W. (Consett)
Lawson, G. M.	Palmer, A. M. F.	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Ledger, R. J.	Pannell, Charles (Leeds, W.)	Summerskill, Rt. Hon. E.
Lee, Frederick (Newton)	Pargiter, G. A.	Sylvester, G. O.
Lindgren, G. S.	Parker, J.	Taylor, Bernard (Mansfield)
Lipton, Marcus	Paton, John	Taylor, John (West Lothian)
Mabon, Dr. J. Dickson	Peart, T. F.	Thomas, George (Cardiff)
McGhee, H. G.	Pentland, N.	Thomas, Iorwerth (Rhondda, W.)
McInnes, J.	Plummer, Sir Leslie	Thornton, E.
McKay, John (Wallsend)	Popplewell, E.	Ungoed-Thomas, Sir Lynn
McLeavy, Frank	Prentice, R. E.	Viant, S. P.
MacPherson, Malcolm (Stirling)	Price, J. T. (Westhoughton)	Weitzman, D.
Mahon, Simon	Price, Philips (Gloucestershire, W.)	Wells, Percy (Faversham)
Mainwaring, W. H.	Proctor, W. T.	Wheeldon, W. E.
Mallalieu, E. L. (Brigg)	Pryde, D. J.	White, Mrs. Eirene (E. Flint)
Mann, Mrs. Jean	Pursey, Cmdr. H.	White, Henry (Derbyshire, N. E.)
Marquand, Rt. Hon. H. A.	Randall, H. E.	Wigg, George
Macon, Roy	Rankin, John	Wilkins, W. A.
Mayhew, C. P.	Redhead, E. C.	Willey, Frederick
Mellish, R. J.	Reeves, J.	Williams, David (Neath)
Messer, Sir F.	Reid, William	Williams, Rev. Llywelyn (Ab'tillery)
Mikardo, Ian	Rhodes, H.	Williams, Ronald (Wigan)
Mitchison, G. R.	Roberts, Albert (Normanton)	Williams, Rt. Hon. T. (Don Valley)
Monslow, W.	Roberts, Goronwy (Caernarvon)	Williams, W. R. (Openshaw)
Moody, A. S.	Rogers, George (Kensington, N.)	Willis, Eustace (Edinburgh, E.)
Morris, Percy (Swansea, W.)	Ross, William	Wilson, Rt. Hon. Harold (Huyton)
Moss, R.	Royle, C.	Winterbottom, Richard
Moyle, A.	Shinwell, Rt. Hon. E.	Woodburn, Rt. Hon. A.
Mulley, F. W.	Short, E. W.	Woof, R. E.
Neal, Harold (Bolsover)	Shurmer, P. L. E.	Yates, V. (Ladywood)
Noel-Baker, Francis (Swindon)	Silverman, Julius (Aston)	Zilliacus, K.
Noel-Baker, Rt. Hon. P. (Derby, S.)	Silverman, Sydney (Nelson)
Oliver, G. H.	Slater, Mrs. H. (Stoke, N.)	TELLERS FOR THE AYES
		Mr. Pearson and Mr. Simmons.
NOES
Agnew, Sir Peter	Currie, G. B. H.	Harris, Frederic (Croydon, N.W)
Aitken, W. T.	Dance, J. C. G.	Harris, Reader (Heston)
Alport, C. J. M.	Davidson, Viscountess	Harrison, A. B. C. (Maldon)
Amery, Julian (Preston, N.)	D'Avigdor-Goldsmid Sir Henry	Harrison. Col. J. H. (Eye)
Amory, Rt. Hn. Heathcoat(Tiverton)	Deedes, W. F.	Harvey, Sir Arthur Vere (Macclesd)
Armstrong, C. W.	Digby, Simon Wingfield	Harvey, John (Walthamstow, E.)
Ashton, H.	Dodds-Parker, A. D.	Hay, John
Atkins, H. E.	Donaldson, Cmdr. C. E. McA.	Heald, Rt. Hon. Sir Lionel
Baldock, Lt.-Cmdr. J. M.	Doughty, C. J. A.	Heath, Rt. Hon. E. R. G.
Baldwin, A. E.	Drayson, G. B.	Henderson-Stewart, Sir James
Balniel, Lord	du Cann, E. D. L.	Hicks-Beach, Maj. W. W.
Barber, Anthony	Dugdale, Rt. Hn. Sir T. (Richmond)	Hill, Rt. Hon. Charles (Luton)
Barlow, Sir John	Duncan, Sir James	Hill, Mrs. E. (Wythenshawe)
Barter, John	Duthie, W. S.	Hinchingbrooke, Viscount
Baxter, Sir Beverley	Eden, J. B. (Bournemouth, West)	Hobson, John (Warwick & Leam'gt'n)
Bell, Philip (Bolton, E.)	Elliott, R. W. (N'castle-upon-Tyne, N.)	Holland-Martin, C. J.
Bevins, J. R. (Toxteth)	Emmet, Hon. Mrs. Evelyn	Hornby, R. P.
Bidgood, J. C.	Errington, Sir Eric	Horobin, Sir Ian
Biggs-Davison, J. A.	Farey-Jones, F. W.	Howard, Hon. Greville (St. Ives)
Birch, Rt. Hon. Nigel	Fell, A.	Hughes Hallett, Vice-Admiral J.
Bishop, F. P.	Fisher, Nigel	Hughes-Young, M. H. C.
Black, C. W.	Fletcher-Cooke, C.	Hulbert, Sir Norman
Boyd-Carpenter, Rt. Hon. J. A.	Forrest, G.	Hutchison, Michael Clark (E'b'gh, S.)
Boyle, Sir Edward	Fort, R.	Hutchison, Sir Ian Clark (E'b'gh, W.)
Braine, B. R.	Fraser, Sir Ian (M'cmbe & Lonsdale)	Hylton-Foster, Rt. Hon. Sir Harry
Braithwaite, Sir Albert (Harrow, W.)	Gammans, Lady	Iremonger, T. L.
Bromley-Davenport, Lt.-Col. W. H.	Garner-Evans, E. H.	Irvine, Bryant Godman (Rye)
Brooman-White, R. C.	Gibson-Watt, D.	Jenkins, Robert (Dulwich)
Browne, J. Nixon (Craigton)	Glover, D.	Jennings, Sir Roland (Hallam)
Burden, F. F. A.	Glyn, Col. R.	Johnson, Dr. Donald (Carlisle)
Butcher, Sir Herbert	Godber, J. B.	Johnson, Eric (Blackley)
Campbell, Sir David	Goodhart, Philip	Johnson, Howard (Kemptown)
Chichester-Clark, R.	Gough, C. F. H.	Joynson-Hicks, Hon. Sir Lancelot
Cole, Norman	Gower, H. R.	Kaberry, D.
Conant, Maj. Sir Roger	Graham, Sir Fergus	Kerby, Capt. H. B.
Cooke, Robert	Grant, W. (Woodside)	Kerr, Sir Hamilton
Cooper, A. E.	Grant-Ferris, Wg Cdr. R. (Nantwich)	Kershaw, J. A.
Cooper-Key, E. M.	Green, A.	Kimball, M.
Corfield, Capt. F. V.	Gresham Cooke, R.	Kirk, P. M.
Craddock, Beresford (Spelthorne)	Grimston, Hon. John (St. Albans)	Lambert, Hon. G.
Crosthwaite-Eyre, Col. O. E.	Gurden, Harold	Lancaster, Col. C. G.
Cunningham, Knox	Hall, John (Wycombe)	Leather, E. H. C.

