Commons Sitting of 8 June 1959

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  NORTH DEVON WATER BILL
  Lords Amendments considered and agreed to.
  RAILWAY PASSENGERS ASSURANCE BILL
  Lords Amendments considered and agreed to.
  THAMES CONSERVANCY BILL [Lords]
  Read the Third time and passed, with Amendments.
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Remploy
    Mr. Probertasked the Minister of Labour what Government assistance has been paid to Remploy Limited for the year 1958–59.
    The Minister of Labour and National Service (Mr. Iain Macleod): Payments to Remploy Limited during 1958–59 totalled £2,955,000.
    Mr. Probert: Whilst thanking the Minister for that information, would he not agree, in view of the valuable work that Remploy Limited is performing and of which all hon. Members are aware, that the time has now come for the Government substantially to increase their contribution to Remploy so that, in its turn, it can expand the number of people which it can employ?
    Mr. Macleod: I think that the amount I have mentioned and the amount for the current year have been in line with the amounts given in the past. I think that in some cases the expansion must be bound up with the trading position of the company. It is quite true that it
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    does a wonderful work, but it is essential that it should, as far as possible, exist as a trading company.
    Miss Burtonasked the Minister of Labour (1) in view of the fact that the present number of disabled people employed at the Remploy factory, Coventry, is 59 in comparison with an average of 71 over the last five years, why there is to be a delay in the admission of eight further people considered suitable by his officers;
    (2) if he will make a statement upon the efforts being made by Remploy to secure more work for Coventry, and other, packaging factories, and also upon the assistance which is being given by his Department in this matter.
    Mr. Iain Macleod: There is not enough work available to justify a further intake to the Coventry Remploy factory at present, but I understand that Remploy has already increased its sales force for packaging work and is at present seeking additional representatives. The main responsibility for obtaining orders must, of course, rest with the company, but my Department and the disablement advisory committees give such help as they can.
    Miss Burton: Whilst believing that the Minister wants to help, we never seem to get any further on this matter. Has the right hon. Gentleman looked at the actual financial position? Would he, for example, with regard to these eight people considered suitable for Coventry, look into what it costs in allowances for them not to be employed by Remploy as compared with the actual wages they would receive at Remploy? Is the Minister aware that some people look only at what they receive as wages and discount what they would otherwise be receiving?
    Mr. Macleod: I am quite prepared to look at that. To some extent, I think, the answer must be the same as I gave to the hon. Member for Aberdare (Mr. Probert) on the first Question. Remploy is not a charity. It is a splendid ideal and it has done this sort of thing better in this country than it has been done in any other. However, I think it would be a mistake if one created work—created orders—all the time for Remploy alone. By far the most satisfactory

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    thing for Remploy is to obtain commercial orders and Government orders. As far as we are concerned, the main Government supplier being the Ministry of Supply, we try to do our part.
    Miss Burton: Is the Minister aware that this factory in Coventry had packaging facilities installed in it at the request of the Ministry? These facilities are not being used. We cannot agree that it is better to have these men sitting at home doing nothing rather than working in the factory, even if the Government have to pay.
    Mr. Macleod: There has been a fall in the volume both of commercial and Government work. As far as the disabled workers in the factory are concerned, they are paid full wages by Remploy for standing time. As regards the eight people to whom the hon. Lady's Question is particularly directed, two of them have been accepted by Remploy and are awaiting vacancies.
    Mr. Hector Hughesasked the Minister of Labour if he is aware of the need of the Remploy factories in Scotland to interest industrialists in their sponsorship schemes; and what steps he is taking to this end with a view to the maintaining of full employment in Scottish Remploy factories.
    Mr. Iain Macleod: Yes, Sir. Remploy, assisted by my Department and by Disablement Advisory Committees, has given these schemes wide publicity among Scottish industrialists. Several industrialists have expressed interest in them. My hon. Friend has written to the hon. and learned Member giving details of the steps taken.
    Mr. Hughes: While thanking the right hon. Gentleman for that note, which I have not yet received, will he consider employing a person with a vivid imagination and a practical character to attract industrialists to take a greater part in these very useful schemes?
    Mr. Macleod: I very much want to attract sponsorship schemes to Remploy. In particular, I would like to see one or two of them in Scotland. One of the difficulties is that sponsorship schemes are sometimes difficult to promote in areas of high unemployment. It sounds paradoxical, but there is no labour
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    shortage there which would induce subcontracting rather than an expansion of the employers' factory. I know that Remploy are very conscious of the needs of Scotland and are doing everything they can to secure sponsorship schemes for Scotland.

    Aberdeen
    Mr. Hector Hughesasked the Minister of Labour what representations he has had from Aberdeen trades unions complaining about unemployment in that city; what reply he has made; and what steps he is taking to deal with this problem.
    Mr. Iain Macleod: I had a letter dated 11th December, 1958, from the Aberdeen Trades Council who had also written to my right hon. Friend the President of the Board of Trade. I replied that I was in constant touch with my right hon. Friend about the employment needs of the area, and my local office continues its regular work of assisting unemployed workers to find jobs.
    Mr. Hughes: Is the right hon. Gentleman aware of the representations made this morning to his Department by a delegation from Aberdeen? Is he yet in a position to make a constructive statement on what he intends to do as a result of that delegation? Will he make an interim statement now and, perhaps, a fuller one later at his convenience?
    Mr. Macleod: I am aware that this deputation, led by the hon. and learned Gentleman, was received this morning. It is a little early to expect me to make a statement about that deputation, although we would be very happy to consider what has been said. I think it is fair to say that there has been a substantial drop in unemployment in Aberdeen in recent months, which we are very happy to see. It has gone down very sharply indeed, and I hope that that process will continue.

    Barry
    Mr. Gowerasked the Minister of Labour how many ship-repair workers and how many docks' employees, respectively, have been unemployed at Barry for more than 14 days; and what steps are being taken to increase employment at the Barry docks.
    Mr. Iain Macleod: Information as to the duration of unemployment is not available for particular industries. On 11th May, 195 persons last employed in shipbuilding and ship-repairing industry were registered as unemployed in Barry and the average number of registered dock workers proving attendance for whom no work was available was 83 in the week ending 30th May. As regards the second part of the Question, I would refer the hon. Member to the Answer given by the Prime Minister to the hon. Member for Newcastle-on-Tyne, Central (Mr. Short) on 27th January.
    Mr. Gower: As these figures represent a rather high proportion of a labour force which has already contracted, and as Barry is to be distinguished from the position of other ports which have been affected by the recent decline in world trade because in South Wales the decline has continued ever since the end of the war due to the decline in coal shipments, could not my right hon. Friend consider some special treatment here and possibly consult his right hon. Friends, particularly the First Lord of the Admiralty, to see whether some Government ship-repair work can be provided?
    Mr. Macleod: It is true that the whole of the Cardiff area is a difficult area. As my hon. Friend has indicated, one of the main reasons is the decline in the coal export trade. I am in constant touch with my right hon. Friends, particularly the First Lord of the Admiralty, on this sort of problem.
    Mr. Callaghan: Is the right hon. Gentleman aware that a problem of growing anxiety in the absence of work is the complete inadequacy of unemployment insurance payments for men who have been out of work for some weeks? Is he further aware that there is growing hardship in this area because people are simply not able to keep pace with their commitments? Will he look urgently into the possibility of raising the unemployment insurance benefits?
    Mr. Macleod: I think that that supplementary question goes a great deal wider than the Question, but it has always been thought to be difficult to isolate unemployment benefit for that
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    particular purpose. For example, sickness and unemployment must surely march together.
    Mr. Callaghan: While that is so and while realising the difficulties, will the right hon. Gentleman take into account that in ship-repairing there is probably a longer-term group of unemployed than in almost any other industry, and that there has been unemployment there for some months? Therefore, the degree of hardship becomes greater.
    Mr. Macleod: Yes, I understand that, but I do not think anyone suggests that we can have differential rates of unemployment benefit according to the industry. It seems to me that it would be impossible to operate such a system. As to the inadequacy of the benefits, my right hon. Friend the Minister of Pensions and National Insurance, who has been listening to this exchange, keeps those under review.

    Disabled Persons, Sunderland
    Mr. Willeyasked the Minister of Labour what is the number of disabled persons registered on the disabled persons register in Sunderland; and how many persons so registered are at present unemployed.
    Mr. Iain Macleod: 3,242, of whom 451 were unemployed on 19th May.
    Mr. Willey: Does the right hon. Gentleman appreciate the particular difficulties of disabled persons in Sunderland at present in obtaining employment? Will he consider whether it is possible to provide more opportunities at the Remploy factory?
    Mr. Macleod: The figures of disabled persons in Sunderland are relatively very high, although over the last year in Sunderland—which has had a bad year from the employment point of view—the percentage increase among the disabled was a good deal less. Indeed, it has been only one-third of the increase among able-bodied unemployment. I agree that this is only relative comfort, but it shows that employers are conscious of their responsibilities towards it. There is a full complement in the Remploy factory of 75. I understand that the Remploy factory in Sunderland is employing its full complement at present.

    Douglas, Lanarkshire
    Mr. Patrick Maitlandasked the Minister of Labour whether, since the introduction of new employment at Douglas, Lanarkshire, would benefit a wide area of unregistered underemployment in the Upper Ward of Lanarkshire, he will assist an incoming firm in training local labour.
    Mr. Iain Macleod: I would refer my non. Friend to the Answer given to him on 18th March. The particular proposal set out in his recent letter to my hon. Friend the Parliamentary Secretary is being considered, and my hon. Friend will write to him as soon as possible.
    Mr. Maitland: While thanking my right hon. Friend for that reply, will he bear in mind that once or twice recently one has been approached by a firm which might consider seeking to obtain factory space but would first wish to consider whether it is possible to get some local workers trained, perhaps in a local building available, in advance of opening the factory? Will my right hon. Friend bear that in mind when lie studies that matter and also realise that we are grateful for the attention that he is giving to it?
    Mr. Macleod

    School-leavers, North-East Region
    Mr. P. Williamsasked the Minister of Labour what special action is being taken to provide employment for school-leavers in the Development Areas in the North-East.
    Mr. Iain Macleod: We have on the whole been successful as the figures for the December and April school leavers show in absorbing these boys and girls into employment. But this is not a short term problem, and the Government intend to continue their policy of stimulating economic expansion and particularly of encouraging new industries in Development Areas.
    Mr. Williams: If my right hon. Friend cannot manage to pay a visit to the North-East, will he pay particular attention to this problem, which is of particular concern at this time of year, before the end of another school term?
    Mr. Macleod: Yes. My hon. Friend has extended an invitation to me to visit the North-East, and I hope to do so in the autumn.
    Mr. Ede: Will the right hon. Gentleman consider making arrangements whereby some of the school-leavers capable of profiting from a further course of education can be induced to stay at school for a little longer?
    Mr. Macleod: I am keeping in close touch with my right hon. Friend the Minister of Education on this matter, and that is one of the matters to which we pay attention.

    Training Schemes
    Mr. Hector Hughesasked the Minister of Labour if he will specify the labour centres and labour schemes under his Department in Great Britain with particular reference to Scotland and indicate what financial assistance is available towards training at each of these centres.
    Mr. Iain Macleod: Regular facilities for training are available under the Government Vocational Training Scheme at 14 Government training centres, of which one is in Scotland. I will, with permission, circulate further details in the OFFICIAL REPORT. Training under the scheme can in certain cases also be provided at technical colleges and other training establishments. Training provided under the scheme is free and maintenance allowances are paid to trainees.
    Mr. Hughes: While thanking the right hon. Gentleman for that comprehensive reply, can he specify in figures the amount of money available for the Scottish centres?
    Mr. Macleod: I am afraid that I cannot do that without notice. The one Scottish centre is at Hillington. If the hon. and learned Gentleman would like details of expenditure there, perhaps he would table a separate Question.
    Following are the details:
    LIST OF TRADES IN WHICH TRAINING IS PROVIDED AT GOVERNMENT TRAINING CENTRES
    (Some of these trades are available only to certain categories of applicant, e.g., the disabled)
    Building and Civil Engineering

    Bricklaying.

    Carpentry.

    House painting and decorating.

    Plastering.

    Plumbing.

    Contractor's plant mechanic.

    Paviors and flag dressing.

    Engineering

    *Draughtsmanship.

    Fitting:—

    general.

    aircraft detail.

    Instrument making.

    Machine operating:—

    *centre lathe turning.

    *capstan setting/operating.

    *milling machine setting.

    precision grinding.

    Welding:—

    electric arc.

    oxy-acetylene/argon arc.

    Miscellaneous

    Agricultural machinery repair fitting.

    *Agricultural machinery repair fitting/blacksmithing/welding.

    Boot and shoe repairing.

    Canteen cooking.

    General commercial.

    Shorthand typing.

    Copy typing.

    Dressmaking.

    Electrical contracting.

    Furniture cabinet making.

    *Hairdressing (men's).

    Instrument mechanic.

    Leather goods manufacture:—

    light.

    heavy.

    *Motor repair.

    Piano manufacture (bench work).

    *Radio and Television servicing.

    Scientific glass ware lamp blowing (bench work).

    Screen process printing and stencil cutting.

    *Store-keeping.

    Tailoring (retail bespoke).

    Typewriter mechanic.

    Vehicle building:—

    body budding.

    coach painting.

    *Watch and Clock repairing.

    Woodcutting machining.

    Trades marked * are available at Hillington Government Training Centre.

    Catering Industry (Tipping)
    Sir F. Medlicottasked the Minister of Labour if, with a view to maintaining and increasing the volume of employment in the hotel and catering trades by attracting more visitors from the Continent, he will introduce an amendment to the Catering Wages Act which will provide for a service charge to be added to all hotel and catering bills and for tipping to be made illegal.
    Mr. Iain Macleod: No, Sir. I do not think the subject lends itself to legislation.
    Sir F. Medlicott: This is the kind of Question which should have been tabled by the other side, because tipping is neither consistent with the dignity of
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    labour nor with any good system of wage structure. Is it not time that we began to dismantle this system, which is often irritating in practice and very uneven in operation?
    Mr. Macleod: Even if all that is so—and some of it may be—I would not have thought that this is an appropriate subject for legislation. I asked the Board of Trade about this matter in view of my hon. Friend's Question, and the Department told me that at the tourist conference held in May, 1958, although any number of tourist organisations attended, not a single one raised this point. I doubt whether there is as much widespread interest as has been suggested.
    Mrs. Slater: Does not that bear out the fact that the wages paid under the Catering Wages Board are extremely low, especially for women? What ought to happen is a raising of the wages rather than pressing this question of tipping.
    Mr. Macleod: That is a matter for wages boards, which by recent decision of the House have now become wages councils.

    Brook Green
    Mr. G. H. R. Rogersasked the Minister of Labour how many North Kensington residents were registered as unemployed at the end of April at the Brook Green Employment Exchange; and how many of these were under 25 years of age.
    Mr. Iain Macleod: I regret that the statistics for the Brook Green Employment Exchange do not record North Kensington residents separately, but the latest figures for Brook Green show that at December, 1958, about 22 per cent. of the adult unemployed were under 25 years of age.
    Mr. Rogers: Could some effort be made to collect these figures? The number of idle hands may be relevant to the problems of the area.
    Mr. Macleod: The figure of 22 per cent. for Brook Green is not really different from the figure for Great Britain, which is around 20 per cent. Brook Green, however, includes Kensington, Hammersmith and Barnes, and I would

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    need to examine all the individual records to answer the hon. Member's Question in relation to North Kensington. I do not think that the time involved would be justified.

    Unemployed and Vacancies
    Mr. Lawsonasked the Minister of Labour (1) the ratio of registered unemployed boys to notified unfilled vacancies for each of the Ministry of Labour regions in Great Britain at the latest convenient date;
    (2) the ratio of registered unemployed men, over 18 years of age. to notified unfilled vacancies for each of the Ministry of Labour regions in Great Britain at the latest convenient date.
    Mr. Iain Macleod: As the reply includes a table of figures, I will, if I may,

    MAY, 1959

    Region

    Men 18 and over

    Boys under 18

    Wholly unemployed

    Vacancies

    Ratio

    Wholly unemployed

    Vacancies

    Ratio

    London and South Eastern

    …

    49,140

    17,797

    1:0·4

    1,644

    6,456

    1:3·9

    Eastern and Southern

    …

    24,883

    15,062

    1:0·6

    953

    3,338

    1:3·5

    South-Western

    …

    17,014

    9,300

    1:0·5

    745

    1,458

    1:2·0

    Midland

    …

    19,222

    8,721

    1:0·5

    508

    3,147

    1:6·2

    North Midland

    …

    14,289

    7,795

    1:0·5

    552

    1,451

    1:2·6

    East and West Ridings

    …

    21,668

    6,027

    1:0·3

    824

    2,101

    1:2·5

    North-Western

    …

    50,152

    7,890

    1:0·2

    2,795

    1,523

    1:0·5

    Northern

    …

    27,487

    3,683

    1:0·1

    1,536

    799

    1:0·5

    Scotland

    …

    57,744

    3,805

    1:0·1

    3,540

    779

    1:0·2

    Wales

    …

    22,021

    5,644

    1:0·3

    1,445

    491

    1:0·3

    Great Britain

    …

    303,620

    85,724

    1:0·3

    14,542

    21,543

    1:1·5

    Shotts Employment Exchange
    Miss Herbisonasked the Minister of Labour (1) the numbers of unemployed registered at the Shotts Employment Exchange in April, 1958, and April, 1959; and what percentage of the insured population these represented;
    (2) the latest figures of those registered as unemployed at the Shotts Employment Exchange; and what percentage of the insured population this represents.
    Mr. Iain Macleod: Two hundred and eighty-four or 3·8 per cent. at 14th
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    circulate a statement in the OFFICIAL REPORT. I would, however, remind the hon. Member of what I said in reply to his Question on 13th April, 1959, about the misleading nature of these ratios.
    Mr. Lawson: Will the Minister confirm that the ratio of unemployed boys in Scotland is about fifteen times worse than the ratio of unemployed boys to unfilled vacancies in the Midlands? Does he not think that this is an intolerable position for Scotland?
    Mr. Macleod: I am not sure how I can make the immediate calculation. The ratio is certainly much higher and, possibly, even rather more than the hon. Member suggests. I merely say that there is no direct comparison that can be drawn between these figures. It would be valid only if the occupational classification were the same.
    April, 1958; 390 or 5·2 per cent. at 15th April, 1959, and 389 or 5·1 per cent. at 11th May, 1959.
    Miss Herbison: Is the Minister aware that these figures are very considerable compared with the figures for the United Kingdom? Is he not also aware that these figures would be much higher had not many hundreds of the people left the area? Will the right hon. Gentleman do anything at all, in conjunction with the President of the Board of Trade, to ensure that alternative work is brought to an area where the coal industry has collapsed almost completely?
    Mr. Macleod: I agree with the hon. Lady about the seriousness of the problem. This is one of the most difficult areas with which we have to deal. As for collaboration with my right hon. Friend the President of the Board of Trade, I will, of course, take it up. This is now a D.A.T.A.C. area and we are trying to bring new industry to it, so far, I am afraid, without much success. We will, however, go on trying.
    Miss Herbisonasked the Minister of Labour the number of men and women registered at the Shotts Employment Exchange who have been unemployed for more than six months and for more than eight weeks, respectively.
    Mr. Iain Macleod: On 9th March, the latest date for which these quarterly statistics are available, there were 79 men and boys and 81 women and girls registered at the Shotts Employment Exchange and Youth Employment Office who had been unemployed for more than eight weeks but less than six months, and 71 men and boys and 52 women and girls who had been unemployed over six months. I will send the comparable figures for June to the hon. Lady as soon as they are available.
    Miss Herbison: Does the Minister not agree that those figures which he has just given show that the majority of those unemployed and registered at the Shotts Exchange have been unemployed for a very long time? Indeed, some of them have been unemployed almost for years. Is the right hon. Gentleman not also aware that many people are tired of hearing of the efforts that the Government are making? What they want to see is some result from those efforts. Surely, when the Government have been considering the question of advance factories, a place in which unemployment has been of such long duration should have been attended to long ago.
    Mr. Macleod: I understand what the hon. Lady says. I, too, want to see results from these efforts. That is why we make them. The figures which I have just given underline the fact that the main problem here is that of a marked shortage of jobs for women. It is not an unusual situation in coal mining areas, but there are very limited employment opportunities here. That is why we will continue to give the area as high a priority as we can.

    Youth Employment Officers (Pay)
    Mrs. Castleasked the Minister of Labour whether he is yet in a position to report on the qualifications and pay of youth employment officers.
    Mr. Iain Macleod: I understand that a statement of qualifications prepared by the local authority associations concerned is likely to be ready very shortly. It is intended to serve as a basis for the negotiation of appropriate salary scales through the machinery of the appropriate National Joint Council for Local Authorities.
    Mrs. Castle: While thanking the Minister for that reply, may I ask whether he is not aware that these discussions have been going on since January? Is he not also aware that the variations in the qualifications required and the salaries paid in this important service are leading to discontent and demoralisation in the service at the very moment when it is most needed? Will the right hon. Gentleman, therefore, do what he can to speed up a settlement of this issue on a fair basis?
    Mr. Macleod: I certainly agree with what the hon. Lady said about the importance of this service and the length of time that the negotiations have taken. I hope now that they are very near the point of finality. Then we can get proper qualifications and appropriate salary scales as soon as possible.

    Part-time Working
    Mr. C. R. Hobsonasked the Minister of Labour to what extent under his regulations a person who has worked short-time for twelve months automatically becomes a part-time worker and, as such, is disentitled to unemployment benefit.
    The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): I have been asked to reply. I recently made Regulations, coming into force on 8th April, 1959, which ensure that in determining the normal extent of a person's working week for the purposes of unemployment benefit, no account will be taken of short-time working due to adverse industrial conditions.
    Mr. Hobson: Whilst thanking the right hon. Gentleman for that reply,

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    may I suggest that he has hardly answered the Question? Rather has he answered Questions in my name which appear later on the Order Paper. What the Question asks is whether a worker who is on short time for a considerable period then becomes classed as a short-time worker and is not entitled to unemployment pay as such. At the moment, employed workers are put into two categories. They can be shown as part-time workers and a person can be a part-time worker whilst at the same time not being a part-time worker in so far as he is only on short-time. Will the Minister look into the matter? I know that it is very complex.
    Mr. Boyd-Carpenter: Yes. The hon. Member has referred to a number of aspects, but I understood him to have principally in mind on this Question, apart from the others which I shall be answering later, the situation which had arisen on the construction of the 1948 Regulations in relation to men who were working short-time due to adverse industrial conditions. As my main Answer made clear, we have dealt with that and restored the position to what, I understand, it was always intended to be.

  NATIONAL SERVICE

    Nuclear Engineering (Research Staff)
    Mr. Blenkinsopasked the Minister of Labour whether he is aware that those responsible for research programmes in nuclear engineering are concerned at the difficulties caused by the call-up of non-graduate research staff; whether he is prepared to give the matter further consideration.
    Mr. Iain Macleod: Representations have been made to me from time to time that the call-up of non-graduates engaged on research has created difficulties for firms engaged in nuclear engineering and other industries. On the advice of my Technical Personnel Committee, which considered this matter again last autumn, I am not prepared to extend the deferment arrangements for science and engineering graduates to men with other qualifications.
    Mr. Blenkinsop: Does the right hon. Gentleman not recognise that this is
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    a serious matter to some important engineering establishments as well as a serious matter to the young men involved? Is it not absolutely wrong that graduates should be excluded whilst the work of non-graduates who are doing almost equally important research work for the nation in this field is being cut in this way?
    Mr. Macleod: I am not without sympathy for that point of view. That is why I particularly asked my technical personnel committee to consider it. That committee, however, came to the conclusion, first, that it is easy to define graduates; and the scheme is kept to them because it must be kept within bounds. It is, however, extremely difficult to distinguish between all the different professional qualifications that non-graduates have.
    Mr. Shinwell: If an employer regards a non-graduate research worker as important and, indeed, essential to the undertaking, is that not a sufficient definition?
    Mr. Macleod: No, I am afraid it is not. That would be giving to the employers the right of veto over the call-up for National Service.
    Mr. Blenkinsop: Is the Minister aware that some of the research directors would be willing to discuss with his personnel some definition that they believe to be quite as effective as the existing graduate definition?
    Mr. Macleod: If the hon. Member would like to organise such a deputation, I will certainly receive it.

  AGRICULTURE, FISHERIES AND FOOD

    Forestry Houses (Rents)
    Mr. Gowerasked the Minister of Agriculture, Fisheries and Food whether, in view of the hardship being experienced, he will reconsider his proposals to vary the rents of forestry houses, taking full account of the average earnings of forestry workers.
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber): The Forestry Commission is reviewing the rents of

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    houses occupied by its workers. This is part of a general review of rents of quarters occupied by Government employees. New rents have not yet been determined. My right hon. Friend cannot, however, accept the implication that the present rents cause hardship.
    Mr. Gower: But is it not a fact that most forestry workers are earning wages which are comparable with those paid to workers in agriculture, and is there any conceivable reason why the Forestry Commission should seek to recover economic rents while farmers and others who employ people in agriculture in most cases have service tenancies not based on some economic rent? Could not this matter be reconsidered?
    Mr. Godber: Rents must be related in some way to standards of accommodation provided——
    Mr. Gower: Why?
    Mr. Godber: —but I would assure my hon. Friend that it is unlikely that any of these workers will have to bear any excessive increase.
    Mr. F. M. Bennett: In fairness to the agricultural workers, would it not be fair for the Joint Parliamentary Secretary to add that agricultural workers do get several shillings less per week than the forestry workers, whose rate is usually fixed a little above the agricultural workers' rate?
    Mr. Godber: Yes.

    Salad Prices
    Miss Burtonasked the Minister of Agriculture, Fisheries and Food whether he is aware of public concern at the increase in salad prices immediately prior to the Whitsuntide weekend; and, in view of the fact that this happens every year, if he will set up a committee of inquiry to investigate the profits made by growers, wholesalers and retailers.
    Mr. Godber: My right hon. Friend is aware that salad prices did tend generally to rise. Supply and demand for salads fluctuates greatly. When, as at Whitsun, there is a heavy demand, which was reinforced this year by the spell of good weather, prices rise. A
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    thorough inquiry was made only three years ago by the Runciman Committee, and I see no point in initiating another.
    Miss Burton: Is the Joint Parliamentary Secretary aware that we get that Answer whether it is fine or whether it is wet? While not knowing whether he does his own shopping or not, may I ask him whether he is aware that on the Friday before Whit Sunday the small shop where I went was ashamed at having to ask 6d. more for tomatoes and 6d. more for cucumbers and that lettuce was up by 3d.? Is he aware that the growers and shopkeepers state that the trouble is that these goods have to go through two or three wholesalers before they reach the shops? Why cannot he have a look at it?
    Mr. Godber: I have advised the hon. Lady before today to read the Runciman Committee's Report, which goes into this, and is very good reading. I commend it to the hon. Lady. I think one must take account of the conclusions which that Committee came to in that Report, and I would say to her that while prices no doubt have risen, she must not lose sight of the fact that some prices previously may have been ones at which the growers were losing considerable sums of money.
    Mr. Willey: We all read the Runciman Report a very long time ago, so can the hon. Gentleman tell us when the Government are going to take any effective action as a result of that Report?
    Mr. Godber: The hon. Gentleman knows perfectly well that that does not arise on this Question.
    Hon. Members: Oh.
    Miss Burton: On a point of order. While that Answer may have reference to the Runciman Report, it has none to my shopping bill prior to Whitsun, so may I give notice that I shall raise it on the Adjournment if possible?

    Heneage Report
    Mr. G. Jegerasked the Minister of Agriculture, Fisheries and Food whether he is now in a position to make a statement on the Heneage Report, which has been under consideration since 1951.
    Mr. Godber: I am glad to say that agreement in principle has recently been reached by the associations principally concerned and my right hon. Friend is now arranging for further detailed study of these proposals.
    Mr. Jeger: Can the hon. Gentleman say how long this detailed study will take in view of the fact that the preliminary discussions have taken over eight years?
    Mr. Godber: I am hopeful that we shall be making some progress here as a result of this agreement, and I am sure that the hon. Member will be as encouraged as I am by the fact that these associations have come together.
    Mr. T. Williams: Can the Parliamentary Secretary say whether, after all the alternatives which have been discussed over the past eight years, he will satisfy himself that the final alternative which may be accepted will be useful?
    Mr. Godber: Yes, that is one of the things we are going to consider very carefully indeed.
    Major Legge-Bourke: While, of course, the opinions of the various associations are immensely important in this matter, may I ask my hon. Friend whether he will make sure that no final decision is given effect to until the House of Commons has had an opportunity of expressing its views?
    Mr. Godber: I will inform my right hon. Friend of my hon. and gallant Friend's view.

