NATIONAL HEALTH SERVICE CONTRIBUTIONS

HC Deb 25 February 1958 vol 583 cc221-79

4.17 p.m.

The Financial Secretary to the Treasury (Mr. J. E. S. Simon)

I beg to move,

1. 1.That the rates of national health service contributions be increased, by substituting the rates specified in the Table set out below for the rates set out in the First Schedule to the National Health Service Contributions Act, 1957.
2. 2. That there be paid into the Exchequer any increase in the sums so payable under the said Act of 1957, being an increase attributable to the change in the rates of national health service contributions.
3. 3. That it is expedient to make provision for other matters incidental or supplementary to the matters aforesaid.

TABLE
Description of person.	Weekly rate of Contribution.
	s.	d.
1. Employed men between the ages of 18 and 70, not including men over the age of 65 who have retired from regular employment	1	10½
2. Employed women between the ages of 18 and 65, not including women over the age of 60 who have retired from regular employment	1	4½
3. Employed boys and girls under the age of 18…		10½
4. Employers … ……		5½
5. Self-employed men between the ages of 18 and 70, not including men over the age of 65 who have retired from regular employment	2	2
6. Self-employed women between the ages of 18 and 65, not including women over the age of 60 who have retired from regular employment	1	8
7. Self-employed boys and girls under the age of 18 …	1	2
8. Non-employed men between the ages of 18 and 65 …	2	2
9. Nan-employed women between the ages of 18 and 60	1	8
10. Non-employed bays and girls under the age of 18 …	1	2

The Chancellor of the Exchequer announced on 18th February the Governments decision to increase the National Health Service contribution payable weekly by all insured persons. The increase proposed is 6d, for men, 4d. for women and 2d. for juveniles, with, in each case, an additional 2d. from the employer in the case of employed persons. This will raise the total Health Service contribution in respect of an employed man to 2s. 4d., of which 1s. 10½d. will fall on the employee and 5½d. on the employer.

A Bill to give effect to this decision will be introduced in due course and will provide a full opportunity for debate. Since the Bill will provide for the payment of the increased contributions into the Exchequer, a Ways and Means Resolution is required and it is for that reason that the matter comes before the Committee this afternoon.

The receipts will, of course, be used for the exclusive benefit of the Health Service. From the inception of the Service, the larger part of the cost has been met from general taxation, but a substantial part is paid for by contributions and a small part by local rates. The contribution element had its origin in the Beveridge Report. Sir William Beveridge, as he then was, was of opinion that insured persons should not be relieved of the whole burden of contributing towards the cost of the comprehensive Health Service which he recommended in the Report. He wrote: There is no obvious reason, apart from a desire to keep the insurance contribution as low as possible, why insured persons should be relieved of this burden wholly, in order that they may bear it as taxpayers. If importance attaches to preserving this contributory principle for cash benefit, it attaches also to contribution for medical treatment.

His proposals envisaged that a sum of 10d. in respect of an adult male employee should be included in the weekly contribution for the purpose of the Health Service.

When my right hon. Friend the Chancellor of the Exchequer, last Tuesday, quoted the original estimate of the cost of the Health Service, The Times, in an otherwise helpful and constructive leader, described it as a rather unworthy statistical debating point, since the figure he quoted was, in fact, a mere abstraction in terms of the pre-war price level.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)

Hear, hear.

Mr. Simon

The hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) cheers, but in point of fact this was carrying impartiality to the point of inaccuracy.

What my right hon. Friend was quoting were, not the figures in the Beveridge Report, but the estimates contained in the Financial Memoranda which accompanied the original National Health Service Bills. The Government of the party opposite accepted fully the Beveridge recommendation that a substantial part of the cost of the Service should be borne by compulsory flat rate contributions. They estimated then that the gross cost of the Service would be £175 million. Of this the Exchequer would meet £126 millionthat is, 72½ per cent.—and nearly 21 per cent. would come from contributions. These were the proportions that, presumably, they felt to be right and fair.

As the Committee knows, the cost of the Service from the outset was far in excess of the sum estimated in the Financial Memoranda. In 1949–50—the first full year of the operation of the scheme—the cost was £450 million, of which £345 million fell to be met by the Exchequer. I suppose that it was partly because this was so much more than was envisaged in the Financial Memoranda and partly with a view to checking the demands on the Service that the Government, in 1949, took power to introduce charges for prescriptions. In 1950–51, they stated that the net amount provided in the Estimates —which was £393 million—was to be treated as a ceiling on the Exchequer cost and that total expenditure must not be allowed to rise above it.

A new element came into the finances of the Service when charges for services were first introduced by the Government of the party opposite, in 1951. That was with the express intention of keeping the National Health Service Estimates within the ceiling of £400 million imposed by the right hon. Gentleman, the Leader of the Opposition for the year 1951–52.

In spite of an extension of the charging system, the cost of the Service has never ceased to rise. Next year, 1958–59, the gross cost is estimated at £740 million. As my right hon. Friend the Chancellor of the Exchequer pointed out last Tuesday, this is over four times as much in money terms, and nearly three times as much in real terms, as was originally contemplated.

Mr. John Baird (Wolverhampton, North-East)

Hon. Members opposite always make the point that the cost of the Health Service is constantly rising. Can the hon. and learned Gentleman tell us what is the proportionate cost of the Service to the national income now as compared with five years ago? It is falling, not rising.

Mr. Simon

I am anxious not to give way too often, because many hon. Members wish to speak. Normally, I would always give way.

In answer to the hon. Member, I would say that the proportion that the cost of the Health Service bears to the national income has remained very steady for the last few years. It has barely varied, although it fell slightly as a result of the introduction of the charging system to which I have referred. Two things must be remembered in this connection. They really fall within the province of my right hon. Friend, but perhaps I may mention them. First, there are many other competing burdens upon the national income. For example, the present Government inherited a massive rearmament programme from the previous Government.

Secondly—and I speak with diffidence here, because this is so peculiarly within the province of my right hon. Friend—I wonder whether we are right to say that the proportion which the cost of the Service bears to the national income must necessarily be maintained. I should have thought that the whole idea of the Service is that with the growth of the prophylactic services that we have seen there will, in the end, be a real improvement in national health, with the result that the proportion spent upon the Health Service will fall.

I know that that argument commands the general approbation of the Committee. Already, with the use of wonderful new drugs in the treatment of tuberculosis, we have seen a fall in the number of beds that must be devoted to patients suffering from that disease. However, that is rather outside my province, and I ought not to be tempted to go further into the matter. Instead, I will return to my main point.

I was saying that next year the gross cost is estimated at £740 million, and that that is nearly three times as much, in real terms, as was originally contemplated. Under present arrangements, £555 million, or 75 per cent. of this, would fall upon the Exchequer. That is £155 million more than the ceiling imposed by the Leader of the Opposition, and it represents a higher proportion of the total envisaged and thought right at the outset of the Service. Unless the Government were to take this increased load on the Exchequer there were three courses open to them: first, they could cut costs by reducing the Service; secondly, they could further extend the system of charges, thus both collecting revenue and discouraging use of the Service; and, thirdly, they could raise the contribution.

As to a cut in the total amount of money spent on the Service, it is possible that proper economies can be made, and I do not doubt that my right hon. Friend the Minister of Health would welcome suggestions to that end. But it is not possible to save the sort of sums that we have in mind by mere administrative economies, however desirable they would be; it would mean reducing the scope of the benefits provided by the Service, or lowering their quality. I recognise that it would be mere profligacy to allow the burden of the Service to become greater than the economy can sustain without serious danger, but I do not think that any hon. Member would wish to blame the Government for having decided that a reduction in the services to those upon whom the hand of misfortune has fallen, sometimes grievously, would not be the best course to pursue in the circumstances.

Similar considerations led the Government to refrain from increasing the charges to patients. The sum which we had in mind can certainly be found with less hardship by those who are well and at work than by the sick or infirm. The Government therefore propose to increase the National Health Service contribution by the amounts that I have stated. On the assumption that the increase takes effect from early in July, it will yield about £24 million in the coming financial year, and bring the Exchequer's share of the cost down to £531 million, marginally less than the 72½ per cent. envisaged in 1946. The increase will mean that the contribution will cover 14 per cent. of the gross cost of the Service next year, compared with the original 20 per cent. Even adding the charges payable by patients, it is still less than that original proportion.

I now turn to consider the criticisms of this proposal. First, it is said that this is regressive taxation. That was the point made by the right hon. Member for Llanelly (Mr. J. Griffiths), when he said last Tuesday: …the only person who now pays the contribution in full is the person who does not earn enough to pay Income Tax."—[OFFICIAL REPORT, 18th February. 1958; Vol. 582, c. 1047.] The right hon. Gentleman meant that as it ranks as a deduction from income assessable to tax, therefore its full incidence comes only on the contributor who does not pay any Income Tax, whereas on higher incomes it operates to relief of the progressive burden of direct taxation. The short answer is that the right hon. Gentleman was wrong. It does not work that way. It did so under the 1946 Act, the right hon. Gentleman's Act. That was the system introduced by the right hon. Gentleman. Under that system of contribution—I repeat that it constituted a higher proportion of the total cost of the Service than we propose—the contribution was a regressive tax.

Since last year the Health Service contribution—in contrast to the pension element of the National Insurance contribution —does not operate as a deductible expense from income before assessing liability to tax. So, today, the Health Service contribution is considerably less regressive than it was under the 1946 scheme. It is a flat-rate impost.

It is said that the increased charges will still press disproportionately on the lower paid worker. That is inherent in any system of flat-rate contributions; it was so under the 1946 scheme. Indeed, it was more so, since the contribution, as I have said, then operated far more regressively than it does now. The right hon. Member for Llanelly put it another way. He said: …his increase will be a substantial reduction in the standard of living of all the lower-paid workers."—[OFFICIAL REPORT, 18th February, 1958; Vol. 582, c. 1047.] In reply, my right hon. Friend the Chancellor of the Exchequer urged him to keep the matter in perspective.

The increase payable by an employed man is 6d. a week. That must be viewed against average weekly earnings of £12 11s. 7d., on the latest figures just published. That is 10s. more than six months previously. The increase in National Health contributions since 1948 will be 1s. 2d. while average earnings are £5 10s. more than in 1948. Secondly, and even more important, when we are talking about the standard of living, we must look on both sides of the accounts. We must not only count the cost, but also the benefits.

Look at the difference in the Service since its inception. There are 27 per cent. more patients now being treated than in 1949. Waiting lists have been reduced; 6 per cent. more beds are now available; the hospital services have been improved; more research has been undertaken and more and better drugs are now available.

The benefit of all this improved medical service to the citizen can be measured in the years added to his life, in the reduced infant mortality, in the startling fall in the incidence of consumption and in a host of other ways which, I know, are so welcome to the Committee. But the point is that all this constitutes a rise, and not a fall, in the standard of living of the people.

The cost of the Service in real terms has increased threefold over what was originally envisaged. Of that increase only one-fifth is paid for by contributions or charges. About three-quarters is paid for out of general taxation, much of which is stringently progressive.

In the end it comes to this. Greatly improved benefits have been made available. They are to be paid for as to three-quarters by general taxation, much of which is progressive, and only as to one-fifth by charges and contributions. The contributions are by a flat-rate system no longer deductible against tax, and they bear a considerably smaller proportion to the total than was considered proper by right hon. and hon. Gentlemen opposite.

In those circumstances, I respectfully submit to the Committee that our proposals are fair and justifiable.

4.36 p.m.

Miss Margaret Herbison (Lanarkshire, North)

Last year, when we were discussing the provisions to introduce for the first time a separate Health Service contribution, very grave fears were expressed from this side of the Committee that it was merely the beginning. My hon. Friend the Member for Tottenham (Sir F. Messer), who has great knowledge of these matters, expressed clearly his fears about this being only the beginning, and from the provisions being put before us today it is evident that our fears were well founded.

We had from the Minister again today a quotation from the Beveridge Report suggesting that a substantial part of the cost of the National Health Service should come from contributions. During the previous debate we spent a long time discussing this point. In paragraph 287, Beveridge had this to say: There is nothing sacred about the division suggested in this Report; it is no more than a basis for discussion and argument.…On behalf of insured persons it can be argued that even if the contribution proposed is within the capacity of most adult men, it is not within that of persons with low wages and that these should be relieved at the cost of the taxpayer or the employer. Even at that time there were grave doubts in the minds of Beveridge and his Committee about a flat-rate contribution and the repercussions it would have on the standard of living of the lowest-paid wage earners. The Report goes on: …the rates of contribution proposed are even more provisional, for they depend on views of financial policy and social equity as to which reasonable men may differ. There is no doubt that hon. Members in this Committee differ as to the rates of contribution.

We have had brought out once more that old bogey, the statement made by my right hon. Friend the Leader of the Opposition when he imposed a ceiling of £400 million. It was stated clearly at the time that that sum did not represent the ceiling for all time. It followed the war in Korea, which was supported by hon. Members opposite, a war that brought grave economic consequences for the people of this country. It was as a result of those grave economic consequences that the ceiling of £400 million was put on, but not as a ceiling for all time.

Mr. Baird

It still was not justified.

Miss Herbison

It might not have been justified, but I am dealing with the policy put forward by the Minister and other hon. Members at that time and making clear the reasons for it, and the fact that it was not the ceiling for all time.