Leavey, J. A.	O'Neill, Hn. Phelim (Co. Antrim, N.)	Spence, H. R. (Aberdeen, W.)
Leburn, W. G.	Ormsby-Gore, Rt. Hon. W. D.	Spans, Rt. Hn. Sir P. (Kens'gt'n, S.)
Legge-Bourke, Maj. E. A. H.	Orr, Capt. L. P. S.	Stanley, Capt. Hon. Richard
Legh, Hon. Peter (Petersfield)	Orr-Ewing, Charles Ian (Hendon, N.)	Stevens, Geoffrey
Lindsay, Hon. James (Devon, N.)	Osborne, C.	Steward, Sir William (Woolwich, W.)
Linstead, Sir H. N.	Pannell, N. A. (Kirkdale)	Stoddart-Scott, Col. Sir Malcolm
Lloyd, Maj. Sir Guy (Renfrew, E.)	Partridge, E.	Storey, S.
Lucas-Tooth, Sir Hugh	Peyton, J. W. W.	Studholme, Sir Henry
McAdden, S. J.	Pickthorn, K. W. M.	Sumner, W. D. M. (Orpington)
Macdonald, Sir Peter	Pike, Miss Mervyn	Taylor, William (Bradford, N.)
Mackie, J. H. (Galloway)	Pilkington, Capt. R. A.	Teeling, W.
McLaughlin, Mrs. P.	Pitman, I. J.	Thomas, Leslie (Canterbury)
McLean, Neil (Inverness)	Pitt, Miss E. M.	Thomas, P. J. M. (Conway)
Macpherson, Niall (Dumfries)	Pott, H. P.	Thompson, Lt.-Cdr. R. (Croydon, S.)
Madden, Martin	Price, David (Eastleigh)	Thorneycroft, Rt. Hon. P.
Maitland, Hon. Patrick (Lanark)	Price, Henry (Lewisham, W.)	Thornton-Kemsley, C. N.
Manningham-Buller, Rt. Hn. Sir R.	Prior-Palmer, Brig. O. L.	Tiley, A. (Bradford, W.)
Markham, Major Sir Frank	Profumo, J. D.	Tilney, John (Wavertree)
Marlowe, A. A. H.	Rawlinson, Peter	Turton, Rt. Hon. R. H.
Marshall, Douglas	Redmayne, M.	Wakefield, Sir Wavell (St. M'lebone)
Mathew, R.	Rees-Davies, W. R.	Walker-Smith, Rt. Hon. Derek
Maude, Angus	Remnant, Hon. P.	Wall, Major Patrick
Mawby, R. L.	Renton, D. L. M.	Ward, Rt. Hon. G. R. (Worcester)
Maydon, Lt.-Comdr. S. L. C.	Ridsdale, J. E.	Ward, Dame Irene (Tynemouth)
Milligan, Rt. Hon. W. R.	Rippon, A. G. F.	Webbe, Sir H.
Molson, Rt. Hon. Hugh	Rodgers, John (Sevenoaks)	Whitelaw, W. S. I.
Mott-Radclyffe, Sir Charles	Roper, Sir Harold	Williams, Paul (Sunderland, S.)
Nabarro, G. D. N.	Ropner, Col. Sir Leonard	Williams, R. Dudley (Exeter)
Nairn, D. L. S.	Russell, R. S.	Wills, G. (Bridgwater)
Neave, Airey	Scott-Miller, Cmdr. R.	Wood, Hon. R.
Nicholson, Godfrey (Farnham)	Sharples, R. C.	Woollam, John Victor
Nicolson, N. (B'n'm'th, E. & Chr'ch)	Shepherd, William	Yates, William (The Wrekin)
Nugent, G. R. H.	Smyth, Brig. Sir John (Norwood)
Oakshott, H. D.	Sperman, Sir Alexander	TELLERS FOR THE NOES:
		Mr. Bryan and Mr. Finlay.

Mr. Marquand

I beg to move, in page 2, line 21, at the end, to insert: (3) Subsection (3) of section four of the National Insurance Act, 1951 (which provides for the increase of a retirement pension by one shilling and sixpence for every twenty-five contributions as an employed or self-employed person pa id by the beneficiary after attaining pensionable age) shall have effect as if for the reference to one shilling and sixpence there were substituted a reference to two shillings and as if the reference to the appointed day were a reference to the appointed day under this Act. The effect of the Amendment, if accepted by the Committee, would be to increase the increment which retirement pensioners may earn on their pension when they stay on at work. I think that the Committee agrees that the provision of an increment of this kind, which gives retirement pensioners some incentive to stay on at work and to earn some reward for doing so, is a good one. It is good for the economy that those who are fit and able to work should continue to do so, and it is unquestionably good for the individual, as everybody who has ever paid any attention at all to the modern science of geriatrics knows full well.

8.45 p.m.

On Second Reading I pointed out that the incentive to continue at work, which at present enables a pensioner who is able to work a year to earn an additional income of 3s. a week upon his retirement pension, is proportionately lessened by the increase in pension. The extra contribution of 2s. a week to be levied does not merely mean a lessened incentive but a positive disincentive to the pensioner.

Thus, the case for increasing the increment is twofold, not merely to make the increment proportionally the same to the pension as previously but to compensate the pensioner and give him some additional incentive to overcome the immense increase in contribution which he will be asked to pay if he remains at work. If the provisions in the Bill are passed and a pensioner remains at work and refrains from taking a pension, worth £130 if he is single and £208 if he is married, he will be paying £5 more in contribution than at present, and the extra annual income that he can earn by postponing his retirement is only £7 10s. It is not a very good bargain. It is a very much worse bargain than he has at the moment.

Pensioners make these calculations for themselves very carefully indeed. It is no use imagining they are content to be told that they can earn an addition to their pension if they stay at work. They sit down and work it out for themselves. There is not an hon. Member who has not received the sort of letters which I have received in very large numbers because people know my special interest in this subject. These show that pensioners carefully calculate how much pension they will forgo and balance it against how much they might earn by increment in relation to what they know to be their expectation of life when they reach seventy.

I have a letter which I had intended quoting, but, as time is running short, and we are not making the progress that we ought perhaps to be making to fulfil our pledge not to impede the opportunity of pensioners to get what money is to be provided for them, I shall not read it. I am sure all hon. Members have seen similar letters.

Pensioners feel that they make a bad bargain now if they postpone retirement, and some of them hesitate to do so. Under the new condition of the extra contribution, with the increment remaining the same and the pension being larger, the incentive to retire is very much greater than at the present time.

Our proposal is a very modest one, to add 6d. to the present 1s. 6d. increase in pension which is permitted for every twenty-five contributions made while remaining at work after pensionable age. When I looked at the Amendment in print, I began to think it was too modest and wished I had made the amount larger. Our proposal is to increase from £7 10s. a year to £10 the extra amount that a pensioner can earn in this way. If the Minister thinks this is too small—I hope he does—and suggests a larger figure, we shall certainly not object. I certainly hope that this entirely reasonable proposal will be acceptable to the Minister.

I note that the Parliamentary Secretary is to reply for the Government and so my hopes are raised, because I feel sure that had the Minister desired to say how wrong or mistaken was this Amendment and how its acceptance would ruin the economy, he would have taken this opportunity to say so.