    Beef
    Mr. Russellasked the Minister of Agriculture, Fisheries and Food what increases are expected in imports of beef from the Federation of Rhodesia and Nyasaland.
    Mr. Godber: During the first quarter of this year, the United Kingdom received 1,320 tons of beef from the Federation, all of it from Southern Rhodesia. These are the first significant imports from these territories for many years. My right hon. Friend understands that the Federation hopes to export a total of five or six thousand tons of beef to Europe during the year, most of which is likely to come to this country.
    Mr. Russell: While thanking my hon. Friend for that Answer, may I ask if he will consider giving every encouragement to the importers here to take Federation meat when it is available?
    Mr. Godber: I do not think that there is any need for specific steps. This meat is being readily absorbed.

    Ordnance Survey Staff (Pay)
    Mr. J. Howardasked the Minister of Agriculture, Fisheries and Food when the result of the research into the work revaluation claim of the Reproduction A grades of the Ordnance Survey Department will be made known.
    Dr. Kingasked the Minister of Agriculture, Fisheries and Food when a reply may be expected to the claim of the Reproduction A grade of Ordnance Survey for work revaluation, which was made on 15th November, 1957.
    Mr. Godber: My right. hon. Friend hopes it will be possible to send a reply to the staff association concerned about the end of this month.
    Mr. Howard: While being extremely obliged to my hon. Friend for that reply, may I ask whether he does not agree that the claim which was lodged in November, 1957, has taken an extraordinarily long time to be considered, and will he ensure that the word "soon" is not used again in fixing any further date ahead?
    Mr. Godber: Yes, I do realise that it has taken a very considerable amount of time, but it was a very complicated claim. I am told that the initial claim was based on a pay increase awarded to a different class of staff, the cartographic draughtsmen, and it was not possible to accept the claim in this form. Therefore, there had to be further discussions which took some considerable time. I am glad to say that we hope, as I indicated in the previous reply, to send a reply at about the end of this month.

    Inshore Fishing Industry (Loans)
    Mr. D. Jonesasked the Minister of Agriculture Fisheries and Food whether he is aware that inshore fishermen who took advantage of the Inshore Fishing Act, 1945, between September, 1957, and June, 1958, to replace their

    621
    fishing boats, now find themselves saddled with repayment of the loan over 20 years at 6¼ per cent. per annum; and what action he proposes to relieve these fishermen of this burden.
    Mr. Godber: No loans have been made under the Inshore Fishing Act, 1945, since 1952, when the present loan scheme administered by the White Fish Authority came into operation. The rate of interest of 6¼ per cent. at which inshore fishermen obtained 20-year loans from the Authority between September, 1957, and June, 1958, compares with a current rate of 5⅞ per cent. I fear I can see no basis for reopening agreements between the Authority and the fishermen.
    Mr. Jones: Does the hon. Gentleman realise that these men were forced to secure these loans when the Bank Rate went up to 7 per cent. in December, 1957? They could not wait. If what the Chancellor of the Exchequer is telling us be true, then we understand that the emergency is now past, but these men are saddled with a 6¼ per cent. charge for another 18 years, which makes it extremely difficult for them. Is there nothing he can do about it?
    Mr. Godber: No, I do not think there is. I can understand and sympathise with the hon. Member, but this applies to everybody who was borrowing money on a long-term basis at that time, and if one made an exception for one section of the community it would have to be extended to others.

    Milk
    Mr. Blenkinsopasked the Minister of Agriculture, Fisheries and Food what is the estimated consumption of fresh milk per person in Newcastle-upon-Tyne at the latest available date; and how this figure compares with the national average.
    Mr. Godber: The latest figures available for Newcastle-on-Tyne are those for 1955, when the Milk Marketing Board made a household survey in nine large towns. That survey showed the consumption of liquid milk in Newcastle to be 4·37 pints per head per week compared with an average of 4·74 pints for the nine towns covered by the survey. The national average for 1955, as shown by the National Food Survey, was 4·81 pints per week.
    Mr. Blenkinsop: Does the hon. Gentleman not feel that it is about time that we had a further inquiry? While welcoming the work of the Dairy Festival and other schemes of this kind, does he not feel that in these areas where consumption is low there should be a continuing campaign to try to increase it?
    Mr. Godber: Inquiries of this sort on a local basis are instituted by the Milk Marketing Board, not by the Government. We try to get our figures from the National Food Survey, covering the country as a whole. I think it would be difficult for us to have selective inquiries in this way. I agree that the figures showed a lower consumption in Newcastle at that time. I have no means of knowing whether that is the position today.

  PENSIONS AND NATIONAL INSURANCE

    National Assistance (North Kensington)
    Mr. G. H. R. Rogersasked the Minister of Pensions and National Insurance how many residents of North Kensington were receiving public assistance at the end of April last; and how many of these were under 25 years of age.
    Mr. Boyd-Carpenter: I am informed by the National Assistance Board that the information asked for is not available as North Kensington is served by two of the Board's area offices each of which covers other areas as well.

    Pneumoconiosis
    Mr. T. Brownasked the Minister of Pensions and National Insurance, in view of the concern amongst sufferers from pneumoconiosis, if he will now consider the advisability of setting up a National Appeals Board, to which cases of suspected pneumoconiosis which have been turned down by the existing medical panels may be submitted.
    Mr. Boyd-Carpenter: I am afraid this is not at present possible.
    Mr. Brown: Arising from that reply, may I ask the Minister whether he is not aware—and surely he must be from

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    the correspondence he has had previously on the subject—that there is growing dissatisfaction today among the unfortunate victims of pneumoconiosis at being turned down by the medical appeal tribunals? Is he further aware that the confidence of the men in these medical panels has now been destroyed? Cannot the right hon. Gentleman do something to restore the confidence felt by these men eighteen months ago and even longer back than that?
    Mr. Boyd-Carpenter: Whilst I would not go as far as the hon. Member, I appreciate that there is a widespread desire for the introduction of an appeal in this matter. I have been into it very fully. As the House may know, I made regulations at the beginning of this year introducing an appeal on diagnosis to the medical appeal tribunals in respect of other prescribed diseases.
    I was not able to include pneumoconiosis for the reason that there is a very limited number of adequately qualified medical specialists, who are at the moment fully occupied on the ordinary panels. Their work, of course, will be very much increased by the wide and comprehensive X-ray survey which the National Coal Board is undertaking. When this is out of the way, which I think will not be for some time, I hope to see some progress made in this connection.
    Mr. Brown: Are we to understand that consequent upon the inadequacy of medical specialists on this peculiar and particular complaint these men must suffer? Can the right hon. Gentleman not do something to arrest this breach of confidence which is now taking place, particularly in the north of England? Surely, he can do something in his Department?
    Mr. Boyd-Carpenter: I do not accept that there is a breach of confidence. I am in close touch with those concerned, including a number of hon. Members, on various points arising from the diagnosis and treatment of pneumoconiosis cases. The Question, of course, refers to the particular expedient of an appeal. I am sure the hon. Member would agree with me that it would be no use, and indeed positively harmful, to introduce a system of appeal on a medical matter in which the appeal lay
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    to tribunals guided by medical men less qualified than those who determined the original question.
    Miss Herbison: Since the right hon. Gentleman says that at present it is quite impossible to do what my hon. Friend the Member for Ince (Mr. T. Brown) is asking for, would he not do something in the intervening period until he has the specialists—and I am not at all sure that it could not be done—to have a complete inquiry into this whole question of the diagnosis of pneumoconiosis? Surely, if the right hon. Gentleman lived in a mining area, as does my hon. Friend and as I do, he would realise the great dissatisfaction at present and the great lack of confidence in the present system.
    Mr. Boyd-Carpenter: I do not know from the way the hon. Lady has framed her question whether she is fully aware of the very skilled and detailed research work on these lines which is being conducted by the Pneumoconiosis Research Unit at Llandough, and which is going on with the fullest encouragement from the Government.
    Mr. J. Griffiths: Does the right hon. Gentleman not think that the time has now come for a re-examination of the criteria upon which doctors decide their diagnosis of this disease? In particular, does he not appreciate that the margin between pneumoconiosis and emphysema has become so thin that disaffection exists because it is possible to have two men one of whom is certified as disabled by pneumoconiosis and receives compensation by way of industrial injury benefit and the other is held by the doctor to be suffering from emphysema, whereas to the layman there appears to be no difference between the symptoms and there is a growing feeling that both are industrial diseases? Has not the time come for a complete review of the medical criteria?
    Mr. Boyd-Carpenter: I am sure the right hon. Gentleman knows that a great deal of work has been and is being done on pneumoconiosis on the one hand and emphysema and bronchitis on the other, and I should not have thought that at the present stage such an inquiry would serve any purpose other than to delay detailed consideration.
    Mr. Brown: Owing to the unsatisfactory nature of the reply and the growing disquiet in the mining areas on this matter, I beg to give notice that I will raise it on the Adjournment at the first opportunity.

    War Pensioners
    Mrs. Castleasked the Minister of Pensions and National Insurance whether he will propose the amendment of Article 58 of the Royal Warrant so as to ensure that any war pensioner who has served a sentence of imprisonment is not punished twice for the same offence by being deprived of his war disability pension.
    Mr. Boyd-Carpenter: No, Sir. It has for a long time been a condition of many forms of public pension that they are liable to forfeiture in cases where the recipient is sent to prison. I have, however, discretionary powers to restore a war pension on release, and these powers are very widely exercised.
    Mrs. Castle: Is the Minister aware that in two recent cases, particulars of which I sent to his Department, two men, one of whom had been rendered deaf and the other had lost a limb in the service of their country, not only had their pensions withdrawn while they were in prison, which is understandable, but have been refused restoration of the pensions on their release from prison on the ground that they have been in prison more than once? Is it not a quite intolerable situation that once a man has served his sentence for a crime he should be punished again by being deprived of a war pension to which he is entitled because of a disability incurred in service on behalf of the country?
    Mr. Boyd-Carpenter: I have studied the two cases about which the hon. Lady was in correspondence with the Joint Parliamentary Secretary. I do not want to go into details but both cases involved a number of serious convictions, and warning was given in advance of the possible effect of a further conviction on the payment of the war pension. I do not think that these cases invalidate either the Answer which I gave or the general principle which, as the hon. Lady knows, goes far wider than war pensions.

    Short-Time Working
    Mr. C. R. Hobsonasked the Minister of Pensions and National Insurance if he will make regulations to reduce the hardship caused to workers who are on short-time, when holidays intervene by not reducing the working week proportionate to the length of holiday.
    Mr. Boyd-Carpenter: I think the hon. Member has in mind a recent case in which difficulty arose as a result of the terms of certain guaranteed week agreements. The solution to the problem lies in the hands of those responsible for these agreements. If the hon. Member has in mind some other matter perhaps he would write to me.
    Mr. C. R. Hobsonasked the Minister of Pensions and National Insurance if he will make regulations to allow workers who are on Friday and Monday short-time working which are consecutive rostered work days to draw unemployment pay.
    Mr. Boyd-Carpenter: Where Friday and Monday are days of unemployment, there seems to be no reason why these workers should not, subject to the ordinary conditions, be entitled to unemployment benefit. Parliament has placed the decision on individual claims in the hands of statutory authorities, with which I have no right to interfere, but if the hon. Member has in mind any general difficulty and will let me have particulars, I will gladly look into it.
    Mr. Hobson: While thanking the right hon. Gentleman for that reply, may I ask whether something should not be done to ensure closer co-ordination between Ministry of Labour officials and the right hon. Gentleman's Department, because they seem to give different rulings in these cases? Whilst agreeing that the right hon. Gentleman's reply is a definite improvement and has clarified the position, may I say that the fact remains that two bodies try to interpret the regulations? Can the right hon. Gentleman put the matter right?
    Mr. Boyd-Carpenter: I have no reason to believe that the Ministry of Labour, which administers unemployment benefit on my behalf, and my own Department take any different view of the law, either on this or any other point,

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    but if the hon. Gentleman has in mind a particular case in which there is difficulty, I should be only too glad to try to sort it out.

  MINISTRY OF POWER

    Sir John Cockcroft (Statement)
    Mr. A. Robertsasked the Paymaster-General if it was with his authority that Sir John Cockcroft made a statement at Darwin, on 25th April, to the effect that 25 per cent. of the electricity requirements of the United Kingdom would be met by atomic generation in 1966, 50 per cent. by 1975 and 100 per cent. by the end of the century.
    The Parliamentary Secretary to the Ministry of Power (Sir Ian Horobin): No, Sir. I understand that this was an informal statement representing Sir John Cockcroft's personal views.
    Mr. Roberts: Would the hon. Gentleman agree that it is a rather irregular statement to be made by a very important person like Sir John Cockcroft? Whilst I am not trying to underestimate the advantages of nuclear energy, may I ask whether, if we are to use it to the extent stated by Sir John Cockcroft, it all depends on the economic situation?
    Sir I. Horobin: The Government are not responsible for the statement that Sir John Cockcroft made, but, unlike some statements on the subject of nuclear energy, anything that he says is worthy of considerable respect.
    Mr. Hobson: Would the hon. Gentleman get his noble Friend to look into this matter, not so much in relation to the statement by Sir John Cockcroft but in relation to the Electricity Authority's provision of atomic power stations? Particularly in view of the harmful effect on the coal industry and the increased cost of electricity from atomic power stations, are we not going too far, in view of United States experience in this matter?
    Sir I. Horobin: That is much too wide a matter for a supplementary question. The programme of nuclear energy for the next few years was settled after careful consideration, and it certainly could not be upset on any temporary considerations.

    Rural Electrification
    Mr. Hiltonasked the Paymaster-General, in view of the continuing absence of rural electrification in many areas, such as Norfolk, if he will now authorise area boards to undertake further additional work on rural electrification.
    Sir I. Horobin: The area electricity boards are well ahead of the targets for rural electrification which were announced to the House on 20th January, 1959. Every opportunity is being taken to make further progress in this matter.
    Mr. Hilton: The area boards may be ahead of their targets, but this is no consolation to the many small business people and small farmers in many rural parts of Norfolk who are still without a supply of electricity, despite the fact that they are reasonably near where electricity is available. Will the Minister do his best to try to expedite the further supply of electricity, because these small business people in particular find competition from others who have electricity very difficult, and it will give much pleasure to them if he can do something to expedite this supply.
    Sir I. Horobin: The boards, with the assistance and guidance of the Government, have made good progress faster than they expected. The hon. Gentleman must realise that there is a limit to the unremunerative connections which can be undertaken by boards who have statutory obligations and also obligations to their existing consumers.

    Fuel Policy
    Mr. A. Robertsasked the Paymaster-General, in view of the uncertainty that exists concerning the supply and demand of British indigenous fuels, and the lack of a coherent policy dealing with the supply of refined fuel, if he will recommend the appointment of a Royal Commission to inquire and advise on the fuel problems of this country, with a view to giving guidance to the National Coal Board, the Central Electricity Generating Board and the Gas Council on future planning to meet potential demand.
    Sir I. Horobin: No, Sir.
    Mr. Roberts: In view of the negative reply, will the Minister agree that some

    629
    committee of inquiry should be set up because of the present very complex fuel problem?
    Sir I. Horobin: No, Sir. This is a matter on which there is a difference of opinion between the two sides of the House. I am afraid that the hon. Gentleman must accustom himself to the fact that if the people of England can get cheap fuel at a profit they are not going to be bothered with dear fuel at a loss.
    Mr. J. Griffiths: Do I gather from that reply by the Parliamentary Secretary that although when this country was desperately short of fuel of any kind miners were asked to surrender their Saturdays and to do many other things, the Government now recognise no obligation to have some regard to their future in spite of their past history?
    Sir I. Horobin: No, Sir, the right hon. Gentleman must not assume that.

    Northern Ireland (Electricity Supplies)
    Mr. Currieasked the Paymaster-General (1) what is the estimated cost of an undersea power cable for the bulk supply of electrical energy to Northern Ireland from south-west Scotland;
    (2) what is the estimated charge, per 100,000 units, which would require to be made for the supply of electrical current from the United Kingdom to Northern Ireland by means of a submarine cable;
    (3) what consideration has been given by Her Majesty's Government, in conjunction with the Governments of Northern Ireland and Eire, to the possibility of extending the national electricity grid so as to include Northern Ireland and Eire; and whether he will make a statement.
    Sir I. Horobin: There have been no recent discussions between Governments. This project was considered by the Government of Northern Ireland a few years ago but was judged to be uneconomic in the circumstances then prevailing. Further exchanges have now taken place between the Northern Ireland and South of Scotland Electricity Authorities and my noble Friend understands that the Northern Ireland Authorities will shortly
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    be making a further study of the problems involved in conjunction with the British Electricity Authorities. I would ask my hon. Friend to await the results of this investigation.

    Power Stations (Slurry)
    Mr. Hamiltonasked the Paymaster-General what steps are being taken to utilise slurry as fuel in electricity generating stations; and whether he will make a statement on the negotiations now proceeding for the siting of such a station in Fife.
    Sir I. Horobin: The National Coal Board are in continuous consultation with the Central Electricity Generating Board and the South of Scotland Electricity Board about the use of slurry in power stations. These discussions have led to a significant increase in the use of this fuel for electricity generation over the last four years.
    My noble Friend understands that the negotiations between the National Coal Board and the South of Scotland Electricity Board over the proposed station in Fife are making good progress.
    Mr. Hamilton: Whilst thanking the hon. Gentleman for that reply, can he give us any indication of when the negotiations are likely to reach a definite conclusion?
    Sir I. Horobin: I cannot give a date, but they are going well, and obviously it is to the advantage of both parties that they should come to a conclusion, so I think we can be hopeful in the matter.

    Methane Gas
    Mr. Russellasked the Paymaster-General what research has been carried out into the possibilities of recovering methane gas from sewage treatment; and what estimate has been made of its cost compared with imported methane gas.
    Sir I. Horobin: The process of recovering methane gas from sewage is already well understood and about thirty schemes are in operation throughout the country. It is, however, costly and is only economic at the largest sewage works. It is not yet possible to estimate the cost of producing town gas from liquid methane.
    Mr. Russell: As the Gas Council has been importing methane, can my hon. Friend say whether it is more expensive than methane produced from these schemes, and will research be continued to try to cheapen the schemes as time goes on and make them more economic?
    Sir I. Horobin: As I said in my first answer, as yet nobody really knows what is the cost of imported methane. That is the object of the test voyages. However, the sewage gas supplies could only contribute something of the order of one-tenth of 1 per cent. of national fuel supplies. I do not think, therefore, that the two are really comparable.
    Mr. Nealasked the Paymaster-General if he will lay before the House the details of the agreement he has authorised between the Gas Council and Constock for the experimental import of liquid methane into the United Kingdom.
    Sir I. Horobin: No, Sir. This is a commercial agreement between the Council and an American company.
    Mr. Neal: Would the Minister say why he will not disclose the agreement? Is this another instance of the stranglehold of American capital on British industry? If we must have liquid methane, how long will it be before we get it from our own oilfields in the Middle East?
    Sir I. Horobin: I think the suspicious nature of some hon. Gentlemen opposite about the activities of a nationalised industry is extraordinary. [An HON. MEMBER: "Answer the question."] The gas industry, as a commercial undertaking, has come to the conclusion that this is something worth doing, and the Government have concurred. It is not normal for commercial agreements, either in the public or in the private field, to be published, and that is all that my answer stated.
    Mr. J. Griffiths: Do I understand from the Parliamentary Secretary that the Ministry of Power, whose function we presume it is to co-ordinate our fuel and power resources in order to make the best use of them, has not taken any view about the importation of liquid methane, with all the consequences that this might have for the coal industry?
    Sir I. Horobin: Again, the right hon. Gentleman must not assume that. We are taking a great interest in the matter. The first thing to do is to find out if this is economic or not. The very forthcoming attitude of the Gas Council should be supported if it thinks, and finds out, that this is an economic source of power for British industry. In an enterprising way the Gas Council is trying to find out exactly what are the facts, and the Ministry is awaiting those facts. When they are determined, it will be the proper time to make a decision of policy as to whether or not to encourage further its commercial use.
    Mr. H. Morrison: The hon. Gentleman, in reply to my hon. Friend's Question, said that the agreement has been authorised between the Government and the Gas Council. If that is so, surely it is wrong for him to refuse to lay it before the House? The House of Commons has a right to know what the agreement is about.
    Sir I. Horobin: I am afraid I must keep to what I have said already. It is not normal for commercial agreements of this kind to be published.

    Pensions
    Dame Irene Wardasked the Paymaster General whether he will direct the attention of the Electricity Board and Gas Council to the Pensions (Increase) Act, with a view to stimulating similar action on their behalf for their pensioners.
    Sir I. Horobin: The Electricity Council and Gas Council are fully aware of the provisions of the Bill now under consideration by this House.
    Dame Irene Ward: Whilst thanking my hon. Friend for that comment, may I ask him if he will indicate that the Government would welcome action on the part of the electricity and gas undertakings, having regard to the fact that we now have the Pensions (Increase) Bill for other Crown servants?
    Sir I. Horobin: The Bill is still before the House, and the primary duty lies with the two Councils, but the Government will, of course, expeditiously consider any proposals which come to them.

    Gas Supplies (Oil Refineries)
    Mr. Nealasked the Paymaster General if he will give a general direction to the gas boards to limit the amount of gas accepted from oil refineries.
    Sir I. Horobin: No, Sir.
    Mr. Neal: Having already mutilated consumption by its economic policy, are the Government conscious of the severe injury which this new process will inflict on the coal industry?
    Sir I. Horobin: No, Sir. I think that is an extremely short-sighted estimate of the situation. The gas industry is one of the coal industry's best customers. If the gas industry cannot sell cheap gas, it will not sell any gas, and then it will not buy any coal.
    Mr. Neal: As the two refineries in the South of England from which the gas industry will take tail gas will displace 200,000 tons of deep-mined coal, where will the Government find customers for that coal?
    Sir I. Horobin: As I have said, the gas industry must get the cheapest supplies it can. It cannot be in the country's interest that tail gas should go to waste. Ii is useful, valuable and cheap fuel; it should be burned, and the gas industry are the best people to burn it.
    Mr. Blyton: In view of the answer given by the hon. Gentleman to Question No. 41, which was a declaration of war by the Government on the coal industry, can the Parliamentary Secretary tell us how far the Government are going to run down this industry?
    Sir I. Horobin: I am afraid the hon. Gentleman must put down his supplementary question. I could not grasp it.

    Electricity and Gas Boards (Joint Working)
    Mr. Willeyasked the Paymaster-General whether he will make a further statement on the committee appointed under the chairmanship of Sir Cecil Weir to inquire into possible joint working between area electricity and gas boards.
    Sir I. Horobin: My noble Friend has not yet received the views of all the boards concerned, but it is already clear that some of the Committee's recommendations may be usefully pursued.

  COAL

    Uses
    Mr. Willeyasked the Paymaster-General what progress has been made in the work on the expansion of existing uses and development of new uses of coal.
    Sir I. Horobin: Our main hope of expanding the existing uses of coal lies in encouraging economic activity and the measures announced in the Budget already appear to be doing so. Progress is also being made in producing smokeless fuels and in developing new methods of gasifying coal. For example, the output of the National Coal Board's new fuel "Warmco" is to be increased to about half a million tons per annum by next winter, a Lurgi plant is being built at Westfield, Scotland, and another is being considered for the Midlands. The House will also be aware that my noble Friend has recently appointed a committee under the chairmanship of Mr. A. H. Wilson, F.R.S., to review the possibilities of developing processes for the conversion of coal into chemicals, gas and oil.
    Mr. Willey: Can the hon. Gentleman say when the Committee is likely to report and what degree of urgency has been given to its work?
    Sir I. Horobin: The matter is certainly being treated urgently, but the Committee has only just been appointed and we must give it a chance.

BUSINESS OF THE HOUSE
Proceedings on the National Insurance Bill exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. R. A. Butler.]
ORDERS OF THE DAY

  NATIONAL INSURANCE BILL
  Order for consideration, as amended (in the Standing Committee), read.
  3.30 p.m.
  The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): I beg to move,
  That the Bill be recommitted to a Committee of the whole House in respect of the Amendments to Clause 9, page 15, line 25, Clause 9, page 15, line 41. Clause 9, page 15, line 42, Clause 10, page 17, line 20, and Clause 10, page 17, line 40, standing on the Notice Paper in the name of Mr. Boyd-Carpenter.
  This Motion is required to deal with the batch of technical Amendments to Clauses 9 and 10.
  Question put and agreed to.
  Bill immediately considered in Committee.
  [Sir CHARLES MACANDREW in the Chair]

  NATIONAL INSURANCE BILL

    Clause 9.—(FURTHER PROVISIONS AS TO PAYMENTS IN LIEU OF CONTRIBUTIONS.)
    The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. W. M. F. Vane): I beg to move, in page 15, line 25, to leave out "under the same employer".
    The Chairman: It seems to me that all the Amendments referred to in the recommittal Motion concern one point, and that it might be for the convenience of the Committee if they were all discussed together.
    Mr. Vane: I was glad to hear you say, Sir Charles, that we might discuss all these Amendments together. No great principles are involved in the Amendments and they make no great changes. They are concerned with two administrative points which make the preservation of rights in relation to contracting out for two groups work smoothly and it would be very difficult to disentangle the two. The groups concerned may not be very numerous but at the same time this seems to be a worthwhile change and I hope that the Committee will support what we propose.
    Where an employee in a contracted-out employment leaves that employment and no other arrangements are made for the satisfactory preservation of rights,
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    the employer makes what is called a payment in lieu which, in simpler language, buys the employee into the State scheme at the maximum. We are concerned here with where the employee leaves one non-participating employment and enters another under the same employer or under a different employer with no long interval between the two. The second group with which we are concerned is closely related to the first; the case is that of a man who is concurrently in two non-participating employments, again under the same employer or under different employers.
    If hon. Members will look at the Bill as drafted, they will see, in relation to the first group, that if the two nonparticipating employments—the first and the succeeding one—are under the same employer and there is no great interval of time between the two, they are treated for our purpose as continuing employment, and the same can follow in the case of employment under different employers provided that a payment passes from the first scheme to the second.
    In practice, this may work hardly in a few cases. It may mean that some moves in the private sector and in the public sector, but particularly in the public sector, may be made difficult because the employers already have some arrangements on a knock-for-knock principle working and that by so doing they achieve the same results as we want to see but no payment passes exactly in the way provided under this subsection. This, in particular, operates in the case of teachers, who are, of course, a very important group, and the Bill as drafted may make it rather harder for teachers to move in and out of Scotland, for instance, than it will be if the Committee will accept the small Amendment that we propose.
    Clause 9 (5) would, therefore, seem to be be better if worded less precisely, if instead of reference to a payment being made, the Minister were given regulation-making powers to cover this point. I do not think that it would be reasonable to suggest that he should now be able to say exactly what words he would like to use, because only in the light of experience shall we know what cases will emerge in this small group and exactly what we shall have to meet.