The Financial Secretary has said that when we called this a poll tax it was really a flat-rate contribution. In the debates on the National Health Service charge, and on the later Bill raising contributions by 2s., we pointed out that the time had come when we must go away from the flat-rate contribution. The Government have had plenty of time to bring forward a scheme of graded contributions, but so far they have not done so. The result is that every increase in the contribution has borne very heavily on the lowest-paid wage earners.

In September, 1957, people began to pay the increased contribution for the National Health Service. The Financial Secretary has not given us any clear evidence today why, a mere five months later, there should be another increase in the Health Service contribution. In those five months, the extra 2s. has been put upon the general contribution. In October, 1951, when Labour lost office, the contribution for an adult male was 5s. 1d. per week. The proposed increase puts it up to 9s. 11d., an increase of 95 per cent. under the present Government.

In the debate last year, as in the Minister's speech today, stress has been placed on the increase in the cost of the Service. The Supplementary Estimates for 1956–57 approach £9 million, of which more than £5¼ million goes to the Hospitals Revenue Account and more than £2¼ million to the pharmaceutical services. My hon. Friend the Member for Tottenham dealt very well with the increase in the cost of the hospital service in the debate last June. As to pharmaceutical services, are the Government really guarding the public purse in that matter?

I have taken the trouble to look at the Reports of the Public Accounts Committee. Over several years there has been a great deal of questioning by members of that Committee on the price of drugs. Only after two and a half years has a scheme been made between the Association of British Pharmaceutical Industry and the Government in the matter. Before the Public Accounts Committee, Sir John Hawton said that the Treasury did not regard the scheme as one that it would have chosen.But the Government are ready to operate it. The scheme means that it has taken two and a half years to achieve a saving of £¾:; million out of a total bill of £22 million at that time.

Mr. John Arbuthnot (Dover)

Is not the hon. Lady making a mistake when she says that Sir John Hawton was speaking for the Treasury? He has nothing to do with the Treasury.

Miss Herbison

Sir John Hawton was giving evidence to the Public Accounts Committee and said that the Treasury was of the view which I have reported.

The scheme is to run for three years, during which time any new drug will have a free run and there will be no price control at all. When the Government are worried, as they pretend to be, about the rising cost of the Health Service, they ought to be much more firm with manufacturers of drugs. Hon. Members on the Public Accounts Committee did everything possible to bring these matters to the notice of the Government.

Mr. William Shepherd (Cheadle)

What does the hon. Lady estimate would be saved,, irrespective of research considerations, if a rigorous policy were pursued against the suppliers of drugs?

Miss Herbison

It is impossible for me to say how much would be saved. The Government have been examining the matter for two-and-a-half years and the Treasury is not satisfied that there will be a sufficiently big saving from the scheme. This is one field in which the Government ought to give the most rigorous examination with a view to finding whether further savings can be made.

The Minister was asked what proportion of the national gross income was being used on the Health Service. We must have that figure, so as to get the matter into true perspective. The cost of the Service in 1950–51, the last year of the Labour Government was 3.9 per cent. of the gross national product. That figure had dropped by 1954–55 to 3.2 per cent. and it has gone up in 1956–57. Taking in the Supplementary Estimate, the figure is 3.44 per cent. In spite of the increase in the cost of the Health Service, it takes today a smaller proportion of the national gross product than it took in 1950–51.

There was an interesting article in Sunday's Observer by Andrew Shonfield, the economic editor of the paper. He was talking about the estimates for 1957–58 that have been produced by the Government, and he said that they added up to slightly more than £5,000 million. He went on to say that that was £45 million more than the Government were spending in the current year and that the increase was entirely due to higher prices. He added: The real volume of Government expenditure has once again fallen.…The State has, in fact, been taking a steadily diminishing share of the national income.

Hon. Members

Hear, hear.

Miss Herbison

Of course, Government supporters will applaud this. They want to cut down the help that is given to people who are in the greatest need. There is no doubt about it.

I want to read further from this article and I advise Ministers to read it. It is worth their study. It went on: Now, the impression is created by this kind of arithmetic "— that is, the arithmetic of the division of the national income— that the State absorbs rather more than a quarter of the resources of the community on its spendthrift activities. In fact, it means nothing of the sort. The proportion is a kind of arithmetical curiosity. For it includes all the money which the Government does not spend itself, but simply takes out of the pockets of one lot of people in order to put into the pockets of another lot. The National Insurance Fund is, of course, one of the main agencies for doing this sort of thing, but there are many other transfers of money in this category. For example, the many millions of pounds of interest on Government debt paid to Surtax payers, who have thus provided the cash in the first instance. There are never any complaints and no jeering from hon. Members on the Government side when that sort of statement is made. In the last Budget, £34 million was given to Surtax payers and cheered by hon. Members opposite, but shortly afterwards there was the imposition of a charge for the Health Service. That seems clearly to show the whole philosophy of the Tory Government and the back benchers who support it.

On the Third Reading of the National Health Service Contributions Bill, last June, the Minister of Health said: This is an attempt to provide the National Health Service with a stability of income which I would have thought hon. Members opposite who have held office would have welcomed."—[OFFICIAL REPORT, 6th June, 1957; Vol. 571, c. 1506.] Where is the stability? In September, increased contributions began to be paid and in February, five months later, there is a further increase in contributions.

It is evident that the stability has gone with the wind, just as so many things affecting the well-being and welfare of our people have done. No wonder the Minister of Housing and Local Government is having such a difficult time. Security of tenure has gone. Employment in Scotland, England and Wales has gone with the wind. All these things affect the ordinary people and take away from security in housing and in employment.

Imposing this additional burden takes away any security that they might have in their standard of living. I say quite clearly to the Government that this additional contribution is a cruel poll tax. Of course, for the wealthy, another 6d. does not mean a thing; it does not mean that they or their families have to go without anything. For the lower-paid wage earners it will prove an intolerable burden. It is almost the last 'straw in the continual increases on contributions imposed by the present Government.

Have the Government had any negotiations with the T.U.C.? This matter affects millions of workers represented by the T.U.C. We should like to know from the Minister who is to reply to the debate whether there were any negotiations. I was honoured to be present at the 1957 Congress of the T.U.C. That Congress declared that it was opposed to special contributions imposed to finance the National Health Service. It was the first Congress held after the first separate contribution. Even before that, the T.U.C. had made it perfectly clear that it was opposed to off-loading on to contributions burdens which ought to be borne by the Chancellor of the Exchequer. Since the Government are always wishing the leaders of the trade unions to help them in their economic difficulties, did they discuss this matter and get the views of the T.U.C.? The T.U.C. is very rightly worried over this matter.

Today, we were given by the Minister the average weekly earnings, but they do not mean a thing when it comes to considering a 6d. increase in contributions. What has to be considered is what the extra 6d. will mean to individual men and women and their families. The railway worker's basic wage is £7 7s. Od. a week. This extra contribution will mean that out of that basic wage he has to pay 6.75 per cent. of his income weekly. The basic wage of the agricultural worker is £7 10s. 0d. and he will have to pay 6.6 per cent. weekly. No one can tell me, or any hon. Member on this side of the Committee, that that is not taxation of the worst kind.

Women workers in the retail food trade have a minimum wage of £4 17s. 6d. a week. With the extra contribution hey will have to pay more than 8 per cent. of their income. Women in the jute industry—which under the Government has been badly hit, as was shown in yesterday's debate—will also have to pay over 8 per cent. of their income, in contributions. I had a letter given to me today by one of my hon. Friends. It came in the post this morning from a woman, and in it she says: I live with an elderly aunt, an old-age pensioner, who does not draw any supplementary pension, being one of the old school. My wage is just over £5 10s. and out of that every week I have to pay 12s. 8d,, 5s. Income Tax and 7s. 8d. contribution. In July, it will be 13s. or more, with no question about how we manage … I hope that the Minister of Health will listen to this, because this has to be set against the average wages we are continually told about. This is what is happening to an individual woman and she wants the Minister to know it. She says: In July it will be 13s. or more, with no question about how we manage, and I am not the only one who feels bitter about the method of paying these increases. I work with many folks who wonder when or where this is going to end. That is a question which was put in the debate last year.

Later, she says: …7s. 8d. a week and no choice about it and then if you are unfortunate enough to be ill, you pay again for your medical treatment. That is a woman with £5 10s. a week. She is not alone in this respect. Many women with £5 a week jobs are not only keeping themselves, but have an aged relative to look after. For them, 6d. a week is a very heavy increase.

I know that many hon. Friends want to speak and that this is to be a short debate. We shall be coming back to this subject soon, when the Bill comes before us. I ask the Minister whether he is the least concerned about the well-being of these people, the well-being of this woman, and many like her, who might have to add to the expense of the Health Service through the nervous results of worry. If the Government are really concerned about these people and about the children of low-paid wage earners they will forget to quote average earnings and take back this proposal.

If the Minister of Health has said to the Treasury that this is an imposition, I hope that the debate will give him added ammunition, because his job, as Minister, is to safeguard the health of the people. He ought to use all the economies he can, if they are good economies, but not to add further burdens on the people, particularly on the low-paid wage earners.

5.0 p.m.

Sir Keith Joseph (Leeds, North-East)

I have enjoyed listening to both of the speeches that have set off this debate. I wish particularly to say what a pleasure it was to me to listen to my hon. and learned Friend the Financial Secretary stressing for once the benefits, instead of the costs, of the Health Service. To the list of extra amenities that he said our citizens now enjoy, I should like to add extra district nurses, more home helps, more midwives—more of almost every medical amenity. I think that every hon. Member in this Committee welcomes that.

I also very much enjoyed the attractive speech of the hon. Lady the Member for Lanarkshire, North (Miss Herbison). If I may say so, it was a pleasure to hear her emphasise the two things that seem to me to matter most in this sort of debate: first, the alternative method of paying, if the Opposition do not like our method; and, secondly, economies. I should like to dwell briefly on those two aspects.

We have heard that the Opposition, rather than increasing the contribution, would prefer a system of grading contributions. We have seen from the exercise that the Opposition have produced in their pension scheme how those would operate. It is absolutely true to say that it would relieve the lowest-paid earner of part of his contribution but, of course, as we all know, only at the expense of putting a heavier burden on those receiving bigger wages. That is a quite acceptable alternative.

I was sorry that the hon. Lady had to bring in what is now almost the King Charles's head of the Opposition—the Surtax relief of £34 million. If I may mix my metaphors, they seem to bring this in like a stage army. It is used to explain how a Socialist Government would finance the reimposition of subsidies for bread and milk, the reimposition, or rather, the removal or reduction of charges in the Health Service, and every other alteration they desire to make. It really will not do. They can use that £34 million only once. I am glad that the hon. Lady suggested as an alternative a graded contribution scheme.

The hon. Lady referred to an article by the financial editor of the Observer which advocated consideration of a social service budget in this country, as they have in many foreign countries. That is an interesting idea and one on which I think that hon. Members on both sides would welcome research. It might be possible for the Government to do some research on this but, failing that, there are such excellent bodies as P.E.P., and the Institute of Social and Economic Research, whose work we all respect. I would be delighted if they would turn their attention to these things.

I have four comments to make on social service budgets. The first is that we do, at present, manage to get a lot of tax for our social services, and for other Government purposes, relatively painlessly from smokers. I am a nonsmoker, and hasten to declare my interest, but if the non-smoker, who can, to that extent, avoid tax, has suddenly to pay more money from his wages to relieve the smoker, it would be a very sad look-out. After making that somewhat frivolous point, I now turn to a pay-roll tax, and its effect on the whole of our structure of costs.

What would happen had we not only a sales tax, as some of us hope, but a social service tax on the whole range of commodities that people buy in the shops? It would alter the cost structure enormously. What are now relatively cheap things would become a burden, and an unnecessary strain on the budgets of households that now can avoid much taxation by keeping off smoking, drinking, going to cinemas, or doing anything that bears that particular tax.

The next point is whether, in any social service budget, there would be a differentiation in pay-roll contribution between, say, the bachelor, and the father of five children. If so, would the father of five children have to pay more, or less because of the size of his family—

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

Would not the hon. Gentleman agree that our very scientific system of Income Tax deals with the very problems of which he speaks?

Sir K. Joseph

The right hon. Gentleman has answered his hon. Friend very effectively. It was the hon. Lady who suggested the idea of a social service budget put forward by the Observer. Personally, I do not think that it would carry us a step forward. I do not think that it would increase incentives or produce a penny more, but there are elements in the graded contributions that share some of the disabilities that I have mentioned, and that ought to be ventilated by detailed research.

The second category relates to economies. It is always easy to talk of economies, but nearly half the National Health Service cost consists of wages and no one wants to cut the salaries of doctors, nurses, dentists, and the rest. I think that the hon. Lady is on very dangerous ground in suggesting that there can be big economies in the drug bill. I defy her to do that without endangering the research on which the discovery and development of such things as the antibiotics depend. And how can we say how far economies there might affect the success of the good firms in producing new drugs? I suggest that my right hon. Friend has a huge field to explore by work study, as there is at least £100 million of National Health Service costs which are strictly non-medical.