The hon. Member for Basingstoke (Mr. Denzil Freeth) made a speech during the Second Reading debate entirely in favour of what I said about increments. I hope that other hon. Members opposite who are now present in the Chamber— unfortunately there are very few of them—will agree with the hon. Member for Basingstoke. To me the astonishing feature of the Bill is that it does not contain a proposal for some increase in this increment. Surely, to give an increment to the pensioner to encourage him to remain at work while he can, and to give him some addition to his meagre pension, is one of the best ways of keeping the Fund solvent, and the Minister is anxious about the solvency of the Fund. It would also help to keep our economy in good shape and to keep old people well. It is really a welfare provision for many old people and I am astounded that the Government did not think of altering the figure. However, now I have drawn attention to the matter I hope that the Amendment will be accepted.

Mr. T. Brown

Because of the lack of time, I will not labour the point, but I wish to refer to what is happening now under what we call "the incentive". When the Bill which became the 1950 Act was before the House great stress was laid on the fact that the incentive would help people to continue at work. We now find that when people of pensionable age respond to the exhortations of the Government to continue at work as long as possible, and receive an increase of 1s. 6d. per twenty-five stamps—approximately an extra 3s. a year—that is taken into consideration by the National Assistance Board when assessing their needs, which is manifestly unfair. If these people are offered an incentive and pay for it, that should be completely disregarded when their needs are assessed. I ask the Parliamentary Secretary and the Minister to consider this matter again.

Mr. Hunter

I wish to support the Amendment. I agree with my right hon. Friend the Member for Middlesbrough. East (Mr. Marquand) that it is very modest. It proposes to increase the figure of 3s. per year to 4s., which may be earned by a woman who continues working after the age of 60 or a man after the age of 65. Surely, that is a very modest increase and I hope that the Government will accept it.

If a man or woman who has reached retirement age continues to work for five years, then under the Amendment he or she would receive £1 a week extra instead of the 15s. provided under the existing Regulations. We want to encourage a person who is fit and well to continue in industry if he or she wishes to do so. Therefore, the Amendment encourages people in good health and who want voluntarily to continue in industry to carry on. Surely we are not asking the Government for very much in this modest Amendment.

It is a matter of 6d. extra for each six months. Often we have heard hon. Members on both sides of the Committee complain about the restrictions on old-age pensioners who work. The Amendment gives the Government the opportunity to increase the present increment which a person can earn. It is a very small beginning. It is only. 1s. a year extra—making it 4s. extra per week for a person who is fit and well and wishes to continue at work. I hope very much that the Government will accept the Amendment.

Miss Pitt

I have considerable sympathy with the points which have been made in this brief discussion on increments, particularly those put forward by the right hon. Member for Middlesbrough, East (Mr. Marquand)—who has just passed me a note apologising for not being present while I am replying,—when he said that to encourage people to stay at work was good for the economy and good for the individual. Of course, we all agree with that.

The hon. Gentleman the Member for Feltham (Mr. Hunter) stressed the fact that we ought to encourage people to carry on at work. I heartily support that suggestion, but we have to consider the main purpose of increments. The Amendment, as the right hon. Gentleman said, would increase the increment for every twenty-five contributions paid after the minimum pension age from 1s. 6d. to 2s. The Amendment does not propose any increase for the wife who enjoys an increment by right of her husband's contributions while she is over pension age, which is at present 1s.

I should like for a moment to look back at the history of increments. The 1946 Act proposed that the increment should be 1s. both for husband and wife by right of his insurance. That, incidentally, was double the amount originally recommended by Lord Beveridge. In 1951, the increment was raised to 1s. 6d. for the insured person only and it still remains at 1s. for his wife. That, I understand, was to provide added incentive to postpone retirement at the time when the party opposite increased the retirement pension for some pensioners up to 30s. But the purpose of the increment is not so much an inducement to encourage people to stay on at work as an effort to avoid discouraging them from staying, on at work. Why do people stay on?

Mr. Percy Shurmer (Birmingham, Sparkbrook)

Because they cannot live unless they do so.

Miss Pitt

Hon. Members opposite must know this from their own experience. The answer has been given by the hon. Member for Sparkbrook (Mr. Shurmer). Men and women stay on at work—certainly from my experience in Birmingham—in the main because they wish to continue to enjoy full wages. That is the first and most important incentive.

The second reason—and one again, I think, not without importance—is that they want to retain the interest and satisfaction of doing a job of work. I have said before in the House—and I have found considerable agreement for it—that in my experience as a factory welfare officer men hated the thought that they would have to retire at the age of sixty-five. They were not made to do so. It was part of my duty to try to fit them into the pattern of work in the factory. If ever it crossed their minds that they might be compelled to retire at sixty-five they would come and ask me to help them. They wanted to continue at work and they were afraid that if they gave up work they would lose their interest in life.

9.0 p.m.

I would attach considerable importance to that principle in considering the reasons why men remain at work. When the Phillips Committee reported in 1954 it said it considered that increments had little or no effect in inducing people to postpone retirement. It recommended that increments should not be increased even if benefit rates were increased.

Mr. Willis

What has this to do with discouraging people? The hon. Lady spoke about giving incentives to discourage people from retiring.

Miss Pitt

The aim of increments is to avoid any discouragement to people to stay on at work.

Mr. G. Thomas

A double negative.

Miss Pitt

The hon. Member for Cardiff, West (Mr. G. Thomas), from his experience in the past as a schoolteacher, corrects my double negative. It is in part an incentive, but, as I asked earlier, what part does it play in a man's consideration of whether he shall stay on at work after sixty-five.

After this digression may I complete what I wanted to say? Otherwise it may not sound a very logical argument. I had just quoted what the Phillips Committee said. It based its conclusions on the Minister's inquiry into the reasons given for retiring or continuing at work. I regard it as most important evidence, because it showed that only seven persons in 1,000 gave increments as their reason for remaining at work after retiring age. This is where we get to the weight we should attach to increments as an incentive.

I agree that increments remain an important part of the scheme. The question today ought to be looked at in the whole context of increments. My right hon. Friend was asked sometime ago, and the hon. Lady the Member for Lanarkshire, North (Miss Herbison) asked him again today, about shorter steps in increments. My right hon. Friend has said that he has not yet completed his consideration. He has been pressed to consider whether shorter steps than twenty-six weeks are possible, perhaps providing a smaller increment, to help men and women who are able to work for a considerable number of weeks but do not quite achieve the required number and so lose another increment.

Mr. T. Brown

Would not the hon. Lady agree that the Phillips Committee reported in 1954, although the incentive was put into the Act of 1951?

Mr. J. Griffiths

It was in the 1946 Act.

Mr. Brown

If we were right to put the incentive at 1s. 6d. in 1951, is it not logical to increase it to 2s. now to meet present-day values?

Miss Pitt

I agree that the Phillips Committee reported in 1954. Among other things, it considered increments, and I was quoting from that part of the Report which refers to them. I had got to the stage where I said that we ought to consider other aspects of increments, in particular, shorter steps and the provision of perhaps smaller increments for a smaller number of weeks of work.

I ought also to make the point, although I do so with a little diffidence, that women have a very much better return than men for the extra weeks of work after retiring age and for the increments they enjoy, because they retire earlier and live longer. Therefore, they enjoy the increments for a very much longer period.