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    The Amendments to Clause 10 are consequential on what I have been explaining. If a question should arise of a recovery from a refund due to the employee at the time when his employer has to make a payment in lieu, the provision will now have to be extended to cover possible recovery from part of two separate refunds, in respect of the first employment and the second employment, which would not have happened if, instead of a knock-for-knock provision, we had seen a payment passing in the first place.
    The second group with which we are concerned is those employees who are in two different employments concurrently under the same employer, two different contracted-out employments. Under the Bill a payment in lieu becomes payable when such an employee leaves either employment, and if he were in the course of his working life to leave both employments at one time or another, then two payments in lieu would come to be paid, and these would overlap or, in some circumstances, exactly cover the same period.
    In these circumstances the man does not stand to gain; he cannot, because two payments in lieu if translated into terms of graduated benefit would carry him above the limit. The fund is, in fact, the gainer. Where the two employments are tinder different employers, neither is any more the loser than he would have been had the other employment not been a non-participating employment.
    But where in the very rare cases it may happen that an employee is in two non-participating employments concurrently, and he leaves first one and then the other, the employer will be buying that man into the State scheme twice over for exactly the same period, and that would not seem to be fair. Therefore, we suggest a new subsection (5) to Clause 9 which widens the Minister's regulation-making powers so that he can spare an employer under these circumstances having to pay virtually twice over for exactly the same thing without the employee benefiting therefrom, because in any case he is being bought into the State scheme at the maximum, which is the simple test of equivalency in all cases.
    I hope that the Committee will see that these proposals, rather complicated
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    though they may be at first hearing, and although not of very large application, may in the end be important to two small groups whose needs we should like to meet.
    Mr. H. A. Marquand: We are very grateful to the Parliamentary Secretary for his clear explanation of what I must confess at first sight looked rather like Greek to me; and it is a long time since I studied any Greek. He also had the courtesy to speak very slowly, so that we could follow the explanation as he went along, although I must confess that if I endeavoured to repeat it now, I might find myself at fault.
    The explanation which the hon. Gentleman gave completely convinced me, and I am sure that my hon. Friends will have no objection to accepting the Amendment that he moved. It is, however, a very remarkable thing that, although we have had about two dozen sittings in Committee on the Bill, it is still possible to discover at this rather late hour a complication of this kind, arising, I gather, principally from representations which have been made by local education authorities or teachers' organisations.
    I am not, of course, complaining that the hon. Gentleman seeks this opportunity to remove an obscurity and put the matter in order. It does, however, illustrate the very complicated nature of the scheme which is now being constructed, and particularly the complicated nature of the provisions concerning contracting out. Indeed we have had vividly illustrated how complicated and difficult the provisions concerning contracting out can be and I hope that when later Amendments on the Notice Paper are moved from this side of the Committee they will be received with the same sympathetic consideration that we have accorded to the Amendment which the hon. Gentleman has moved.
    I am glad to see that my hon. Friend the Member for Lanarkshire, North (Miss Herbison) has entered the Chamber, because we rejoice to hear that this series of Amendments will facilitate the movement of teachers from and into Scotland. I am more interested in the movement of teachers from Scotland and am grateful for the very great

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    help rendered during the Committee stage by the hon. Member for Lanarkshire, North and the hon. Member for Motherwell (Mr. Lawson), both of whom were once teachers in Scotland. When they come here they undoubtedly strengthen our teaching and debating capacity. I hope that the Committee will accept the Amendment.
    Amendment agreed to.
    Further Amendments made: In page 15, line 41, at end insert:
    Provided that—

    (i) this subsection shall not apply unless either both employments are under the same employer or such other conditions as may be prescribed are satisfied; and

    (ii) regulations may direct that paragraph (c) of this subsection shall not apply in any prescribed cases in which provision is made by the recognised superannuation scheme relating to the new employment for taking into account in any manner the service in the previous employment.

    (5) Provision may be made by regulations for excluding or restricting the liability to make payments in lieu of contributions in cases where a person serves at the same time in more than one employment, and for modifying the operation of any provision of this Act in relation to any such payment of which the amount is reduced by virtue of this subsection; and regulations may also modify the operation of subsection (4) of this section in cases where a person serves as aforesaid or would, apart from the regulations, be treated by virtue of that subsection as so serving.
    In page 15, line 42, leave out subsection (5).—[Mr. Vane.]
    Clause, as amended, ordered to stand part of the Bill.

    Clause 10.—(EMPLOYER'S RIGHT OF RE COVERY IN RESPECT OF PAYMENT IN LIEU OF CONTRIBUTIONS.)
    Amendments made: In page 17, line 20, leave out "or (5)".
    In line 40, at end insert:
    (6) Where on the coming to an end of an insured person's service in a non-participating employment—

    (a) he (or, by virtue of a connection with him, any other person) is entitled to a refund of any payments made by or in respect of him under the recognised superannuation scheme relating to a previous employment towards the provision of benefits under that scheme; and

    (b) a payment in lieu of contributions falls to be made in respect of him, and under subsection (4) of the last foregoing section his service in the two employments
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    is treated as service in one employment in fixing that payment;

    then in respect of that payment the person liable for it shall have the like right of recovery from that refund (so far as the payment is not recoverable out of a refund in respect of a later employment) as a person has under the foregoing subsections where a payment in lieu of contributions and a refund fall to be made on the coming to an end of service in the employment in respect of which the refund is to be made; and subsection (5) of this section shall apply accordingly.—[Mr. Vane.]
    Clause, as amended, ordered to stand part of the Bill.
    Bill reported, with Amendments; as amended (in the Standing Committee and on recommittal), considered.

    New Clause.—(PROVISION FOR CASES OF PERMANENT INCAPACITY.)
    Where a person has paid graduated contributions and before attaining pensionable age has ceased to be in whole-time employment and has become permanently incapacitated therefor, there shall be paid to him, in addition to any sickness benefit or industrial injury benefit to which he may be entitled, the amount of graduated benefit that would have been payable had he reached pensionable age on the date on which he became incapacitated as aforesaid.—[Mr. Houghton.]
    Brought up, and read the First time.
    3.45 p.m.
    Mr. Douglas Houghton: I beg to move, That the Clause be read a Second time.
    This is a proposal to introduce a breakdown Clause into the Bill. It proposes that where a person under the scheme retires from whole-time employment on health grounds and is permanently incapacitated from working whole-time, the graduated benefits, if any, accrued to the date of his retirement on health grounds should be payable to him, in addition to any sickness or industrial injury benefits to which he may be entitled under the National Insurance Acts.
    This is a feature of most vocational pension schemes. It is obvious that an employed person who has contributed towards retirement benefits which he would normally enjoy on reaching the age limit, and who retires prematurely on health grounds, should be given some compensation for the surrender of his interest in the pension scheme. Indeed, some vocational schemes go further by paying more than the accrued benefit at

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    the time of retirement, especially in cases where the employee has comparatively short service and would otherwise retire on quite a small pension. Where total incapacity is involved, the aim of some of these schemes is to ensure that the employee stricken down by ill-health is given something approximate to a living wage retirement pension.
    This Clause is more narrowly drafted than the breakdown clause in most vocational schemes. Most private schemes, and in the public services, too, have a provision that a person may retire on health grounds on satisfying the employing authority that owing to ill-health he is permanently incapacitated from doing his job—that is, the job in which he is employed under the public authority or the private employer. The Clause restricts the benefit of accrued pension rights on retirement for ill-health to those cases where a person has become permanently incapacitated from working whole time. It does not specify working whole time in the employment in which he is engaged, but working whole time and, therefore, it is intended to apply to a person who is so ill that he is unlikely to be able to work whole time again. This seems to be the minimum which should be provided under any scheme which has to bear comparison with schemes outside.
    In some schemes where contributions are returned not only does the employee receive back his own contributions, but the employers' contributions as well, and in many cases plus interest. In other schemes, as I have already mentioned, there is an actual pension payable, as in the case of civil servants and in most vocational schemes, where there is a normal expectation of a life career and where a pension is payable on retirement.
    The Minister may say that this is a very late time at which to introduce a new benefit. It is true that in Committee we became immersed in the complicated arrangements for graduated benefits on retirement, and we did not ask the Committee to devote itself to this aspect of the matter. However, under our procedure it is never too late to improve a Bill until it finally passes from our control, and the Minister must be conscious of the fact that his
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    scheme has this rather significant omission of not providing for permanent breakdown.
    The Minister may say that we can write what benefits we like into the Bill, provided that all concerned are prepared to pay for them. While that is true, there are some schemes which are basically inadequate unless they provide for the sort of immediate contingencies which we have to take into account in devising schemes of social benefit of this kind.
    We all appreciate that sickness benefit and even industrial injury benefit, which is higher than sickness benefit, are not enough to provide for those permanently suffering from ill-health and who are in the wage or salary ranges covered by the Bill's graduated contributions. It is to those and those alone that these provisions would apply. That is why we propose that the graduated benefits—which in all conscience will be small enough, and in many cases even tiny—should be provided in cases where permanent breakdown takes place after comparatively few years in the scheme. No lavish provision is involved in the request that graduated benefits be paid in addition to sickness or industrial injury benefits, if those are payable.
    It is impossible to make any firm estimate of what the likely burden of this breakdown pension on the fund would be, but we think that the Bill should contain the provision and that the finances of the scheme should provide for it. Taking the long-term view, they appear to do that. They appear to provide a margin for additional benefits in the years to come. We went into that matter very fully in Committee when we saw that there was apparently to be a considerable surplus of contributions over likely benefits. We realised that some part of the surplus would be utilised for paying basic retirement pensions under the National Insurance Scheme. This is a matter which can be studied as the scheme emerges and passes through its initial stages, when some more valid estimate could be made of the likely expense of breakdown pensions.
    Finally, the House will want to ensure that a scheme of this kind should provide benefits as nearly as possible comparable

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    with those provided under private schemes. In many cases, vocational schemes providing for breakdown benefit will be difficult to compare with this scheme if the comparison is confined to retirement benefits—for the purpose of opting out, for instance. The minds of those who have to decide may well be influenced by whether there is any breakdown provision in the State scheme. It seems desirable in this respect, as in one or two others, that the State scheme should be comparable with private schemes, and that cannot be so unless there is provision for cases of permanent incapacity.
    Whenever we have discussed breakdown provisions in a State scheme, something more than sickness benefit, the question of certification, has been raised as a serious medical and administrative problem. There have been discussions on whether under the existing scheme something more adequate could be provided for total or permanent incapacity other than sickness benefit. In those discussions, the problem of certification has always been raised. This problem arises in the ever-extending range of private schemes with breakdown clauses. More and more people are having to submit themselves to medical opinion as to whether they are permanently incapacitated from continuing their employment for the purpose of taking advantage of breakdown benefits. We have to face this question. People do break down and are totally incapacitated. In vocational schemes, account is taken of that and special benefits are provided for it. Are we to say that those benefits cannot be extended to a national scheme because of the difficulty of dealing with more claimants?
    At the outset, 1 said that the Clause was tightly drawn. Permanent incapacity refers to incapacity from any whole-time employment. That is an extreme qualification on which doctors would have little difficulty in pronouncing with some degree of certainty. In the extension of our social benefits as the years go by, the problem of breakdown will loom very largely in any national scheme and it will be necessary to overcome any administrative difficulties which arise. With the development of the science of diagnosis and the ever-
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    widening knowledge and experience of the medical profession, it will become easier rather than more difficult to arrive at medical judgments in cases of this kind.
    I sincerely hope that the Minister will sympathetically consider our proposal. He has the opportunity to say what the Government's attitude will be towards this significant omission from the scheme as it stands. If he says that we are making a small beginning, and will enlarge upon it or extend it as the years go by, he will have to say something more positive about his hopes and expectations about the benefits in the scheme. We are looking to the Minister to enlarge on this new angle of the scheme and to give the House some encouragement that this is the sort of benefit which the scheme will provide.
    Mr. George Lawson: I beg to second the Motion.
    I will be surprised if the Minister resists our proposal, or something very like it. What we are asking is very modest. We are not asking that when a man is sick he should have his sickness benefit supplemented, or that when he is unemployed he should have his unemployment benefit supplemented, or that when he is injured his industrial injury benefit should be supplemented.
    We are merely saying that when a man is found to be so incapacitated that he is adjudged not to be able to work again, he should have added to his sickness or industrial injury benefit the amount of the graduated benefit which he had built up at that time. He should be treated at the time when he ceases to be able to work as though he were at that stage 65 years of age, and paid on the basis not of what he might have achieved had he gone on working until he was 65, but what he had built up by that time.
    My right hon. and hon. Friends are asking for something very modest indeed, and if the Minister is not prepared to accede to this request he will be most ungenerous indeed. I hope that he will show that at least one Amendment from this side of the House can be accepted.
    4.0 p.m.
    The Clause should be judged from the standpoint of what the Government

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    are supposed to be doing in the Bill. They are supposed to be giving a State substitute for the private industrial insurance schemes that have grown up so rapidly in the past few years. We recognise that a growing number of workers are insured in addition to the normal State insurance scheme. Many of them are very well insured indeed. Some will have a benefit of perhaps two-thirds of their earnings during the last five years of their working lives. There is nothing like this in the State scheme which is a substitute for those private vocational schemes.
    As my hon. Friend the Member for Sowerby (Mr. Houghton) pointed out, in those private vocational schemes, or private industrial insurance schemes, where an insured person becomes incapacitated from working he is paid the benefit, or. at any rate, some part of it, which has accrued to him. We are asking that in this respect the State scheme should be more comparable to the private schemes for which it is supposed to be a substitute.
    This concession, if it could be called a concession, would cost very little indeed. I hardly think that most hon. Members are aware of how small the graduated benefits would be. If a man aged 40 Joined the scheme and paid contributions until he was 60 and was then unable to continue working, the addition to his pension would be as follows. If he had been earning £10 a week during the whole of that period and been paying the graduated payment that would be paid by a man earning that sum, the addition to his basic pension would amount to only 3s. a week.
    If, over those twenty years, he had been earning £11 a week, and been paying on that basis, the addition would amount to only 7s. a week. If he had been earning £12 a week, the addition would be 10s. a week. If he had been earning £13 a week, the addition would be 14s. a week. If he had been earning £14 a week, the addition would be 18s. a week. If he had been earning the maximum of £15 a week, the addition to his pension would be only 22s. a week.
    It means that a person receiving a basic pension of 50s. a week would, at the most, receive an additional 22s. We know that many people would
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    receive very much less than that. It seems, therefore, that what we are asking for here is so small—in fact, it is so niggardly under circumstances of that sort—that I shall be amazed if the Minister tells me he will not accept the Clause.
    There is one further point which we ought to bear in mind. The graduated payments, or the graduated contributions and benefits derived from those contributions, are not in any way subsidised by the Exchequer. There is no Exchequer grant towards those contributions or benefits, so they would cost the Exchequer nothing. It would be a case of the contributor being prepared to pay for the man who had dropped out and was unable to work. I am sure that if this proposition were put to the contributor he would say "Oh, yes. I will lend a hand to my fellow workman who is unable to carry on working. especially when the amount is so small."
    I hope that the Minister will tell us for the first time in the course of the long arguments that we have had on the Bill that he is prepared to accept something coming from this side.
    The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Edith Pitt): As the hon. Member for Sowerby (Mr. Houghton) said, the new Clause has the effect of providing a premature graduated pension for those who become permanently incapacitated for full-time work before pension age.
    The hon. Member used the colloquial expression, with which I think most of us are familiar, of a "breakdown" pension. It means that the graduated pension earned up to the date of the breakdown would be paid from the date that the permanent incapacity was certified, and would normally be payable in addition to the flat-rate sickness benefit or Industrial Injuries benefit under the National Insurance scheme.
    I should add the caution that that would not always be the case, because the Clause allows room for some part-time work. If the Clause were acceptable I would not object to that because it is a good thing that any man incapable of doing full-time work should he encouraged to do part-time work if he is able to do so.
    Mr. Houghton: I said that it should be payable in addition to any sickness benefit or industrial injuries benefit which may be payable. I had in mind a person who might be totally incapacitated for the purpose of the breakdown pension, but not sick for the purpose of National Insurance sickness benefit. It is conceivable that they might be distinct physical conditions. I also had in mind the question of entitlement.
    Miss Pitt: In most cases they will he entitled to sickness benefit, but so long as the hon. Gentleman is aware that in not all cases would sickness or industrial injuries benefit be payable, I think that we are clear.
    This permanent incapacity for whole-time employment would be a new conception for National Insurance, and it is not defined in the Clause. The Clause leaves the expression of permanent incapacity fairly wide, and no power is taken to define this by regulation. As hon. Members are aware, the present position is that someone who becomes sick for a long time receives the normal benefit of National Insurance, which is £4 a week for a married couple plus increases for dependent children. This is paid indefinitely, without limit and without reduction.
    Sick pay for employees by employers for a limited period is now fairly widespread in industry and commerce. In my experience the pattern set by the Civil Service has been followed and some kind of sickness benefit, tied to the length of a man's service but with limits on it, is paid. In only a small proportion of cases do the employees—and these are mostly in the public service or nationalised industries—receive any cover for pension on premature retirement through ill health.
    The hon. Member for Sowerby said that this was a feature of most vocational pension schemes. The hon. Member for Motherwell (Mr. Lawson) said that this was usually the case in private schemes, but that is not strictly true. It applies in the Civil Service and the nationalised industries, but if both hon. Gentlemen will refresh their memories and refer to the Report of the Government Actuary on Occupational Pension Schemes they will find this statement in paragraph 33:
    "Section 10 shows that ill-health pensions or other special benefits are available to all mem-
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    bers of pensions schemes for employees of the public service and nationalised industries, but that a material proportion of non-insured private schemes do not include such benefits and that the majority of members of insured schemes receive only the normal withdrawal benefit, i.e. a refund of contributions or its equivalent."
    Their argument, therefore, is based on a false supposition.
    Mr. Lawson: It must be pointed out that these private schemes are very different from the State scheme, namely, that on withdrawal the contributions are repaid. That does not happen in the State scheme.
    Mr. J. T. Price: We ought not to draw any false conclusions from the rather vague reference by the Government Actuary. No doubt he had good reasons for making that statement but, unfortunately, he does not quote any figures or proportions. From practical experience, as distinct from theorising, I can say that in the case of a vast number of private trust funds, including all the pension funds operating in the British Co-operative movement, of which there are several hundreds, there is a specific provision for breakdown pensions on a most generous basis to provide for those unfortunate people who do not reach the normal retiring age. It is a little risky to draw any general conclusion from the vague statement in the Government Actuary's Report.
    Miss Pitt: The Report is not vague, nor is it a matter of theory; the hon. Member will remember that the Government Actuary circularised many private firms, and they answered his questionnaire, upon which he built up information which enabled him to present the Report to us. I still think that the description of vocational schemes given by the hon. Member for Sowerby and the hon. Member for Motherwell is not correct; however desirable it might be.
    The Government proposals are limited to provision for old age, and are so limited because of the growing number of old people in the community and the growth of occupational pension schemes. We feel that an extension of the flat-rate scheme into the field of provision for old age can do the most good.

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    I sympathise with the view behind the Clause. We all feel tremendous sympathy for those who, entirely without fault of their own, are permanently incapacitated from earning a living or from the satisfaction of being able to work. The hon. Member for Sowerby asked whether we could not consider the matter in its initial stages, when, as he thought, the cost would be very low. I think that it would be better to project our minds further. It may be that after experience in the graduated field of retirement pensions it will be possible to consider an extension to cover the graduated breakdown pension, and it may be thought desirable to provide for such an extension. But, first, we need to have experience of retirement pensions. We think that it is much wiser to take one step at a time.
    If it were possible to consider such a proposal in future it would require very detailed consideration. The problem is not simple. Indeed, the hon. Member gave me my cue when he talked about certification. What do we mean by "permanent incapacity"? How do we define it? Do we define it by the duration of incapacity? Do we say, "This man has been sick for six months, therefore he can be regarded as permanently incapacitated"? Or do we make the period twelve months? Is not there another danger, which is of interest to all those who are concerned with social work? Is it right to label a man as permanently incapacitated? Might that not be a bad influence against any hope of his recovery? Is it to be defined by the severity of the illness, or the prognosis of the medical people on the chances of the man's recovery? Is it to be based upon the limitation of his earning capacity, or it to be a combination of all the factors that I have mentioned?
    We also need to take into account the question whether payment should be made in the modest proportions which both the hon. Member for Sowerby and the hon. Member for Motherwell have talked about. Would it not be wiser to consider whether such a benefit should be the amount of benefit earned to date or should be based upon some other formula? I am thinking particularly of the case of the younger man, with children, who may
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    suffer extreme hardship. He may have a terrible accident which renders him unable to work or to contemplate work for all the years that lie ahead. For those reasons I think that the Clause needs further consideration, as well as the question whether the contributions should be altered.
    In proposing the Clause no reference was made to the man who would be contracted out. He would have no such benefit unless his scheme provided for it, and in many private schemes there is no such provision. We must take that point into account, unless we want two sections of the working population—those who, under the Government scheme, would get graduated benefit in the case of permanent incapacity, and those who, under occupational schemes, would not receive any such benefit.
    I sympathise with the motives behind the Clause but I do not think that today is the time to accept such a recommendation, and I must ask the House to reject the Clause.
    5 p.m.
    Mr. Scholefield Allen: Perhaps the hon. Lady will allow me to refer to the Workmen's Compensation Act, 1925. She says that permanent incapacity is not defined, and that that was one of the criticisms of the Clause. She posed a number of what she thought were difficult problems involved in defining permanent incapacity. Are the hon. Lady and the Minister aware that the whole problem is dealt with in Section 13 of the Workmen's Compensation Act, 1925? That Section provides that an employer may redeem a payment of compensation where he satisfies the courts that the workman concerned is permanently incapacitated. The words are used in that Section although they are not defined. The matter may be referred to the judge for arbitration.
    If the hon. Lady will look at the last edition of Willis she will find, on page 413, a reference to redemption by agreement, which states that the county court judge, with the assistance of medical witnesses and, if he cares to have him, a medical referee, can consider the question—which is a very mixed one of fact and medicine—whether a man is perma-

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    nently incapacitated. It is putting up a red herring to say that the phrase "permanently incapacitated" creates any obstacle to the acceptance of the Clause.
    Mr. J. T. Price: I congratulate the hon. Lady for putting up such a brave defence upon grounds which convinced nobody but herself. She must realise as well as anybody else that if an insured contributor has the misfortune to become a total loss, in terms of employment, before he reaches the normal retirement age of 65, the State owes him not only a legal but a moral obligation. 1 know that in the isolated context of the Clause we are dealing with the strict legal obligations, as defined in the terms of the Bill. In principle, we are dealing with a man who may have paid contributions to National Insurance for ten, fifteen, twenty or even thirty years, but who may still be less than 65 years of age when his health breaks down and he can no longer work.
    Let us deal with the hon. Lady's postulation that the question of permanent incapacity has never been defined in terms of National Insurance. I know that it is very difficult to define it, but the hon. Lady is overlooking the fact that when she administers industrial injuries benefit—as she has done with distinction in her Department—she works to the formula that if a man is 100 per cent. disabled, after 26 weeks of normal benefit he goes for assessment before a tribunal, which makes a final award.
    I suggest to the hon. Lady that if this tribunal gives a final award of 100 per cent. it is tantamount to an acceptance of the fact that the man concerned is totally incapacitated. It is not only implicit in that sector of National Insurance, but, as my hon. and learned Friend the Member for Crewe (Mr. Scholefield Allen) has said, this matter was dealt with in great detail by the county court judges and occasionally by the Court of Appeal and higher courts of law, when we had widespread reference to the court of workmen's compensation cases.
    The Workmen's Compensation Act is not a dead letter. It is no longer an active Statute governing the payment of benefit today. but we still have thousands of cases of men who are being dealt with and paid benefit under that
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    Act. They are the residual group of people whose benefit arose at the time that the Act was in operation. The hon. Lady might, therefore, reflect on these things and not come so readily to the Government Dispatch Box and say that these matters have not been defined. I suggest that they have been defined.
    I wish to put one or two new points in support of the Clause. The hon. Lady said that the adoption of breakdown pensions is not widespread or general in the private occupational schemes. I very much dispute that. As an outstanding example of the kind of practice that is observed in the best industries and the best employments, I merely quote the practice observed by, for example, the hundreds of companies functioning within the Lever combine. As all the world knows, they are very good employers and have the most progressive schemes of benefit in favour of their employees, both in pensions and in insurance of all kinds.
    In the schemes governing, for example, Imperial Chemical Industries, which is another of the giants of British industry, we find most specific reference to the question of men who break down in health. The Co-operative movement has over 98 per cent. of all its employees covered for pensions. Let it be said with credit to the Co-operative movement that this is the highest percentage of any industrial group in the country. In all the co-operative schemes of which I have knowledge, there is specific provision for the men who break down in health.
    Let me deal with one proposition that the hon. Lady used in support of her argument. She said that in many of the insurance schemes—that is, pension schemes under which insurance companies issue a policy of indemnity to the employer for payment of certain benefits—breakdown pensions do not operate. I accept that in many cases they do not operate. The reason, however, is that in all those contracts between insurance companies and employers, there is provision for repayment of contributions or the payment of a deferred annuity on reaching a certain age which is equivalent to the rate of benefit in terms of capital values which would have been payable if the person concerned had not met with the unfortunate circumstance.