Perhaps I may now touch on a point on which the hon. Lady misled the House. I refer to the perpetual complaint of the Opposition that the amount spent on medical services in proportion to our gross national product has fallen. We can all think of a number of things that we would like added to the National Health Service. If I mention the word "chiropody" hon. Members on both sides of the Committee would agree. But if the time comes when the Government can afford to allow the whole of the Health Service to expand as we all want it to, and to serve the country as much as we think it ought to do, and if, by that date, the gross national product has increased even more, the proportion that the Health Service cost bears to it will have fallen again—and a jolly good thing, too.

Apart from that, I say again that I have enjoyed both the speeches, but I thoroughly support the action of the Government in this matter.

5.7 p.m.

Mr. A. E. Hunter (Feltham)

I am pleased to be able to join in the protest of my hon. Friend the Member for Lanarkshire, North (Miss Herbison) against this added burden on the lower-paid worker. No Government have such a record for rapid insurance changes as have the present Administration. We had 6d. last summer; we had 2s. in the autumn; now we have 6d. this winter, and I am wondering if there are other increases in store for the summer. Since 1951, the insurance contribution paid by the adult male worker has gone up from 5s. ld. to 9s. 11d.—an increase of 4s. 10d. This is a very long cry from the days when National Health Insurance was introduced by the Liberal Government, with the slogan "9d. for 4d." Insurance contributions for women have also been considerably increased.

I am sorry that the Financial Secretary to the Treasury has left the Chamber, as I want to examine one of his statements very closely. He said that the average earnings of a male worker are £12 a week. It is very unfair to base an argument on that average figure, when one can quote thousands of workers who are not earning as much as £10 a week. There are thousands of shop assistants, ware-housemen and packers, railwaymen, postmen, messengers and clerical workers in the Civil Service and local government who are not earning £12 a week. The agricultural workers are certainly a long step from that average figure. The hon. and learned Gentleman must know that there are very many who earn below the average he quoted, and that this extra charge will be an added burden.

As I have said, the contribution has gone up from 5s. 1d. to 9s. 11d. since 1951. I can imagine what would have been the remarks of hon. Members opposite if this rapid increase had occurred under a Labour Government. I therefore gladly join in the protest against this further burden on the lower-paid workers.

This extra insurance contribution is not imposed in order to improve the National Health Service. It is not designed to improve either the hospitals or any of the other medical services. We have already had the 1s. per item for prescription charges introduced by the present Government. Whereas under the Labour Government the contribution was 5s. 1d. per week, and there were at first no charges for surgical appliances, for teeth, glasses or prescriptions, under this Government, who are now increasing the insurance contribution to 9s. 11d., we also have these added charges. I therefore hope that we shall go into the Division Lobby tonight to vote against this proposal again to increase National Insurance charges.

5.11 p.m.

Mr. William Shepherd (Cheadle)

I had hoped that hon. and right hon. Gentlemen opposite would by now have come to the conclusion that to stick to the original pattern of the National Health Service was not necessarily the proper thing to do. I should have thought that people who claim to be progressively minded would show a little more flexibility than do hon. Gentlemen opposite on these matters. I cannot see that there is anything sacred about preserving the original pattern of the contribution, and indeed we are not aiming to go as far as that. It may well be that when we devised this scheme, we were wrong. I think we probably were.

I think that nearly every other country in the world has chosen a method different from our own for financing the social services. For instance, France, Belgium, Austria and Mexico have chosen other methods. Is it really right, in circumstances that change considerably, and where there is considerable falsification, to put it no higher, of the original estimate, to stick to the original concept concerning the finances of these services? Further, as the community enjoys continuously expanding and improving services, is it wrong that it should be called upon to make a larger contribution? I cannot see any reason why it should not. There is a principle inherent in the National Health Service, to which every hon. Member should direct his attention, and which can never be challenged. It is that the services must be made available to all persons in the community, irrespective of their standing. That is the principle. We are concerned that every individual in this society shall have this service at his disposal—nothing beyond that.

I hope that hon. and right hon. Gentlemen opposite will realise the gravity of the stand they are taking. It is perfectly true that the amount of money taken by the Exchequer as a percentage of the national income has declined under a Tory administration, although sometimes, when I am listening to irate Tories, I feel that I must be wrong in my calculations. The amount of money taken by the Government is now reduced from well over 30 per cent. of the national income to 25 per cent.

It is still true that there is very heavy personal taxation, and that we have not yet been able to produce a truly deflationary Budget. These two statements are demonstrably true. There is still very heavy personal taxation, and a man earning £5,000 a year is still paying far too much in personal taxes. It is also true that no Chancellor of the Exchequer since the end of the war has produced a truly deflationary Budget.

In these circumstances, it seems to me most proper that we should reconsider the method by which we finance the National Health Service. I see no reason at all why the individual should not be called upon to pay a higher contribution. In fact, I think that my right hon. Friend is perhaps guilty of a little timidity. When I last spoke on this subject in June of last year, I expressed the view that it would not be unreasonable, and would not involve any hardship or strain upon the great majority of people in the community, if we were to have contributions representing one-third of the total cost, and I stick to that view. I believe that, in the economic circumstances of this country, it would not be an unreasonable thing to ask people to pay one-third of the total cost—

Mr. Thomas Fraser (Hamilton)

Would the hon. Gentleman say what size of flat-rate contribution he would ask from the worker receiving £7 or £8 per week?

Mr. Shepherd

I am saying that I believe that it is not unreasonable that even the flat-rate worker, who takes home £7 or £8 a week, at the standard rate, which does not necessarily represent his earnings, should help to pay one-third of the cost. I notice that hon. Gentlemen opposite always quote wage rates and never earnings rates, and I think that in dealing with this matter we must consider earnings, and not wage rates. Even if it is true—

Mr. Fraser

What flat-rate contribution has the hon. Gentleman in mind for a man or woman who earns £7 or £8 a week?

Mr. Shepherd

I certainly would impose a flat-rate contribution so that these contributions would represent one-third of the total cost, and I say that, admittedly, that would involve a heavy strain on the very lowest-paid workers —on the woman earning £5 per week. I agree about that, but I prefer that, in the case of the low-paid workers, some adjustment should be made rather than that the whole or a large part of financing the service should be put upon the Exchequer, for the reasons I have given. It is much better to tackle the case of the low-paid worker and work out some form or other rather than allow so much of this constantly increasing cost to be borne by the Exchequer.

Several Hon. Members rose—

Mr. Shepherd

I do not think I ought to give way again.

I would make one other comment about contributions for the social services. We are now entering into discussions in connection with the Free Trade Area, and we are likely to find ourselves in very serious trouble with our friends on the Continent in respect of our social services finances. As hon. Members know, on the Continent of Europe there is a very different system of financing the social services. For example, in France, it is roughly true that social service costs in one form or another to the employer and employee add about 50 per cent. to the wages bill. and nothing comes out of the Exchequer. In Italy, the situation is not very dissimilar, and in varying degrees this pattern applies almost over the whole Continent of Europe.

It is perfectly true that we are open to the accusation by members of the Free Trade Area that we are in fact subsidising our exports to them, because our goods are not bearing the direct cost of our social services, as theirs are. I hope that right hon. and hon. Gentlemen opposite will face this issue. It is not an argument which can be lightly set aside. The hon. Member for Hamilton (Mr. T. Fraser) smiles, but if he had to negotiate on this matter, he would not find it a smiling matter at all.

If one were a Frenchman today, having to pay up to 40 or 50 per cent. on his wages bill for the social services, and one were asked to allow the free entry of British goods, when almost the entire cost of the British social services is borne by the Exchequer, one would be tempted to say, "I am not meeting fair competition."

Therefore, I say that I welcome this change in the contributions, and I feel that, for the reasons I have already given, the Government may not yet have gone far enough. I think it would not be unreasonable in all the circumstances to expect the people who use these services to pay one-third of their total cost.

5.20 p.m.

Mr. R. E. Prentice (East Ham, North)

This has, so far, been a debate of short speeches, and I shall try to maintain the pattern. We are arguing about one short point, it seems to me, and this is the sort of debate which is carried on by cut and thrust across the Committee. I want to deal principally with points already made by hon. Members opposite.

I make the comment on what seemed to be the main proposal advanced by the hon. Member for Cheadle (Mr. Shepherd) that it is completely irresponsible for anyone to come here and say that one-third of the cost of the National Health Service should be paid for by flat-rate contribution levied upon everybody, irrespective of earnings or family commitments, without there having been any consideration in detail of what the cost will be.

The hon. Member for Cheadle said, and I agree, that there is nothing sacred about the formula written into the National Health Service Act and the National Insurance Act. Of course not. There are, however, two principles which we on this side of the Committee regard as of fundamental importance. The first is that the services should be available to people according to their medical needs and not according to their personal ability to pay. That is why we are against the extension of the charges which have been made under the present Government. Secondly, the bills which have to be paid ought to be paid by people according to their ability to pay, better off people making a larger contribution. We are, therefore, against the flat-rate principle which is being extended by the Motion before us today.

When the hon. and learned Gentleman the Financial Secretary introduced the Motion, he said that the original proportion of the cost of the Health Service suggested in the Beveridge Report to be borne by the flat-rate contribution was higher than that now in force. My comment on that is that Beveridge envisaged also that the Exchequer should make a much bigger proportion of the contributions to the National Insurance Fund. We are not discussing the National Insurance Fund, Sir Gordon, and you would probably rule me out of order if I went into that, but, in their effect on the individual worker, these things are linked together, because the individual is concerned with how much he has to pay. The Trades Union Congress has, therefore, definitely taken the attitude that, on the National Insurance side first of all, the Exchequer should go back to paying one-fifth, the original proportion, and secondly, as regards the Health Services, there should not be this extension in the flat-rate contribution. It is worth mentioning in passing also, since Beveridge has been quoted, that Beveridge did not envisage the sort of direct charges which have been propressively introduced by the Government.

I agree with the hon. and learned Gentleman to this extent, that it is better that the extra cost should be met by those who are well and in work rather than by higher charges for treatment and appliances. The point that we then have to decide is how that extra cost shall be distributed. The result of Government policy in the last few months has been to put up the National Insurance contribution from 7s. 5d. to 9s. 11d, a week, an increase of about one-third. This has come about as a result of the policy adopted by the Government in regard to the National Insurance Act and the proposal before us today. We are, therefore, faced with a contribution of virtually 10s. a week, which is a very heavy burden indeed upon the railway worker, the agricultural worker, the shop assistant and other people in poorly paid jobs.

One of my hon. Friends quite rightly said that it is quite unfair to quote average earnings when we are discussing this topic. Millions of workers are earning below the average. It is unfair also to draw a distinction between earnings and wage rates. The implication always is that most people are earning more than their basic rate. There are, of course, millions who have no opportunity to earn above their basic rate, whose pay in the basic rate less these deductions. That is what they take home week by week. In any case, if people do earn more than their basic rate through overtime and so on, that is a special reward due to them for the sacrifice of their leisure. Therefore, the only fair thing to look at when discussing these matters is the basic rate which applies to a particular job.

We on this side of the Committee, and our party, are thinking in terms of the social services now, and we have in mind proposals for moving farther away from the flat-rate contribution. Our national superannuation scheme is designed on the basic principle that people should pay more if their earnings are more and they can afford to pay more.

Mr. Shepherd

That is not really the whole story. What the scheme says is that if people pay more they will get more. That is the essential difference between a fiat-rate scheme and a graduated scheme as it affects, on the one hand, pensions and, on the other hand, the National Health Service. We really must be fair about it.

Mr. Prentice

Yes, I want to be fair. It is part of our scheme that the pension should be related to earnings, because we regard it as a good thing that there should not be too drastic a drop in a person's standard of life when he retires. There is also an evening out element in that the lower-paid people will receive a larger proportion of their average wage in their pension than the higher-paid people.

Mr. Shepherd

They would still get more.

Mr. Prentice

They will still get more, as the hon. Gentleman says. But one of the things bringing us to our conclusion is that we cannot go much further in forcing up the weekly rate paid by people for National Insurance benefits and, to some extent, for the National Health Service. There is a limit to which that can be pushed.

Mr. Anthony Fell (Yarmouth)

Why?

Mr. Prentice

There is a limit, because it is such a tremendous burden on the lower-paid worker, representing as it does such a large proportion of his earnings.

Mr. Fell

Surely, the hon. Gentleman is begging the question of economic circumstances. He is saying that there is a limit, but he is having regard only, in what he means by a limit, to the present salary scales and wage rates. That is most important.

Sir Frederick Messer (Tottenham)

What is the point of that?

Mr. Prentice

We are glad to hear that the hon. Member for Yarmouth (Mr. Fell) talks of the need for higher earnings. What we say is that, in the foreseeable future, having regard to the sort of wages we expect people to receive, it would be an intolerable burden on the lowest-paid workers to push National Insurance contributions up sufficiently high to provide these pensions and other things we need to provide in the framework of our Welfare State. In fact, what the lowest-paid worker can afford to pay presents a limit on our advances in pensions and other aspects of the social services.

When my hon. Friend the Member for Lanarkshire, North (Miss Herbison) was speaking, there was a good deal of applause from the benches opposite when she reminded us that the State is now spending a smaller percentage of our national income. We agree that Government spending should be reduced, provided that the reduction means real benefit to the people. If it represents the avoidance of waste, if it means ceasing to spend money on things which are undesirable or which could be avoided, we are as much in favour of reducing taxation as any one. Of course we are. But the Measure before the Committee now is not that sort of Measure. It does not effect any economy. It does not even reduce the Health Service; indeed, we are glad that it does not. What it does is to transfer the cost from the Exchequer to this flat-rate poll tax on everybody. That sort of saving is not the right sort of saving at all.