Although it is never argued, and I do not think it has ever been said on either side of the Committee, that increments provide a full return for pensions forgone and contributions paid, there is some unfairness in the fact that women enjoy greater benefit from increments than men. In saying that I want to make it clear that I am not anti-feminine. Although the female of the species is perhaps no more sturdy than the male, she certainly manages to live longer and therefore enjoys a better return from the increments she manages to build up after her normal retiring age, which is sixty.

Mr. Willis

What has this to do with the Amendment?

Miss Pitt

I am stressing the fact that we ought not to consider the amount of the increment alone. There are other considerations we should take into account when thinking of increments. One, I hope I have made clear, is the shorter steps, and another is that as at present placed women enjoy a better return than men. Whatever the problem in increments, it is tied with the structure of the National Insurance Scheme.

I think it inappropriate in a Bill which proposes to increase benefit rates to suggest that we should amend the amount of increments. [HON. MEMBERS:" Why?"]The increments are an addition to the basic pension, and to improve them would not help existing pensioners. Therefore, this is outside the main purpose of the Bill, because the Amendment proposes only to increase increments after the appointed day.

I think it is part of the consideration we should give to the wider aspects of the structure of the Scheme, but it has no bearing on the present Bill, which is intended to raise benefits and increase contributions. For that reason, I am sorry that we cannot accept the Amendment.

Mr. T. Brown

Will the hon. Lady answer the question I put to her?

Miss Pitt

I beg the pardon of the hon. Member for Ince (Mr. T. Brown). I had made a note to try to answer his question. He asked whether increments could not be disregarded in applying for National Assistance. I shall have to answer the hon. Member, as I think he has been answered before, that the National Assistance Board has a statutory duty to take means into account. As increments are income, the Board is bound to take them into account when assessing means under the National Assistance Act.

Mr. Ede (South Shields)

We have listened to a most extraordinary speech. The hon. Lady made a bad start so far as we were concerned because she assured us that she had considerable sympathy with us. That is a certain sign that what is wanted is going to be refused.

I cannot understand the logic of the argument of the hon. Lady, particularly having regard to what we heard in discussion on the previous Amendment. In this case there is some productivity in return for the expenditure. To that extent this may be not inflationary at all, or at any rate less inflationary than some of the other proposals in this Measure. It seemed to me that the main burden of the argument of the hon. Lady was that we ought to have proposed a great deal more in the way of further amendments of the law, such as shorter periods. If the hon. Lady or the right hon. Gentleman, who has now returned to support her, will bring in an Amendment proposing shorter periods and any of the other things the hon. Lady mentioned, they can rest assured that they will find no opposition from this side of the Committee.

I should feel reassured in regard to the whole of the argument of the hon. Lady if she had said, "We will accept this as the very minimum and, between now and Report stage, we will bring in all the other matters I have mentioned and upbraided you for not putting into the Amendment." It was a most deplorable, illogical argument, and I hope my hon. Friends will continue to press the Amendment on the Committee.

Miss Herbison

I agree with my right hon. Friend. I have never heard an argument quite so illogical as that of the Parliamentary Secretary. It is not only the double negative, which was really a positive, which we got from the hon. Lady, but the greater part of her speech with which we disagree. Incidentally, I object strongly to being considered a "female of the species." I would rather he called a woman.

The whole of the hon. Lady's argument must have left an impression on both sides of the Committee that increments for continued employment were completely bad and that we ought not to have had increments in the first place at all. The whole tenor of the hon. Lady's speech was to that effect. Let us examine that proposition very carefully. Those who continue at work—women after 60 and men after 65 years of age—will each have to pay 2s. a week extra contribution. In 52 weeks they will pay £5 4s. a year extra. Take the man who at 65 years of age continues to work until he is 66. During that year he will contribute £5 4s. extra and he will go without a pension which will he £130. That is £135 4s. which is being given to the Insurance Fund.

Mr. Willis

Plus the employer's contribution.

Miss Herbison

Yes, but I am concerned only with what the man is giving and what he is losing. It seems to me that if one takes that into account and examines this purely as an insurance matter, then it is only justice that this benefit of an increment on a pension ought to be raised along with other benefits.

Yet the hon. Lady said that this Amendment was outside the main purpose of the Bill. She told us that it would be inappropriate to increase this increment because this was a Bill to increase benefit rates. What is this increment that the old woman or the old man get when they retire if they have postponed their retirement? They regard this as one of their benefits. If we consider what they are losing in pension and what they are paying in extra contribution, there is no case whatever for the Government refusing this modest Amendment.

I want to take up one further point which the hon. Lady mentioned as a reason for not accepting this Amendment. I had a Question down to the Minister today about that very point with which the hon. Lady dealt. If what the hon. Lady said is correct, what seems to be in the mind of the Minister is that we shall have shorter steps and smaller increments. I would be opposed to that completely. At present if a man is under 65 years of age he pays his contribution when he is working. If he is off work and on sickness benefit or Industrial Injuries benefit, the contributions are credited to him, but not so for the man between 65 and 70 or the woman between 60 and 65 years of age.

I have taken cases like this to the Minister. I have raised this matter in a previous debate and I have had a Question down on the subject because the Minister promised that he would consider it. If a man, after normal retiring age, is off work on Industrial Injuries benefit or sickness benefit, he discovers when he

retires at 69 or 70 that he has not had any credits. Instead of getting all the increments which he expected to get, he loses the increments. Here is an old man, called upon to pay 2s. extra a week, who will lose £130 a year, and the only hope to be derived from the hon. Lady's speech is her suggestion about shorter steps and smaller increments. The whole thing is completely unjust.

9.15 p.m.

I beg the hon. Lady and the Minister to look at the matter logically. We ask for no more. We do not ask for sympathy. We do not even ask them to be human in this matter. Let them look at it actuarially and logically, and they will see that the only thing they can do is to accept the modest Amendment we propose.

Question put, That those words be there inserted:—

The Committee divided: Ayes 195, Noes 218.