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    One cannot, therefore, use the argument that because the insurance companies do not give a breakdown pension, the Government are entitled to use this in defending their own refusal to give a breakdown pension. The insurance companies give an alternative pension which is equivalent to the breakdown pension. They give a return of contributions.
    On several occasions in Committee upstairs, I took the opportunity of saying—and not always to the great pleasure of some of my hon. Friends on this side—that I considered that one of the major defects of the Bill and a major defect of the Labour Party scheme, which has been widely publicised and which I will strongly develop on the appropriate occasion, has been that there is no provision for the repayment of contributions or any part of the accumulated contributions in the event of death or breakdown in health. That is a major defect. Once we begin to scale up the schemes into any substantial contribution, we may find that a man who has paid for most of his life loses his life savings, which may be considerable if the contributions are made on a high scale.
    Sir Spencer Summers: The hon. Member speaks of somebody losing the benefit of the contributions that he has paid if he is incapacitated before the age of 65. Surely, however, on becoming 65, he would be entitled to that benefit for which he has paid.
    Mr. Price: I am coming to that. I am grateful to the hon. Member for drawing my attention to it. I had not overlooked it.
    My argument rests on the fact that in most of the private industrial schemes there are a number of provisions for dealing with situations like this. It is quite beside the point for the Government to defend their refusal to make provision by saying that it is not the universal practice in other schemes. In reply to the hon. Member for Aylesbury (Sir S. Summers), it is true that in case of breakdown, the accumulated value that a man has acquired under the Government scheme, under the Bill, will be available for payment in terms of benefit at 1s. a week for each £15 of capital which stands to his credit at
    654
    the time of retirement. The Minister is smiling. I do not know whether he agrees with me. If he disagrees, I am willing to give way to him.
    In all these situations in which a man has to cease work because of physical disablement so serious as to be total disablement, he is, in terms of insurance, an impaired life. In other words, in most cases he is not likely to live the expected span of life that the Government Actuary has calculated in deciding the rate of pension which should be paid.
    Leaving aside the question of morality, when we consider the equity of these provisions we surely should be as generous and as progressive in our attitude to them in Parliament as the progressive, enlightened or efficient insurance company might be in writing a policy of insurance. Any insurance man who knows his business will agree with me. There is one on the back bench opposite, the hon. Member for Horsham (Mr. Gough), who is smiling. I know that he agrees with me.
    Mr. Frederick Gough Mr. Frederick Gough (Horsham) indicated dissent.
    Mr. Price: I am willing to give way to the hon. Member if he disagrees, because he knows a lot about this. Every insurance company would willingly write a more generous policy of insurance with a man who has an impaired life in terms of pension benefit that if he were a normal labourer who would live 13·5 years after reaching the age of 65.
    I have put the case as impartially as I can. We have put forward a Clause which will have to be considered in principle either on this Bill or on subsequent Bills. Parliament cannot simply ride off and leave these people, who fall on evil times due to early breakdown in health, with no kind of benefit. In the preparation of the hon. Lady's brief, somebody has obviously overlooked that when as a Minister of her Department she pays, for example, industrial injury benefits, after the first six months a man may have a certificate from the medical board that he is 80 or even 100 per cent. disabled.
    That does not take away from him the sickness benefit which is payable to him under the National Insurance Act. In other words, a disabled workman who has

    655
    sustained an injured or impaired condition as the result of an industrial accident can, at the same time, receive the full sickness benefit plus the full industrial injury benefit if the certificate of the medical board so determines.
    I do not think that there is any distinction in principle to justify that a man who has sustained his injured condition because of something that happened in industry should be treated differently from a man who falls by the wayside from natural causes. There is a contradiction in terms in the Government's argument in that respect. I seriously hope, Mr. Deputy-Speaker, now that you have returned to the Chair, that we can have a more favourable reply from the Joint Parliamentary Secretary, if not from the Minister himself who is sitting there and so much enjoying the debate.
    4.30 p.m.
    Sir S. Summers: In spite of the fact that you have returned to the Chair, Mr. Deputy-Speaker, I would like to say a word in support of the Minister in rejecting the proposed Clause.
    It is unsound to call in aid of the argument of the mover and supporters of the proposed Clause anything that happens in the industrial injuries field or in a comparable field, because that is a social service which is financed largely by the taxpayer. The degree of generosity can be high or low at will, according to whatever Parliament may decide. We should be making a mistake if we introduced into this attempt to improve retirement pensions by paying graduated benefits in return for graduated contributions any element of assistance to hard luck cases as a sort of improvement to the scheme, which is designed to be a co-operative effort to improve retirement pensions. We should be much wiser to confine it to that.
    The suggestion was made a little earlier that this proposal does not affect the Exchequer. It is asking that the cost, such as it is, of those who are to be paid when they break down a pension for very many more years than they would have been paid had they worked on till 65, shall come from the other contributors. I do not think that it is possible to argue that because in all the benefits of the graduated pension scheme there is
    656
    an element provided by the taxpayer, if, instead of getting his benefit at 65 the contributor gets it at 55, or 35, the share that the taxpayer provides for the Exchequer will not inevitably be much greater in such a case than it otherwise would be.
    Mr. G. W. Reynolds Mr. G. W. Reynolds (Islington, North) rose——
    Mr. J. T. Price: I am grateful to my hon. Friend for giving way. I hope that there is no competition between us about who is to intervene.
    This is a serious point, and I think that the hon. Member for Aylesbury (Sir S. Summers) is trying to reply to my argument. I put it to the hon. Gentleman that when we are dealing with a man who may break down in health at 45 or 50 years of age, or some other early age, it does not automatically follow by any means that he will receive pension for much longer than if he had gone on to the normal age, because his will be an impaired life. Suppose he has a heart ailment; he will not have the expectation of life that he otherwise would have.
    Sir S. Summers: That may or may not be true. The fact remains that if he becomes entitled to a pension for many more years than he would have been entitled had he remained sound the chances are that there will be an additional cost to the Fund. Some part of the cost will come out of the Exchequer. I do not want to make much of that point but merely to put right the suggestion that was made a little earlier, that only contributors would find the cost of this extra benefit of paying pensions in certain cases rather sooner.
    My main reason for supporting the Government in their rejection of the proposed Clause is that we should be unwise to introduce a social element into the scheme. It will be far wiser, at any rate at this stage, to confine it to paying that benefit at the rate for which the contribution has been calculated.
    Mr. Reynolds: We were given only one main reason by the Joint Parliamentary Secretary why the Clause should be rejected, and that was that the provision it contains is not the sort of provision that is included in any private

    657
    scheme at present. A little later the hon. Lady said that it would probably necessitate another look at the level of contributions.
    The admission was thus made that this provision is in almost all the public service schemes. Of course, there is a provision in the Bill itself, at the top of page 11, for this sort of breakdown pension being paid to someone in a private scheme. Hon. Members have probably noticed that when someone finishes a term of employment in an approved scheme a sum of money has to be paid into the new scheme set up under the Bill, unless at the end the person is assured of an equivalent pension. If someone is getting a breakdown pension from a public service scheme, I assume that he would be assured of an equivalent pension and that therefore no transfer would have to be made to the new State fund if he prematurely retired from employment.
    It seems to be recognised that some people are to get breakdown pensions. We were told by the Joint Parliamentary Secretary that the thing is operating in the public service, so I cannot see any reason why it is impossible to have a similar provision in the new State wage-regulated scheme. The hon. Lady must realise that there is this provision in the vast majority of private schemes which have grown up during the last few years, as against those that have been in operation for a considerable number of years.
    I will go further and say that almost all new schemes in private industry now include a breakdown provision of this nature. All that the hon. Lady was saying is that because a large number of these private schemes were drawn up twenty years or thirty years ago, when a breakdown provision such as we are now proposing was not the common practice, in introducing the State scheme we should be guided by the practice of twenty or thirty years ago. The hon. Lady will find that almost all private schemes drawn up at the present time contain provision for breakdown. Why should we not accept current practice and not what happened twenty or thirty years ago and write a breakdown provision into the Bill?
    Mr. S. Storey: While it is right that new private schemes do pro-
    658
    vide a breakdown provision, is it not a fact that it increases the cost? Are hon. Members opposite willing to accept an increase in the contribution?
    Mr. Reynolds: I was coming on to the Joint Parliamentary Secretary's second argument that it might be necessary to have another look at the contributions if a breakdown provision were brought into operation. The hon. Member for Stretford (Mr. Storey) is like the majority of hon. Members who do not realise the implications of the Bill, which we have now been discussing for twenty-five sittings. The hon. Member is apparently unaware that the contributions that are to be paid in the wage-regulated section of the scheme are greatly in excess of what is required to cover the cost of benefits.
    Mr. Storey: If the hon. Gentleman will read my Second Reading speech he will see that I made that very point.
    Mr. Reynolds: In that case, I cannot understand why the hon. Gentleman thinks there is justification for increasing contributions still further in order to get a "couple of bob" a week breakdown pension, after five or six years of this scheme. The hon. Gentleman admits what we have been trying to prove to the Minister upstairs—the Minister will not admit it—that the contributions are greatly in excess of what is required.
    The hon. Lady said that if this sort of provision were accepted it would be necessary to have another look at the contributions. May I remind her that the contributions for a man earning £15 a week are to go up from 9s. 11d. to 13s. 5d. per week?
    Then we are told that we shall need to have another look at them to give the sort of derisory extra benefit to which my hon. Friend the Member for Motherwell (Mr. Lawson) referred a few moments ago. With all due respect to my hon. Friend's calculations, I think that he overestimated the benefits by about 15 to 20 per cent.
    We are providing in the Bill also for National Insurance contributions by a woman earning £15 a week or more to rise from 8s. a week to 12s. 3d. a week. Yet we are told that a Clause providing for an additional benefit which will cost

    659
    a mere fraction should not be accepted because it would mean increasing the contribution to an even greater height. I cannot understand that. No real arguments against the new Clause being inserted have been advanced.
    I want to emphasise what my hon. Friend the Member for Motherwell said about benefits. My first example is a man who enters the scheme when it starts in eighteen months' time, as it is proposed, at the age of 45. Let us assume that he works for a further ten years, earning £15 a week, and then at the age of 55 is suddenly found to be incapable of continuing further in employment. He would presumably receive the £2 10s. a week sick pay. The new Clause would make it possible for him to draw only a further 8s. a week to add on to the £2 10s. a week sick pay.
    My second example is a woman earning £12 a week who when the scheme starts is 45. Let us assume that she works until she is 55 and is then unable to continue in employment due to some kind of incapacity. She has been earning £12 a week for ten years. The new Clause would make it possible for her to receive a further 3s. a week in addition to the 50s. a week sick pay to which she would be entitled.
    The fact that these amounts are so small is not the fault of the new Clause. It is the fault of the Bill, because they are the type of niggardly benefit provided by the Bill which the Government have the audacity to call "wage-related benefit". It bears no relation to either wages or contributions. The new Clause cannot be blamed for the sort of benefit which would be payable under the Bill as a whole. Although it would be a slight improvement on the Bill as at present drafted, it would not go nearly far enough.
    I hope that the Government will reconsider this matter before the Bill completes its process through the House.
    Mr. Tom Brown: I want to lend my very strong support to the acceptance of the new Clause. Anyone reading the Bill will soon discover that there is no provision in it for what we call a breakdown pension. By introducing the new Clause we seek to protect those who are overtaken by misfortune in industry.
    660
    The difference between the two sides of the House is that hon. Members opposite have very little knowledge, if any—I am not blaming them—of prevailing industrial conditions and the number of people who suffer accident or misfortune in industry.
    We all know that those who will come within the scheme when it becomes operative will have to earn £9 to £15 a week. In the mining industry those men who will be within the scheme earning £9 to £15 a week are the men working in the most dangerous sectors, namely, at the coal face. The highest incidence of serious accidents is at or near the coal face. Although I am happy to say that there has been a considerable reduction in serious accidents over a period of years, many men will be compelled to pay into this scheme who, if they sustain an accident, will not have the advantage of the Bill as it stands. But they would have the advantage of the superannuation scheme if the new Clause was accepted. The new Clause would afford some protection to those men who are maimed and rendered permanently incapacitated.
    It is important that the House should examine the ages, because age is a determining factor. We have to employ in the pits today, in the most dangerous sectors, men between the ages of 25 and 45. Let us assume that a man enters straightaway when the scheme becomes operative, that he pays from the ages of 25 to 35 and that he is suddenly overtaken by a very serious accident which necessitates his absence from work and renders him totally incapacitated for any work. He will be debarred from receiving the benefit for which he has paid. If the new Clause were accepted, he would be afforded some protection.
    4.45 p.m.
    It cannot be within the knowledge of right hon. and hon. Members opposite, but a tremendous number of men are permanently maimed at the age of 35. It is because of their very dangerous work. It may be of interest to the House if I speak about a letter I received today, bearing on this very subject. It concerns a man who was injured in 1936. After all these years, he is still permanently incapacitated. I am not saying that this man would benefit by the Clause. What T am saying is that it is important that

    661
    Parliament should try to protect men earning between £9 and £15 a week, and who will be participators in this scheme. from suffering great financial misfortune.
    Therefore, I strongly support the new Clause. I hope that the Government will note that my right hon. and hon. Friends and I are anxious, as we have been all along, to give more protection than the Government are. My hon. Friend the Member for Islington, North (Mr. Reynolds) mentioned our 25 meetings in Committee. My hon. Friends and are trying in every conceivable way to give further protection than the Government are prepared to do. I ask the right hon. Gentleman and his Department to give further consideration to this very important point.
    The hon. Lady mentioned that in some private schemes provision is made for what we call breakdown pensions. I have had something to do with pensions in the mining industry. We have focused our minds on trying to protect those men, not on account of age, but on account of misfortune. I have always maintained that the Government of the day should go one better than operators of private schemes are prepared to do for their members or their insured contributors. They should do so because the Government are trying to apply by a far-reaching method the social schemes to which the people of the country are entitled.
    I conclude by asking the Government to have another look at this matter. They should not throw it overboard by thinking up minor reasons against it. The new Clause is not put down for fun, but with a profound desire to protect those overtaken by misfortune in industry and other walks of life. Surely we can go one better than private schemes and afford these people protection, not only in old age, but when overtaken by industrial misfortune.
    Mr. Boyd-Carpenter: This new Clause suggests that we should now put into the Bill provision for a graduated breakdown pension. If the House decides, as I hope it will, not to do this, it certainly does not conclude the matter for ever, even with this scheme. I thought that my hon. Friend the Joint Parliamentary Secretary, in a most impressive speech, made it clear, in the first place, how undesirable it is at this stage, when we
    662
    are proceeding for the first time in this country to the introduction of a graduated system of pensions, to add to that system provision on a graduated basis for a new benefit.
    I really must advise the House that, in our judgment at any rate, the wise thing to do is to go ahead with the provision as proposed in the Bill—and in that respect, at least, we are in the company of hon. Members opposite in their own proposals—and confine the graduated benefits to pensions. As my hon. Friend said, that does not exclude the possibility, later, of our proceeding to deal with this benefit—perhaps in this way. I would not go beyond saying that, because I am very doubtful, if at any time it is thought desirable to make an improvement in breakdown pensions, whether incorporation in the graduated scheme would be the best method.
    The point was made earlier in the debate that perhaps the most tragic of these cases are those of quite young men suffering a breakdown. Of course, in the very nature of things. a man who has a breakdown earlier in life must, even when the scheme is in full operation, earn much less benefit—because he has had less opportunity to earn—than a man whose breakdown occurs later in life. It may, therefore, well prove doubtful—I do not put it higher—if we wanted, in another Bill and in another context, to deal with the question of breakdown pensions—which has very considerable appeal, as speeches from both sides of the House have made clear—whether incorporation in this system is the right way to do it.
    In any event—and here I should like to take up what was said by the hon. Member for Islington, North (Mr. Reynolds)—little, if anything, is lost if the House is prepared to respond to my appeal to leave the Bill, in its initial impact, as a Bill to provide graduated pensions. No provision is made in this Measure for back-service liabilities. People will draw in future, as the years pass, what they have contributed towards without, as in the flat-rate system, making some provision for back-service liability.
    If the House is prepared to leave the matter over until the scheme is in operation, all that would be involved, in any event, in the first year or two of the

    663
    scheme, would be very small amounts, which would be all that anyone could have earned at that date. That, I think, reinforces the plea that we should consider the matter, perhaps, at another time, and decide, possibly, the context and scope of a Bill to devise graduated breakdown pensions.
    We should not be wise, I believe, to add these complications to the present Bill. I take the point put by the hon. and learned Member for Crewe (Mr. Scholefield Allen) about the Workmen's Compensation Acts, but settling what is, in form, an action between employer and employee is a very different matter from deciding on the administration of a social benefit.
    These are complicated matters. I do not place excessive weight on the point about what the private schemes do, but I must point out that my hon. Friend referred to that practice only in reply to the argument that it was a universal practice of the private schemes. That, for better or worse, is not the case. The main weight of my argument is that the House will lose little and gain much by letting this not uncomplicated Measure go forward without further complications. Let us take the first step of getting contributions and pension benefits into operation. Then, when it is working, and when we can see how it is working, by all manner of means let us look at the possibility—and it is no more—of an extension, possibly, to other benefits.
    For those reasons, I hope that the House, having discussed the new Clause with sympathy and understanding—and, as I have said, no hon. Member on either side of the House doubts the personal tragedy of some of these cases—will decide that we should confine ourselves in the Bill to the very heavy task that we are proposing to impose on our administration, and leave this other matter for another occasion.
    Mr. Marquand: If the right hon. Gentleman had made a definite promise
    of the introduction of legislation in the near future to provide breakdown benefit in better form than can be entirely provided by this Bill I might have been willing to advise my hon. Friends to withdraw the new Clause. But there is no promise. The Minister said that it is no more than a possibility, and, as we very well know, he is not in a position to make it anything more than a possibility. We are coming very rapidly to the end of this Parliament, and he will not be in a position to do anything about it.
    We feel very strongly that there should have been some provision, even in this Measure, for a breakdown pension. We cannot accept for one moment the right hon. Gentleman's argument that it is not possible to make proper definitions of when a person is sufficiently incapacitated as a result of sickness or industrial injury to be unable to carry on with his work. These definitions already exist in relation to war pensions, to industrial injuries, unemployability supplement and, as my hon. and learned Friend the Member for Crewe (Mr. Scholefield Allen) reminded the House, in the Workmen's Compensation Acts.
    When a man has contributed, however little—has bought bricks in the scheme—we think it wrong that he should be deprived of breakdown of that little amount, however small it may be, which he has, as a Conservative pamphlet points out, earned by his contributions. A refusal to give him what the Conservative Party itself claims he has earned by his own and his employer's contributions, when he suffers serious breakdown which permanently incapacitates him, is an ungenerous gesture, and we are bound to record our disagreement in the Division Lobby.
    Question put, That the Clause be read a Second time:—
    The House divided: Ayes 179, Noes 220.

    Division No. 116.]

    AYES

    [4.57 p.m.

    Ainsley, J. W.

    Benn, Hn. Wedgwood (Bristol, S.E.)

    Bonham Carter, Mark

    Albu, A. H.

    Benson, Sir George

    Bowden, H. W. (Leicester, S.W.)

    Allaun, Frank (Salford, E.)

    Beswick, Frank

    Bowen, E. R. (Cardigan)

    Allen, Arthur (Bosworth)

    Bevan, Rt. Hon. A. (Ebbw Vale)

    Bowles, F. G.

    Allen, Scholefield (Crewe)

    Blackburn, F.

    Boyd, T. C.

    Bacon, Miss Alice

    Blenkinsop, A.

    Braddock, Mrs. Elizabeth

    Bellenger, Rt. Hon. F. J.

    Blyton, W. R.

    Brockway, A. F.

    Bence, C. R. (Dunbartonshire, E.)

    Boardman, H.

    Brown, Thomas (Ince)

    Burton, Miss F. E.

    Hughes, Cledwyn (Anglesey)

    Pursey, Comdr. H.

    Butler, Herbert (Hackney, C.)

    Hughes, Emrys (S. Ayrshire)

    Randall, H. E.

    Butler, Mrs. Joyce (Wood Green)

    Hughes, Hector (Aberdeen, N.)

    Rankin, John

    Carmichael, J.

    Hunter, A. E.

    Redhead, E. C.

    Castle, Mrs. B. A.

    Hynd, H. (Accrington)

    Reeves, J.

    Champion, A. J.

    Irvine, A. J. (Edge Hill)

    Reid, William

    Chapman, W. D.

    Irving, Sydney (Dartford)

    Reynolds, G. W.

    Chetwynd, G. R.

    Isaacs, Rt. Hon. G. A.

    Roberts, Albert (Normanton)

    Coldrick, W.

    Jay, Rt. Hon. D. P. T.

    Roberts, Goronwy (Caernarvon)

    Collick, P. H. (Birkenhead)

    Jenkins, Roy (Stechford)

    Robinson, Kenneth (St. Pancras, N.)

    Corbet, Mrs. Freda

    Johnson, James (Rugby)

    Shinwell, Rt. Hon. E.

    Cronin, J. D.

    Jones, David (The Hartlepools)

    Silverman, Julius (Aston)

    Crossman, R. H. S.

    Jones, Elwyn (W. Ham, S.)

    Silverman, Sydney (Nelson)

    Cullen, Mrs. A.

    Kenyon, C.

    Simmons, C. J. (Brierley Hill)

    Darling, George (Hillsborough)

    Key, Rt. Hon. C. W.

    Skeffington, A. M.

    Davies,Rt.Hn.Clement(Montgomery)

    Lawson, G. M.

    Slater, Mrs. H. (Stoke, N.)

    Davies, Ernest (Enfield, E.)

    Lee, Frederick (Newton)

    Slater, J. (Sedgefield)

    Davies, Harold (Leek)

    Lee, Miss Jennie (Cannock)

    Sorensen, R. W.

    Deer, G.

    Lever, Leslie, (Ardwick)

    Soskice, Rt. Hon. Sir Frank

    Diamond, John

    Lewis, Arthur

    Sparks, J. A.

    Dodds, N. N.

    Lindgren, G. S.

    Spriggs, Leslie

    Donnelly, D. L.

    Lipton, Marcus

    Stewart, Michael (Fulham)

    Ede, Rt. Hon. J. C.

    McAlister, Mrs. Mary

    Stonehouse, John

    Edwards, Robert (Bilston)

    McCann, J.

    Stones, W. (Consett)

    Edwards, W. J. (Stepney)

    MacColl, J. E.

    Strauss, Rt. Hon. George (Vauxhall)

    Evans, Albert (Islington, S.W.)

    McKay, John (Wallsend)

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

    Finch, H. J, (Bedwellty)

    McLeavy, Frank

    Summerskill, Rt. Hon. E.

    Fletcher, Eric

    MacPherson, Malcolm (Stirling)

    Sylvester, G. O.

    Fraser, Thomas (Hamilton)

    Mahon, Simon

    Taylor, Bernard (Mansfield)

    Gaitskell, Rt. Hon. H. T. N.

    Mallalleu, E. L. (Brigg)

    Thomson, George (Dundee, E.)

    George, Lady Megan Lloyd(Car'then)

    Mann, Mrs. Jean

    Thornton, E.

    Gibson, C. W.

    Marquand, Rt. Hon. H. A.

    Tomney, F.

    Greenwood, Anthony

    Mayhew, C. P.

    Ungoed-Thomas, Sir Lynn

    Grenfell, Rt. Hon. D. R.

    Mellish, R. J.

    Viant, S. P.

    Grey, C. F.

    Mikardo, Ian

    Wade, D. W.

    Griffiths, Rt. Hon. James (Llanelly)

    Mitchison, G. R.

    Warbey, W. N.

    Griffiths, William (Exchange)

    Moody, A. S.

    Watkins, T. E.

    Grimond, J.

    Morris, Percy (Swansea, W.)

    Weitzman, D.

    Hale, Leslie

    Morrison, Rt.Hn.Herbert(Lewis'm,S.)

    Wells, Percy (Faversham)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Mort, D. L.

    Wheeldon, W. E.

    Hamilton, W. W.

    Moss, R.

    White, Mrs. Eirene (E. Flint)

    Neal, Harold (Bolsever)

    Wilkins, W. A.

    Hannan, W.

    Noel-Baker, Francis (Swindon)

    Willey, Frederick

    Hastings, S.

    Oswald, T.

    Williams, David (Neath)

    Hayman, F. H.

    Owen, W. J.

    Williams, Rev. Llywelyn (Ab'tillery)

    Henderson, Rt. Hn. A. (Rwly Regis)

    Parkin, B. T.

    Williams, Rt. Hon. T. (Don Valley)

    Herbison, Miss M.

    Paton, John

    Williams, W. R. (Openshaw)

    Hewitson, Capt. M.

    Pearson, A.

    Woof, R. E.

    Hobson, C. R. (Keighley)

    Peart, T. F.

    Yates, V. (Ladywood)

    Holman, P.

    Plummer, Sir Leslie

    Zilliacus, K.

    Holmes, Horace

    Popplewell, E.

    Houghton, Douglas

    Price, J. T. (Westhoughton)

    TELLERS FOR THE AYES:

    Hoy, J. H.

    Probert, A. R.

    Mr. John Taylor and Mr. Rogers.

    NOES

    Agnew, Sir Peter

    Bryan, P.

    Farey-Jones, F. W.

    Aitken, W. T.

    Bullus, Wing Commander E. E.

    Fell, A.

    Allan, R. A. (Paddington, S.)

    Burden, F. F. A.

    Finlay, Graeme

    Alport, C. J. M.

    Butler,Rt. Hn.R. A. (Saffron Walden)

    Fisher, Nigel

    Amery, Julian (Preston, N.)

    Campbell, Sir David

    Fletcher-Cooke, C.

    Arbuthnot, John

    Cary, Sir Robert

    Fraser, Hon. Hugh (Stone)

    Armstrong, C. W.

    Channon, H. P. G.

    Freeth, Denzil

    Ashton, H.

    Chichester-Clark, R.

    Gammans, Lady

    Atkins, H. E.

    Cole, Norman

    George, J. C. (Pollok)

    Balniel, Lord

    Cooke, Robert

    Glover, D.

    Barlow, Sir John

    Cooper, A. E.

    Glyn, Col. Richard H.

    Barter, John

    Cooper-Key, E. M.

    Godber, J. B.

    Batsford, Brian

    Cordeaux, Lt.-Col. J. K.

    Gough, C. F. H.

    Baxter, Sir Beverley

    Corfield, F. V.

    Graham, Sir Fergus

    Bell, Philip (Bolton, E.)

    Craddock, Beresford (Spelthorne)

    Grant, Rt. Hon. W. (Woodside)

    Bell, Ronald (Bucks, S.)

    Crosthwaite-Eyre, Col. O. E.

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Bennett, F. M. (Torquay)

    Crowder, Sir John (Finchley)

    Gresham Cooke, R.

    Bidgood, J. C.

    Crowder, Petre (Ruislip-Northwood)

    Gurden, Harold

    Biggs-Davison, J. A.

    Cunningham, Knox

    Hall, John (Wycombe)

    Bingham, R. M.

    Dance, J. C. G.

    Harris, Frederic (Croydon, N.W.)

    Birch, Rt. Hon. Nigel

    D'Avigdor-Goldsmid, Sir Henry

    Harris, Reader (Heston)

    Bishop, F. P.

    Deedes, W. F.

    Harrison, A. B. C. (Maldon)

    Black, Sir Cyril

    de Ferranti, Basil

    Harvey, Sir Arthur Vere (Macclesf'd)

    Boyd-Carpenter, Rt. Hon. J. A.

    Dodds-Parker, A. D.

    Harvey, John (Walthamstow, E.)

    Braithwaite, Sir Albert (Harrow, W.)

    Donaldson, Cmdr. C. E. McA.

    Harvie-Watt, Sir George

    Brewis, John

    Doughty, C. J. A.

    Hay, John

    Bromley-Davenport, Lt.-Col. W. H.

    du Cann, E. D. L.

    Heald, Rt. Hon. Sir Lionel

    Brooman-White, R. C.

    Emmet, Hon. Mrs. Evelyn

    Heath, Rt. Hon. E. R. G.

    Browne, J. Nixon (Craigton)

    Errington, Sir Eric

    Henderson-Stewart, Sir James

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    667

    Hesketh, R. F.

    McMaster, Stanley

    Roper, Sir Harold

    Hicks-Beach, Maj. W. W.

    Macmillan,Rt.Hn.Harold(Bromley)

    Ropner, Col. Sir Leonard

    Hill, Rt. Hon. Charles (Luton)

    Macmillan, Maurice (Halifax)

    Russell, R. S.

    Hill, Mrs. E. (Wythenshawe)

    Macpherson, Niall (Dumfries)

    Sandys, Rt. Hon. D.

    Hinchingbrooke, Viscount

    Maitland, Cdr. J. F. W. (Horncastle)

    Scott-Miller, Cmdr. R.

    Hirst, Geoffrey

    Maitland, Hon. Patrick (Lanark)

    Sharples, R. C.

    Holland-Martin, C. J.

    Manningham-Buller, Rt. Hn. Sir R.

    Simon, J. E. S. (Middlesbrough, W.)

    Hope, Lord John

    Markham, Major Sir Frank

    Spearman, Sir Alexander

    Hornby, R. P.

    Marlowe, A, A. H.

    Speir, R. M.

    Horobin, Sir Ian

    Marples, Rt. Hon. A. E.

    Stanley, Capt. Hon. Richard

    Howard, Gerald (Cambridgeshire)

    Marshall, Douglas

    Stoddart-Scott, Col. Sir Malcolm

    Howard, John (Test)

    Mathew, R,

    Storey, S.

    Hughes-Young, M. H. C.

    Maudling, Rt. Hon. R.

    Stuart, Rt. Hon. James (Moray)

    Hulbert, Sir Norman

    Mawby, R. L.

    Studholme, Sir Henry

    Hutchison, Michael Clark(E'b'gh, S.)

    Maydon, Lt.-Comdr. S. L. C.

    Summers, Sir Spencer

    Hyde, Montgomery

    Milligan, Rt. Hon. W. R.

    Taylor, Sir Charles (Eastbourne)

    Hylton-Foster, Rt. Hon. Sir Harry

    Molson, Rt. Hon. Hugh

    Teeling, W.

    Iremonger, T. L.

    Morrison, John (Salisbury)

    Temple, John M.

    Irvine, Bryant Godman (Rye)

    Nairn, D. L. S.

    Thomas, Leslie (Canterbury)

    Jenkins, Robert (Dulwich)

    Neave, Airey

    Thomas, P. J. M. (Conway)

    Jennings, J. C. (Burton)

    Nicholson, Sir Godfrey (Farnham)

    Thompson, Kenneth (Walton)

    Johnson, Dr. Donald (Carlisle)

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Thornton-Kemsley, Sir Colin

    Johnson, Eric (Blackley)

    Noble, Comdr. Rt. Hon. Allan

    Tiley, A. (Bradford, W.)

    Jones, Rt. Hon. Aubrey (Hall Green)

    Noble, Michael (Argyll)

    Turner, H. F. L.

    Kerby, Capt. H. B.

    Nugent, Richard

    Vane, W. M. F.

    Kerr, Sir Hamilton

    Oakshott, H. D.

    Vickers, Miss Joan

    Kimball, M.

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Vosper, Rt. Hon. D. F.

    Kirk, P. M.

    Orr, Capt. L. P. S.

    Wakefield, Edward (Derbyshire, W.)

    Lambton, Viscount

    Orr-Ewing, C. Ian (Hendon, N.)

    Wakefield, Sir Wavell (St. M'lebone)

    Lancaster, Col. C. G.

    Page, R. G.

    Walker-Smith, Rt. Hon. Derek

    Leavey, J. A.

    Pannell, N. A. (Kirkdale)

    Ward, Rt. Hon. G. R. (Worcester)

    Legge-Bourke, Maj. E. A. H.

    Partridge, E.