We must get our priorities right. This action is simply one of a series produced by the Government over a number of years, small niggling measures which add up to a redistribution of our national wealth. We were chided because we reminded the Committee of the relief to Surtax payers. It is all in the same tradition. It is a giving away, whatever hon. Members opposite may say, of concessions to people better off and an imposing of extra burdens on those least able to afford them. They add up to an application of the Tory philosophy, applied gradually—because they dare not apply it all at once—so as to redistribute the wealth of the country in favour of those whose interests they have at heart.

5.30 p.m.

Colonel Tufton Beamish (Lewes)

Like the hon. Member for East Ham, North (Mr. Prentice), I will try to be very brief. I think that the proposals of the Government are sound and sensible. It is true, as has been said on the other side of the Committee, that the imposition of these small extra charges will not improve the service: they will simply help to pay for it. What I want to do in maybe six or seven minutes is to reply to some of the points made about the drug industry by the hon. Lady the Member for Lanarkshire, North (Miss Herbison). The Opposition seem to have a bee in their bonnet about the drug industry. The suggestion is always being made that the drug bill is a major factor in the kind of problem we are discussing, whereas, in fact, I do not honestly believe that that is so.

I should like, without heat, to give a few facts and figures for the Committee to consider so that we may get this question in perspective. I have a small interest in this matter in that I do some advisory work for a pharmaceutical firm. If I did not, I would not know one-tenth as much as I do about this question. In a way, that may be an advantage.

First, it is often suggested that the price of drugs is a major factor, and the implication is that if the drug bill could be more stringently controlled some of these charges would not be necessary. That was the implication of the hon. Lady's criticisms of the industry. I should like the Committee to realise that the wholesale price of pharmaceutical products has been very steady indeed for the last ten years.

I am certain that it is safe to say that not one hon. Member opposite can think on the spur of the moment of one single article being manufactured in this country which has increased in price by only 6½ per cent. since June, 1949, which is the base taken by the Board of Trade for its wholesale price index. There are only two or three articles, goods or services which have gone up by so little. One of them is heavy linen. But one has to hunt for them in the Board of Trade Journal. The average increase is about 40 or 50 per cent. and some products have gone up by 100 per cent. or more since June, 1949. But the price of pharmaceutical products has risen by only 6.6 per cent. since June, 1949. The Committee must admit that that is a sizeable achievement, bearing in mind that some of the drugs which are used to an increasing extent these days are initially bound to be expensive because of the very high research costs.

Secondly, I feel that when these attacks are made the Committee should bear in mind that the pharmaceutical industry plays a valuable part in our export trade. I have not the figures in my head—I did not intend to speak today, otherwise I should have been armed with them, but, from memory, I would say that about £25 million to £30 million worth of medical and pharmaceutical products are exported every year, and about £11 million of this comes from the export of proprietary drugs. The hon. Lady did not specifically attack the proprietary drug industry, although many attacks have been made on it from the Front Bench opposite.

Here again, when one looks at the facts one finds that well over one-half of the proprietary medicines are either cheaper or, at any rate, no more expensive than their standard equivalents. It is, therefore, unfair to make these constant attacks on the proprietary drug industry and on the manufacturers of proprietary drugs. I repeat that well over one-half of the proprietary medicines are cheaper or no more expensive than their standard equivalents. This is a fact.

Two inquiries have been made by the Ministry of Health, and the facts and figures are available for anyone who wishes to study them. This ought not to be a partisan question or a question of party politics.

Mr. Arthur Moyle (Oldbury and Halesowen)

May I ask this question so that we may have the whole picture? In view of the fact that the National Health Service is such a big consumer of the goods to which the hon. and gallant Gentleman is referring, may I ask whether he does not think the time has arrived for the Service to consider supplying its own proprietary medicine and producing its own supplies in the same way as the London County Council did in days gone by? I see no difference between providing such a service in exactly the same way as we have done for years and in providing, at the expense of public funds, the main medical research work upon which the National Health Service is based.

Colonel Beamish

That is a perfectly tenable point of view, and I concede it. I do not agree with it. I think that it is nonsense. I do not wish to be offensive and I know that the hon. Gentleman will not think that I am. It is for this reason that I think that it is nonsense. All the evidence that I can find leads me to believe that, if one were to introduce State manufacture, drugs would be more expensive and research would be less efficient than at present. That is my view. I do not know of evidence from any country which leads me to believe that the hon. Gentleman's suggestion is a good one.

On the whole, the pharmaceutical industry is an efficient industry. It compares quite favourably with some of our main competitors. America is our largest competitor, and Switzerland is a very large one. Also, Germany and some of the Scandinavian countries are quite important. On the whole, although the crushing burden of taxation has meant too little research, it is an efficient industry. I do not believe that, if the State were to intervene and go in for Government manufacture of drugs, it would do anybody any good at all. That is a matter of opinion, and I understand that there can be an honest difference of opinion.

What I wanted to do was to look very briefly indeed at one or two other matters, in particular the other side of the balance sheet. This was something to which my hon. and learned Friend the Financial Secretary to the Treasury referred. He said that we must look at the benefits that we receive for what we pay.

Miss Herbison

If the hon. and gallant Gentleman is leaving the question of drugs, may I put this to him? He seems to think that everything is as fair as it can be regarding prices. If he reads the Report of the Public Accounts Committee, and the expression of opinion from the Treasury and the Ministry, he will find that the Treasury and the Ministry are far from satisfied that the prices of drugs are as low as they ought to be.

Colonel Beamish

That is true. Of course, I have read all the Reports of the Public Accounts Committee about this question. Frankly, I think that the Committee has shown a woeful lack of understanding of the problems of the industry. I am sorry that it has not called, as I believe it would be entitled to call, for expert evidence from people who work in the industry. I have read all the remarks about the industry. I honestly believe that the Committee has misunderstood the situation to a very considerable extent. I realise that the cost of drugs is a happy hunting ground for people who wish to make economies. At any rate, when one looks at the constant attacks made on the ever-rising drug bill, it would appear that it is.

I now come back to the other side of the balance sheet. Has anybody ever tried to make even the roughest calculation, in terms of millions of £s or even tens of millions of £s, of the enormous benefit to this country from the use of modern drugs? I am thinking of the way in which formerly killing or crippling diseases, or diseases which put one off work for weeks or months, have been cured by the use of modern drugs. I am not an expert, and I do not pretend to be. The Committee will, therefore, forgive me if I make mistakes; but let us consider consumption.

Consider childbirth and the number of children who were stillborn in the old days in comparison with the very few nowadays. Look at the numbers of mothers who used to die when children were being born and how few die these days. Look at pneumonia, which nowadays is often cured at home within a few days, and pleurisy. When I was a boy at school, I was terrified of getting scarlet fever, because I was told that it would probably kill me. I have not heard of the disease for years.

Sir F. Messer

Preventive measures did that. Diseases have not been abolished by drugs.

Colonel Beamish

Drugs have had a great deal to do with it. In addition to the diseases I have mentioned, look at diabetes and tuberculosis. Look at what we are doing now with polio vaccines. Are we to have a great outcry from the party opposite that the price of drugs is soaring because so many children are being given vaccines against polio? Look at the way that we were able to try to control the recent outbreak of Asian 'flu by the use of modern drugs. The other side of the balance sheet runs into tens of millions of £s. This is not a party point. I may not have put it very well, because I am speaking on the spur of the moment, but the other side of the balance sheet is extremely important.

I would like my right hon. and learned Friend the Minister of Health to try to give us figures to show the rate at which hospital beds are turned over, if hon. Members understand what I mean. I am not talking about apple-pie beds. I mean the rate at which people go into hospital and how quickly they come out again.

I do not know what was the average length of stay in hospital ten or twenty years ago, because I cannot find the figures, but I should be willing to bet with anyone that the length of stay in hospital is being reduced rapidly year by year. A very potent factor in this reduction has been the use of modern drugs. Whereas with many diseases people used to be put straight to bed in hospital, they are now treated at home by the use of modern drugs. This is something that must be put on the other side of the balance sheet if we are to have a fair picture of the whole question.

In the same way as hospital beds are being turned over so much more rapidly, hospital waiting lists are being reduced. One factor in this is the use of modern drugs. We must, therefore, look at the other side of the balance sheet before making attacks, which people sometimes may regard as rather irresponsible, on the pharmaceutical industry as a whole.

I apologise to the Committee for going on rather longer than I intended—

Dr. Barnett Stross (Stoke-on-Trent, Central)

Before the hon. and gallant Member sits down, as he has spoken so bravely about the pharmaceutical industry, he ought to make a full and proper claim and give a guess as to how much is saved in terms of money, if ever the things which he has described could fully be translated into money terms, and say frankly—he would not be without others who would agree with him—that he thinks that in this direction modern science has probably saved very much more than the total cost of the drug bill.

Colonel Beamish

That may well be so. It is an interesting question to look into, but I could not answer it now. It is the sort of question which all of us who are interested in this subject, quite outside party politics, should study very carefully indeed. I entirely agree with the hon. Member.

By the use of modern drugs, we have greatly increased human happiness. There is no doubt that production has been greatly increased, because people get back to work more quickly, and people are kept alive longer. As a result, we are all enjoying a higher standard of living than we otherwise would. That is part of the other side of the balance sheet which is apt to be overlooked.

I hope I have not introduced a party attitude. It was not my intention to do so. If I have, I apologise. I felt, however, that this was an angle which was sometimes overlooked and I hope that when these attacks are made on the industry, all of us will bear in mind that there is another side to the balance sheet.

I am positive that there is no difference whatever between the two sides of the Committee in their desire to see the National Health Service improved. What it boils down to is that the Health Service, the cost of which is always going up, must be paid for somehow. There may be—there are—differences of opinion, not only between the two sides of the Committee, but inside the two parties, about how we should pay for the increasing cost. That is a perfectly legitimate difference of opinion. I am, however, sorry that the hon. Lady the Member for Lanarkshire, North introduced the whole question of the unemployed, the Surtax payers and all that, into what is really a rather scientific debate. I believe that while we retain the flat-rate system, the proposals that the Government are now making are sensible and should have our support.

5.46 p.m.

Mr. John Baird (Wolverhampton, North-East)

Like the hon. and gallant Member for Lewes (Colonel Beamish), I had not intended to speak this afternoon. I agree with much of what the hon. and gallant Member has said about the great contribution made by the drug industry to medicine in recent years. There are, however, two points I should like to take up.

The hon. and gallant Member said that the increase in the cost of drugs had been only 6½ per cent. over recent years.

Colonel Beamish

The wholesale prices.

Mr. Baird

The wholesale price of drugs has risen by only 6½ per cent. in recent years. I accept that figure. The Committee should, however, bear in mind when discussing this small increase that one of the major reasons for the smallness of the increase has been the large increase in demand for drugs under the National Health Service.

Colonel Beamish indicated assent.

Mr. Baird

Production has gone up, and that has allowed the drug industry to keep prices down.

Secondly, I am open to correction, but I thought the hon. and gallant Member was wrong in saying that the cost of proprietary drugs was rather less than the cost of their equivalent. It is true that the cost of some proprietary drugs is less, but surely the hon. and gallant Member was referring to proprietary drugs under the National Health Service. I know that that is true, because if the cost of proprietary drugs is much higher than the cost of their equivalent, they are not allowed on the National Health Service E.C. list. That is, perhaps, why they are rather less in cost. Over the whole range of proprietary drugs—the hon. Member for Putney (Sir H. Linstead) will correct me if I am wrong—the cost of proprietary drugs is very much in excess of the cost of their equivalent. I am open to correction if I am wrong.

Sir Hugh Linstead (Putney)

Can the hon. Member give an example of a proprietary drug which is excluded from the National Health Service?

Colonel Beamish

I do not think there are any, unless they are publicly advertised.

Sir H. Linstead

There is no proprietary drug of any kind, advertised or otherwise, which is excluded from the National Health Service.

Mr. Baird

I shall not argue about that, because I did not come prepared, but I was under the impression that there were quite a number of them. I said, however, that I was open to correction. I did not come with figures and I do not therefore press the point.

The hon. Member for Cheadle (Mr. Shepherd) said that we must be flexible in our approach to the financing of the National Health Service, and I entirely agree with him, but if we are to consider any alternative method of financing the Health Service, it must be a more progressive and more efficient and equitable method than the present one. It was rather ridiculous to suggest, as did the hon. Member, that one-third of the cost of the Health Service might come out of a flat-rate contribution on earnings. That would amount to a very considerable sum indeed.

Mr. Shepherd

The hon. Member is making the mistake of assuming that I intended to say that the present ratio of contributions as between employers and employed should be maintained. Quite clearly, if one wants to ease the burden upon the lower-paid worker, one of the ways in which to do so would be to make the employer pay a much higher percentage of the contribution than he now pays.

Mr. Baird

Had the hon. Member said that at the beginning, it would have made a difference to his speech, but he said no such thing. He said that there should be a flat-rate contribution of one-third, which would mean £200 million, which would be ridiculous and unworkable in the financing of the Health Service.