Division No. 6.]	AYES	[9.16 p.m.
Ainsley, J. W.	Edwards, Robert (Bilston)	Lawson, G. M.
Albu, A. H.	Edwards, W. J. (Stepney)	Ledger, R. J.
Allen, Arthur (Bosworth)	Evans, Albert (Islington, S.W.)	Lee, Frederick (Newton)
Allen, Scholefield (Crewe)	Evans, Edward (Lowestoft)	Lindgren, G. S.
Awbery, S. S.	Fernyhough, E.	Lipton, Marcus
Bacon, Miss Alice	Finch, H. J.	Mabon, Dr. J. Dickson
Benn, Hn. Wedgwood (Bristol, S.E.)	Foot, D. M.	McGhee, H. G.
Benson, C.	Fraser, Thomas (Hamilton)	McInnes, J.
Blackburn, F.	George, Lady Megan Lloyd (Car'then)	McKay, John (Wallsend)
Blenkinsop, A.	Gibson, C. W.	McLeavy, Frank
Blyton, W. R.	Greenwood, Anthony	MacPherson, Malcolm (Stirling)
Boardman, H.	Grenfell, Rt. Hon. D. R.	Mahon, Simon
Bottomley, Rt. Hon. A. G.	Grey, C. F.	Mainwaring, W. H.
Bowden, H. W. (Leicester, S.W.)	Griffiths, David (Bother Valley)	Mallalieu, E. L. (Bragg)
Bowen, E. R. (Cardigan)	Griffiths, Rt. Hon. James (Llanelly)	Mann, Mrs. Jean
Bowles, F. G.	Grimond, J.	Marquand, Rt. Hon. H. A.
Boyd, T. C.	Hale, Leslie	Mason, Roy
Braddock, Mrs. Elizabeth	Hall, Rt. Hn. Glenvil (Colne Valley)	Mayhew, C. P.
Brockway, A. F.	Hannan, W.	Mellish, R. J.
Broughton, Dr. A. D. D.	Harrison, J. (Nottingham, N.)	Messer, Sir F.
Brown, Thomas (Ince)	Hastings, S.	Mikardo, Ian
Burke, W. A.	Hayman, F. H.	Mitchison, G. R.
Burton, Miss F. E.	Henderson, Rt. Hn. A. (Rwly Regis)	Monslow, W.
Butler, Herbert (Hackney, C.)	Herbison, Miss M.	Moody, A. S.
Callaghan, L. J.	Hewitson, Capt. M.	Morris, Percy (Swansea, W.)
Castle, Mrs. B. A.	Holman, P.	Moss, R.
Champion, A. J.	Holmes, Horace	Moyle, A.
Clunie, J.	Howell, Charles (Perry Barr)	Mulley, F. W.
Coldrick, W.	Hoy, J. H.	Neal, Harold (Bolsover)
Collick, P. H. (Birkenhead)	Hubbard, T. F.	Noel-Baker, Francis (Swindon)
Collins, V. J. (Shoreditch & Finsbury)	Hughes, Emrys (S. Ayrshire)	Noel-Baker, Rt. Hon. P. (Derby, S.)
Cove, W. G.	Hunter, A. E.	Oliver, G. H.
Craddock, George (Bradford, S.)	Hynd, J. B. (Attercliffe)	Oram, A. E.
Cullen, Mrs. A.	Irving, Sydney (Dartford)	Orbach, M.
Dalton, Rt. Hon. H.	Isaacs, Rt. Hon. C. A.	Oswald, T.
Darling, George (Hillsborough)	Jay, Rt. Hon. D. P. T.	Owen, W. J.
Davies, Stephen (Merthyr)	Jeger, George (Goole)	Padley, W. E.
Deer, G.	Johnson, James (Rugby)	Paling, Rt. Hon. W. (Dearne Valley)
Delargy, H. J.	Johnston, Douglas (Paisley)	Palmer, A. M. F.
Diamond, John	Jones, Rt. Hon. A. Creech (Wakefield)	Pannell, Charles (Leeds, W.)
Dodds, N. N.	Jones, J. Idwal (Wrexham)	Pargiter, G. A.
Donnelly, D. L.	Jones, T. W. (Merioneth)	Parker, J.
Dugdale, Rt. Hn. John (W. Brmwch)	Kenyon, C.	Paton, John
Ede, Rt. Hon. J. C.	Key, Rt. Hon. C. W.	Peart, T. F.
Edelman, M.	King, Dr. H. M.	Pentland, N.
Plummer, Sir Leslie	Shurmer, P. L. E.	Wells, Percy (Faversham)
Popplewell, E.	Silverman, Julius (Aston)	Wheeldon, W. E.
Prentice, R. E.	Silverman, Sydney (Nelson)	White, Mrs. Eirene (E. Flint)
Price, J. T. (Westhoughton)	Slater, Mrs. H. (Stoke, N.)	White, Hanry (Derbyshire, N.E.)
Price, Philips (Gloucestershire, W.)	Slater, J. (Sedgefield)	Wilkins, W. A.
Prootor, W. T.	Smith, Ellis (Stoke, S.)	Willey, Frederick
Pryde, D. J.	Snow, J. W.	Williams, David (Neath)
Pursey, Cmdr. H.	Soskice, Rt. Hon. Sir Frank	Williams, Rev. Llywelyn (Ab'tillery)
Randall, H. E.	Stonehouse, John	Williams, Ronald (Wigan)
Rankin, John	Stones, W. (Consett)	Williams, Rt. Hon. T. (Don Valley)
Redhead, E. C.	Stross, Dr. Barnett (Stoke-on-Trent, C.)	Williams, W. R. (Openshaw)
Reeves, J.	Summerskill, Rt. Hon. E.	Willis, Eustace (Edinburgh, E.)
Reid, William	Sylvester, G. O.	Wilson, Rt. Hon. Harold (Huyton)
Rhodes, H.	Taylor, Bernard (Mansfield)	Winterbottom, Richard
Roberts, Albert (Normanton)	Taylor, John (West Lothian)	Woodburn, Rt. Hon. A.
Roberts, Goronwy (Caernarvon)	Thomas, George (Cardiff)	Woof, R. E.
Rogers, George (Kensington, N.)	Thomas, Iorwerth (Rhondda, W.)	Yates, V. (Ladywood)
Ross, William	Thornton, E.	Zilliacus, K
Royle, C.	Ungoed-Thomas, Sir Lynn
Shinwell, Rt. Hon. E.	Viant, S. P.	TELLERS FOR THE AYES:
Shore, E. W.	Weitzman, D.	Mr. Pearson and Mr. Simmons.
NOES
Agnew, Sir Peter	Fisher, Nigel	Lancaster, Col. C. G.
Aitken, W. T.	Forrest, G.	Leather, E. H. C.
Alport, C. J. M.	Fort, R.	Leavey, J. A.
Amory, Rt. Hn. Heathcoat (Tiverton)	Fraser, Sir Ian (M'cmbe & Lonsdale)	Leburn, W. G.
Armstrong, C. W.	Gammons, Lady	Legge-Bourke, Maj. E. A. H.
Ashton, H.	Garner-Evans, E. H.	Legh, Hon. Peter (Petersfield)
Atkins, H. E.	Gibson-Watt, D.	Lindsay, Hon. James (Devon, N.)
Baldwin, A. E.	Glover, D.	Linstead, Sir H. N.
Balniel, Lord	Glyn, Col. Richard H.	Lloyd, Maj. Sir Guy (Renfrew, E.)
Barber, Anthony	Godber, J. B.	Lucas-Tooth, Sir Hugh
Barlow, Sir John	Goodhart, Philip	McAdden, S. J.
Barter, John	Gough, C. F. H.	Macdonald, Sir Peter
Baxter, Sir Beverley	Gower, H. R.	Mackie, J. H. (Galloway)
Bell, Philip (Bolton, E.)	Graham, Sir Fergus	McLaughlin, Mrs. P.
Bennett, Dr. Reginald	Grant, W. (Woodside)	Macpherson, Niall (Dumfries)
Bevins, J. R. (Toxteth)	Grant-Ferris, Wg Cdr. R. (Nantwich)	Maddan, Martin
Bidgood, J. C.	Green, A.	Maitland, Hon. Patrick (Lanark)
Birch, Rt. Hon. Nigel	Gresham Cooke, R.	Manningham-Buller, Rt. Hn. Sir R.
Bishop, F. P.	Grimston, Hon. John (St. Albans)	Markham, Major Sir Frank
Black, C. W.	Gurden, Harold	Marlowe, A. A. H.
Boyd-Carpenter, Rt. Hon. J. A.	Hall, John (Wycombe)	Marshall, Douglas
Boyle, Sir Edward	Harris, Frederic (Croydon, N.W.)	Mathew, R.
Braine, B. R.	Harrison, A. B. C. (Maldon)	Maude, Angus
Braithwaite, Sir Albert (Harrow. W.)	Harrison, Col. J. H. (Eye)	Mawby, R. L.
Bromley-Davenport, Lt.-Col. W. H.	Harvey, Sir Arthur (Macclesfd)	Maydon, Lt.-Comdr. S. L. C.
Brooman-White, R. C.	Harvey, John (Walthametow, E.)	Milligan, Rt. Hon. W. R.
Browne, J. Nixon (Craigton)	Hay, John	Molson, Rt. Hon. Hugh
Burden, F. F. A.	Heald, Rt. Hon. Sir Lionel	Mott-Radclyffe, Sir Charles
Butcher, Sir Herbert	Heath, Rt. Hon. E. R. G.	Nabarro, G. D. N.
Campbell, Sir David	Henderson-Stewart, Sir James	Nairn, D. L. S.
Chichester-Clark, R.	Hicks-Beach, Maj. W. W.	Heave, Airey
Clarke, Brig. Terence (Portsmth, W.)	Hill, Rt. Hon. Charles (Luton)	Nicholson, Godfrey (Farnham)
Cole, Norman	Hill, Mrs. E. (Wythenshawe)	Nicolson, N. (B'n'm'th, E. & Chr'ch)
Conant, Maj. Sir Roger	Hobson, John (Warwick & Leam'gt'n)	Nugent, G. R. H.
Cooke, Robert	Holland-Martin, C. J.	Oakshott, H. D.
Cooper-Key, E. M.	Hornby, R. P.	O'Neill, Hn. Phelim (Co. Antrim, N.)
Corfield, Capt. F. V.	Hornsby-Smith, Miss M. P.	Ormsby-Gore, Rt. Hon. W. D.
Craddock, Beresford (Spelthorne)	Horobin, Sir Ian	Orr, Capt. L. P. S.
Crosthwaite-Eyre, Col. O. E.	Howard, Hon. Greville (St. Ives)	Orr-Ewing, Charles Ian (Hendon, N.)
Cunningham, Knox	Hughes Hallett, Vice-Admiral J.	Osborne, C.
Currie, G. B. H.	Hughes-Young, M. H. C.	Pannell, N. A. (Kirkdale)
Dance, J. C. G.	Hulbert, Sir Norman	Partridge, E.
Davidson, Viscountess	Hutchison, Michael Clark (E'b'gh, S.)	Peyton, J. W. W.
D'Avigdor-Goldsmid, Sir Henry	Hutchison, Sir Ian Clark (E'b'gh, W.)	Pickthorn, K. W. M.
Deedes, W. F.	Hylton-Foster, Rt. Hon. Sir Harry	Pike, Miss Mervyn
Digby, Simon Wingfield	Iremonger, T. L.	Pilkington, Capt. R. A.
Donaldson, Cmdr. C. E. McA.	Irvine, Bryant Godman (Rye)	Pitman, I. J.
Doughty, C. J. A.	Jenkins, Robert (Dulwich)	Pitt, Miss E. M.
Drayson, G. B.	Jennings, Sir Roland (Hallam)	Pott, H. P.
du Cann, E. D. L.	Johnson, Dr. Donald (Carlisle)	Price, David (Eastleigh)
Dugdale, Rt. Hn. Sir T. (Richmond)	Johnson, Eric (Blackley)	Price, Henry (Lewisham, W.)
Duncan, Sir James	Joynson-Hicks, Hon, Sir Lancelot	Prior-Palmer, Brig. O. L.
Duthie, W. S.	Kaberry, D.	Profumo, J. D.
Eden, J. B. (Bournemouth, West)	Kerby, Capt. H. B.	Rawlinson, Peter
Elliott, R. W. (N'castle upon Tyne, N.)	Kerr, Sir Hamilton	Redmayne, M.
Emmet, Hon. Mrs. Evelyn	Kershaw, J. A.	Rees-Davies, W. R.
Errington, Sir Eric	Kimball, M.	Remnant, Hon. P.
Erroll, F. J.	Kirk, P. M.	Renton, D. L. M.
Farey-Jones, F. W.	Lambert, Hon. G.	Ridsdale, J. E.