    Ward, Dame Irene (Tynemouth)

    Legh, Hon. Peter (Petersfield)

    Peyton, J. W. W.

    Webbe, Sir H.

    Lindsay, Hon. James (Devon, N.)

    Pickthorn, Sir Kenneth

    Webster, David

    Lindsay, Martin (Solihull)

    Pike, Miss Mervyn

    Whitelaw, W. S. I.

    Linstead, Sir H. N.

    Pilkington, Capt. R. A.

    Williams, Paul (Sunderland, S.)

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Pitt, Miss E. M.

    Williams, R. Dudley (Exeter)

    Lovays, Walter H.

    Powell, J. Enoch

    Wills, Sir Gerald (Bridgwater)

    Lucas-Tooth, Sir Hugh

    Price, David (Eastleigh)

    Wilson, Geoffrey (Truro)

    McAdden, S. J.

    Profumo, J. D.

    Wolrige-Cordon, Patrick

    Macdonald, Sir Peter

    Redmayne, M.

    Woollam, John Victor

    McLaughlin, Mrs. P.

    Rees-Davies, W. R.

    Maclay, Rt. Hon. John

    Renton, D. L. M.

    TELLERS FOR THE NOES:

    Maclean, Sir Fitzroy (Lancaster)

    Rippon, A. G. F.

    Colonel J. H. Harrison and

    McLean, Nell (Inverness)

    Roberts, Sir Peter (Heeley)

    Mr. Gibson-Watt.

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Robertson, Sir David

    Clause 1.—(CHANGES IN CONTRIBUTIONS TO THE NATIONAL INSURANCE FUND.)
    Mr. Boyd-Carpenter: I beg to move, in page 2, line 17, to leave out from "then" to "and" in line 27 and to insert:
    "if the employment was an employed contributor's employment and he either is under pensionable age or has not retired from regular employment—

    (i) he shall be liable to pay a graduated contribution based on that payment; and

    (ii) his employer in the employment shall be liable to pay such a contribution in respect of him ".

    This Amendment is tabled to meet an undertaking which I gave in Standing Committee to look into a point which was raised there. Under the Bill as it stands, where a person earning above £9 a week is a pensioner he himself does not pay graduated contributions, but his employer is liable so to do. That, as the House knows, follows the provision already existing in the flat-rate National Insurance scheme and was inserted, I think, largely for that reason.
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    In Standing Committee and, indeed, on the Second Reading, the point was raised that these employer-only contributions would very greatly complicate the collection and administration by employers of graduated contributions. The point was raised, among others, by my hon. Friend the Member for Aylesbury (Sir S. Summers) who had tabled an Amendment in Standing Committee, and hon. Members who follow closely the drafting or Amendments will see that we have availed ourselves in this Amendment of precisely my hon. Friend's drafting.
    The case is simply one as to whether we do not, if we leave the Bill as it stands, put an unnecessarily heavy burden on the administration of the scheme. I think that it is clear that to many particularly large employers who have mechanised accountancy and paying systems there will be a very great advantage if the amount of the employer's contribution in total can be the same as the employee's. In what I may call

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    the ordinary case that is so, because the graduated contribution is on a 50-50 basis. But once we add to that these cases of employer-only contributions the simple calculation of taking the total of the employee's contributions deducted from pay and doubling it ceases to be possible.
    We have heard a good deal, both in this Chamber and, as hon. Members will recall, in the Standing Committee, quite justifiably about the very heavy administrative burden on all concerned which a change-over to a system of graduated contributions inevitably involves. I am anxious, as I am sure hon. Members on both sides are anxious, to keep this down to the minimum and I have been impressed, on reflecting on the matter, by the considerable saving in administrative costs and in administrative trouble which would result if we abandoned the employer-only contribution. I have come to the conclusion that the point raised by my hon. Friend's Amendment which, upstairs, received at least supporting murmurs, I think, from both sides of the Committee, indicates the right solution.
    I looked at various alternative methods of doing it without sacrificing the revenue, which will be a little over £1 million in the early stages of the scheme, but I came to the conclusion that none of these alternative methods would work. It seems to me, therefore, that the straightforward thing, so far as the graduated contribution in respect of a pensioner is concerned, is to abolish the employer's contribution and leave the position in general that, where an employer has collected contributions from his employees, he doubles them and hands the amount over to the Inland Revenue.
    The only doubt expressed upstairs, a doubt which was in some of our minds, was whether this departure from what has been the principle of the National Insurance Act could possibly lead to any discrimination by employers against younger people in respect of whom they would have to pay contributions. When one remembers that one is here concerned only with people earning, ex hypothesi, at least £9 a week and one is concerned only with the contribution from the employer which at its maximum is 5s. 1d., it seems that those considerations, which were relevant and, for all I
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    know, may still be relevant in respect of the larger amounts and, possibly, in respect of smaller earnings on the flat-rate scheme, really in this day and age do not carry very much weight.
    I recommend to the House, therefore, that we simplify the administration of the collection of these contributions by eliminating these employer-only contributions.
    Sir S. Summers: I do not want to take up the time of the House. I wish not so much to express my own appreciation of the attitude the Minister has shown in this matter but, what is more important, to assure him of the welcome which this decision of his will receive from those who have to administer the scheme. As he has explained, there is no doubt that it will greatly simplify the whole operation, and I am sure that the change he proposes will be of great advantage to those concerned.
    Mr. Marquand: We on this side are, as I have said already, very conscious of the administrative complications of the scheme. In the light of the right hon. Gentleman's explanation, we have no objection to the Amendment he has moved.
    Mr. Donald Wade: In case there is too much enthusiasm about the slight improvement that this Amendment makes, I wish to make it clear that, in my view, the administrative burden upon employers will still be very great indeed. There is a shock coming to them in 1961. The complexity of the calculations which they will have to make in regard to the amount payable by employees is very great. I intervene now only to ensure that no employer is left with the idea that his task will be very much simplified, although it will be somewhat simplified by the Amendment.
    Amendment agreed to.
    5.15 p.m.
    Mr. R. H. S. Crossman: I beg to move, in page 2, line 30, to leave out "six" and to insert "sixteen".
    This will have the effect of raising the ceiling in the new graduated pensions from £15 to £25. We put this forward partly in order to be able to discuss

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    the whole principle and the problem of the ceiling and the floor introduced by the Government in their scheme. Upstairs, we had many discussions on this matter, and the more we heard from the Minister and the Parliamentary Secretaries the more puzzled we were or, I should say, the more confirmed we became in our view that it was the existence of this ceiling and floor which exposed the real purpose of the National Insurance Bill.
    It is a very remarkable thing that the Government should be introducing such a vast administrative machine for such a very small pension effect. Here I should like to congratulate the Liberal Party on its return to our deliberations. If I remember aright, the Liberal Party was present at the first meeting of the Committee, it omitted twenty-four meetings of the Committee, and it is now back for the Report stage with its usual constructive, vacuous attitude. We are glad to see the Liberal Party here to provide that permanent, Liberal vacuum between the two great parties.
    I support the one thing which the representative of the Liberal Party, the hon. Member for Huddersfield West (Mr. Wade) said, namely, that it would be a very complicated administrative matter to carry out the scheme. Upstairs, we learnt from the Minister that, if one is to have this floor and ceiling, if one is to have graduated contributions paid for separately from the flat-rate contributions, if the flat-rate contributions are to continue to be on the stamp, and if, as is proposed, the graduated contributions are to be on the P.A.Y.E. system in a separate column, this will mean an entirely new departure and a vast administrative task. It means that, in future, everybody who earns between £9 and £15 a week will have something recorded on his P.A.Y.E. record by the Inland Revenue. It may be 2½d. for people who earn a little above £9 or it may be just a little more than that, but never more than 6s. 5d., I think. So there will be millions of people who will have this record made in the new P.A.Y.E. column. Then, we understand, the record will be microfilmed and transported to Newcastle, where it will be re-recorded in one's life history.
    The Minister and the Parliamentary Secretary are not very clear about how
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    all this is to be done. They will be busy getting down to work after we pass the Bill in order to arrange it all. I gather that several hundred civil servants will have to be hired specially for this job alone, and a considerable number of new buildings will be constructed solely for the purpose. We on this side shall not oppose the introduction of the machinery because any adequate system of superannuation will require similar machinery. For although the machine is out of all proportion to the Government's miserable scheme, it may well be the kind of machinery which we shall be able to take over after the next election when we introduce an adequate superannuation Bill.
    Today, I wish only to draw attention to the fact that the machinery bears no relation to the pitiable contributions and benefits, and that it is the existence of the floor and ceiling which complicates the machinery enormously If one had a complete graded pension scheme where all the contributions were graded from the smallest earnings up to £50 or £60 a week, then one would not have this particular problem of recording what fell just above or below the £9 level or what fell just above or below the £15 level. The peculiar administrative difficulties are entirely the result of the peculiar decision to levy the contribution only on the wage band between £9 and £15 a week and, therefore, to have wage-related pensions only as regards the element from £9 to £15 a week.
    It is not because we are suspicious people but, knowing the character of the Minister, knowing his intelligence and knowing the intelligence of the civil servants behind him, we know that they would not produce such a ridiculous scheme as this without an excellent purpose. Nobody would produce a gigantic administrative machine of this kind with no adequate benefit for it unless it was to conceal something very big. This is the facade behind which the Government's real purpose is concealed. Though we could not get any concession out of those twenty-five meetings upstairs, at least we got this fact. We discovered in the course of them what the purpose of the Bill is and what the purpose of the records and the hundreds of civil servants is. The purpose is, of course, to conceal that this is not a pensions Bill but a Bill for transferring the

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    liability for paying the existing pensions from the Exchequer to the contributor on a wage band between £9 and £15 a week. If a person earns £16 a week, he pays his contribution from between £9 and £15 but not beyond.
    What we have discovered and what we have conclusively proved is that the purpose of the Bill is to transfer the sum of £400 million, which is at present an Exchequer liability, and to find a way of paying it from contributions, not from flat-rate contributions but through the new graded contributions combined with a somewhat slight increase of the Exchequer contribution.
    We were able to prove conclusively that this was the Minister's purpose by studying the way in which the Exchequer contribution will steadily sink during the next period ahead while the graded contributions will increase. We were able to show, for instance, that the graded contributions which people will have levied upon them will bear virtually no relation to the benefits they receive.
    I think it was my hon. Friend the Member for Wallsend (Mr. McKay), whom I am glad to see is in the Chamber, who pointed out that on his calculation anybody who pays a graded contribution, and whose employer pays it, will get back in benefit only 22 per cent. of his contribution. All the rest will be clawed up by the Chancellor of the Exchequer for paying the existing Exchequer liability. The real purpose of the Bill and of this elaborate machinery, therefore, is merely to put on to this wage band a liability which at present rests on the taxpayer at large.
    I do not want to dilate on this at length because we have many important matters to discuss, but I want to concentrate on pointing out the object of the present ceiling of £15. In Committee we asked the Minister why the ceiling was fixed at £15. We asked him several times. We had, perhaps, half a dozen answers in the course of the twenty-five sittings of the Committee, and I will choose the nicest and most concise. The Minister said:
    "On this side of the Committee, as in the House, we take the view that it is the proper function of a State scheme to provide something in the nature of a basic minimum."
    Farther down the column, the Minister said:
    "I rest my argument on the view that it is really not the proper function of a State
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    system to go beyond the moderate level. We may be right or wrong in putting that level at £15 a week—that is a matter of judgment and assessment. Fortunately, we do not at present have to argue about a reasonable figure as against a completely unlimited one. But from the point of view of our philosophy, I am quite certain that the right level is somewhere related to a basic minimum …[OFFICIAL REPORT, Standing Committee A, 17th February, 1959; c. 50–1.]
    That is spelt out even more clearly on page 7 of the Government's pension pamphlet in question and answer which I am sure the Minister himself drafted The question asks:
    "Why does the graduated contribution not extend to earnings above £15 per week?"
    The answer states:
    "The object of the new scheme is, of course, to make better provision for old age in the light of our rising national prosperity. But it would not be right for a State scheme to make people contribute more for their old age than is reasonably necessary. For that would amount to dictating to a person how to spend his money during his working life. Such State dictation would be rightly resented and would undermine people's sense of responsibility for their own affairs."
    That is the answer given. No answer could be more disingenuous, for it gives the impression that what we are saying is that we should not compel people earning over £15 a week to contribute large sums to their own pensions. That is clearly what one would gather, but, in fact, of course, the graduated contributions are contributions taken and spent, for the large part, not on one's own pension but on someone else's.
    What the Government are really saying is that if we have to pay the bill, as we must, for the liabilities incurred for the present pensions, it is fair to put the bill on to those earning under £15 a week and not over. We, on the other hand, hold the view, and we have always held it quite candidly, that since the bill has to be paid it should be fairly distributed among the whole community and that that is best done partly by a much larger Exchequer contribution and partly by graduated contributions going right up the scale to £50 or £60 a week. Therefore, on this issue, there is a sharp division.
    We do not have much hope of this modest Amendment being accepted. When we moved it in Committee we raised the figure to £50 a week. We are more modest now and we are putting the figure in the realm of possibility for the

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    Minister. I ask the right hon. Gentleman, why not £25 a week? Why place the burden on the £9 to £15 wage band? Why not place the burden of the present old-age pensions a little higher? I see a smile of support from experts below the Gangway opposite for the idea. One should spread it a little further up the scale than £15 a week.
    When we consider the burden placed on the lower-paid wage earner by the flat-rate contribution in the last two years and add this further graduated contribution on top, I calculate that a major redistribution of expenditure is now occurring and is being placed on the lower-paid worker. On top of the increase in the flat-rate contribution is now added the new graduated contribution. It is a discriminatory tax designed to relieve the general taxpayer at the cost of the wage earner.
    That is the case on which we base our opposition to the whole Bill. But the Bill would be a little better if this Amendment were accepted and if the ceiling were raised from £15 to £25 a week.
    Mr. Reynolds: I beg to second the Amendment.
    Whilst I agree with everything that my hon. Friend the Member for Coventry, East (Mr. Crossman) has said, I wish to draw attention to another and different aspect of this problem. The House will appreciate that as the Bill is at present drafted, with contributions being levied on £6 of income between £9 and £15 a week, anyone earning over £15 a week is, of course, making his contribution on earnings of £15 a week.
    In the table and Appendix 2 of the Government White Paper prepared by the Government Actuary, we are told that in making all his calculations the Government Actuary has assumed that the rate of increase of earnings
    "will be 2 per cent. per annum."
    In other words, we are being told by the Government, and it has already been quoted with great approval earlier this afternoon, that the rate of increase in earnings is going up 2 per cent. per annum on average for everyone in the country. If we now had a Bill drafted as this Bill is drafted, fixing no wage band at all as the basis on which contributions are going to be levied, sooner
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    or later, of course, more and more people are going to be earning over £15 a week. The Amendment, of course, retains the wage band.
    I would rather see the wage band disappear altogether and, instead, have some other calculation based on average earnings or a percentage of average earnings. But the most simple way of improving the Bill is to increase the wage on which contributions will be paid.
    Let us take someone who enters the scheme at 20 years of age and earns a fraction over £9 a week and pays his contributions. He will be working and contributing to the scheme for forty-five years. On the basis of the Government Actuary's own assumption of the 2 per cent. average increase in wages per year, by the time that individual retires, assuming that he is doing exactly the same job as when he started at the age of 20, the normal 2 per cent. increase per annum will mean that instead of earning £9 a week he will, in forty-five years' time, be earning £21 10s. 2d. per week. Yet the pension to which he will be entitled under the Bill is £3 17s. a week. That is the ridiculous situation one gets into by trying to fix actual figures in legislation knowing that as the years go by earnings will go up and that the figures will become less and less realistic.
    5.30 p.m.
    Let us consider someone who is a little closer to retiring age, namely, a person of 50 years of age earning £9 a week. When he retires fifteen years later, on the basis of the 2 per cent. increase each year, his earnings will be £11 17s. 6d. The pension to which he will be entitled will be the maximum and wonderful sum of £2 13s. per week—a 3s. a week increase on the pension being paid today. The income of that individual would drop from £11 17s. 6d. to £2 13s. This Amendment would not greatly improve his position. It would, however, considerably improve the position of a younger person.
    Let us go a little further up the wage scale and consider a person who is at present earning £15 a week. It does not matter what happens to earnings in future—they will go up 2 per cent, per year, according to the Government Actuary—his contribution for the whole of his working life will be based on £15 a week, as the Bill now stands. If he

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    is 20 years of age when the scheme comes into operation and forty-five years later is due to draw his pension, the 2 per cent. increase will have taken his wage up from £15 a week to £35 16s. 11d. a week. On retirement he will be expected to scratch along on £4 10s. a week. According to the Government Actuary, he will not pay any contribution on that increase because he is earning £15 a week when the scheme starts. Therefore his benefits, whatever he is earning—and, as I say, he will probably be earning about £36 a week—will always be related to the £15 a week which he was receiving at the age of 20.
    It would be ridiculous for the House to assent to such a ridiculous position. In fixing the present income level at £15 a week we are putting into permanent form by way of legislation something that will in due course mean that people in this country, as earnings keep going up, will pay a flat-rate contribution which at the moment is a proper contribution for someone earning £15 a week and who in due course will draw a flat-rate benefit.
    Our Amendment would be a great improvement on the Bill and would insert a figure which could be a basis for the assessment of average adult earnings. The Amendment would go part of the way towards improving the position.
    For the reasons which my hon. Friend the Member for Coventry, East has given and in view of the point which I have made, I hope that the Government will consider the Amendment more seriously than the other Amendments which we have put forward.
    Mr. Wade: I have at last discovered a statement made by the hon. Member for Coventry, East (Mr. Crossman) with which I agree. I gathered that in his opinion the administrative structure which the Government propose to set up would be useful if ever the Labour Party had the opportunity of introducing its own proposals. I forecast that on Second Reading and I think that is true. I considered tabling an Amendment to alter the Title of the Bill to "The Labour Party Pensions Plan (Enabling) Bill", but in view of the fate that has befallen all other Amendments which I have tabled on Report it
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    is probably not much use my attempting to table further Amendments.
    Mr. J. T. Price: On a point of order. Is it not a reflection on the Chair that a Liberal Member should complain because the Amendments which he was too incompetent to draft in proper terms have been rejected by the Chair?
    Mr. Deputy-Speaker (Sir Charles MacAndrew): No. I thought that the hon. Member was congratulating the Chair.
    Mr. Wade: I am delighted that you should regard it in that way, Mr. Deputy-Speaker. I should put the matter in a slightly different way. As I observed on Second Reading and in Committee, I regard the introduction of compulsory graded pensions as basically unsound and therefore the Bill, from my point of view, is difficult to amend. Furthermore, I think that it is a waste of breath to spend a great deal of time in discussing a Bill which I do not think can be satisfactorily amended. If there is to be a system of compulsory graded pensions—I emphasise the word "compulsory" because it means that the State will ensure that one retired pensioner shall receive more on retirement than another; it is a form of compulsory inequality—and if one proposes to introduce this compulsory inequality and to provide for its payment by contributions, I think that there is something to be said for a higher ceiling. I mentioned this in Committee as well as on Second Reading.
    Under the scheme there seems to be an argument for a higher ceiling than is provided in the Bill. I have not heard an adequate or satisfactory argument for maintaining the present proposed ceiling. Therefore, coming as near as I can to discussion of the details of the scheme, I suggest that the Amendment improves a Bill which I fear is nevertheless fundamentally unsound.
    Miss Pitt: The Amendment seeks to increase the upper limit on earnings on which graduated contributions would be paid from £15 to £25. It reopens the question of dimensions which we debated very fully during the long Committee stage. I think, however, that the proposal of the party opposite has suffered a change. At the end of the

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    Committee stage, various figures for the ceiling were suggested, such as £47 and £50, and at times the hon. Member for Coventry, East (Mr. Crossman) spoke about the figure of £2,000 a year. I think that he was a little mixed with the two schemes. The party opposite has now proposed the more modest figure of £25. So far, I have not heard a reason from the benches opposite why the figure should be set at £25.
    Mr. Crossman: We put that figure in to try to find a real reason why it should be £15 in the Bill.
    Miss Pitt: It seems to me that it has been proposed to provide a vehicle for another exercise on the proportions of the Bill. In any event, it is not acceptable for the same reasons which my right hon. Friend and Members on this side advanced in Committee, because it is contrary to the Government's intentions.
    We have given considerable thought to the proportions which should be introduced in a Bill to provide graduated pensions. We believe that the ceiling of £15 which we propose is reasonable because it will not damage existing private schemes or prevent developments in the private sector to which we attach importance. It will not interfere unduly with an individual's right to dispose of his own money as he chooses, and that is something which we as a party consider to be important. We do not believe that compulsory State insurance should be developed to such an extent that the individual is not able to spend his own money as he chooses. We believe that this modest ceiling will not discourage private provision for old age and will not be inflationary. Furthermore, we believe, perhaps most important of all, that it will provide a workable system of contracting out.
    A ceiling of £15 a week or £780 a year, which is slightly above the average industrial earnings for men, compares very reasonably with schemes in other countries, for instance, those in America and Germany. Though modest, the scheme is not out of step with what is being done in other progressive industrial countries. I also advise hon. Members that if the Amendment were accepted it would mean that a man earning £25 a week or more would pay a graduated
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    pension contribution of 13s. 7d. a week and his employer a similar amount, and that the total joint contribution would he 42s. 6d. a week, of which the employee's share would be 21s. 11d. The maximum graduated pension which that would earn would be £5 11s. 7d. a week, compared with 41s. 6d.
    The hon. Member for Coventry, East said that he believed that the graded contribution should apply from the smallest amount of earnings up to £50 or £60. Why has he put £25 in the Amendment? He went on to add that the contributions would be used under the Government scheme to meet the deficiencies and to remove the taxpayers' liability. He rehashed all the arguments which we have had over and over again in Committee, and I hope that the House will forgive me if I do not take up time in replying to them once again.
    He then added that we impose the burden on those earning between £9 and £15 a week, a point which he made twice. Lie understands, however, that those earning above £15 a week would in any event make their contribution within the band because they would be liable for graduated contributions. The hon. Member also said that there is a considerable burden on the lower-paid workers at the moment for the present flat-rate scheme. I will emphasise what I am sure he knows—that the provisions in the Bill will mean that the contributions of the lower-paid workers to the flat-rate scheme can be reduced, which is a not unimportant development of the graduated benefit scheme.
    The hon. Member for Islington, North (Mr. Reynolds) said that everyone earning between £9 and £15 or more a week would make contributions on that part of their earnings but that they would make no other contributions. He has perhaps forgotten that they are bound to bear their share of the Exchequer liability which will be collected through Income Tax. His argument, if I understood him correctly, was that the higher paid were not making their full contribution towards the cost of this scheme, although he agrees that they would pay on that part of their earnings between £9 and £15. I remind him that the Exchequer contribution of not less than £170 million—and in the years ahead more than that—will have to come from the taxpayer.

    681
    He gave as one of his examples of the poor return which he alleges a man would get from graduated contributions that a man who entered the scheme at the age of 20 and contributed until he retired at the age of 65 would receive only the flat-rate pension plus the benefit of the graduated scheme of 41s. 6d. That assumes no change at all in the scheme or graduated benefits over a period of forty-five years, and no change in the flat-rate provisions of the present scheme. Furthermore, it assumes that the man he has in mind is unable to make any addition to the State pension by private provision out of the prosperity which he enjoys. I do not think that that is a very reasonable argument to advance in support of the Amendment.
    5.45 p.m.
    If the Amendment were accepted it would enlarge the size of the present scheme, which is contrary to what the Government have decided would be reasonable. It would have a considerable impact on private schemes and would mean a much higher bill for future generations to meet in the way of State provision. It would also necessitate a further amendment to Part II of the Bill, which deals with the contracting-out provisions. Neither the hon. Member for Coventry, East nor the hon. Member for Islington, North mentioned that. Without such an Amendment there would be no guarantee that equivalent benefits would apply at the limit of £25 suggested in the Amendment. I am not sure whether the proposers have it in mind to put the test of equivalency at £25 for those who are contracted out. If they have, it would make it much more difficult for companies operating private schemes to contemplate contract-out, because they would have to match a much higher level of benefits against the State scheme and guarantee those benefits, if a man left their service, in the form, for example, of a transfer payment.
    Mr. Reynolds: I am worried by what the hon. Lady has said. A moment ago she was talking of the possibility of considerable alterations in the scheme in a period of forty-five years. At the same time, she refers to the test of equivalency at £15. If employers and employees are to look at this scheme and to work
    682
    out equivalency on £15, and then to look back a few lines in the hon. Lady's speech and see that in a few years' time the equivalency will not be £15—for she was emphatic on that point—what are they to decide? They will be in a ridiculous position.
    Miss Pitt: I asked, and I repeat, who is to say that in a period of forty-five years there will be no changes in either the graduated scheme or the flat-rate scheme? In view of our experience of the present flat-rate scheme, that is a very proper point to make.
    I was trying to stress that if the Amendment were accepted it would mean reconsideration of the test of equivalency, because if there were no change it would mean less favoured treatment for the man who has contracted out, because he would be contracted out with a guaranteed pension based only on earnings of £15, whereas the individual in the State scheme with earnings above that figure would have a guaranteed pension based on earnings of up to £25. That adds to the difficulty.
    The levels represented in the Bill have been arrived at after long consideration of what it is reasonable to impose in a State scheme of compulsory insurance for graduated benefits in old age. It rests on this moderate proposition, that we can say that we believe the scheme to be workable. The test is to be equivalency at £15 and the payment in lieu if a man leaves contracted-out employment is to be related to £15. It represents a reasonable figure above average earnings. I believe that it would be unworkable in maintaining contracting out, to which we attach importance, if the upper limit of contributions were increased by two-and-a-half times. For those reasons I am unable to accept the Amendment.
    I would add a final word to the hon. Member for Huddersfield, West (Mr. Wade), because I should hate his intervention to be ignored. Nevertheless, it was a little contradictory, He regarded the introduction of graduated pensions as unsound, which means that he is out on a limb and agrees with neither party. He then said that the figure should be higher. I assume that that is not a very responsible contribution.
    Question put, That "six" stand part of the Bill:—
    The House divided: Ayes 229, Noes 181.

    Division No. 117.]

    AYES

    [5.50 p.m.

    Agnew, Sir Peter

    Gurden, Harold

    Molson, Rt. Hon. Hugh

    Aitken, W. T.

    Hall, John (Wycombe)

    Morrison, John (Salisbury)

    Allan, R. A. (Paddington, S.)

    Harris, Frederic (Croydon, N.W.)

    Nairn, D. L. S.

    Alport, C. J. M.

    Harris, Reader (Heston)

    Neave, Airey

    Amery, Julian (Preston, N.)

    Harrison, A. B. C. (Maldon)

    Nicholson, Sir Godfrey (Farnham)

    Arbuthnot, John

    Harrison, Col. J. H. (Eye)

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Armstrong, C. W.

    Harvey, Sir Arthur Vere (Macclesf'd)

    Noble, Comdr. Rt. Hon. Allan

    Ashton, H.

    Harvey, John (Walthamstow, E.)

    Noble, Michael (Argyll)

    Atkins, H. E.

    Harvie-Watt, Sir George

    Nugent, Richard

    Balniel, Lord

    Hay, John

    Oakshott, H. D.

    Barlow, Sir John

    Heald, Rt. Hon. Sir Lionel

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Barter, John

    Heath, Rt. Hon. E. R. G.

    Orr, Capt. L. P. S.

    Batsford, Brian

    Henderson, John (Cathcart)

    Orr-Ewing, C. Ian (Hendon, N.)

    Baxter, Sir Beverley

    Henderson-Stewart, Sir James

    Osborne, C.

    Bell, Philip (Bolton, E.)

    Hesketh, R. F.

    Page, R. G.

    Bell, Ronald (Bucks, S.)

    Hicks-Beach, Maj. W. W.

    Pannell, N. A. (Kirkdale)

    Bennett, F. M. (Torquay)

    Hill, Rt. Hon. Charles (Luton)

    Partridge, E.

    Bidgood, J. C.

    Hill, Mrs. E. (Wythemhawe)

    Peel, W. J.

    Biggs-Davison, J. A.

    Hinchingbrooke, Viscount

    Peyton, J. W. W.

    Bingham, R, M.