I was glad to listen to the hon. and gallant Member for Lewes talking about the great contribution made by the drug industry to the improved health of the people over recent years, and also to the Minister when he talked about how, over recent years, we have increased the number of hospital beds by something like 6 per cent. and how the waiting lists have been cut. He also spoke of new drugs which had been used. On the whole, he was saying that people were in much better health and living much longer now than they were in the past. That is exactly our case on this side of the Committee. That is why we introduced the National Health Service.

I do not want to start rubbing it in, but it is true that hon. Members opposite were not as enamoured of the National Health Service when we were fighting it through the House of Commons as they seem to be today. If it is true that the National Health Service has been one of the major contributors to improving the health of the people, it is cogent to argue that any cuts in the Service will reduce its efficiency and prevent that progress continuing, because any charges on the Service will be retrogressive and will hold it back. Therefore, we cannot justify these cuts and charges from that point of view.

During the Minister's speech,I asked him whether he would tell us about the proportion of the cost of the National Health Service to the gross national income. He hedged, but it is true that that proportion has been slightly less since the Tory Government came into power. We must face that fact. The Minister said that one reason for it was that we had a large armaments programme. It may be true that the proportion of the national income devoted to the National Health Service must be cut because of the huge armament programme, but that is not an argument which I should like to put forward on a question of priorities.

Apart from that, the Minister also seemed to argue that a fixed proportion of the cost of the National Health Service should come out of the weekly contribution and out of the pay-packet. He seemed to suggest that the Government were carrying on a policy which we on this side of the Committee initiated. I was in the House of Commons when the National Health Service was introduced, and I took a considerable part in the debates. I say categorically that we had no intention that any fixed proportion of the weekly contributions should be devoted to the National Health Service, and we never envisaged a sliding scale whereby when the cost went up the weekly contribution should go up proportionately. This is art innovation which has been introduced by hon. Members opposite. We entirely disown it, and I hope that when we get back to Office we shall remove any tendency in that direction.

It was ridiculous that the Minister should attack my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) when he said that this proposal would hit the poorest of the community. My constituency is largely made up of working-class people, and it is no good going to them and arguing about the average weekly wage. A great many of them are railwaymen earning low wages. They are not worried about the national average, they are worried about their own wages, and for people on that low level of income this extra 6d. a week is a fairly considerable knock to their weekly budget.

Mr. Brian Harrison (Maldon)

My right hon. and learned Friend, in his reference to the right hon. Member for Llanelly (Mr. J. Griffiths), was concerned with the right hon. Gentleman's statement that …the only person who now pays the contribution in full is the person who does not earn enough to pay Income Tax."—[OFFICIAL REPORT, 18th February, 1958; Vol. 582, c 1047.] That is not correct, and that was the point which my right hon. and learned Friend was making when he was criticising the right hon. Gentleman's statement.

Mr. Baird

That was one aspect, but the right hon. and learned Gentleman was also attacking my right hon. Friend on the main point of his argument that the poorest would be hit hardest.

This is not an equitable method of raising money for any national service. The only equitable method is by a system of tax on income. That is what we on this side of the Committee argue, and I hope that hon. Members opposite will agree. The Minister also said that we on this side of the Committee were the first to introduce a ceiling to the National Health Service and the first to introduce charges. It is true that we introduced a temporary ceiling and that we introduced charges.

Dr. Stross

Temporary charges.

Mr. Baird

It is also true that hon. Members opposite have increased these charges tremendously since they came into power. I was one of those who voted against both the ceiling and the charges. I hope that the majority of my party who accepted these charges, and even the temporary ceiling, have learned their lesson. They gave hon. Members opposite the excuse they wanted to impose much more repacious charges than we ever envisaged. I am glad that we on this side of the Committee intend to remove the charges when we come to power.

Dr. Stross

Does my hon. Friend remember that I moved an Amendment from what was then the Government side whereby all charges would cease in April, 1954, and that that Amendment was accepted?

Mr. Baird

That is true.

I want to try to answer the hon. Member for Leeds, North-East (Sir K. Joseph), who said that if we on this side of the Committee did not accept the Government's proposal we should say how we would raise money to finance the National Health Service. He said that we should have to accept further charges or place a ceiling on the Service or have further contributions.

I believe that the only way in which we can finance our growing social services is to look not only at the cost of the social services but at the whole of our national expenditure. I do not believe we can have expanding social services when we have at the same time the armaments bill that we have today. I do not believe that we can sustain N.A.T.O. and our commitments to it and at the same time oppose the Government when they suggest making charges on the National Health Service. I do not believe that we can expand these social services unless we can also increase the gross national product year after year as we did in the first year of the Labour Government. We cannot discuss the National Health Service in a vacuum, but only in relation to our international policy and our policy for planning our economy and increasing production.

I say to my hon. and right hon. Friends, as well as to right hon. Members opposite, that if we want expanding social services we must look again at all our commitments to N.A.T.O. and ask if we can afford them. We must face the need for a planned Socialist economy which will take us into an expanding system in which production will increase. Only in this way can we secure the finance to expand our health, education and other social services.

5.59 p.m.

Mr. R. P. Hornby (Tonbridge)

I am sure that everyone agreed with the hon. Member for Wolverhampton, North-East (Mr. Baird) when he said at the end of his speech that we cannot ignore the total cost of the Health Service. If we are to look at the total size of the bill we must look at it in the context of the rest of our national expenditure. I cannot go into the pros and cons of defence as against the social services in this debate, and we must deal with the subject in the context of present Government expenditure.

The hon. Member for Wolverhampton, North-East, like almost every hon. Member who has spoken from the benches opposite, made the point that in the present situation the money to meet the rise in the cost of the Health Service would have come more equitably from the taxpayer than from the contributor. I want to make two points on that.

The first is one which I tried to make in a debate on the social services, last summer. It is that by comparison with every other country in Europe the contributor in Britain gets a very good deal for what he pays, even at the new figure. By and large, the contributor in this country, compared with France. Belgium or any other European country, is paying a smaller percentage of his earnings.

Secondly, he is getting more for it. Even allowing for the charges, about which hon. Gentlemen opposite have complained, for spectacles, for dental treatment, and so on, and which were imposed in many cases to limit the extravagant use of those services and not as a principle, the Health Service as we have it today is the admiration of Europe, and we are trying to sustain that comprehensive Service.

My next point is on the plea that taxation should carry this burden. We cannot ignore the economic effects of allowing the total tax bill to rise, and the view is held that the total tax bill is doing serious economic damage to the country. This damages not just one section of the community, but affects the prospect of employment, the prospect of sustaining defence and the prospect of maintaining the social services.

If hon. Gentlemen opposite still insist, in spite of what I have said, on allowing the increased cost of the Health Service to be carried by taxation, they must bear in mind one other point. It is that if we earmark that additional sum to the tax burden, by doing so we lessen the chances of expansion of other services. They may say that it is the Health Service which deserves expansion, which deserves the extra £24 million from the taxpayers' money more than any other service. I want them to think of the priorities in relation to the current year's expenditure. For instance, out of every £ of Government expenditure, for every 2s. ld. spent on health only 1s. 8d. goes on education. So, before they suggest earmarking this extra money for health out of the tax bill, are they certain that they want it for the Health Service rather than for some other service?

What I am trying to say is that we cannot necessarily accept the existing proportions as being the right ones. There is always room for flexibility. For example, immediately after the war parhaps hon. Members on both sides of the House would have said that housing was priority No. 1. They may say next perhaps that health is the first priority, or education. We should not insist that the services should always be allowed to expand at exactly the same rate, because there may be a need to alter the priorities and switch resources from one to another.

I believe that the increased contribution was a better answer than either increased charges or reductions in the ser vice. I agree that there is hardship for the lowest-paid worker and that there is ground for considering whether the time has not come to look at all the problems involved in sliding scales of contribution. As my hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said, there are many difficulties that need to be examined closely. However, in spite of the hardship, increased contributions make more sense than increased charges, because the latter hit people when they are sick, whereas contributions are carried by people when they are well and working.

Mr. Douglas Houghton (Sowerby)

The hon. Gentleman is constantly referring to the alternative of increased charges or reductions in the standard of services. Is that the only alternative?

Mr. Hornby

The other alternative was the question of paying for this from taxation. I thought I had made the point that I do not think we can divorce this question from the total economic effects on the country of increased taxation. I feel that it would be extremely damaging to the economic health of the country and to our ability to carry the total bill if we moved in that direction.

I regard this, Sir Charles, as the right solution of the present problem, but I do not regard it as a final solution. This is a holding operation which leaves certain questions to be examined carefully. There are the questions of 'the sliding scale, what is a fair weekly contribution in proportion to earnings, whether there are any other methods, not yet devised, of limiting the extravagant use of the service, perhaps in pharmaceutical goods, and, also, whether there would be any sense in trying to earmark contributions to specific parts of the Service, so that people might understand what they were paying for by these contributions.

It is important that we should persuade people that this is not, and cannot be, a free Service in the sense that no one pays for it. The money must come from somewhere, and this has to be brought home to people. I believe that this is the right answer at the moment, but that the flat-rate contribution is as high as it can be for low-paid wage earners, and I therefore hope that my right hon. Friends will be able to tell us that they are investigating the question of social service payments, which is a subject worthy of research.

6.8 p.m.

Sir Frederick Messer (Tottenham)

This has been an interesting debate, because it has produced between both sides of the Committee agreement on certain essentials. It is now accepted on both sides that the National Health Service is here to stay and will continue to be national. Having accepted that, the Committee rightly then addressed itself to the problem of how it is to be paid for.

I was interested in what was said by the hon. Gentleman the Member for Cheadle (Mr. Shepherd). I was unaware that in France, for instance, so much of their social services are borne as between the employer and the workman. This is the reverse of what we attempted to do when our service was introduced. After Sir William Beveridge had produced his Report, on which there were many discussions, the Government of the day decided that the Treasury must be responsible for the provision of the necessary finance for a Health Service. The fact that, in the beginning, £40 million was to come from insurance funds did not destroy the principle that the main responsibility for finance was to be on the Treasury.

Consequently, when that Act was followed by the National Insurance Bill, a comprehensive contribution was fixed. It was not a contribution for old-age pensions, not a contribution for unemployment with a separate contribution for health, but one contribution which entitled people to retirement pensions of 26s. a week at that time, to unemployment benefit of 26s. a week at that time, and which entitled them to sickness benefit of the same amount. There was a uniformity of benefit and one comprehensive contribution.

My objection to the addition to the health contribution is based on my objection to any special contribution for health purposes. As soon as we identify a contribution with a particular aspect of the Service, then, as soon as we see its cost rise, we see the amount to be paid in a contribution rise. In this case, that means that the sick must pay for their sickness, a principle with which I disagree.

Some hon. Members have said that this is the only way out, because the alternative would be for it to be done through the medium of taxation. Is not this addition to the contribution which the people pay a taxation? The only difference is that this is inequitable, whereas if it were Income Tax it would be equitable. Here we get the same contribution paid by someone with a very small income as is paid by those who may be very wealthy and who will not notice 6d. a week.

The burden of an additional 6d. a week to the rich is obviously not comparable with that which may be borne by others. I feel that we may have now opened the door to a process by which, as the cost of the Service increases, there will be an addition not to other aspects of insurance, but only to this aspect.

I was very pleased to hear the Service commended for what it has done. You, Sir Charles, will never be able to measure in economic terms the value of this Service. That is impossible. How can increasing costs be avoided? We sometimes fail to realise what we are getting for our money. When the incidence of tuberculosis was steadily rising, and we were unable to get beds for our patients, we even had to pay very high prices for patients to be admitted to sanatoria in Switzerland. It is not merely a matter and food and drugs.

There is something to be paid for many other things which have contributed to the improvement in the health of the people. We do not now send patients to Switzerland. Indeed, we cancelled the contract and brought patients home. We reduced the number of patients in tuberculosis beds and, what is more, we have admitted into British hospitals patients from Malta. Those are things whose benefit is immeasurable.

I am not an economist or a financier, but I cannot understand why, if I am called upon to pay 6d. a week more for the Health Service, that is very different from being called upon to pay 6d. a week in Income Tax. I do not know why one should necessarily be a disadvantage and the other an advantage. Why should it be any different in its total effect? That has to be explained to me, ignorant as I am of high finance.

I oppose the increased charges because I believe the principle to be wholly wrong. I believe that the community as a whole ought to take responsibility for people while they are sick and pay for it by recognising that as a national obligation.

6.15 p.m.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)

I am sorry to intervene at this stage, but it is desirable that in the general interests of the Committee hon. Members should leave the Chamber rather earlier than usual in view of the weather. There will be opportunities later to follow up these matters when the appropriate Bill comes before the House.

I was very glad to hear the views expressed by my hon. Friend the Member for Tottenham (Sir F. Messer), whom we are always glad to hear in these debates and who always brings us to some sense of reality. Not only he but other hon. Members, I am glad to say, have stressed what we are getting for the cost of our National Health Service. That suggests the impossibility of talking about costs in this matter and the danger of using purely monetary terms in this way when we are all agreed about the enormous value of the Service and about the dangers which would flow from any restriction or diminution of it.