Rippon, A. G. F.	Stoddart-Scott, Col. Sir Malcolm	Wall, Major Patrick
Rodgers, John (Sevenoaks)	Storey, S.	Ward, Rt. Hon. G. R. (Worcester)
Roper, Sir Harold	Studholme, Sir Henry	Ward, Dame Irene (Tynemouth)
Ropner, Col. Sir Leonard	Sumner, W. D. M. (Orpington)	Webbe, Sir H.
Russell, R. S.	Taylor, William (Bradford, N.)	Whitelaw, W. S. I.
Scott-Miller, Cmdr. R.	Teeling, W.	Williams, Paul (Sunderland, S.)
Sharples, R. C.	Thomas, Leslie (Canterbury)	Williams, R. Dudley (Exeter)
Shepherd, William	Thomas, P. J. M. (Conway)	Wills, G. (Bridgwater)
Smyth, Brig. Sir John (Norwood)	Thompson, Lt.-Cdr. R. (Croydon, S.)	Wood, Hon. R.
Spearman, Sir Alexander	Thorneycroft, Rt. Hon. P.	Woollam, John Victor
Spence, H. R. (Aberdeen, W.)	Thornton-Kemsley, C. N.	Yates, William (The Wrekin)
Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)	Tiley, A. (Bradford, W.)
Stanley, Capt. Hon. Richard	Turton, Rt. Hon. R. H.	TELLERS FOR THE NOES
Stevens, Geoffrey	Wakefield, Sir Wavell (St. M'lebone)	Mr. Bryan and Mr. Finlay.
Steward, Sir William (Woolwich, W.)	Walker-Smith, Rt. Hon. Derek

Mr. J. Griffiths

May I ask leave, Sir Charles, to move, "That the Chairman do report Progress and ask leave to sit again"?

I ask permission in order to call attention to the catastrophic fall in the Government's majority. This, we are told, is a very important Bill, and we find that the Government's supporters have vanished, instead of being here to do their duty. In view of that, and the fact that their majority is going down with each vote and will expire before the evening is out, I ask your permission to move, "That the Chairman do report Progress and ask leave to sit again". May we also have from the Minister an explanation of this catastrophic fall in the majority? Is not this an indication that the sooner they go out the better?

The Chairman

I am afraid that I cannot accept such a Motion.

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Hale

I did say earlier that I wanted to make a few observations at this stage. There are one or two points that need to be put, which have been raised on this matter generally. This Clause is virtually the effective Clause of the Bill, and I suggested when I intervened before that it is based entirely on faked figures—figures faked quite deliberately and quite improperly by the Government. It is supported by an actuarial report in which pressure has been put upon the actuary not to put his own figures—[Interruption.] Yes, indeed. I will give way to the right hon. Gentleman if he wishes to intervene.

Mr. Boyd-Carpenter

I only intervene to say that I hope that the hon. Gentleman, if he is to make allegations of that kind, will substantiate them.

Mr. Hale

I am very glad to say that the right hon. Gentleman's hopes will be gratified, if not those of the old-age pensioners. I propose to give chapter and verse in this matter, and the attitude of the right hon. Gentleman has not been one to command much respect. What this Government did first of all was to nobble the National Assistance Board. They sacked Georgie Buchanan and replaced him by a Conservative Member of Parliament in the hope that they would get a Conservative policy. Since then, we have found gradual reductions of the maximum rates for public assistance in relation to, and by comparison with, the rates of old-age pensions, the most serious thing of all.