    Hirst, Geoffrey

    Pickthorn, Sir Kenneth

    Birch, Rt. Hon. Nigel

    Holland-Martin, C. J.

    Pike, Miss Mervyn

    Bishop, F. P.

    Hope, Lord John

    Pilkington, Capt. R. A.

    Body, R. F.

    Hornby, R. P.

    Pitt, Miss E. M.

    Boyd-Carpenter, Rt. Hon. J. A.

    Horobin, Sir Ian

    Powell, J. Enoch

    Braithwaite, Sir Albert (Harrow, W.)

    Howard, Gerald (Cambridgeshire)

    Price, David (Eastleigh)

    Brewis, John

    Howard, John (Test)

    Profumo, J. D.

    Bromley-Davenport, Lt.-Col. W. H.

    Hughes-Young, M. H. C.

    Redmayne, M.

    Brooman-White, R. C.

    Hutchison, Michael Clark(E'b'gh, S.)

    Rees-Davies, W. R.

    Browne, J. Nixon (Craigton)

    Hyde, Montgomery

    Renton, D. L. M.

    Bryan, P.

    Hylton-Foster, Rt. Hon. Sir Harry

    Rippon, A. G. F.

    Bullus, Wing Commander E. E.

    Iremonger, T. L.

    Roberts, Sir Peter (Heeley)

    Burden, F. F. A.

    Irvine, Bryant Godman (Rye)

    Robertson, Sir David

    Butler, Rt. Hn. R. A.(Saffron Walden)

    Jenkins, Robert (Dulwich)

    Roper, Sir Harold

    Campbell, Sir David

    Jennings, J. C. (Burton)

    Ropner, Col. Sir Leonard

    Cary, Sir Robert

    Jennings, Sir Roland (Hallam)

    Russell, R. S.

    Channon, H. P. G.

    Johnson, Dr. Donald (Carlisle)

    Sandys, Rt. Hon. D.

    Chichester-Clark, R.

    Johnson, Eric (Blackley)

    Scott-Miller, Cmdr. R.

    Cole, Norman

    Jones, Rt. Hon. Aubrey (Hall Green)

    Sharples, R. C.

    Cooke, Robert

    Kerby, Capt. H. B.

    Simon, J. E. S. (Middlesbrough, W.)

    Cooper, A. E.

    Kerr, Sir Hamilton

    Smyth, Brig. Sir John (Norwood)

    Cooper-Key, E. M.

    Kimball, M.

    Spearman, Sir Alexander

    Cordeaux, Lt.-Col. J. K.

    Kirk, P. M.

    Speir, R. M.

    Corfield, F.V.

    Lambton, Viscount

    Stanley, Capt. Hon. Richard

    Craddock, Beresford (Spelthorne)

    Lancaster, Col. C. G.

    Stoddart-Scott, Col. Sir Malcolm

    Crosthwaite-Eyre, Col. O. E.

    Legge-Bourke, Maj. E. A. H.

    Storey, S.

    Crowder, Sir John (Finchley)

    Legh, Hon. Peter (Petersfield)

    Stuart, Rt. Hon. James (Moray)

    Crowder,Petre (Ruislip-Northwood)

    Lindsay, Hon. James (Devon, N.)

    Studholme, Sir Henry

    Cunningham, Knox

    Lindsay, Martin (Solihull)

    Summers, Sir Spencer

    Dance, J. C. G.

    Linstead, Sir H. N.

    Taylor, Sir Charles (Eastbourne)

    D'Avigdor-Goldsmid, Sir Henry

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Teeling, W.

    Deedes, W. F.

    Loveys, Walter H.

    Temple, John M.

    de Ferranti, Basil

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Thomas, Leslie (Canterbury)

    Dodds-Parker, A. D.

    Lucas, P. B. (Brentford & Chiswick)

    Thomas, P. J. M. (Conway)

    Donaldson, Cmdr. C. E. McA.

    Lucas-Tooth, Sir Hugh

    Thompson, Kenneth (Walton)

    Doughty, C. J. A.

    McAdden, S. J.

    Thornton-Kemsley, Sir Colin

    du Cann, E. D. L.

    Macdonald, Sir Peter

    Tiley, A. (Bradford. W.)

    Emmet, Hon. Mrs. Evelyn

    McLaughlin, Mrs. P.

    Turner, H. F. L.

    Errington, Sir Eric

    Maclay, Rt. Hon. John

    Vane, W. M. F.

    Farey-Jones, F. W.

    Maclean, Sir Fitzroy (Lancaster)

    Vickers, Miss Joan

    Fell, A.

    McLean, Neil (Inverness)

    Fisher, Nigel

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Vosper, Rt. Hon. D. F.

    Fletcher-Cooke, C.

    McMaster, Stanley

    Wakefield, Edward (Derbyshire, W.)

    Fraser, Hon. Hugh (Stone)

    Macmillan,Rt.Hn.Harold(Bromley)

    Wakefield, Sir Wavell (St. M'lebone)

    Freeth, Denzil

    Macmillan, Maurice (Halifax)

    Wall, Patrick

    Gammans, Lady

    Macpherson, Niall (Dumfries)

    Ward, Rt. Hon. G. R. (Worcester)

    Garner-Evans, E. H.

    Maitland, Cdr. J. F. W. (Horncastle)

    Ward, Dame Irene (Tynemouth)

    George, J. C. (Pollok)

    Maitland, Hon. Patrick (Lanark)

    Webbe, Sir H.

    Gibson-Watt, D.

    Manningham-Buller, Rt. Hn. Sir R.

    Webster, David

    Glover, D.

    Markham, Major Sir Frank

    Williams, Paul (Sunderland, S.)

    Glyn, Col. Richard H.

    Marlowe, A. A. H.

    Williams, R. Dudley (Exeter)

    Godber, J. B.

    Marples, Rt. Hon. A. E.

    Wills, Sir Gerald (Bridgwater)

    Gough, C. F. H.

    Marshall, Douglas

    Wilson, Geoffrey (Truro)

    Graham, Sir Fergus

    Mathew, R.

    Wolrige-Gordon, Patrick

    Grant, Rt. Hon. W. (Woodside)

    Maudling, Rt. Hon. R.

    Woollam, John Victor

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Mawby, R. L.

    Gresham Cooke, R.

    Maydon, Lt.-Comdr. S. L. C.

    TELLERS FOR THE AYES:

    Grimston, Hon. John (St. Albans)

    Medlicott, Sir Frank

    Mr. Finlay and Mr. Whitelaw.

    Grimston, Sir Robert (Westbury)

    Milligan, Rt. Hon. W. R.

    NOES

    Ainsley, J. W.

    Herbison, Miss M.

    Pearson, A.

    Albu, A. H.

    Hewitson, Capt. M.

    Peart, T. F.

    Allaun, Frank (Salford, E.)

    Hobson, C. R. (Keighley)

    Plummer, Sir Leslie

    Allen, Arthur (Bosworth)

    Holman, p.

    Popplewell, E.

    Allen, Scholefield (Crewe)

    Holmes, Horace

    Price, J. T. (Westhoughton)

    Bacon, Miss Alice

    Houghton, Douglas

    Probert, A. R.

    Bellenger, Rt. Hon. F. J.

    Hoy, J. H.

    Pursey, Cmdr. H.

    Bence, C. R. (Dunbartonshire, E.)

    Hughes, Cledwyn (Anglesey)

    Randall, H. E.

    Benn, Hn. Wedgwood (Bristol, S.E.)

    Hughes, Emrys (S. Ayrshire)

    Rankin, John

    Benson, Sir George

    Hughes, Hector (Aberdeen, N.)

    Redhead, E. C.

    Beswick, Frank

    Hunter, A. E.

    Reeves, J.

    Bevan, Rt. Hon. A. (Ebbw Vale)

    Hynd, H. (Accrington)

    Reid, William

    Blackburn, F.

    Irvine, A. J. (Edge Hill)

    Reynolds, G. W.

    Blenkinsop, A.

    Irving, Sydney (Dartford)

    Roberts, Albert (Normanton)

    Blyton, W. R.

    Isaacs, Rt. Hon. G. A.

    Roberts, Goronwy (Caernarvon)

    Boardman, H.

    Jay, Rt. Hon. D. P. T.

    Robinson, Kenneth (St. Pancras, N.)

    Bowden, H. W. (Leicester, S.W.)

    Jeger, George (Goole)

    Rogers, George (Kensington, N.)

    Boyd, T. C.

    Jenkins, Roy (Stetchford)

    Royle, C.

    Braddock, Mrs. Elizabeth

    Johnson, James (Rugby)

    Shinwell, Rt. Hon. E.

    Brockway, A. F.

    Jones, Rt. Hn. A. Creech (Wakefield)

    Silverman, Julius (Aston)

    Brown, Thomas (Ince)

    Jones, David (The Hartlepools)

    Silverman, Sydney (Nelson)

    Burton, Miss F. E.

    Jones, Elwyn (W. Ham, S.)

    Skeffington, A. M.

    Butler, Herbert (Hackney, C.)

    Kenyon, C.

    Slater, Mrs. H. (Stoke, N.)

    Butler, Mrs. Joyce (Wood Green)

    Key, Rt. Hon. C. W.

    Slater, J. (Sedgefield)

    Callaghan, L. J.

    Lawson, G. M.

    Sorensen, R. W.

    Carmichael, J.

    Lee, Frederick (Newton)

    Soskice, Rt. Hon. Sir Frank

    Castle, Mrs. B. A.

    Lee, Miss Jennie (Cannock)

    Sparks, J. A.

    Champion, A. J.

    Lever, Leslie (Ardwick)

    Spriggs, Leslie

    Chapman, W. D.

    Lewis, Arthur

    Stewart, Michael (Futham)

    Chetwynd, G. R.

    Lindgren, G. S.

    Stones, W. (Consett)

    Coldrick, W.

    Lipton, Marcus

    Strauss, Rt. Hon. George (Vauxhall)

    Collick, P. H. (Birkenhead)

    McAlister, Mrs. Mary

    Corbet, Mrs. Freda

    McCann, J.

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

    Crossman, R. H. S.

    MacColl, J. E.

    Summerskill, Rt. Hon. E.

    Cullen, Mrs. A.

    McKay, John (Wallsend)

    Sylvester, G. O.

    Darling, George (Hillsborough)

    McLeavey, Frank

    Taylor, Bernard (Mansfield)

    Daves, Ernest (Enfield, E.)

    MaePherson, Malcolm (Stirling)

    Taylor, John (West Lothian)

    Davies, Harold (Leek)

    Mahon, Simon

    Thomson, George (Dundee, E.)

    Diamond, John

    Mallalieu, E. L. (Brigg)

    Thornton, E.

    Dodds, N. N.

    Mann, Mrs. Jean

    Tomney, F.

    Donnelly, D. L.

    Marquand, Rt. Hon. H. A.

    Ungoed-Thomas, Sir Lynn

    Ede, Rt. Hon. J. C.

    Mayhew, C. P.

    Viant, S. P.

    Edwards, Robert (Bilston)

    Mellish, R. J.

    Warbey, W. N.

    Edwards, W. J. (Stepney)

    Messer, Sir F.

    Watkins, T. E.

    Evans, Albert (Islington, S.W.)

    Mikardo, Ian

    Weitzman, D.

    Finch, H. J. (Bedwellty)

    Mitchison, G. R.

    Wells, Percy (Faversham)

    Foot, D. M.

    Moody, A. S.

    Wells, William (Walsall, N.)

    Fraser, Thomas (Hamilton)

    Morris, Percy (Swansea, W.)

    Wheeldon, W. E.

    Gaitskell, Rt. Hon. H. T. N.

    Morrison, Rt.Hn. Herbert (Lewis'm,S.)

    White, Mrs. Eirene (E. Flint)

    George, Lady Megan Lloyd(Car'then)

    Mort, D. L.

    Wilkins, W. A.

    Gibson, C. W.

    Moss, R.

    Willey, Frederick

    Grenfell, Rt. Hon. D. R.

    Neal, Harold (Bolsover)

    Williams, David (Neath)

    Grey, C. F.

    Noel-Baker, Francis (Swindon)

    Williams, Rev. Llywelyn (Ab'tillery)

    Griffiths, Rt. Hon. James (Llanelly)

    Noel-Baker, Rt. Hon. P. (Derby, S.)

    Williams, Rt. Hon.T. (Don Valley)

    Griffiths, William (Exchange)

    Oswald, T.

    Williams, W. R. (Openshaw)

    Hale, Leslie

    Owen, W. J.

    Woof, R. E.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Padley, W. E.

    Yates, V. (Ladywood)

    Hamilton, W. W.

    Palmer, A. M. F.

    Zilliacus, K.

    Hannan, W.

    Pargiter, G. A.

    Hastings, S.

    Parker, J.

    TELLERS FOR THE NOES:

    Hayman, P. H.

    Parkin, B. T.

    Mr. Simmons and Mr. Deer

    Henderson, Rt. Hn. A. (Rwly Regis)

    Paton, John

    6.0 p.m.
    Mr. Lawson: I beg to move, in page 2, line 37, to leave out paragraph (a).
    Mr. Deputy-Speaker: I think the hon. Member's next Amendment, in page 3, line 9, leave out "to a quarter" goes with this one.
    Mr. Lawson: Yes, the second is contingent upon the first.
    The reason for the Amendment will be made much clearer if it is understood what this paragraph does. It gives the
    686
    Minister the power in each quinquennial period to raise the graduated contribution which is paid in respect of the graduated benefit; it gives him power to raise it from 4¼ per cent. of the amount between £9 and £15, by ¼ per cent. each five years, to 5¼ per cent. It should be understood that this means that the Minister is given power to raise the contribution by as much as 23 per cent.
    It should also be understood that the contribution of 4¼ per cent. is payable

    687
    by the employee and is covered by a like 4¼ per cent. payable by his employer. Therefore, the total contribution is one of 8½ per cent., which will be raised to 10½ per cent. over the four quinquennial periods. This means a quite substantial increase in the amount to be paid. When the Bill becomes law, the maximum payment to begin with, by the £15 a week man, will be 5s. 1d., in addition to his basic contribution, and his employer will also pay 5s. 1d. Therefore, the contribution in respect of graduated benefits to begin with will be 10s. 2d.
    The Minister is given the power under this paragraph to raise the contribution in those four periods to about 12s. 8d. from 10s. 2d., though I may be wrong to a penny in my calculations. Both Amendments would deprive the Minister of that power and would leave a position in which the contribution would be 4¼ per cent. precisely, or 8½ per cent. taking employer and employee jointly. In other words, the fixed maximum contribution would be 10s. 2d.
    It may be that the Minister or the Parliamentary Secretary will tell us why power is also taken under the Bill to raise the flat-rate contribution. I agree that at this stage we are not challenging that point. We have shown in Committee what we feel about it. We are concerned here solely with the treatment to be given to the graduated contribution.
    In the first place, the graduated contribution differs very materially from the basic contribution. It differs, for example, in the fact that there will be no Treasury contribution or supplement in respect of the graduated contribution, and that means, of course, no Treasury supplement in respect of the graduated benefit. The two types of contribution differ also in that the graduated contribution will not be payable by all. Thirdly, the graduated contribution of 4¼ per cent. is already more than enough to pay for the benefit which will be paid out eventually.
    Let us consider these three points separately. The first is that the Exchequer will make no supplement towards the graduated contribution or graduated benefit. This may be of interest to the hon. Member for Aylesbury (Sir S. Summers) who earlier in the debate
    688
    seemed to be challenging this. I would refer him to Clause 1 (3, a) which states:
    "(i) the Exchequer supplements for contributions as an employed person and for employer's contributions shall be of an amount equal to one quarter of the contributions, but"—
    and I underline what follows—
    "but so that no Exchequer supplements shall be payable for graduated contributions …"
    In other words, there is here not merely an omission of provision to pay supplements towards graduated contributions and benefits but a deliberate prohibition of any such supplement being paid. It means that if we ever intended or felt it desirable to make an Exchequer supplementation, a new Bill would have to be passed to repeal this provision. This definite prohibition makes the graduated part of the Bill very different from the flat-rate part.
    Everyone is included in the flat-rate part but that is not the case here. There is also the point that graduated contributions are not payable by everyone. In the first place, they are payable only by employed persons. Self-employed people are not brought into this part of the scheme. They are payable only by those employees whose income is about £9 and up to £15. Therefore, only that band of earners pay the graduated contributions, and it means that probably 9 million employees whose income is £9 or under will be excluded from this provision in the Bill.
    The provision, again, does not apply to those who earn over £15 a week. Therefore, another substantial number of people is excluded. Nor will the graduated contributions be payable by those who are contracted out. When it is remembered that at present about 8 million people are in private industrial schemes, it will be realised that a very large number of these are likely to be contracted out, and the selective nature of these provisions in respect of graduated contributions will be seen. Here, therefore, is a section which is being treated differently from the working population.
    The third point was to the effect that even at 4¼ per cent. on each side, that is, the employer paying 4¼ per cent. and the employee 4¼ per cent., the graduated contributions are already excessive. If we look at the benefit that will be derived from those contributions we can

    689
    see how excessive they are. For example, let us take how much will be paid for each six pennies a week in terms of graduated retirement benefit. Six pennies will cost £15 in contributions at the initial rate; that is, £7 10s. will be paid by the employer and £7 10s. by the employee, so a unit is one of £15.
    Mr. Marquand: It will be £18 for a woman.
    Mr. Lawson: At the moment I am talking about men. For the total of £15 there will be paid eventually sixpence a week by way of pension. As my right hon. Friend has just pointed out, it will be more expensive for women. A woman will have to pay £9, and her employer will also have to pay £9, in order to earn the same six pennies at the beginning of the scheme, before any addition has been made. I calculate that at this rate, before a man can recover the amount of contribution paid either by himself or on his behalf at the initial rate, the cheapest rate, it will take him 11½ years. If he retires at the age of 65, it will be 76½ years before he has recovered the money paid on his behalf. This is not taking into account inflation or any interest on the contribution he has made.
    So if the Minister is enabled by this paragraph in the Bill to raise the cost of the unit by these percentages each five-year period, the unit will cost, after the completion of these rises, not £15 but £18 13s. The price of the unit rises but the benefit to be derived from it remains the same. In other words, although so much more money will be paid—£18 13s. instead of £15—the contributor will receive when he retires not a penny more than the six pennies for the unit. On this basis it will take a man fourteen years—far more than his expectation of life—merely to recover the amount of the contribution which either he has made or his employer has made on his behalf.
    6.15 p.m.
    It was shown clearly in Committee that the benefits to be derived from the contributions were not as much as half that would be payable on any commercial terms. An interesting percentage was worked out in Committee to the effect that a man earning £15 a week and commencing at the age of 20 to contri-
    690
    bute at the 4¼ per cent. rate—that is to say, 5s. 1d. himself and 5s. 1d. by his employer, or 10s. 2d. a week—towards graduated benefits to any of the existing insurance companies would receive a retirement pension which would be more than double that being paid under the Bill. In fact, the estimate was that if this sum of money were put aside and allowed to accumulate at only 3 per cent. compound interest—many companies pay substantially better interest rates than that—it would provide a pension of £5 6s. 5d. a week as compared with the maximum under the State scheme payable to a man entering at the age of 18 and paying the maximum for forty-seven years, under which the additional pension would be only £2 1s. That is £5 6s. 5d. against £2 1s., and it is without any increases being made in contributions.
    This is supposed to be a scheme in substitution of the existing private ones. This is the Government's reply to the fact that there is a growing number of people who are being taken care of in private industry schemes, many giving handsome benefits and some without the payment of contributions. This is the Government's solution for those who cannot be enrolled in such private schemes. But there will be no choice for such people. If a man's income is over £9, he will have to pay on this basis, whether he likes it or not, if his employer has not contracted him out and put him into a private scheme. So there is no question of choice.
    If, for example, a person thought it would suit him much better to take the money and put it into a private scheme, he will not be permitted to do so unless he is doing it in addition to what the State is demanding he should do. So we have not a second-rate superannuation scheme but one which can only be described as a fraud. We have this scheme, which exists not for the purpose of providing a genuine substitute for the private industry schemes that are growing up. If that were the purpose it would provide benefits at least as good as those which are being provided by the insurance companies. The insistence upon raising contributions for the graduated benefit is clearly for the purpose of transferring the cost of the deficit on the flat-rate benefit that is emerging on to the shoulders of those who are paying

    691
    the graduated contribution in return for this benefit which is less than half the benefit they would be entitled to under any commercial scheme.
    This is so blatantly a fraud that I ask the Minister, if he is to be honest with the people of this country, to tell us that he will at least agree not to add to the burden of those who are compulsorily enrolled in the graduated aspect of this scheme.
    Mr. Reynolds: I beg to second the Amendment.
    I have not yet heard any occupants of the Government Front Bench state definitely that they really believe in the Ministry of Pensions and National Insurance providing wage-related pensions for people who cannot get them from any other source through their employers. In that respect I congratulate them upon not trying to make out that the Bill is something which it is not. On Second Reading, my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand) spoke of the real effect of the Bill and said that it ought to have been a Finance Bill.
    Looking at the graduated contribution, one finds that a man earning £15 a week will have to pay a graduated contribution, with his employer, of 10s. 2d. per week—5s. 1d. each—but the cost of providing the graduated benefit is only 4s. 4d. In other words, the man is having to pay 135 per cent. more than is necessary to cover the cost of providing the benefit which he will eventually receive.
    To look at it another way, each £1 worth of benefit which the contributor will eventually get will cost him £2 7s. That is the scheme as it starts off according to the Bill. Yet we are told in this subsection that, despite the fact that the contributor is being swindled in this way at the start, the Minister must have the right every five years to get a little more money from him, to increase the contribution by another ¼ per cent. if he thinks it necessary.
    I cannot understand this on the basis of the arguments which we have heard from the Government side Looking at the graduated pension scheme, one finds that in its first year the income will be £196 million and the expenditure nil.
    692
    Five years later when the first increase in the contribution will be levied as proposed in the subsection, the total income will be 248 million and the total expenditure £3 million. Five years later a further increase in the graduated contribution is provided for. Then the total income will be £295 million and, on the Government's own figures, the total expenditure will be £16 million.
    When the figures already provide for an annual surplus of £279 million in 1971, is it necessary to have yet another increase five years later so that the annual income will go up to £342 million, whereas by that time the benefits will still be costing the Government only £35 million and there will be a surplus of £307 million a year on the graduated pension scheme? I suggest that the surplus of about £200 million which we have in the earlier years is sufficient without deliberately providing for extra money each quinquennium, as the money is not required to meet the cost of providing the graduated benefit.
    We can see what the money is actually required for and what is the main purpose of the Bill. The purpose of the Bill is not to provide graduated benefit. The purpose is to increase the contributions and in return, as a slight sweetener, to promise a little extra money at some time in the future to the people who pay the increased contributions. However, once the money has been collected by means of increased contributions it will be used to meet the deficit which at present exists under the National Insurance Scheme, a deficit which will amount to £144 million in the opening year of the scheme. Therefore, we shall have a surplus of £196 million on the graduated benefit part of the scheme which will be used in its entirety to meet the existing deficit of £144 million on the present National Insurance Scheme. Five years later the deficit on the present National Insurance Scheme will increase to £227 million.
    That is the reason for the proposal to increase the graduated contribution. The object is that the surplus of £245 million which will then arise will be sufficient to meet the deficit on the flat-rate National Insurance Scheme of £227 million. The intention is that each five years, as the deficit on the present flat-rate National Insurance Scheme increases, there shall

    693
    be an increase in the percentage contribution being paid for the new graduated scheme, not for the purpose of providing decent graduated benefits but solely to meet the deficit on the flat-rate National Insurance Scheme, a deficit which over the years both parties in the House have accepted should be met from general taxation.
    I object to a change in that policy now. The community, which has accepted this emerging deficit ever since 1925 and before, should be prepared to continue to accept it. I hope that the Amendment will be carried so that the graduated contributor will have to bear only the burden which is being forced upon him at the beginning of the scheme and will not have a prospect of an increase in his contribution every five years thereafter.
    Mr. Vane: The hon. Member for Motherwell (Mr. Lawson) and the hon. Member for Islington, North (Mr. Reynolds) went a little wide of the comparatively narrow effect of the Amendment. The hon. Member for Islington, North, I thought too, went a little far in saying that all parties in the House accepted that the emerging cost of retirement pensions consequent on changes in the population—
    Mr. Reynolds: If that was not the intention behind the Government's Pensions Act, 1953, where did they expect to get the money to meet the deficit? The Government's Measures of 1953 and 1957, on the basis of the Government Actuary's Report, assume that a deficit has to be met. Everyone has assumed that it was the intention of the Government that it should be met from general taxation. This Bill is the first indication that any of us have had that the deficit is to be met by contributions from the contributors.
    Mr. Vane: It is one thing to indicate that a deficit will arise. It is another thing to accept the principle which the hon. Gentleman wrongly attributes to us. The principle of a change in the contribution rates, such as the quinquennial increases proposed in the Bill, is certainly no novelty, as someone might have supposed when listening to the speeches of hon. Gentlemen opposite. Something of the same kind has previously been considered and implemented.
    694
    The Amendment proposes to exempt the graduated contribution from the impact of any quinquennial increase which may—not "will"—be made. It is suggested that by providing for the graduated contribution to bear some fractional increase it was being treated selectively and unfairly. I should have thought that it was the other way round, that to leave the graduated contribution exactly where it is at times when other contributions under the scheme will be bearing a small increase would be unfair and selective.
    Mr. Lawson: The person paying the graduated contribution also pays the flat-rate contribution. So he pays an increase as well as the others.
    Mr. Vane: At the lowest rate. This would certainly interfere with the proportions on which things have been worked out, and I hope I shall be able to make that clear. The position was indeed made clear from the very beginning. The White Paper made it clear that there might have to be this series of ¼ per cent, increases. I can remember answering questions on this point during the Committee stage.
    We have decided not to ask contributors for funds in advance of the time when they will be needed to meet the increasing cost of retirement pensions which will emerge. Although national earnings will, we hope, continue to be bouyant and increase over the years, I do not think that anybody can honestly suggest that they can be expected to meet the increasing cost of retirement pensions which we all know will be presented to us a few years ahead.
    The increases which we propose are broadly in proportion over the whole field. If the graduated contributors are to be exempted, I submit that it will create unfairness and we shall then find that a larger share of the emerging cost will be borne by those with the smallest incomes. I am sure that hon. Gentlemen opposite do not want that to be the effect of the Amendment.
    6.30 p.m.
    The self-employed, too, and those contracted out will be larger share bearers, because they will pay an increase of 9d. maximum while a member of the State scheme paying graduated contributions will pay, under the Amendment, no

    695
    more than 5d., even though his earnings may be more than a man paying 9d. There will also be a very considerable loss to the fund—£15 million in 1965 has been estimated, a figure which could rise to over £80 million per annum.
    That loss would make a quinquennial increase at the full rate absolutely certain. At present it is a maximum, not a certain increase, and it could be less. If we forgo the increases due from this ¼ per cent. calculated on the graduated contributions, there is little doubt that the quinquennial increases would have to be at a maximum, and even then they might not met the full cost required and a succeeding Government would have to think further as to how they were to meet the cost.
    Mr. J. T. Price: How can the hon. Gentleman sustain this argument when, in practice, the purpose of this Clause would be to give the Government the right to impose an additional ¼ per cent. but, in fact, whatever the right percentage on wages may be in the future it must be related to the product of the capital which is available for paying pensions? In other words, the contribution is to buy so many bricks and if the contribution is to be increased the size of the brick will increase, or the number of bricks available will increase in the proportion of 1s. a week for each £15.
    I am not clear how the Joint Parliamentary Secretary is applying this argument, because it appears to me that the result he envisages will not take place if the pension liability is increased proportionately, because the pension will relate to the capital standing to the fund.
    Mr. Vane: I do not follow the hon. Gentleman entirely, because the Amendment suggests that at a quinquennial increase the graduated contribution should not be included with the other contributions and should be exempted entirely. In fact, as we have argued before—I remember doing so in Committee—that this small fractional addition to the graduated contribution will coincide with a surcharge on the amount of the brick.
    Mr. Lawson: It is not a small fractional increase. It is ¼ per cent. added
    696
    to 4¼ per cent. which, over the period, amounts to about 23 per cent. on the initial contribution, which is quite a substantial increase.
    Mr. Vane: We are anticipating an increase of ¼ per cent. When we get down basically to this the difference between the two sides of the House seems to be that hon. Gentlemen opposite think that it is meritorious to ask contributors to pay a great deal more money than is needed in the early days of the scheme. That is a feature of the scheme that they published.
    We consider that it is not our duty to ask contributors to pay, through stamps or other methods of collection, substantially more than is needed in the earlier stages and that, as the cost of retirement pensions over the years becomes higher, we should increase the contributions to meet that cost. I cannot see why hon. Gentlemen opposite should consider this demanding of additional contributions from the outset to be something that is meritorious and that to ask no more than is needed for a pay as you go scheme is something that merits their opposition.
    Mr. Crossman: I wonder whether the hon. Gentleman is deliberately not understanding the point that we are making. It is about the idea of contribution and units. He has launched this wage-related scheme of contributions on the idea that we can earn so much by paying so much. He says that by paying so many £s we get 1s. on the pension. It says in the pamphlet that if one contributes so many pounds one gets so many shillings pension. We then discover that the value of the brick declines every five years. We object to this. We say that with a straight contribution one can raise it by ½ per cent. to pay for the pension, but if one launches a new scheme and talks about bricks and units and says, "You can earn so much with so many bricks" and then one is found to be cheating because every five years the value of the brick is reduced, that is an outrage. It would have been better to have had a simple percentage scheme.
    The Conservative pamphlet says:
    "Under the new scheme.… Each £1 of graduated contribution paid … will amount to a 'unit of contribution'."
    That is in the first period, but after five years the Government quietly introduce

    697
    another increase which decreases the value of the unit. if the Government do this, they should rewrite the scheme and tell people that it is no longer true that £1 would always earn that amount, and that it will earn less than that amount every five years.
    Mr. Vane: There is nothing in what we have so far argued in the course of Committee or today which is not clear from the White Paper in its original form. Hon. Members opposite, from time to time, have pretended that they could not understand the very straightforward and simple paragraphs which set this out in great detail because we wanted people to be able to understand it.
    Because we are not proposing to ask contributors to pay more in the first few years than is actually needed to meet the
    charges on the fund, hon. Members opposite accuse us of strange calculations with ulterior motives. It is nothing of the kind. It is their calculations which are so strange, because they are asking from the public more money than they need in the early stages.
    If, at the time of a quinquennial increase, it were decided that one type of contribution should be exempted from its proportionate share, the whole scheme would be thrown out of balance and it would be necessary to search for further income by other means. I am sure that the House will agree that the Bill as drafted is very much fairer than the proposal of hon. Gentlemen opposite.
    Question put, That the words proposed to be left out stand part of the Bill:—
    The House divided: Ayes 229, Noes 179.