That is why one is always so disturbed when one hears proposals in purely financial terms. It is amazing that the Government have not attempted to justify these proposals. What justification do the Government have for raising an extra £24 million in the current year and the larger sum of £32 million in a full year? If there is a justification for raising the extra money, is this the way to do it?

The whole issue of what amount is required has been clouded by utterly misleading financial statements, firstly from the Chancellor himself and then, I am sorry to say, from the Financial Secretary, who has, no doubt, inevitably caught on to the coat-tails of the Chancellor. We have been deluged with much misleading information, no doubt calculated to mislead not only hon. Members but the general public about the cost of the Service. That is a serious matter, because right hon. Gentlemen opposite are building an utter misconception in the country about the true cost of the Service.

My hon. Friend the Member for Lanarkshire, North (Miss Herbison) rightly mentioned the constant references to the original estimate in the Beveridge Report of £170 million as the cost of the National Health Service. How right The Tunes was in saying that it was misleading on the part of the Chancellor to refer to that figure. He should have referred to the first full year of the operation of the Service, 1949–50, which gave a figure of some £450 million. That is a gross figure of expenditure, and it is estimated that for 1957–58 it will have risen to £690 million. But a very large part of that figure is accounted for by the increase in the cost of living to which we have been subjected in this period. If we were to calculate the 1957–58 figure in terms of costs as they were running in 1949–50, we should get a figure of £515 million.

Why does not the Chancellor give us those figures so that we have a fair estimate of the problem we are facing? Over a period of eight years, there has been an increase of less than 15 per cent. Even then, the Guillebaud Committee, which went into the matter at some length, made a rather different calculation of the use of resources—many of us feel that it was much more accurate—and the right hon. Gentleman should tell us what the present figure is compared to that which was provided by the Guillebaud Committee in regard to the use of resources.

After further allowances have been made for the increase in the number of old people in our population and other increased pressures that the Service has inevitably had to bear, I am quite sure that we shall find that it is not costing more. In actual terms of cost, it is probably costing us less. I mention this because it is important to avoid getting caught up in mere money figures. I know that we must start from them, but we must be able to understand them, and I believe that right hon. Gentlemen opposite have been purposely using them to confuse the general issue and give people the impression that the Service is costing vastly more than it really is.

The other misleading references concern the £40 million contribution towards the Service from the National Insurance Fund. There never was any understanding that there should be a fixed proportion, as my hon. Friends have pointed out. There was an acceptance of the figure at that time, but there was no suggestion that it should be altered so as to maintain a definite relationship with expenditure. This is another attempt by right hon. Gentlemen opposite to misrepresent the position.

Figures have been quoted showing the effect upon the earnings of workers, and many examples of average earnings have been given. Even the average earnings show how the National Insurance contribution as a whole has increased as a proportion, and has now risen quite considerably. But my hon. Friends are quite right in saying that we are not talking about average earnings; we are talking about the effect of these proposals upon the lower income groups. We are blamed for taking the basic rates, but right hon. Gentlemen opposite are doing their best to make sure that many working people are forced down to those basic rates, so they should be the last to complain that we are using those figures.

We are quite incapable of understanding precisely why the sum mentioned is required. The Chancellor has told us that we are to raise an extra £24 million. After considering all the figures that we have been given, we still do not see why the Government should require that sum for the coming year. We should like a full explanation. Even on the Government's own figures, the.sum required should be £9 million instead (of £24 million. That is surely a point which should be fully explained to us.

I now turn to the other matter which has naturally engaged the attention of many hon. Members. What is to be our attitude towards the way in which we raise funds for the Service? I was amazed to hear the hon. Member for Cheadle (Mr. Shepherd) suggesting that we were hidebound in some way. If he wants to talk about people being hidebound, he had better direct his criticism to the right hon. Gentlemen on his own Front Bench. Here, as the Opposition, we have been providing right hon. Gentlemen opposite for the last few years with all kinds of stimulating ideas and suggestions about the financing of National Insurance, especially in regard to superannuation. We have given them a great deal of encouragement.

We have even encouraged the Minister of Pensions and National Insurance, although he has not yet been able to dig his way right through our proposals. We hope that he may be able to follow them at some time. He laughs, but he should be the last to laugh, because, in effect, he and the other Members of the Government are now accepting proposals for flat rate increases upon charges which everybody agrees are already past the maximum. I should have thought that he would be eager to present us with some form of alternative method of raising funds, certainly in regard to old people, if not in other respects. If the right hon. Gentleman is incapable of thinking up any fresh ideas, that is his look-out. It is apparently another example of the Government being incapable of bringing forward constructive ideas of their own and waiting until we produce something for them. We feel that it is high time that we took over the Government. We cannot go on giving them the benefit of our services and leaving them to act as the executive. The position is becoming ridiculous.

The two major questions that we have a right to ask have not been answered. First, why have the Government settled upon the figure of £24 million? I hope that the right hon. Gentleman will clear up the mass of misleading figures which have been given in connection with the expenditure upon the Service. Perhaps he will tell the Committee the real cost. What are the latest figures, following those of the Guillebaud Committee? If this Committee were given this information, it would have a fair basis of comparison, year by year, instead of having to work upon what the right hon. Member himself must agree are misleading figures, which deal with the subject in crude, financial terms.

Secondly, what is the right method of raising the funds? We do not believe that the Government have chosen the right one. We say that we have now gone far beyond reasonable bounds in using the flat rate method. We cannot discuss the problem in isolation and without some regard to the other two increases which have been imposed in the last nine months. The right hon. Gentleman who was then Minister of Health discussed this question in the House only a relatively short time ago. May I say in parenthesis how glad we are to see him back in, I hope, good health.

It is astonishing that after such a short period we should be presented with not only another increase as far as the National Health Service is concerned, but also with a very much heavier increase for National Insurance purposes imposed under the Measure that we discussed in the House in November last. That means that we have had three increases within less than nine months. When one discusses this last increase of 6d., one must, of course, have in mind all the time the other two increases which have taken place.

I seemed to discern some anxiety on the part of hon. Members opposite about this. The hon. Member for Leeds, North-East (Sir K. Joseph) seemed to indicate that he, too, was anxious that the Government should undertake a proper review of the whole matter. We hope that such a review will take place. It is fantastic that, at the very time when the Government keep saying that they are anxious about the problem of costs and their relationship to wages, any extra burden at all should be added to the lower-paid worker with the inevitable consequence of its inclusion in new wage demands. Such wage demands are bound to follow, and as they come along they are bound to take into account not only this last increase of 6d. but the other increases which have already taken place.

The Government will not escape by calling the total 9s. 11d. It is rather like the bargain basement where one avoids putting the price into double figures because one thinks that it is psychologically better not to do so.

The Minister of Health (Mr. Derek Walker-Smith)

It is actually better.

Mr. Blenkinsop

It is 1d. better, but I am sure that every working man in the country will regard the total payment as 10s., and, of course, he will be right. If the present Government stagger on for a few more months, who knows what other increases may be placed before us. Then, I suppose, the Government will try to keep the total sum within 20s.

I should have thought that impositions of this kind were bound to have a psychological as well as an economic effect upon workers in very many industries where wages are still low. I have in mind the bus drivers in my own City of Newcastle whose wage rate is around £8 15s. a week. In relation to that figure, 10s. is quite a considerable sum. These bus drivers are some of the people who are being told by right hon. and hon. Members opposite that they have no right to make any fresh claim for higher wages. These men do a very responsible job, and I should have thought that it would be a very good thing if they did not have to work so much overtime in order to earn a living wage, if they had a reasonable basic wage and if their lives were not made much more difficult by this new proposed charge.

As I have said, I have no desire to continue the debate unnecessarily long at the moment, because we shall very soon have an opportunity of examining the fresh Bill which the Government will no doubt bring in. However, I want to make it absolutely clear that we on this side of the Committee wholly reject the Government's approach to the matter. We do not think that the Government have made any attempt to justify the Motion on the Order Paper, and we are satisfied that this kind of approach is bound to lead to greater hardship and to more numerous wage demands.

6.35 p.m.

The Minister of Health (Mr. Derek Walker-Smith)

I think that the Committee will agree with me when I say that the quality of the speeches to which we have been privileged to listen so far this afternoon is a happy augury for interesting debates on the further stages of the Bill, assuming that, in a few minutes' time, the Committee passes this Motion in order to pave the way for the introduction of the Bill.

Perhaps I ought to say, at the outset, that, inevitably, there has been a good deal of reference today to matters going beyond the National Health Service element and into the broader field of National Insurance contributions. A good many statements have been made and many statistics have been bandied about. I hope that it will not be assumed that any facts or statistics in this wider sphere of National Insurance contributions which I do not correct or comment upon are thereby accepted by the Government. It simply means that I regard it as more appropriate for my right hon. Friend the Minister of Pensions and National Insurance to deal with those matters at a more appropriate time and in his own much more competent way.

At the end of this short but interesting debate, I think that I can, with confidence, commend the Motion to the Committee, but, be it said also, with some natural regret, because one must always have some regret when, for whatever good reason and in however good a cause, one asks one's fellow citizens to pay more money for the services they are receiving. Of course, it would be ideal if we could stabilise, or, still better, reduce, the total gross cost of the Health Service without any reduction in the Service or any detriment to the interests of the patient.

That would be the ideal position, because then the problem—and problem there undoubtedly is—of the burden on the Exchequer would be absorbed within the solution of the wider problem of the total cost. I should be lacking in frankness if I did not tell the Committee straight away that, at present, that happy and ideal solution is not within the realm of practicality.

I recognise that there is a very considerable interest in the country as a whole in the economics of the Health Service, and I hope, if I am fortunate in catching Mr. Speaker's eye on the Second Reading debate on the Bill, if such there be, to say something at perhaps a little more length on the general issue of the economics of the Service.

At present, it would perhaps suffice if I said, on that aspect of the matter, that we are persevering with the application of all proper measures of economy within the Health Service and with the search for new economies. Our search for new economies which can be put into effect without detriment to the interest of the patient is unceasing and untiring.

Mr. Houghton

Are radiographers affected by those economies?

Mr. Walker-Smith

In the result, the Health Service, in whatever way one computes it—I accept the point made by the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) that there is some difficulty in translating these matters into the ordinary economic idiom —the Service is costing the country a lot of money. But I would say that for that money the country receives good value from the Service.

The gross cost, estimated for the financial year 1958–59 at £740 million, is, in fact, £31 million more than the estimated out-turn for the current financial year. I would add that that figure, albeit £31 million more than the estimated out-turn for this financial year, has been achieved only by the most vigorous pruning of the 1958–59 Estimates—that is to say, the most vigorous pruning within the formula which I have suggested, without detriment to the interests of the patient.

The additional money for which we are obliged to ask in the coming financial year is needed to meet the inescapable commitments of the Service. I should add that it would clearly be possible to reduce the gross cost by reducing services. Of course it would, but that would involve major alterations in the Service —for example, reductions in the work of hospitals or an increase in waiting lists, or even the excision of a particular part of the Service—dentistry, ophthalmics, or whatever it might be.

It is only by such bold, rough and sweeping measures that we could get the sort of economies in the Health Service that we are discussing today. If the Committee accepts, as I apprehend it does, that it is not at present possible to reduce, or even with certainty to stabilise, the gross cost of the Service, except by making some such unacceptable cuts as that, we must look to the pattern of the cost.

As hon. Members will know, the pattern of the financing of the Health Service is made up, in very disproportionate amounts, of five elements: the Exchequer element, the contribution element, the charges on patients, and two other elements—rates and superannuation contributions. But, of course, those last two are very small and, taken together, have remained at a steady figure of 8 per cent. to 9 per cent. of the total over the years. I do not think that the Committee need trouble about those two.

We are concerned here with the three major elements. Therefore, the real question which we have to decide is simply this: is every increase in the total cost of the National Health Service to go automatically onto the Exchequer, or are those other two elements, contributions and charges, to share in the added burden and, if so, in what proportion should those two share?

So far as that last question is concerned, I do not think that I need detain the Committee for more than a moment or so, because there has been no suggestion that it would have been better to introduce an increase in charges. I mention it very shortly and parenthetically only for this reason, that there were various possibilities canvassed in the newspapers a few weeks ago as to what might happen in this respect. Some of them thought there might be an increase in prescription charges; others mentioned the possibility of hospital charges or even charges for doctors' visits. I am bound to say that when my right hon. Friend the Chancellor of the Exchequer made his statement on 18th February hon. Members opposite were very successful in disguising any relief they may have felt that these particular measures had not been resorted to.

The reason for our choice rests quite simply on the broad ground of principle that it is better to take, if take one must, from those who are earning and well rather from those who are anxious and sick. If one is not then going to cut the Service, and if one is not to impose a charge, one is back to the main question, whether there should be an unlimited liability on the Exchequer in respect of any increases in the gross cost of the Service. whatever may be the inflationary pressures on the economy and whatever may be the position of sterling. In my submission, it does not make sense, either from the point of view of the economy as a whole, or from the point of view of the Health Service, that the Exchequer should be asked to assume an unlimited liability.

Several hon. Members have referred to the Beveridge Report and to the 1946 pattern. I fully agree with all those hon. Members—the hon. Member for Cheadle (Mr. Shepherd) and others—who have said that there is nothing permanent or rigid about the Beveridge pattern or the 1946 pattern. But they are interesting because they were accepted by the then Labour Government in 1946 and received general acquiescence in the immediate post-war period.