I spent part of my time in the last election going round the country, and I found that people said to me "You said that you would give us more, but every time I get virtually less." Most of them did, and this same swindle has been perpetrated again. They have increased National Assistance for a married couple by 9s. a week, and they have increased the grant for a married couple on the National Insurance by 15s., with the result that the lowest-paid recipients will benefit by 6s. less—the poorest people—than those who have other income.

Not only that, but they have taken off the tobacco coupons, something like 4s. 8d. a week, with the result that the poor people in Oldham and throughout the country generally are getting an increase of about 4s. 4d., which is hardly enough with which to buy a copy of the Annual Report of the Ministry complete with photographs of the Foreign Secretary and the Minister of Pensions and National Insurance.

9.30 p.m.

I had the privilege or the misfortune or the good fortune to listen to the right hon. Gentleman speaking on this issue at Brighton. I would say to him, almost in a tone of apology now, that when I made some observations that night on his speech and said that it was the speech to end all speeches and most listeners, I had not then heard the Prime Minister. Suffice it to say that if I had heard the Prime Minister first I should have awarded him the palm for bathos.

Sustained by members of the Primrose League, fortified by the local periwinkles who cheered him to the echo, the right hon. Gentleman appeared in the guise of a fairy queen about to bestow benefits, spring in his heels, and summer in his heart. Now the winds of autumn are blowing, searing through the poorest streets of Oldham, and winter and Christmas are coming. We have talked again this time of the possibility of some benefits for Christmas. We are not going to have benefits for Christmas but are going to postpone the increase for a happy new year.

The right hon. Gentleman appears in this matter as a rather faded Scrooge. "Out upon you, and your merry Christmas is all humbug."

Mr. Dudley Williams (Exeter)

And so are you.

Mr. Hale

I can assure the hon. Member that nothing will gratify the Committee more than to hear a word from him. If he succeeds in catching the eye of the distinguished Chairman of the Committee we shall be happy to listen to him say—

Miss Herbison

But the hon. Member has not been here all day.

The Chairman

Order. I do not know that I shall be at all happy. I wish hon. Gentlemen would not call one another names across the Floor of the Chamber.

Mr. Dudley Williams

I do not think I said anything at all, Sir Charles, to which exception can be taken. The hon. Gentleman referred to my right hon. Friend as a humbug, and I simply said, "So are you."

The Chairman

It is even worse to make such remarks to the Chair.

Mr. Hale

I was only quoting a well-known piece of English literature, presented in an adaptation of Charles Dickens by Stanley someone or another on the records some years ago when Christmas was rather a festivity. The right hon. Gentleman might adopt the adaptation and say, "Two years ago this Christmas I succeeded to the place of Osbert Peake, and, I was left his sole and residuary legatee and sole executor on the day he became Lord what's-his-name upon his removal to another place." The day he goes to another place shall we say, "This was the finest thing done by John Boyd-Scrooge in all his life"? Ah, well, it is very sad for the retirement pensioner.

The right hon. Gentleman asked me to substantiate some of the statements I am making. In order to substantiate the obvious swindle which is being perpetrated, to justify taking some of the extra value of the pensions from the contributors, in order to try to substantiate taking the 5d. or 6d. extra they are taking away from every worker starting next January, as a very reasonable basis they have to produce figures to show that the Fund will not always remain solvent.

There are £1,500 million in the kitty so why increase the contributions? They say "We shall have extra demands to meet." They say, "We estimate that although unemployment at the moment is running at 1½per cent., by 1959 it will be running at 3 per cent." On what is that estimate based? On this Government remaining in office? Is this really the opinion of Her Majesty's advisers at this moment?

My hon. Friend the Member for Jarrow (Mr. Fernyhough) in a very effective speech reminded us of the Government's boast of doubling the standard of living in twenty-five years. Are they going to double the standard of living by doubling unemployment?

The Report goes further. The Report says that in 1960 to 1961 unemployment is estimated at over 1 million. We are now at the end of 1957. This Government comes with a Report which they have instructed the Actuary to make, which the Actuary did not want to make. I challenge the right hon. Gentleman to deny that. I say he did that on instructions from the Government, who said, "You must take our estimate of unemployment and say that this Fund will become insolvent." Does the right hon. Gentleman deny that?—[HON. MEMBERS: "Answer."]

Sir Ian Fraser (Morecambe and Lonsdale)

Will the hon. Member for Oldham, West (Mr. Hale) allow me?

Hon. Members

No.

Mr. Boyd-Carpenter

If the hon. Member for Oldham, West (Mr. Hale) decides to adopt an interrogatory method of speech, I shall reply in due course, but I do not propose to allow him to assume that because I do not intervene at every point in his speech I accept every single word that he says. It seems more than improbable that I should have cause to do so.

Mr. Hale

I am obliged to the right hon. Gentleman for that rather miserable denial, that rather half-hearted contradiction, that suggestion that I may be wrong. Therefore, I now give my authority for that statement. The Government Actuary, in his report for 1954, quotes his quinquennial review, on which he gives his own opinion, and then says: The new bases have been adopted for the purpose of the present report, including the assumption, on Government instructions, of a long-term unemployment rate of 4 per cent. The Actuary does not put in the words "on Government instructions" unless he wants to say, "This is not my view. I was made to adopt it," because he could see nothing in his knowledge of the existing situation, excepting the in competency of Her Majesty's advisers, which justified that view at all.

Does the Minister now want to deny it? Does he now say that that document is not true? Does he say that Her Majesty's advisers really expect a million unemployed in 1961? Does he say that they are planning for a million unemployed in that year and that the war on the trade unions that they talk about is intended to produce an industrial situation which will result in increased unemployment? The right hon. Gentleman has to face at least one dilemma. Either he instructed, or the Government instructed, the Government Actuary to make an assumption in which the Government do not believe or to make an assumption in which they do believe. The House is entitled to know as a matter of first importance—

Sir I. Fraser

Will the hon. Member allow me to put a question? Will he remember that in 1946 the then Government instructed the Actuary that an 8 per cent. unemployment figure was probable?

Mr. Hale

The hon. Member is wrong as usual. He is completely wrong. The Beveridge Report, prepared under the auspices of a Coalition Government, and which had never seen a Labour Government in office, assumed a high rate of unemployment because all the cognoscenti at that time assumed that a Tory Government would be re-elected. That was not done in 1946 but in 1944, and the basis of the Beveridge scheme was that we should continue to have unemployment after the war because we had always had it and no political party in office had hitherto shown that it could deal with it. We on this side of the Committee came along and we abolished unemployment.

Captain Richard Pilkington (Poole)

Abolished what?

Mr. Hale

The hon. and gallant Member should not sit there yap-yapping like a constipated Pekinese.

Captain Pilkington

The hon. Member said that the Labour Government abolished unemployment. What unemployment was there to abolish in 1945?

Mr. Hale

I will tell the hon. and gallant Member. There were 4 million or 5 million soldiers in all parts of the world. There were men coming from the prison camps of Burma. The folly and stupidity of Her Majesty's then advisers had failed to get any continuation of American aid, and we were left with the problem of transporting these men back at our cost, of providing the planes, of re-orientating the whole ambit of trade and beating our swords into ploughshares—and I wish to heaven we had stuck to that—and creating full employment for the first time in peace time. I would remind the hon. and gallant Member of the figures. By July, 1951, we had brought the figure down to 1 per cent. unemployment over-all, the lowest figure in history.

Mr. Hubbard

That figure included unemployable people.