    Division No. 118.]

    AYES

    [6.37 p.m.

    Agnew, Sir Peter

    Cunningham, Knox

    Hirst, Geoffrey

    Aitken, W. T.

    Currie, G. B. H.

    Holland-Martin, C. J.

    Allan, R. A. (Paddington, S.)

    Dance, J. C. G.

    Hope, Lord John

    Alport, C. J. M.

    Davies,Rt.Hn.Clement(Montgomery)

    Hornby, R. P.

    Amery, Julian (Preston, N.)

    D'Avigdor-Goldsmid, Sir Henry

    Horobin, Sir Ian

    Arbuthnot, John

    Deedes, W. F.

    Howard, Gerald (Cambridgeshire)

    Armstrong, C. W.

    Dodds-Parker, A. D.

    Howard, John (Test)

    Ashton, H.

    Donaldson, Cmdr. C. E, McA.

    Hutchison, Michael Clark(E'b'gh, S.)

    Atkins, H. E.

    Doughty, C. J. A.

    Hyde, Montgomery

    Balniel, Lord

    du Cann, E. D. L.

    Hylton-Foster, Rt. Hon. Sir Harry

    Barlow, Sir John

    Emmet, Hon. Mrs. Evelyn

    Iremonger, T. L.

    Barter, John

    Errington, Sir Eric

    Irvine, Bryant Godman (Rye)

    Batsford, Brian

    Farey-Jones, F. W.

    Jenkins, Robert (Dulwich)

    Baxter, Sir Beverley

    Fell, A.

    Jennings, J. C. (Burton)

    Bell, Philip (Bolton, E.)

    Finlay, Graeme

    Jennings, Sir Roland (Hallam)

    Bell, Ronald (Bucks, S.)

    Fisher, Nigel

    Johnson, Dr. Donald (Carlisle)

    Bennett, F. M. (Torquay)

    Fletcher-Cooke, C.

    Johnson, Eric (Blackley)

    Bidgood, J. C.

    Fraser, Hon. Hugh (Stone)

    Jones, Rt. Hon. Aubrey (Hall Green)

    Biggs-Davison, J. A.

    Freeth, Dentil

    Kerby, Capt. H. B.

    Bingham, R. M.

    Gammans, Lady

    Kerr, Sir Hamilton

    Birch, Rt. Hon. Nigel

    Garner-Evans, E. H.

    Kimball, M.

    Bishop, F. P.

    George, J. C. (Pollok)

    Kirk, P. M.

    Body, R. F.

    Glover, D.

    Lancaster, Col, C. G.

    Bonham Carter, Mark

    Glyn, Col. Richard H.

    Legge-Bourke, Maj. E. A. H.

    Bowen, E. R. (Cardigan)

    Godber, J. B.

    Legh, Hon. Peter (Petersfield)

    Boyd-Carpenter, Rt. Hon. J. A.

    Gough, C. F. H.

    Lennox-Boyd, Rt. Hon. A. T.

    Braithwaite, Sir Albert (Harrow, W.)

    Graham, Sir Fergus

    Lindsay, Hon. James (Devon, N.)

    Brewis, John

    Grant, Rt. Hon. W. (Woodside)

    Lindsay, Martin (Solihull)

    Bromley-Davenport, Lt.-Col. W. H.

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Linstead, Sir H. N.

    Brooman-White, R. C.

    Gresham Cooke, R.

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Browne, J. Nixon (Craigton)

    Grimond, J.

    Loveys, Walter H.

    Bryan, P.

    Grimston, Hon. John (St. Albans)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Bullus, wing Commander E. E.

    Grimston, Hon. John (St. Albans)

    Lucas, P. B. (Brentford & Chiswick)

    Burden, F. F. A.

    Grimston, sir Robert (Westbury)

    Lucas-Tooth, Sir Hugh

    Butler, Rt. Hn.R.A.(Saffron Walden)

    Gurden, Harold

    McAdden, S. J.

    Campbell, Sir David

    Hall, John (Wycombe)

    Macdonald, Sir Peter

    Cary, Sir Robert

    Harris, Frederic (Croydon, N.W.)

    McLaughlin, Mrs. P.

    Channon, H. P. G.

    Harris, Reader (Heston)

    Maclay, Rt. Hon. John

    Chichester-Clark, R.

    Harrison, A. B. C. (Maldon)

    Maclean, Sir Fitzroy (Lancaster)

    Cole, Norman

    Harrison, Col. J. H. (Eye)

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Conant, Maj. Sir Roger

    Harvey, Sir Arthur Vere (Macclesf'd)

    McMaster, Stanley

    Cooke, Robert

    Harvey, John (Walthamstow, E.)

    Macmillan,Rt.Hn.Harold(Bromley)

    Cooper, A. E.

    Harvie-Watt, Sir George

    Macpherson, Niall (Dumfries)

    Cooper-Key, E. M.

    Heath, Rt. Hon. E. R. G.

    Maitland, Cdr. J. F. W.(Horncastle)

    Cordeaux, Lt.-Col. J. K.

    Henderson-Stewart, Sir James

    Maitland, Hon. Patrick (Lanark)

    Corfield, F. V.

    Hesketh, R. F.

    Manningham-Buller, Rt. Hn. Sir R.

    Craddock, Beresford (Spelthorne)

    Hicks-Beach, Maj. W. W.

    Markham, Major Sir Frank

    Crosthwaite-Eyre, Col. O. E.

    Hill, Rt. Hon. Charles (Luton)

    Marlowe, A. A. H.

    Crowder, Sir John (Finchley)

    Hill, Mrs. E. (Wythenshawe)

    Marples, Rt. Hon. A. E.

    Crowder, Petre(Ruislip-Northwood)

    Hinchingbrooke, Viscount

    Marshall, Douglas

    Mathew, R.

    Price, Henry (Lewisham, W.)

    Teeling, W.

    Maudling, Rt. Hon. R.

    Profumo, J. D.

    Thomas, Leslie (Canterbury)

    Mawby, R. L.

    Rawlinson, Peter

    Thomas, P. J. M. (Conway)

    Maydon, Lt.-Comdr, S. L. C.

    Redmayne, M.

    Thornton-Kemsley, Sir Colin

    Medlicott, Sir Frank

    Rees-Davies, W. R.

    Tiley, A. (Bradford, W.)

    Milligan, Rt. Hon. W. R.

    Renton, D. L. M.

    Tilney, John (Wavertree)

    Molson, Rt. Hon. Hugh

    Ridsdale, J. E.

    Turner, H. F. L.

    Morrison, John (Salisbury)

    Rippon, A. G. F.

    Vane, W. M. F.

    Nairn, D. L. S.

    Roberts, Sir Peter (Heeley)

    Vickers, Miss Joan

    Neave, Airey

    Robertson, Sir David

    Vosper, Rt. Hon. D. F.

    Nicholson, Sir Godfrey (Farnham)

    Roper, Sir Harold

    Wade, D. W.

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Ropner, Col. Sir Leonard

    Wakefield, Edward (Derbyshire, W.)

    Noble, Comdr. Rt. Hon. Allan

    Russell, R. S.

    Wakefield, Sir Wavell (St. M'lebone)

    Noble, Michael (Argyll)

    Scott-Miller, Cmdr. R.

    Wall, Patrick

    Nugent, Richard

    Sharples, R. C.

    Ward, Rt. Hon. G. R. (Worcester)

    Oakshott, H. D.

    Shepherd, William

    Ward, Dame Irene (Tynemouth)

    O'nell, Hn. Phelim (Co. Antrim, N.)

    Simon, J. E. S. (Middlesbrough, W.)

    Webbe, Sir H.

    Orr-Ewing, C. Ian (Hendon, N.)

    Smyth, Brig. Sir John (Norwood)

    Webster, David

    Osborne, C.

    Spearman, Sir Alexander

    Whitelaw, W. S. I.

    Page, R. G.

    Speir, R. M.

    Williams, Paul (Sunderland, S.)

    Pannell, N. A. (Kirkdale)

    Spens, Rt. Hn. Sir P. (Kens'gt'n.S.)

    Williams, R. Dudley (Exeter)

    Partridge, E.

    Stanley, Capt. Hon. Richard

    Wills, Sr Gerald (Bridgwater)

    Pickthorn, Sir Kenneth

    Steward, Harold (Stockport, S.)

    Wilson, Geoffrey (Truro)

    Pike, Miss Mervyn

    Stoddart-Scott, Col. Sir Malcolm

    Woollam, John Victor

    Pilkington, Capt. R. A.

    Storey, S.

    Pitt, Miss E. M.

    Studholme, Sir Harry

    TELLERS FOR THE AYES:

    Powell, J. Enoch

    Summers, Sir Spencer

    Mr. Hughes-Young and

    Price, David (Eastleigh)

    Taylor, Sir Charles (Eastbourne)

    Mr. Gibson-Watt.

    NOES

    Ainsley, J. W.

    Gibson, C. W.

    Mitchison, G. R.

    Albu, A. H.

    Grenfell, Rt. Hon. D. R.

    Moody, A. S.

    Allaun, Frank (Salford, E.)

    Grey, C. F.

    Morris, Percy (Swansea, W.)

    Allen, Arthur (Bosworth)

    Griffiths, Rt. Hon. James (Llanelly)

    Morrison, Rt.Hn.Herbert(Lewis'm,S.)

    Allen, Schofield (Crewe)

    Griffiths, William (Exchange)

    Mort, D. L.

    Awbery, S. S.

    Hale, Leslie

    Moss, R.

    Bacon, Miss Alice

    Hall, Rt. Hn.Clenvil (Colne Valley)

    Moyle, A.

    Bellenger, Rt. Hon. F. J.

    Hamilton, W. W.

    Neal, Harold (Bolsover)

    Bence, C. R. (Dunbartonshire, E.)

    Hannan, W.

    Noel-Baker, Francis (Swindon)

    Benn, Hn, Wedgwood (Bristol, S.E.)

    Hastings, S.

    Oram, A. E.

    Beswick, Frank

    Hayman, F. H.

    Oswald, T.

    Bevan, Rt. Hon. A. (Ebbw Vale)

    Herbison, Miss M.

    Owen, W. J.

    Blackburn, F.

    Hewitson, Capt. M.

    Padley, W. E.

    Blenkinsop, A.

    Hobson, C. R. (Keighley)

    Palmer, A. M. F.

    Blyton, W. R.

    Holman, P.

    Parker, J.

    Boardman, H.

    Holmes, Horace

    Parkin, B. T.

    Bowden, H. W. (Leicester, S.W.)

    Houghton, Douglas

    Paton, John

    Boyd, T. C.

    Hoy, J. H.

    Pearson, A.

    Braddock, Mrs. Elizabeth

    Hughes, Cledwyn (Anglesey)

    Plummer, Sir Leslie

    Brockway, A. F.

    Hughes, Emrys (S. Ayrshire)

    Popplewell, E.

    Brown, Rt. Hon. George (Belper)

    Hughes, Hector (Aberdeen, N.)

    Price, J. T. (Westhoughton)

    Brown, Thomas (Ince)

    Hynd, H. (Accrington)

    Probert, A. R.

    Burton, Miss F. E.

    Irvine, A. J. (Edge Hill)

    Pursey, Cmdr. H.

    Butler, Herbert (Hackney, C.)

    Irving, Sydney (Dartford)

    Randall, H. E.

    Butler, Mrs. Joyce (Wood Green)

    Isaacs, Rt. Hon. G. A.

    Rankin, John

    Callaghan, L. J.

    Jay, Rt. Hon. D. P. T.

    Reeves, J.

    Carmichael, J.

    Jeger, George (Goole)

    Reid, William

    Castle, Mrs. B. A.

    Jenkins, Roy (Stechford)

    Reynolds, G. W.

    Champion, A. J.

    Johnson, James (Rugby)

    Roberts, Albert (Normanton)

    Chapman, W. D.

    Jones, Rt. Hn. A. Creech (Wakefield)

    Roberts, Goronwy (Caernarvon)

    Chetwynd, G. R.

    Jones, David (The Hartlepools)

    Robinson, Kenneth (St. Pancras, N.)

    Coldrick, W.

    Kenyon, C.

    Rogers, George (Kensington, N.)

    Collick, P. H. (Birkenhead)

    Key, Rt. Hon. C. W.

    Royle, C.

    Corbet, Mrs. Freda

    Lawson, G. M.

    Shinwell, Rt. Hon. E.

    Crossman, R, H. S.

    Lee, Frederick (Newton)

    Silverman, Julius (Aston)

    Cullen, Mrs. A.

    Lee Miss Jennie (Cannock)

    Silverman, Sydney (Nelson)

    Darling, George (Hillsborough)

    Lever, Leslie (Ardwick)

    Skeffington, A. M.

    Davies, Ernest (Enfield, E.)

    Lindgren, G. S.

    Slater, Mrs. H. (Stoke, N.)

    Davies, Harold (Leek)

    Lipton, Marcus

    Slater, J. (Sedgefield)

    Davies, Stephen (Merthyr)

    Logan, D. G.

    Smith, Ellis (Stoke, S.)

    Diamond, John

    McAlister, Mrs. Mary

    Sorensen, R. W.

    Dodds, N. N.

    McCann, J.

    Soskice, Rt. Hon. Sir Frank

    Donnelly, D. L.

    MacColl, J. E.

    Sparks, J. A.

    Ede, Rt. Hon. J. C.

    McKay, John (Wallsend)

    Spriggs, Leslie

    Edwards, Rt. Hon. Ness (Caerphilly)

    McLeavy, Frank

    Stewart, Michael (Fulham)

    Edwards, W. J. (Stepney)

    MacPherson, Malcolm (Stirling)

    Stones, W. (Consett)

    Evans, Albert (Islington, S.W.)

    Mahon, Simon

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

    Finch, H. J. (Bedwellty)

    Mallalieu, E. L. (Brigg)

    Summerskill, Rt. Hon. E.

    Fitch, A. E. (Wigan)

    Mann, Mrs. Jean

    Sylvester, G. O.

    Fletcher, Eric

    Marquand, Rt. Hon, H. A.

    Taylor, Bernard (Mansfield)

    Foot, D. M.

    Mayhew, C. P.

    Taylor, John (West Lothian)

    Fraser, Thomas (Hamilton)

    Mellish, R. J.

    Thomson, George (Dundee, E.)

    Gaitskell, Rt. Hon. H. T. N.

    Messer, Sir F.

    Thornton, E.

    George, Lady Megan Lloyd(Car'then)

    Mikardo, Ian

    Tomney, F.

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    701

    Viant, S. P.

    Wilkins, W. A.

    Woof, R. E.

    Warbey, W. N.

    Willey, Frederick

    Yates, V. (Ladywood)

    Watkins, T. E.

    Williams, David (Neath)

    Zilliacus, K.

    Wells, Percy (Faversham)

    Williams, Rev. Llywelyn (Ab'tillery)

    Wells, William (Walsall, N.)

    Williams, Rt. Hon. T. (Don Valley)

    TELLERS FOR THE NOES:

    Wheeldon, W. E.

    Williams, W. R. (Openshaw)

    Mr. Deer and Mr. Simmons.

    White, Mrs. Eirene (E. Flint)

    Willis, Eustace (Edinburgh, E.)

    Clause 2.—(FURTHER PROVISIONS AS TO GRADUATED CONTRIBUTIONS.)
    Mr. A. J. Irvine: I beg to move, in page 4, line 15, to leave out from "employment" to the end of line 17 and to insert:
    "which is a non-participating employment under Part II of this Act".
    This Amendment is designed to clear up an ambiguity in the present wording of the Bill and to spell into the Bill an explanation which the Joint Parliamentary Secretary gave in Standing Committee. To that extent, I hope that the Amendment will be welcome to the Government.
    The paragraph which it is sought to amend deals with the case where more than one payment is made to an employee, and it provides for the aggregation of separate weekly payments before the amount of the contribution is determined. Separate payments may take place where there is a single employment and also, as specifically provided for in the Bill, where there are separate employments under the same employer and in respect of which separate wages are paid.
    As we understand, it is the intention that in such cases the remunerations shall be aggregated. To take the simplest example of all, where there are two employments under the same employer and each employment is paid for at £8 a week, those sums are to be aggregated and the remuneration for the purpose of the Bill will be treated as being £16 a week. An explanation to that effect was given with perfect clarity by the Joint Parliamentary Secretary.
    We think that that is a correct intention and that that is how it should be. The question is whether that intention is effected by the wording of the Bill. The Bill provides for an exception. There is one class of employment remuneration in respect of which will not be aggregated. That is an employment such that graduated contributions are not payable in respect of it. The doubt I feel, and it is a substantial doubt, is that when one looks at that and applies the example
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    I have already referred to in respect of which £8 is paid for each employment, in my reading of the matter, each would be employment such that graduated contributions were not payable in respect of it. That would seem to be the effect of Clause 1, which clearly provides that there will be taken into account a payment in respect of remuneration in any one employment only where it exceeds £9.
    There is an ambiguity here which can be readily disposed of. We are told that the purpose of the exception is to except non-participating employments but the wording of the paragraph goes wider than that. There is a little more to it, for this reason. If my construction of the paragraph is correct, the result would be, to take an example, that where there were two employments under the same employer, one for £10, and the other for £7, the employer could spread the remuneration and pay, instead, £8 10s. in respect of each of the employments. There would be no difference in the total of remuneration, but the result would be that in respect of neither employment would there be any obligation to pay graduated contributions.
    It is undesirable that the Bill should pass with avoidable ambiguity. The courts, seeing the background of what has been said about the intention here, would probably up to a point stress the interpretation of the paragraph in the direction intended, but in my view they would have to stretch it rather far, and undesirably far, before they could find that the £8 a week job was anything other than an employment in which graduated payments were not payable.
    In Committee, the Joint Parliamentary Secretary gave an undertaking that this would be further considered. I have no doubt that it has been, and it would appear that it has been concluded that there is no substance in this criticism. It is because I believe that there is substance in it, and that there is a wholly undesirable ambiguity, that I have ventured to this extent to insist on the proposition.
    Mr. Reynolds: I beg to second the Amendment.
    I have not the legal knowledge of my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine), but my impression from reading the Clause was that it would be possible for someone to be employed by the same person in two jobs, both under £9, and escape paying graduated pensions. It was not until the debate in Standing Committee that I realised that that was not the intention in the Minister's mind when drafting this Clause.
    I feel that the Amendment will put the matter clearly and I hope that he is in the position of being the first hon. Member on this side of the House who will have an Amendment to the Bill accepted.
    Mr. Vane: The hon. and learned Gentleman the Member for Liverpool, Edge Hill (Mr. A. J. Irvine) raised this point in Committee as he said, and my right hon. Friend has fulfilled the undertaking he gave and has had the point looked into very carefully. The criticism of the wording as drafted was, first, that it could be clearer. I think that we all felt that when we were considering the Bill, which must, by its very nature, be complicated, where we could make any sentence read more simply we should endeavour to accept simple rather than technical words.
    Secondly, it was suggested that it might provide an unintentional loophole whereby a man with two employments under the same employer, each of which was below £9 a week, would be exempted or relieved from paying graduated contributions when it was the intention that such two employments should be added together and graduated contributions paid on the amount by which the sum of those two remunerations exceeded £9.
    My right hon. Friend has carried out his undertaking and confirmed that the present words could not have the effect suggested since the employments to be left out of account are described in terms which make no reference to the amount of remuneration they yield. There is another factor which we should consider. Although the main reason for this exemption is to exclude non-participating employment such as we have been re-
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    ferring to here and previously in Committee, it would be an advantage if it were left as it is so that it would go a little further. I will now try to explain because cases exist—and this is something like the first Amendment I had to speak to—where it is generally accepted that two employments are under the same employer and both remunerations are assessed for Income Tax under Schedule E and subject to P.A.Y.E., yet one ranks as self-employed.
    This may happen in the Parliamentary and Governmental field, and I will give an example to show that this is not merely imagination. There really is some substance in asking for the Clause to be left with this exception in such a form that it goes a little wider than precisely describing non-participating employment and stopping there.
    Within the Church of England it is possible for the director of religious education of a diocese also to be an incumbent of a parish whose stipend is augmented by funds from the diocese. One there has two employments where the remuneration stems in one case in whole and the other in part from diocesan funds, yet the second, his duty as the incumbent of a parish, ranks as being self-employed.
    If the hon. and learned Gentleman's words were preferred one would find that in a case like that graduated contributions would be assessed on a certain income which, in point of fact, should be excluded. One would then have to cover those cases by regulations and I am advised that it would be simpler to leave the words in the Clause with their wider meaning than to insert the words of the hon. and learned Gentleman. This would spare us from having to provide for this class of case in the regulations which I am told would be a longer and more cumbersome way of achieving this end.
    I hope that the hon. and learned Gentleman will see, and I am sure all hon. Members will agree, that though it was right to draw our attention to the apparent ambiguity that although the main class intended to be exempted by those words is non-participating employment, there is a small group of others which falls outside that grade which it is really our duty to cater for.
    Amendment negatived.
    7.0 p.m.
    Miss Pitt: I beg to move, in page 4, line 46, to leave out from "and" to the end of line 49 and to insert:
    "may include provision for modifying subsection (2) of this section; and regulations may also, for the purpose of graduated contributions, make provision as to the intervals at which a person's remuneration or any part of it is to be treated as paid where it is not all paid at the same intervals of a week or longer and in the amounts due for those or for corresponding intervals."
    The Amendment implements an undertaking given by my right hon. Friend in Committee, following the Amendment moved by my hon. Friend the Member for Aylesbury (Sir S. Summers). The purpose of the Amendment is to take power to deal with bonus or other occasional lump sum payments made as additions to normal remuneration—in other words, to spread payments. The Amendment moved by my hon. Friend in Committee was withdrawn on the undertaking that my right hon. Friend would consider whether subsection (5) gave the full regulation-making powers which he agreed were desirable. It was after consideration that my right hon. Friend tabled the Amendment to make sure that he had the necessary powers.
    If subsection (5) is enacted in the terms proposed, the object of my hon. Friend and other hon. Members, expressed in Committee, will be achieved. There will be power to provide in the graduated contribution regulations that payments not related to the week or other pay period in which they are made shall not be limited in their effect on the contribution liability to the period of payment, but can be spread over a longer period. We are dealing with the adequacy of regulation-making powers. Their practical application, is a complicated subject which must be left for consideration and discussion at a later stage.
    Under the Bill the liability for contributions is tied to earnings and, in the vast majority of cases, it will be tied to weekly remuneration. Liability for graduated contributions will fall upon the amount by which the earnings exceed £9, up to a limit of £15. The first part of subsection (5) enables the Minister to make regulations prescribing "equivalent amounts" for remuneration which
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    is not paid weekly—such as remuneration paid at regular intervals longer than a week—in which case the "equivalent amounts" will be proportionate to those laid down in the Bill. Perhaps I may give an example. In the case of a man who is paid fortnightly, the equivalent amounts will be contributions due on payments between £18 and £30—double the amounts we have fixed for the weekly paid. As amended, the subsection will leave the regulations to determine how remuneration, not all paid at regular weekly intervals, will be brought within this pattern; cases may include bonus payments in addition to regular pay, all pay at irregular intervals, and weekly payments made regularly, but with additions in respect of overtime, for instance, added at fortnightly or other intervals.
    Because this is a regulation-making power, it means that there will be full opportunity for consultation with the interests concerned before the regulations are brought into effect. The Minister must submit a preliminary draft of the regulations to the National Insurance Advisory Committee and, as hon. Members know, in that case representations may be made to that Committee by anyone, including employers or organisations representing employees, and other bodies of people or individuals. The Committee, having received those recommendations, must lay its report, with the regulations, before Parliament, where the regulations may be prayed against if it is thought desirable.
    The Amendment follows the one moved by my hon. Friend the Member for Aylesbury. When we discussed it in Committee he was supported by my hon. Friend the Member for Basingstoke (Mr. Denzil Freeth), the hon. Member for Islington, North (Mr. Reynolds)—who, made it quite clear that he supported it for different reasons—and the hon. Member for Bradford, South (Mr. George Craddock). I hope, therefore, that with that measure of support and with my explanation that the Amendment implements a promise given by my right hon. Friend, the House will be prepared to accept it.
    Mr. Houghton: This seems to be a coalition Amendment—and a very sensible one. The hon. Members concerned did a service to the Bill when

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    they probed subsection (5) to find out whether we should run into difficulties in cases where people are receiving substantial payments, possibly at irregular intervals, on account of bonuses, commissions, and so forth. If a large bonus were treated as remuneration for the week in which it were paid the graduated contribution upon it would be limited to the £15 wage band, and both the contribution and the graduated pension to be earned later would be smaller on that account.
    Some persons may approach the Amendment feeling that higher benefit would be achieved and others may think that a higher contribution would be imposed. The two will come together with the higher contribution and the higher benefit which will be achieved by the spread of the bonus and commission payments over a period, which will even the matter out. That is desirable. If a person is receiving fixed pay of a certain amount, but a very substantial part of his earnings is paid by bonus or commission, it is obviously sensible and fair that some spread should be made, so that his total contribution and total benefit are related to his total earnings on a sensible spread and not left to the hazards of occasional payments of different sums.
    The Amendment will give the Minister more power than he had previously. When the regulations come before the House, later, we shall see how the Minister has solved the problem. In the meantime, I have no doubt that those who may have employees in vocations of this kind will have views as to how the spread should be made, and that will lead to a general satisfaction with the way in which the scheme will be administered.
    Mr. Wade: It would be ungracious not to express approval at finding something of which I can approve. This provision will meet some of the difficulties which have been causing considerable concern among firms who will have to operate the scheme, particularly when they pay bonuses at uncertain periods of time. The Amendment will go some way towards easing the situation. I therefore welcome it and join this coalition. It is the only one that I have been able to join during the course of the debates on the Bill.
    Mr. J. T. Price: When I hear the word "coalition" being bandied about I become a little uncomfortable. I do not wish to introduce an incongruous note into this discussion, in which mutual bouquets have been awarded, except to ask one question. When the regulations are made, will the Minister bear in mind the fact that there should be, in principle, a maximum period over which an average is taken? Since this proposal envisages the averaging out of earnings on bonuses and commissions over a period, many undesirable consequences might flow if there were some such application as one for a three-year average, which applies to certain matters of taxation.
    I suggest modestly, and without making heavy weather of it, that in any regulation of this kind there ought to be a reasonable maximum, not exceeding, let us say, twelve months. If it is extended beyond that period there will be other complications which no other hon. Member would like once he began to consider them.
    Amendment agreed to.