The hon. Lady the Member for Lanarkshire, North (Miss Herbison) referred to the Beveridge Report, with that happy selectivity of quotation with which we in this House are familiar, and I may supplement it in a moment. First, £170 million was to be the cost of the Health Service as estimated by Sir William Beveridge as he then was; £40 million was the estimated cost to be met by contributions as a whole; and £33 million was the estimated cost to insured persons only. In percentage terms, the insured persons would have paid 19 per cent. and the percentage to be borne on contributions would have been 23½ per cent.

Mr. Blenkinsop

Would the right hon. and learned Gentleman also quote the figures for the first full year of the Health Service? Why does he insist on going back to the very much respected Lord Beveridge, instead of dealing with the really practical issues?

Mr. Walker-Smith

I am certainly coming to that. Surely the hon. Gentleman will do me the justice of thinking that I would not fail to point out to the Committee the very great increase in cost when the Labour Party started to operate the scheme.

The hon. Lady the Member for Lanarkshire, North quoted the passage from the Beveridge Report in which he properly said that there was nothing rigid about these estimates. Then she went on and read the passage in which he said that the rates of contribution proposed are…provisional, for they depend on views of financial policy…as to which reasonable men may differ. But she did not read the next sentence, which stated that, as a whole, the division proposed between the three parties is not, on the face of it, unreasonable. We start from the position that this was taken to be a reasonable pattern, although not a rigid pattern, at the time of the inception of the Service. It is, of course, quite true, as the hon. Member for Newcastle-upon-Tyne, East has been good enough to remind the Committee, that that assumed Exchequer percentage was from the start greatly exceeded. But, in the meanwhile, the Beveridge figures were, broadly, incorporated into the Financial Memorandum annexed to the National Health Service Bill, 1946. When the Service came into operation it is quite true that the percentages were considerably different.

I have been asked to give the figures, and I will certainly do so. The figure envisaged for the Exchequer element in 1946 was 72.4 per cent. In 1949–50, the first complete year of the Service, the percentage was 76.3. By 1950–51, the percentage had risen to 80.9, at which time the right hon. Gentlemen opposite, who then composed the Government, felt that it was time to call a halt. Before my right hon. Friend the then Minister introduced the 1957 Bill, the Exchequer percentage had again increased to 80.2. Had the figure of £555 million total Exchequer contribution remained, as it would do if this Motion were defeated today, the Exchequer contribution for 1958–59 would have been 75 per cent.

Our problem, simply, was: were we, in the light of this experience, to watch impassively the steady and inexorable mounting both of the Exchequer contribution and the percentage which it bore of the whole? Surely our duty was to take note of this trend of increasing Exchequer liability and ask whether it was either a favourable or healthy thing at a time of inflationary pressure, and of consequential danger to sterling.

We say that it was our duty to ask whether, if this pattern were left unamended, it was not in danger of becoming distorted. When I say "distorted" I mean not only deviation from the original pattern contemplated by Lord Beveridge in 1946, but, more important, deviation from the proper and prudent pattern from which alone social services in the conditions of today can hope to maintain their real strength and usefulness. We now propose this modest adjustment as a result of which, for the first time in the 10-year history of the Health Service, the proportionate Exchequer burden is as low as was contemplated at the time of the inception of the Service. That is not something for which I apologise. That is a fact which I proclaim.

My hon. Friend the Member for Ton-bridge (Mr. Hornby) in an interesting speech, pointed out that the contributor in this country is getting a good bargain; a better bargain than the citizens of other countries, and better than he could have expected in the early days of the Service.

The hon. Member for Newcastle-upon-Tyne, East spoke about real terms. There is now £80 million more being spent on the Service in real terms than in 1949–50, and £35 million more of Exchequer money going into it, in real terms. That, of course, is not an extravagant addition, because it is one for which we are getting the benefit of increased quality and efficiency. But it does lead to the conclusion that the contributor is getting a good bargain, for which we say he can, not unfairly, be asked to pay a little more. We shall have more opportunity to debate these figures at greater length in due course, but it is only a small amount.

My hon. and learned Friend pointed out that the average wage earnings—I am taking provisional figures of earnings —were £12 1ls. 7d. Sixpence is 0.2 per cent. of that total.

Mr. Hunter rose—

Mr. Walker-Smith

No; I am sorry that I cannot give way.

The whole ls. 100. National Health Serxice contribution is 0.75 per cent. of that figure. Similarly for women, 4d. is only 0.26 per cent. of the whole and the total contribution of 1s. 4½d. is only 1.06 per cent. So it is a fact that we are here dealing with very small, marginal amounts.

As I understand it, the case of the right hon. and hon. Gentlemen opposite is that more should be put on the taxpayer. But they must appreciate that many of the people who are not paying tax now would have been paying tax had the margins been left as they were when we had a Labour Chancellor of the Exchequer. In fact, the Opposition are in a tactical dilemma on this matter of the Health Service charges. They cannot be both consistent and right. If, from the start, the Labour Party had said that, whatever the cost, it must all go on the taxpayer, then we could respect their consistency while doubting their wisdom. But that is exactly what most of them did not say. They said that there must be a ceiling to the Service. Now they try to get out of it and suggest a new form of the old nursery riddle, when is a ceiling not a ceiling?—the answer, presumably, being, when it rests only on the statements of right hon. and hon. Gentlemen opposite.

Mr. Blenkinsop rose—

Mr. Walker-Smith

The hon. Gentleman has already pointed out that we shall have further opportunities to debate this matter.

Mr. W. Griffiths (Manchester, Exchange)

On a point of order, Sir Charles. This is exempted business. The Government had a Motion on the Order Paper, which was carried earlier today,

to exempt the proceedings of this Committee from the Standing Order. Why, then, should not the Minister give way to my hon. Friend?

The Chairman

It is exempted business but I think that it is the wish of the Committee to come to a decision before 7 o'clock.

Mr. Walker-Smith

The hon. Member for Newcastle-upon-Tyne, East has pointed out that it would be convenient for the Committee to come to a conclusion and that we shall have an opportunity to debate this on a future occasion. I say that the Committee should now let us have this Motion in order to pave the way for a Bill which would not only add to the strength and stability of sterling, but give the National Health Service itself added security and greater safety.

Question put:—

The Committee divided: Ayes 302, Noes 230.

Division No. 48.]	AYES	[6.58 p.m.
Agnew, Sir Peter	Cary, Sir Robert	Gibson-Watt, D.
Aitken, W. T.	Channon, Sir Henry	Glover, D.
Allan, R. A. (Paddington, S.)	Chichester-Clark, R.	Glyn, Col. Richard H.
Alport, C. J. M.	Clarke, Brig. Terence (Portsmth, W.)	Godber, J. B.
Amery, Julian (Preston, N.)	Cole, Norman	Gomme-Duncan, Col. Sir Alan
Amory, Rt. Hn. Heathcoat (Tiverton)	Conant, Maj. Sir Roger	Goodhart, Philip
Anstruther-Gray, Major Sir William	Cooke, Robert	Gough, C. F. H.
Arbuthnot, John	Cooper, A. E.	Gower, H. R.
Armstrong, C. W.	Cooper-Key, E. M.	Graham, Sir Fergus
Ashton, H.	Cordeaux, Lt.-Col. J. K.	Grant, W. (Woodside)
Astor, Hon. J. J.	Corfield, Capt. F. V.	Grant-Ferris, Wg Cdr. R.(Nantwich)
Atkins, H. E.	Craddook, Beresford (Spelthorne)	Green, A.
Baldock, Lt. Cmdr. J. M.	Crowder, Sir John (Finchley)	Gresham Cooke, R.
Baldwin, A. E.	Crowder, Petre (Rulslip—Northwood)	Grimston, Hon. John (St. Albans)
Balniel, Lord	Cunningham, Knox	Crimston, Sir Robert (Westbury)
Banks, Col. C.	Currie, G. B. H.	Grosvenor, Lt.-Col. R. G.
Barber, Anthony	Dance, J. C G.	Gurden, Harold
Barlow, Sir John	Davidson, Viscountess	Hall, John (Wycombe)
Barter, John	D-Avigdor-Goldsmid, Sir Henry	Hare, Rt. Hon. J. H.
Baxter, Sir Beverley	Deedes, W. F.	Harris, Frederio (Croydon, N.W.)
Beamish, Col. Tufton	Digby, Simon Wingfield	Harris, Reader (Heston)
Bell, Philip (Bolton, E.)	Donaldson, Cmdr. C. E. McA.	Harrison, A. B. C. (Maldon)
Bell, Ronald (Bucks, S.)	Doughty, C. J. A.	Harrison, Col. J. H. (Eye)
Bennett, F. M. (Torquay)	Drayson, G. B.	Harvey, Sir Arthur Vere (Macclesf'd)
Bennett, Dr. Reginald	du Cam, E. D. L.	Harvey, Ian (Harrow, E.)
Bevins, J. R. (Toxteth)	Dugdale, Rt. Hn. Sir T. (Richmond)	Harvey, John (Waithamstow, E.)
Bidgood, J. C.	Duncan, Sir James	Harvie-Watt, Sir George
Bishop, F. P.	Duthie, W. S.	Hay, John
Black, C. W.	Eooles, Rt, Hon. Sir David	Heath, Rt. Hon. Sir Lionel
Body, R. F.	Eden, J. B. (Bournemouth, West)	Heath, Rt. Hon. E. R. G.
Boothby, Sir Robert	Elliott, R.W.(N'castle upon Tyne,.N.)	Henderson-Stewart, Sir James
Bossom, Sir Alfred	Emmet, Hon. Mrs. Evelyn	Hesketh, R. F.
Bowen, E. R. (Cardigan)	Erroll, F. J.	Hicks-Beach, Maj. W. W.
Boyd-Carpenter, Rt. Hon. J. A.	Farey-Jones, F. W.	Hill, Rt. Hon. Charles (Luton)
Boyle, Sir Edward	Fell, A.	Hill, Mrs. E. (Wythenshawe)
Braithwaite, Sir Albert (Harrow, W.)	Finlay, Graeme	Hill, John (S. Norfolk)
Bromley-Davenport, Lt.-Col. W. H.	Fisher, Nigel	Hirst, Geoffrey
Brooke, Rt. Hon. Henry	Forrest, G,	Hobson, John(Warwick & Leam'gt'n)
Brooman-White, R. C.	Foster, John	Holland-Martin, C. J.
Browne, J. Nixon (Craigton)	Fraser, Sir Ian (M'ombe & Lonsdale)	Hope, Lord John
Bryan, P.	Freeth, Denzil	Hornby, R. P.
Bullus Wing Commander E. E.	Galbraith, Hon. T. G. D.	Hornsby-Smith, Miss M. P.
Butcher, Sir Herbert	Gammans, Lady	Horobin, Sir Ian
Butler, Rt. Hn. R. A.(Saffron Walden)	Garner-Evans, E. H.	Horsbrugh, Rt. Hon. Dame Florence
Carr, Robert	George, J. C. (Pollok)	Howard, Gerald (Cambridgeshire)
Howard, Hon. Greville (St. Ives)	Maitland, Cdr. J. F. W. (Horncastle)	Scott-Miller, Cmdr. R.
Howard, John (Test)	Markham, Major Sir Frank	Sharples, R. C.
Hughes Hallett, Vice-Admiral J.	Marlowe, A. A. H.	Shepherd, William
Hulbert, Sir Norman	Marples, Rt. Hon. A. E.	Simon, J. E. S. (Middlesbrough, W.)
Hund, A. R.	Marshall, Douglas	Smithers, Peter (Winchester)
Hutchison, Michael Clark (E'b'gh, S.)	Mathew, R.	Smyth, Brig. Sir John (Norwood)
Hutchison, Sir Ian Clark (E'b'gh, W.)	Maudling, Rt. Hon. R.	Soames, Rt. Hon. Christopher
Hutchison, Sir James (Scotstoun)	Mawby, R. L.	Spearman, Sir Alexander
Hylton-Foster, Rt. Hon. Sir Harry	Maydon, Lt.-Comdr. S. L. C.	Speir, R. M.
Iremonger, T. L.	Medlicott, Sir Frank	Spence, H. R. (Aberdeen, W.)
Irvine, Bryant Godman (Rye)	Milligan, Rt. Hon. W. R.	Spens, Rt. Hn. Sir P. (Kens'gfn, S.)
Jenkins, Robert (Dulwich)	Molson, Rt. Hon. Hugh	Stanley, Capt. Hon. Richard
Jennings, J. C. (Burton)	Moore, Sir Thomas	Stevens, Geoffrey
Jennings, Sir Roland (Hallam)	Morrison, John (Salisbury)	Steward, Harold (Stockport, S.)
Johnson, Dr. Donald (Carlisle)
Johnson, Eric (Blackley)	Nabarro, G. D. N.	Steward, Sir William (Woolwich, W.)
Jones, Rt. Hon. Aubrey (Hall Green)	Neave, Airey	Storey, S.
Joseph, Sir Keith	Nicholson, Harmar	Stuart, Rt. Hon. James (Moray)
Kaberry, D.	Nicholson, Sir Godfrey (Farnham)	Studholme, Sir Henry
Keegan, D.	Nicolson, N. (B'n'm'thi, E. & Chr'oh)	Summers, Sir Spencer
Kerby, Capt. H. B.	Noble, Comdr. Rt. Hon. Allan	Sumner, W. D. M. (Orpington)
kerr, Sir Hamilton	Nugent, G. R. H.	Taylor, Sir Charles (Eastbourne)
Kershaw, J. A.	O'Neill, Hn. Phelim (Co. Antrim, N.)	Taylor, William (Bradford, N.)
Kimball, M.	Ormsby-Gore, Rt. Hon. W. D.	Teeling, W.
Kirk, P. M.	Orr-Ewing, Sir Ian (Weston-S-Mare)	Temple, John M.
Lagden, G. W.	Osborne, C.	Thomas, Leslie (Canterbury)
Lambton, Viscount	Page, R. G.	Thomas, P. J. M. (Conway)
Lancaster, Col. C. G.	Pannell, N. A. (Kirkdale)	Thompson, Kenneth (Walton)
Langford-Holt, J. A.	Partridge, E.	Thompson, Lt.-Cdr. R. (Croydon, S.)
Leather, E. H. C.	Peel, W. J.	Thorneycroft, Rt. Hon. P.
Leavey, J. A.	Peyton, J. W. W.	Thornton-Kemsley, Sir Colin
Leburn, W. G.	Pike, Miss Mervyn	Tiley, A. (Bradford, W.)
Legge-Bourke, Maj. E. A. H.	Pilkington, Capt. R. A.	Tilney, John (Wavertree)
Legh, Hon. Peter (Petersfield)	Pitt, Miss E. M.	Turton, Rt. Hon. R. H.
Lindsay, Hon. James (Devon, N.)	Pott, H. P.	Tweedsmuir, Lady
Linstead, Sir H. N.	Powell, J. Enoch	Vane, W. M. F.
Llewellyn, D. T.	Price, David (Eastleigh)	Vaughan-Morgan, J. K.
Lloyd, Rt. Hon. G. (Sutton Coldfield)	Price, Henry (Lewisham, W.)	Vickers, Miss Joan
Lloyd, Maj. Sir Guy (Renfrew, E.)	Prior-Palmer, Brig. O. L.	Vosper, Rt. Hon. D. F.
Lloyd, Rt. Hon. Selwyn (Wirral)	Profumo, J. D.	Wakefield, Edward (Derbyshire, W.)
Longden, Gilbert	Ramsden, J. E.	Wakefield, Sir Wavell (St. M'lebone)
Low, Rt. Hon. Sir Toby	Rawlinson, Peter	Walker-Smith, Rt. Hon. Derek
Lucas, Sir Jocelyn (Portsmouth, S.)	Redmayne, M.	Wall, Patrick
Lucas, P. B. (Brentford & Chiswick)	Rees-Davies, W. R.	Ward, Rt. Hon. C. R. (Worcester)
Lucas-Tooth, Sir Hugh	Remnant, Hon. P.	Ward, Dame Irene (Tynemouth)
McAdden, S. J.	Renton, D. L. M.	Watkinson, Rt. Hon. Harold
Macdonald, Sir Peter	Ridsdale, J. E.	Webbe, Sir H.
McKibbin, Alan	Rippon, A. G. F.	Whitelaw, W. S. I.
Mackie, J. H. (Galloway)	Roberts, Sir Peter (Heeler)	Williams, Paul (Sunderland, S.)
McLaughlin, Mrs. P.	Robertson, Sir David	Williams, R. Dudley (Exeter)
Maclay, Rt. Hon. John	Robinson, Sir Roland (Blackpool, S.)	Wills, G. (Bridgwater)
Maclean, Sir Fl[...]zroy (Lancaster)	Robson Brown, Sir William	Wood, Hon. R.
Macleod, Rt. Hn. lain (Enfieid, W.)	Rodgers, John (Sevenoaks)	Woollam, John Victor
MacLeod, John (Ross & Cromarty)	Roper, Sir Harold
Macmillan, Maurice (Halifax)	Ropner, Col. Sir Leonard	TELLERS FOR THE AYES:
Macpherson, Niall (Dumfries)	Russell, R. S.	Mr. Oakshott and
Maddan, Martin	Sandys, Rt. Hon. D.	Mr. Hughes-Young
NOES
Ainsley, J. W.	Brown, Rt. Hon. George (Belper)	Davies, Ernest (Enfield, E.)
Allaun, Frank (Salford, E.)	Brown, Thomas (Ince)	Davies, Harold (Leek)
Allen, Arthur (Bosworth)	Burke, W. A.	Davies, Stephen (Merthyr)
Allen, Scholefield (Crewe)	Burton, Miss F. E.	Deer, G.
Awbery, S. S.	Butler, Herbert (Hackney, C.)	de Freitas, Geoffrey
Bacon, Miss Alice	Butler, Mrs. Joyce (Wood Green)	Delargy, H. J.
Baird, J.	Callaghan, L. J.	Diamond, John
Bellenger, Rt. Hon. F. J.	Carmichael, J.	Dodds, N. N.
Bence, C. R. (Dunbartonshire, E.)	Castle, Mrs. B. A.	Donnelly, D. L.
Benn, Hn. Wedgwood (Bristol, S.E.)	Champion, A. J.	Dugdale, Rt. Hn. John (W.Brmwch)
Benson, Sir George	Chetwynd, G. R.	Dye, S.
Beswick, Frank	Clunie, J.	Ede, Rt. Hon. J. c.
Bevan, Rt. Hon. A. (Ebbw Vale)	Coldrick, W.	Edwards, Rt. Hon. John (Brighouse)
Blackburn, F.	Collick, P. H.(Birkenhead)	Edwards, Rt. Hon. Ness (Caerphilly)
Blenkinsop, A.	Collins, V. J. (Shoreditch & Finsbury)	Edwards, W. J. (Stepney)
Blyton, W. R.	Corbet, Mrs. Freda	Evans, Albert (Islington, S.W.)
Boardman, H.	Cove, W. G.	Finch, H. J.
Bottomley, Rt. Hon. A. G.	Craddock, George (Bradford, S.)	Fletcher, Eric
Bowden, H. W. (Leicester, S.W.)	Cronin, J. D.	Foot, D. M.
Bowles, F. G.	Crossman, R. H. S.	Fraser, Thomas (Hamilton)
Boyd, T. C.	Cullen, Mrs. A.	Gaitskell, Rt. Hon. H. T. N.
Braddock, Mrs. Elizabeth	Dalton, Rt. Hon. H.	George, Lady Megan Lloyd (Car'then)
Brobkway, A. F,	Darling, George (Hillsborough)	Gibson, C. W.