Mr. Hale

Yes, that included the hard core of unemployable people. We had virtually got down to the bedrock of human possibility and had performed a job that no other nation on the face of the earth has ever done. If anyone wants to see Toryism working, let him look at Italy or go to Northern Ireland, which is near enough. Within a few months of this Government coming into office, unemployment had gone up in Oldham. It went up to 2 per cent., and now it is hovering around 1½per cent.

Mr. G. B. Drayson (Skipton)

It is 4 per cent. in my constituency.

Mr. Hale

The hon. Gentleman's constituency will be interested in the argument I am putting, because the right hon. Gentleman says that it will be 4 per cent. all over the country by 1961— 1 million unemployed. That is Tory freedom working. Freedom for everyone, except the Government Actuary.

The right hon. Gentleman the Minister is unusually coy. He is not making observations with his usual facility. There was a time in the history of this House when we could not keep him down. Now it is extremely difficult to get him to his feet. I have made the points I wish to make, and when the right hon. Gentleman has thought over the reply to them I will consider whether it is worth while using the time of the Committee to make any observations on the reply he has made.

Mr. Marquand rose—

Mr. Boyd-Carpenter

I would give way to the right hon. Gentleman the Member for Middlesbrough, East (Mr. Marquand), but as the hon. Member for Oldham, West (Mr. Hale), after that extraordinary outburst, seems to think that a reply is called for, I am only too happy to oblige him. I must say at once, however, that his suggestion that a very high public official had been subjected to pressure, and had yielded to it, was not substantiated by a single thing he said. I hope, therefore, that the hon. Gentleman will have the decency to withdraw what he said.

Mr. Hale

On the instructions of the Government.

Mr. Boyd-Carpenter

It is not the custom in the House of Commons to mention by name or office public officials, except in extreme cases, and it is certainly unusual to make an allegation such as the hon. Gentleman has seen fit to make against a very high and very intelligent public official, who does his duty by this House and by all Governments with absolute integrity. The subsequent speech of the hon. Gentleman did not contain one item of support for his allegation. I can demonstrate that in a sentence.

It is not the function of the Government Actuary himself to forecast the trends of unemployment or employment. He is not an economist and he takes advice on this, and always has done, under all Governments, as right hon. Gentlemen on the opposite bench know perfectly well.

Mr. J. Griffiths indicated assent.

Mr. Boyd-Carpenter

I see that the right hon. Gentleman the Member for Llanelly (Mr. J. Griffiths) is nodding to that. The Government Actuary takes advice from the Government as to the assumptions he is to make. To suggest that because he makes the calculations on certain assumptions he has been either subjected to undue pressure or has done something that he should not, simply will not bear one moment's examination, and the hon. Member for Oldham knows that very well.

Let me make it quite clear that the form of words used, to which he has objected, has been used before. It is the regular form of words. The hon. Member for Oldham said, "We abolished unemployment in 1951". It is odd, therefore, that the Report of the Government Actuary on the 1951 Bill contains these words: On the Government's instructions a long-term average of 4 per cent. unemployment has been adopted in the present estimates. Therefore, not only the figure but the form of words which the hon. Gentleman seemed to suggest was improper were adopted under his own Government.

9.45 p.m.

A further answer is hardly called for on the merits of the matter, save by way of reassurance to any hon. Member who may have been disturbed by the outburst of the hon. Member for Oldham, West. It has been the custom since 1951 to assume the current level of unemployment for the next couple of years and then to put it at a 4 per cent. figure for the years after the year immediately following those two years. That was done in 1951, and it has been done again this time. These are the words of the Government Actuary's Report on the 1951 Bill: This figure is deliberately put on the high side to provide that margin of safety which is necessary in an insurance scheme.

Mr. Hale

The Minister has not said whether he believes these figures are true or whether they are false, and he has not said whether the Fund stands at £800 million or £900 million more than it did in 1951.

Mr. Boyd-Carpenter

If the hon. Gentleman wants an answer, he should have studied the Actuarial Report on this fund and he would know that at £1,500 million it is not even one-tenth of what it would be if the scheme were funded. Therefore, any suggestion that there is a vast fund available for the distribution of benefits is one to which no hon. Member who has studied the matter would give credence.

Mr. Marquand

I had thought that it might be more appropriate to pursue the examination of the size of the Insurance Fund, the relation between the Fund and the benefits, and the increases now proposed when we come to the Schedule, but since my hon. Friend the Member for Oldham, West (Mr. Hale) has opened up the discussion on the Question, "That the Clause stand part of the Bill," and since the Minister has referred to the question of the size of the Fund, perhaps it would be appropriate if we embark on this discussion now and we can then finish it tomorrow. I assure the right hon. Gentleman, as I am sure he knows, that I have no intention of prolonging the discussion, but since we are on this topic I thought that we might carry on, which will no doubt shorten our discussion when we come to the Schedules.

Mr. Boyd-Carpenter

I understood that the right hon. Gentleman desired to carry on the main discussion on the Schedules. The rate of contribution, of course, is an important matter. I am at the Committee's disposal, and I imagine that it would wish not to have to deal with it twice.

Mr. J. Griffiths

Discuss it on the Schedules.

Mr. Marquand

My right hon. Friend says that we should discuss it on the Schedules. I do not mind, but before we depart from this Clause I should like to ask one question which I am sure could not be raised in any way on any of the Schedules. We should like to have a little more elaboration than the Parliamentary Secretary was able to give us the other night about the position of part-time workers. She had only a short time in which to wind up the debate, and referring to the question which has been raised widely in many parts of the country about part-time workers, she said: The National Insurance Advisory Committee recently recommended that part-time workers who worked for eight hours in any occupation should not pay the stamp, and the regulations are going through."—[OFFICIAL REPORT, 13th November, 1957; Vol. 577, c. 1087.] The anxiety of employers who employ part-time workers is that, under the provisions of the Bill, they will have to pay a substantially increased contribution each week for each part-time worker they employ, and in a case where they are employing part-time workers half-time, this might involve a substantial increase in the total contributions they have to pay. The hon. Lady referred only to part-time workers not having to pay for stamps. Will the employers have to pay for this increased contribution? If so, will it not be a strong incentive to employers, if there is an increase of 2s. for the stamp, to reduce the numbers of part-time workers they employ and, thereby, reduce the level of employment and reduce the opportunities for married women and others who have special obligations elsewhere, to do some good for the country's benefit while yet having to attend to their households? I would like an answer to that.

Mr. Boyd-Carpenter

I am very glad to respond to the right hon. Gentleman's question. I agree with him that this point is particularly relevant to the Question, "That the Clause stand part of the Bill", as opposed to the wider issues which we now feel could best be discussed when we debate the Schedules.

The position is this. At the present, as a result of rules made under the classification regulations, a person who works for any one employer for less than four hours a week, or for eight hours if it is domestic work, is removed from Class I and no Class I National Insurance contrition is payable either by the employer or employee, Of course, Industrial Injury contributions are payable. The worker drops into Class II, but if his total weekly remuneration is less than 20s. Class III, not Class II, contributions become payable.

Regulations are at present before the National Insurance Advisory Committee to raise the "less than four hours" rule to a not more than eight hours rule, and also to raise the figure of total weekly remuneration which I have mentioned from 20s. to 40s. I cannot, of course, anticipate what the Committee will report, but the matter is before it and I hope to have its report very shortly.

Question put and agreed to.

Clause ordered to stand part of the Bill.