Gooch, E. G.	McKay, John (Wallsend)	Roberts, Goronwy (Caernarvon)
Gordon Walker, Rt. Hon. P. C.	McLeavy, Frank	Robinson, Kenneth (St. Pancras, N.)
Greenwood, Anthony	MacMillan, M. K. (Western Isles)	Rogers, George (Kensington, N.)
Grenfell, Rt. Hon. D. R.	MacPherson, Malcolm (Stirling)	Ross, William
Griffiths, David (Rother Valley)	Mahon, Simon	Royle, C.
Griffiths, Rt. Hon. James (Llanelly)	Mallalieu, E. L. (Brigg)	Silverman, Julius (Aston)
Griffiths, William (Exchange)	Mallalieu, J. P. W. (Huddersfd, E.)	Simmons, C. J. (Brierley Hill)
Hale, Leslie	Mann, Mrs. Jean	Skeffington, A. M.
Hall, Rt. Hn. Glenvil (Coine Valley)	Marquand, Rt. Hon. H. A.	Slater, Mrs. H. (Stoke, N.)
Hannan, W.	Mason, Roy	Slater, J. (Sedgefield)
Harrison, J. (Nottingham, N.)	Mayhew, C. P.	Snow, J. W.
Hastings, S.	Mellish, R. J.	Sorensen, R. W.
Hayman, F. H.	Messer, Sir F.	Soskice, Rt. Hon. Sir Frank
Healey, Denis	Mikardo, Ian	Sparks, J. A.
Henderson, Rt. Hn. A. (Rwly Regis)	Mitchison, G. R.	Steele, T.
Herbison, Miss M.	Monslow, W.	Stewart, Michael (Fulham)
Hobson, C. R. (Keighley)	Morris, Percy (Swansea, W)	Stonehouse, John
Holman, p.	Morrison, Rt.Hn.Herbert (Lewis'm S.)	Stones, W. (Consett)
Houghton, Douglas	Mort, D. L.	Strachey, Rt. Hon. J.
Howell, Charles (Perry Barr)	Moss, R.	Stross, Dr. Barnett(Stoke-on-Trent, C.)
Howell, Denis (All Saints)	Moyle, A.	Swingler, S. T.
Hughes, Cledwyn (Anglesey)	Mulley, F. W.	Sylvester, G. O.
Hughes, Emrys (S. Ayrshire)	Neal, Harold (Bolsover)	Taylor, Bernard (Mansfield)
Hughes, Hector (Aberdeen, N.)	Noel-Baker, Francis (Swindon)	Taylor, John (West Lothian)
Hunter, A. E.	O'Brien, Sir Thomas	Thomas, George (Cardiff)
Hynd, H. (Acorington)	Oliver, G. H.	Thomson, George (Dundee, E.)
Hynd, J. B. (Attercliffe)	Orbach, M.	Timmons, J.
Irvine, A. J. (Edge Hill)	Oswald, T.	Tomney, F.
Irving, Sydney (Dartford)	Owen, W. J.	Ungoed-Thomas, Sir Lynn
Isaaos, Rt. Hon. C. A.	Padley, W. E.	Usborne, H. C.
Janner, B.	Paling, Rt. Hon. W. (Dearne Valley)	Warbey, w. N.
Jay, Rt. Hon. D. P. T.	Palmer, A. M. F.	Weitzman, D.
Jeger, Mrs. Lena(Holbn & st. Prics, S.)	Pannell, Charles (Leeds, W.)	Wells, Percy (Faversham)
Jenkins, Roy (Stechford)	Pargiter, G. A.	Wells, William (Walsall, N.)
Johnson, James (Rugby)	Parker, J.	West, D. G.
Jones, David (The Hartlepools)	Parkin, B. T.	Wheeldon, W. E.
Jones, Jack (Rotherham)	Pearson, A.	White, Mrs. Eirene (E. Flint)
Jones, J. Idwal (Wrexham)	Peart, T. F.	White, Henry (Derbyshire, N.E.)
Jones, T. W. (Merioneth)	Pentland, N.	Wilkins, W. A.
Kenyon, C.	Plummer, Sir Leslie	Willey, Frederick
Key, Rt. Hon. C. W.	Popplewell, E.	Williams, David (Neath)
King, Dr. H. M.	Prentice, R. E.	Williams, Rev. Llywelyn (Ab'tillery)
Lawson, G. M.	Price, J. T. (Westhoughton)	Williams, Ronald (Wigan)
Lee, Frederick (Newton)	Price, Philips (Gloucestershire, W.)	Williams, Rt. Hon. T. (Don Valley)
Lee, Miss Jennie (Cannock)	Probers, A. R.	Williams, W. R. (Openshaw)
Lewis, Arthur	Prootor, W. T.	Willis, Eustace (Edinburgh, E.)
Lindgren, C. S.	Pursey, Cmdr. H.	Winterbottom, Richard
Lipton, Marcus	Rankin, John	Woodburn, Rt. Hon. A.
Logan, D. G.	Redhead, E. C.	Woof, R. E.
Mabon, Dr. J. Dickson	Reeves, J.	Yates, V. (Ladywood)
McCann, J.	Reid, William	Younger, Rt. Hon. K.
MacColl, J. E.	Rhodes, H.	Zilliacus, K.
MacDermot, Niall	Robens, Rt. Hon. A.
McGhee, H. G.	Roberts, Albert (Normanton)	TELLERS FOR THE NOES
McGovern, J.		Mr. Short and Mr. Bowden.

Resolved,

NATIONAL HEALTH SERVICE CONTRIBUTIONS

1. That the rates of national health service contributions be increased, by substituting the rates specified in the Table set out below for the rates set out in the First Schedule to the National Health Service Contributions Act, 1957.

2. That there be paid into the Exchequer any increase in the sums so payable under the said Act of 1957, being an increase attributable to the change in the rates of national health service contributions.

3. That it is expedient to make provision for other matters incidental or supplementary to the matters aforesaid.

TABLE
Description of person	Weekly rate of contribution
	s.	d.
1. Employed men between the ages of 18 and 70, not including men over the age of 65 who have retired from regular employment	1	10½
2. Employed women between the ages of 18 and 65, not including women over the age of 60 who have retired from regular employment	1	4½
3. Employed boys and girls under the age of 18		10½
4. Employers		5½
5. Self-employed men between the ages of 18 and 70, not including men over the age of 65 who have retired from regular employment	2	2
6. Self-employed women between the ages of 18 and 65, not including women over the age of 60 who have retired from regular employment	1	8
7. Self-employed boys and girls under the age of 18	1	2
8. Non-employed men between the ages of 18 and 65	2	2
9. Non-employed women between the ages of 18 and 60	1	8
10. Non-employed boys and girls under the age of 18	1	2

Resolution to be reported.

Report to be received Tomorrow; Committee to sit again Tomorrow.