    Clause 4—(GENERAL PROVISIONS AS TO GRADUATED RETIREMENT BENEFIT.)
    Mr. Marquand: I beg to move, in page 7, line 1, to leave out "sixpence" and to insert "eightpence".
    All workers in this country are at present required to pay a flat-rate contribution for a flat-rate retirement pension. Some more fortunate people have private occupational schemes on which they can rely to give them in their old age a benefit over and above this national flat-rate pension. They are a limited number and are more fortunate than the remainder.
    We are told that in the Bill the State provides something similar for those who are earning more than £9 a week but who, at present, have no occupational scheme to give them an addition to their basic pension. Under the Bill all will receive a basic pension and will pay a flat-rate contribution for it. To judge the value of what is proposed in a national system of graduated pensions and contributions, therefore, the only fair and valid comparison, we on this side of the House believe, is a comparison with what private insurance can do for private schemes.

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    The conclusion which we have reached after examining very exhaustively in Committee this comparison between what the Government plan will provide as a graduated addition to basic pensions and what is provided by private schemes is that there is a discrepancy which is almost incredible when we seek to explain it to those who have not had the advantage of studying the Bill exhaustively in Committee.
    The purpose of the debate is to report to the House. We feel obliged to return again and again to an aspect of the problem which has already been ventilated but which, when hon. Members who have not been in the Committee hear it, they can scarcely believe. I think that no one will deny that it was generally agreed in the sittings upstairs that the scheme means that, taking the flat-rate and the graduated benefits together, a man earning £10 4s. or £10 10s. a week would receive a better pension if he were contracted out of the national scheme.
    The conclusion which we have reached from our study upstairs is that those who earn less than £10 4s., or shall we say £10 10s., a week would be well advised to remain in the national scheme, but that everybody above that level of earnings would be well advised to stay out. Above the figure of £10 10s. a week the advantage of being contracted out of the national scheme, if the man can persuade his employer to contract him out, rises very steeply.
    A man earning £11 a week will pay, with his employer, 9½d. a week more in the national scheme than is actuarially required to meet the pension which he will be paid. A man earning £15 a week or more will be paying, with his employer, 4s. 8½d. a week more than is required to buy a similar pension privately. It was said when Mr. Lloyd George introduced the first National Insurance Act that he would give 9d. for 4d.
    As I said in 1957, when the right hon. Gentleman introduced a National Insurance Bill, he then proposed to give 9d. for 10d. In this Bill, as far as we can work it out, he proposes to give 9d. for 1s. 7d. The discrepancy between the contribution payable and the benefit received is most surprising when it is compared with what could be obtained
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    privately. People who have not studied the matter can scarcely believe what we tell them.
    7.15 p.m.
    This is done to relieve the Exchequer of the emerging cost of promises which were made long ago to pay pensions which have not yet fully become due. It is by this means that the Exchequer's total obligation on account of emerging and other costs, which would have been £508 million twenty years hence, is to be reduced to £170 million.
    This method of meeting the emerging cost of pensions promised in the past but yet to be due is called concentrating the Exchequer supplement on the lower-paid worker. In fact, it is whittling away the Exchequer supplement as incomes rise above £9 a week until the Exchequer supplement to pensions disappears altogether at or about a level of £10 10s. a week. By far the greater part of the cost of meeting the emerging deficit which arises from pension promises made in the past is, therefore, being concentrated in the Bill upon the income band between £9 and £15 a week. Moreover, it is being concentrated on earnings between £9 and £15 a week among a selected group of individuals.
    Those who succeed in being contracted out of the national scheme—and I have suggested that many will try to be contracted out—will be exempt from this contribution to the emerging costs. This heavy emerging cost, which we all undertook with our eyes wide open in 1946 and which we then thought would be met eventually by the general body of the public, is to be placed on those people who remain in the national scheme and whose earnings are between £9 and £15 a week.
    It is a regressive form of taxation for meeting an emerging cost, as my hon. Friend the Member for Coventry, East (Mr. Crossman) has pointed out, because it requires a smaller proportionate contribution from everybody whose earnings exceed £15 a week than from those whose income is between £9 and £15 a week. It is also selective in that it lays the burden upon those who, for one reason or another, cannot be contracted out. It is a piece of taxation which is not merely regressive, but also selective.
    If everybody contracted out the plan would have to be drastically revised, but

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    many people cannot contract out. Those working for small employers, possibly in farming or the building trade or the catering trade or the pottery trade or the textile trade, where the normal unit of production is comparatively small and where the industries are exposed to fierce competition, will find that their employers are unable or unwilling to contract them out. It is upon these workers, who are already among the lower paid of our industrial workers, that the burden is to fall.
    The relationship between the graduated contribution and the graduated benefit is calculated in the Bill by means of the brick system. A sum of 6d. a week in pension will be bought for every £7 10s. of contribution made by a man and every £9 of contribution made by a woman.
    We have, to the best of our ability with the resources available to us, calculated that £3 3s. 10d. would be enough to buy outside benefits of that amount The brick to be accumulated has to amount to £7 10s. My hon. Friend the Member for Motherwell (Mr. Lawson) pointed out on an earlier occasion that it might even be increased in amount later, if the Bill goes through. Even in the earlier period, it is envisaged that only 42 per cent. of the proposed contribution, according to our calculation, would be needed to buy the proposed graduated benefits.
    Therefore, if we are to amend this proposal and suggest a greater degree of justice, we have various means of doing it. We recognise that the emerging cost must be met, and we believe that in a proper and satisfactory system of national superannuation it could and should be possible to put a substantial part of that emerging cost upon the contributors. We would certainly, if we had the power, ensure that the State's contribution was larger than is proposed in this scheme. We cannot for one moment agree, however, that, even if it is right and proper to require the contributors to meet some part of the emerging cost, it is right to select a particular group—a comparatively badly-off group—of contributors and to throw the whole burden of the emerging cost on them.
    We have attempted during these discussions to meet this problem by ex-
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    tending the range over which contributions are to be required. My hon. Friend the Member for Coventry, East moved an Amendment not long ago to secure that contributions be levied on higher incomes than those of £15 per week. My hon. Friend the Member for Motherwell tried even more recently to do it in another way; but his solution has been rejected.
    I now propose a third way, namely, to raise the amount of the pension given by each brick from 6d. to 8d. This does not go as far as to make the brick as valuable as it would need to be to pay the sort of pension which could be obtained from this contribution by outside insurance or as is required by justice. It is put forward in the hope that it might be accepted and that it is reasonable. This moderate suggestion of increasing the value of the pension payable by each brick by one-third might, even at this late hour, find favour in the eyes of the Minister.
    It has not been denied during this debate, and it was not denied in the later stages of our Committee proceedings, that this very heavy emerging cost is being put by the Bill upon a very small number of contributors, and those not the best off. This modest suggestion is put forward, taking account of the fact that there will undoubtedly be some redistribution of income even within the graduated scheme, and taking account of the difficulties that the right hon. Gentleman will face in meeting some reduction of the income which he expects to get.
    We put forward now a solution less just than we would like to see it in the hope that it may be acceptable. It would go a little nearer to giving, to those who will be obliged to be in the national scheme with no hope of getting out of it, something like justice for their contribution. It will make them feel that they are not discriminated against in an unduly harsh manner. I am sure that they will still be discriminated against even if the Amendment be accepted, but at least we shall modify that discrimination and give something nearer to what should be given to these contributors.
    The Joint Parliamentary Secretary, objecting to the proposal made by my hon. Friend the Member for Coventry,

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    East, said that his proposal would limit the number who might be able to contract out. My proposal goes less far than his and is not open to that objection. I hope that this evening we will find that it will meet with favour in the eyes of the right hon. Gentleman, or, at any rate, that he may be prepared, even at this late hour, to announce a concession to make the future less austere and bitter than it will be for the selected group of people who will be forced to bear the whole burden of the emerging cost, which the nation undertook in 1946 thinking that it would be spread over the whole population and not concentrated upon a particular group.
    Mr. John McKay: I beg to second the Amendment.
    I shall do so on rather different lines from those pursued by other hon. Members on this subject. My right hon. Friend the Member for Middlesbrough, East (Mr. Marquand) has presented a very strong case for some amendment, whole other hon. Members, like my hon. Friend the Member for Motherwell (Mr. Lawson), have indicated that ordinary business circles can provide far better benefits than are now proposed. It is remarkable, if that be true—the suggestion has not yet been refuted—that the State scheme should be worse than schemes based upon private resources.
    I propose to deal as far as I can with the finance of the Bill. There is need for a little preliminary explanation so that the House may understand what I am driving at. At present, we pay 9s. 11d. per week for general insurance. Information from Treasury officials and Ministers shows that it has been accepted that out of that 9s. 11d. approximately 4s. 11d. goes to pay the pension. There is an injury and health cost of 2s. 6½d., leaving 2s. 5½d. for sickness, unemployment and other benefits. The changed contribution for all those earning less than £9 per week will now be 8s. 4d. The injury, health and ordinary sickness benefit will have to be provided for out of that 8s. 4d. The cost of them is practically the same within the 8s. 4d as it was in the 9s. 11d.
    If we take the 5s., which covers all those benefits apart from pensions, from the 8s. 4d. there is 3s. 4d. left for pensions, which will be paid at the level rate of 50s. for a single man. People
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    earning less than £9 a week will in future receive their pension of 50s. a week by paying 3s. 4d.
    7.30 p.m.
    What will the graded contributors pay? Naturally, it will be far more than 3s. 4d. I will state the proportions so that the House may see what these people will pay. If a man earning less than £9 a week can receive a pension of 50s. for paying 3s. 4d., how much pension in proportion should the others receive for the extra amount of money which they pay? A man earning £12 a week will pay the ordinary 3s. 4d., but he will pay an additional 2s. 6d. Therefore, through the graded system, he will pay in reality 5s. 10d. towards his fiat-rate and graded pension. If the man earning £12 a week were to receive from his contribution of 5s. 10d. a proportionate benefit to that received by the £9 a week man, his benefit would be 87s. However, under the Bill he will receive, after paying for forty-seven years, a flat-rate pension of 50s. and a graduated pension of 20s., making a total of 70s. That is a difference of 17s. proportionately. The Amendment would give the man earning £12 a week 6s. 8d. extra, by increasing the 20s. graduated pension by one-third.
    A man earning £15 a week will be paying 3s. 4d., like everyone else, plus 5s. 1d. If he received a pension proportionate to his contribution, he would receive 126s. 3d. Instead of that, he will receive 50s. flat-rate pension and 41s. graduated pension, making a total of 91s., which is 35s. 3d. less than the amount to which he would proportionately be entitled. Under the Amendment he would receive an additional 13s. 8d. Even with that, he would still be receiving much less than the amount of pension to which he would proportionately be entitled.
    My hon. Friends and I press the Amendment because we think that the proposition contained in it is more just, taking all things into consideration, than the Bill as it stands.
    What would the financial situation be if the Amendment were implemented? As far as I can understand the financial arrangements and contributions, the Actuary has very strongly indicated that there will be a sufficient balance in the financial arrangements to meet the increased liability which my hon. Friends

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    and I propose under the Amendment. The Actuary takes us to the year 2000, after forty years implementation of the Act. Taking the whole Bill as implemented and carrying it forward for forty years, that is when the pension scheme will be in a mature state. The vast majority of men reaching sixty-five will be getting well on to their maximum pension. The Government Actuary indicates that under the proposed Bill there will be a balance of £115 million at that stage.
    Assuming that that is an accurate figure after the scheme is in a mature condition, is there anything to indicate from the Actuary's figures what the increased liability brought about by the Amendment will be? The Amendment would increase graded benefits by one-third. The Actuary tells us that in the year 2000 the total amount of graded pensions will be £223 million. The Amendment would increase that amount by £74 million. As I have already said, in the year 2000 there will be a balance of £115 million to meet the increased liability of £74 million.
    The principle embodied in the Bill is that we should pay as we go. So far as I can judge in relation to incomes meeting liability, the position is satisfactory, assuming that I am interpreting the figures of the Government Actuary in a proper and systematic way.
    The Actuary goes on to try to show clearly the financial position by taking the averages per year instead of giving simply the final results as a balance for one year. In another part of h4 diagnosis he indicates that the average balance for the last five years, when the scheme has reached a mature position in the year 2000, will be £98 million. My right hon. and hon. Friends and I are proposing an increased liability of £74 million.
    We think that the Amendment should be supported, even by the Government. After all is said and done, the amount of pension to be received by people earning higher wages who pay extra contributions is not fair as compared with people earning £9 a week or under. I suggest that this will be seen when the figures are analysed in a little detail, but not in much detail, because the Actuary states the position definitely, which is remarkable for an Actuary.
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    The Government Actuary shows that in the year 2000, the amount of contributions paid by the graduated pensioners alone will be more than the benefit collectively received by them under the Bill. In other words, though their contributions will meet the full cost of their benefits, as a result of this change the employers' contributions will amount to practically the same amount as that of the employees' contributions, so that the whole of the employers' contributions under the graduated scheme will not help the graded pensioner's pension by one iota. The whole of the employers' contributions in relation to the graduated part of the scheme goes back into the general pool, so that the contribution paid by men earning less than £9 a week can be reduced.
    While we agree, in principle, that the better off should try to help the underdog, we think that the Bill has gone too far. By the time we include the £15-a-week men we have covered 90 per cent. of the workpeople, and we think that the sacrifice enforced on insured contributors earning £10 to £15 a week is more than is justified. That is our main reason for tabling the Amendment, and I hope that the Government will accept it.
    Mr. Boyd-Carpenter: I must confess that I did not wholly follow some of the figures deployed by the hon. Member for Wallsend (Mr. McKay) in support of his argument, so if I do not deal with them now I certainly promise to read them in HANSARD in the morning, and seek, perhaps, some other occasion to deal with them.
    One point that I did fully appreciate was his argument that the cost of the proposals in the Amendment could, as he put it, be carried without difficulty by the National Insurance Fund. The position is, as the Government Actuary's Report makes clear, that for the first three quinquennia the scheme will, taking the quinquennia as a whole, be slightly in deficit. That is because the cost rises with a steady curve, whereas the quinquennial increases, in so far as they are made, operate sharply on each five-year period.
    Therefore, though the cost in the earlier years is limited, being in the first three quinquennia, to single figures, the effect of the Amendment would be to

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    increase the deficit over the first three quinquennia, taken as such. At the end of the century, the total cost of some £60 million would not, by itself, wipe out the estimated surplus at that period—though the House will view figures as far ahead as that with very considerable caution——
    Mr. J. T. Price: Hear, hear.
    Mr. Boyd-Carpenter: I am glad to carry the hon. Member for Westhoughton (Mr. J. T. Price) with me in that, though, regrettably, I may not do so in other things.
    As I understood it, the main theme of the argument presented by the right hon. Member for Middlesbrough (Mr. Marquand) was the comparison of what, under the Bill, the State scheme will do, with what would be obtainable under private schemes. It is no part of my argument that, taking the graduated part separately, a State graduated scheme taken separately can compete in yield with a commercially-operated scheme. There are obvious and fundamental differences between a State scheme, run on a pay-as-you-go basis and without any interest element in it, and a private scheme, where balances are accumulated and in which there are interest factors. The House will appreciate the difference to be so fundamental as to make such comparisons not particularly helpful in our consideration of the State scheme.
    7.45 p.m.
    The other factor that vitiates such comparison, taking the graduated scheme separately, is the treatment of the subsidy. Under this scheme, as the right hon. Gentleman quite rightly said, the subsidy is concentrated on the lower-paid workers. That is done, as I think the House will recall, by putting in the subsidy on contributions relating to earnings of £9 a week, and gradually and progressively withdrawing it from earnings of up to about £15. When that fact is allowed for, it is obvious that a comparison of the graduated scheme, taking it by itself, with an outside scheme must be in favour of the outside scheme, which does not have in it this element of withdrawal of subsidy.
    With respect to the right hon. Gentleman, however, all the comparisons of the graduated scheme, taken by itself, with private schemes, are really not valid
    718
    criticisms of the Bill's proposals. I have said in Standing Committee on a number of occasions—perhaps to the weariness of hon. Members, but, in the light of what the right hon. Gentleman said, I must repeat it—that when we are dealing with a pensions scheme the contributions and benefits must be looked at as a whole.
    After all, from the point of view of the contributor he, if he is an employed person, feels that contribution as a whole—and as a hole, perhaps, in his wage packet, from which it is deducted. He gets his pension as a whole from the post office. Therefore, when we are making these comparisons, what I suggest should be looked at—and the only point that is very relevant is that whether this is a reasonable proposition from the State point of view—is the totality of contribution and benefit.
    We start with the very formidable reinforcement of the argument in favour of the scheme which derives from the fact that, taking the flat-rate element by itself, it will be many years indeed, as the White Paper has made clear, before any recipient of the flat-rate benefits has paid anything like value for money for his pension. That, of course, derives from the acceptance by the State of successive increases of the back-service liability, which is one of the main reasons for the emerging deficit to which the right hon. Gentleman referred——
    Sir S. Summers: Could my right hon. Friend clarify that point by saying how many years it would be before the recipient had paid half of what it would cost to provide that benefit?
    Mr. Boyd-Carpenter: I hate making calculations on my feet, but I can certainly have the figure worked out and given to my hon. Friend. It is the fact that, broadly speaking, it will be very near the end of the century before the recipient of a flat-rate pension will have paid full actuarial value for it. However, as I say, I would prefer, if my hon. Friend will forgive me, not to attempt to calculate the half figure. Were I to try, it would almost certainly involve me in making a statement at the end of Questions——
    Mr. Lawson: Will the right hon. Gentleman tell the House by how much a youngster—coming into the scheme at

    719
    the age of 18 and paying on the full £15 a week—pays in excess of the actuarial value?
    Mr. Boyd-Carpenter: I am coming to that part of the matter in the light of the table with which, I am glad to see, the hon. Gentleman has furnished himself, but I would prefer, if I might, to deploy my argument in reply to that of the right hon. Gentleman the Member for Middlesbrough, East, more or less in the order that the right hon. Gentleman used in addressing himself to this subject.
    In dealing with the emerging deficit, I thought that the right hon. Gentleman inadvertently contradicted himself. At one time, he was apparently suggesting that the party opposite had not accepted the idea that the whole of the emerging deficit should be borne by the taxpayer, but then I was glad to hear him say that he appreciated that some part of that burden should be borne by the contributors, but that what he objected to was the concentration of the burden on a smaller number of contributors among the less well off.
    There I thought the right hon. Gentleman had fallen into error, because in so far as the cost of meeting the deficit is contributed towards by those who contribute to graduated pensions, it will, it is true, begin to fall upon them on the tranche of earnings above £9 a week but will, in fact, on earnings between £9 and £15 a week be borne by all those above that range as well as those within it. While I cannot give the figures offhand, the number of people in this country earning more than £9 a week is very substantial indeed.
    Then the right hon. Gentleman, as I understood it, accepts that part of the emerging deficit should be borne by the contributors to the scheme and part by an increased contribution from the Exchequer. That is, of course, precisely what this Bill seeks to do. One of the provisions is to increase the fixed Exchequer contribution now running at £123 million, to a minimum of £170 million above which it will rise as the percentage formula operates. Therefore, I do not think there is so much difference between the right hon. Gentleman and those of us on this side of the House as appeared at one time.
    720
    Then the right hon. Gentleman referred to those contracting out of graduated contributions and the effect on the emerging deficit. I should point out that the 18s. 2d. contribution which will remain contains some element towards this, and it is an element in this calculation which will depend upon the exact amount of their earnings. We had a discussion on that in Standing Committee. But to say that they are completely cleared of a contribution is not the fact.
    Then we come to what is really the gravamen of this Amendment, and that is whether we should at this stage increase the benefits. We have been warned by very authoritative outside voices in recent weeks of the dangers of falling into the temptation in dealing with pension schemes of making improvements which will cost us very little in the near future but which will impose a heavy burden on our descendants. In various authoritative publications and statements those responsible for the scheme of right hon. and hon. Gentlemen opposite and Her Majesty's Government have received warnings of the ease and wrongness of falling into that temptation. I suggest that this Amendment is a very good example of the value of such a warning. As I said, the cost of this in the earlier years would be quite limited. It would obviously be a popular and attractive thing to do, but it would be doing just what I would suggest that in the handling of pension schemes we should not do—namely, fall into that temptation of making at present excessive promises for the future. The hon. Member for Westhoughton agreed when I said that we should look at figures forty years ahead with a certain degree of caution, and I think that the more practical experience we have the more caution we apply in that respect.
    Mr. J. T. Price: The right hon. Gentleman might also, while he is giving this little homily to the House, which is not without merit, have a word with his right hon. Friend the Home Secretary and Leader of the House who, not long ago, informed us that in twenty-five years' time the standard of living in this country would be doubled as a result of the policy of this Government. The right hon. Gentleman might also bear in mind that he himself is being a little careless in throwing rash statements about.
    Mr. Boyd-Carpenter: In twenty-five years' time, when I hope both the hon. Member for Westhoughton and I will be Members of this House, I shall hope to have great pleasure in reminding the hon. Member of this intervention of his, and in listening to the apologies which I am sure, with his customary grace, he will make.
    As I have said, this proposal seems to me an example of adding to the benefits at an early stage of this scheme which I suggest it would be irresponsible for us to do.
    Then there is the small technical point, but quite an important one, that when the time came to increase the benefits this would he a very bad way to do it. It would produce pensions ending in rather odd numbers of pennies. If and when the time came to make an improvement, far better than increasing the amount of pension bought by a brick would be to adjust the price of the brick and maintain the position that the pensions would be paid ending in sixpences. This is one of the technical difficulties into which one is liable to be drawn.
    The hon. Member for Motherwell (Mr. Lawson) asked whether a man of 18 would get value for money. I saw that he had in his hand a document which, at the request of his hon. Friends, I made available to the Standing Committee. I made it clear in Standing Committee—indeed, the hon. Member for Coventry, East (Mr. Crossman) took me to task for doing so—that in the consideration of a pay-as-you-go scheme actuarial calculations of this kind were largely irrelevant, and that is why they were not immediately available, but that it was the wish of the Government not to deprive the Committee of any information which the Committee wanted if it could be obtained without unreasonable difficulty. Therefore, although, in my view, the value of this in consideration of the scheme is small, as others took a different view my duty was to make it available.
    The short answer is this. This scheme, even on the actuarial calculations and assumptions of hon. Members opposite, gives good value to everybody at the £9 a week level; for all except the very youngest on the £12 a week level; and all over 30 at the £15 a week level. All those assumptions
    722
    which show that the scheme is weighted in favour of the lower paid and of the older are themselves dependent, if anybody is to get less than value for money, on the assumption which my hon. Friend the Joint Parliamentary Secretary referred to earlier, that there will be no change in the flat rate over the next forty years. Therefore, with respect to hon. Members opposite, I do not intend to spend any more time on this aspect of the matter which I think is not of major importance; I have simply dealt with it because I was asked a question, and I think hon. Members will agree that I generally try to answer these questions.
    Let us return to the main point of the Amendment. I do not think that at this stage of the scheme we ought to fall into the temptation of increasing the proposed benefits. It may be that when we have some experience of the scheme, if the assumptions on which the contributions are calculated turn out to be cautious, we could look at them again. But this is a scheme, on those assumptions, which is very narrowly balanced in its finances for, at any rate, the first twenty years, and I am sure that the responsible way to deal with the matter is to leave the benefits at the level at which they at present stand in the Bill and to put the Bill into operation on that basis. I hope, therefore, that the House will reject the Amendment.
    8.0 p.m.
    Mr. Lawson: The Minister laid some emphasis on our concern with future generations and said that we ought not to place a heavy burden on them. He reminded us that we had recently received a statement from those very responsible bodies, the actuaries of Scotland and of England and Wales, which had stressed the burden that the pensions placed upon present and future generations, and uttered dire warnings about the dangers of adopting the Labour Party scheme and even the right hon. Gentleman's scheme, though clearly, in the opinion of the actuaries, the right hon. Gentleman's scheme is very much better than the scheme pro-pounded by the Labour Party.
    The point made by the actuaries is that the State scheme is building up a burden in respect of pensions which future generations will have to meet. The right hon. Gentleman makes the

    723
    same point, and he warns the House that we must be careful and give thought to the position of future generations. Neither the actuaries nor the right hon. Gentleman mention the fact that there are building up vast debts in the future in the form of private superannuation schemes. Huge sums will be paid out on the basis of those private superannuation schemes which must be paid for by future generations, just as the State scheme must be paid for by future generations.
    Although they tell us that they are non-political, the actuaries conveniently ignore the fact that there is building up this huge debt in the future. I would say that, if there is a debt in the State scheme, there is certainly a debt in the private superannuation schemes. Let us take both into account when we think in terms of the burden that we are placing on future generations.
    As regards payment, the right hon. Gentleman suggests that everybody is getting a bargain out of the proposed scheme. He mentioned that I had in my hand a statement which he himself, after very great pressure from my right hon. and hon. Friends, issued to the Committee. We said, when we were discussing this matter in Committee, that we had no actuarial statement at all and that we were talking in the air. We pressed very strongly for an actuarial table to be prepared which would give us some idea of what the costs were in relation to the benefits which were to be paid. Out of this statement some very interesting facts have emerged.
    For example, we have the reason for the minimum payment which is to be made under the Bill in respect of those in the scheme where the income is £9 a week or less, that is to say, excluding the Health Service contribution and other extraneous parts and dealing only with the pension contribution. It amounts in this case to a total contribution of 5s. 9½d. a side—5s. 9½d. for employer and 5s. 9½d. for employee—making a contribution of 11s. 7d. Actually, the actuarial cost of the pension to be derived from this for a man of 18 years of age entering the scheme initially—and this is the basis on which all these things have been calculated in the past—is 13s. 6d. That is the Government's own figure.
    724
    Thus, we have 11s. 7d. as the minimum contribution to be paid, plus 1s. 7d., which, in effect, represents one-seventh, which is the old basis of calculation of the Treasury or Exchequer grant. We have the actuarial cost of the present pension, which is 13s. 6d., that is, 11s. 7d. to be paid by the employer and employee, plus one-seventh coming from the Government.
    With the table which the Minister was so good as to provide, after a very great deal of pressure, we are able to calculate the cost of the graduated part of the pension as well as many other things. I will confine myself to the cost of the basic pension for a young man of 18 years of age, plus the cost for that young man of the full graduated pension, that is to say, assuming that this young man starts out at the age of 18 earning from that time £15 a week.
    Sir S. Summers: If the hon. Gentleman is able to trace this mythical person, will he kindly give us the benefit of knowing what is the occupation where one can earn £15 a week at 18?
    Mr. Lawson: I am granting certain things to the Government. Will the hon. Gentleman grant me that this young man might conceivably come to earn more than £15 a week? We are assuming that he is paying on the full sum——
    Sir S. Summers: I want to know the job.
    Mr. Lawson: —of £15. He will still be paying proportionately, according to his earnings, the excess about which I am speaking. If the hon. Member for Aylesbury (Sir S. Summers) wants me to take £12 as his earnings, I can still show the excess he is paying, but, on the basis of the £15, which is recognised by all as the figure on which these calculations were made, we arrive at the conclusion that his basic pension in terms of the Government's own actuarial calculations for a man of 18 is worth 13s. 6d., and the actuarial cost of his graduated pension will be worth 4s. 4d. This figure has been mentioned already by my hon. Friend the Member for Islington, North (Mr. Reynolds). It is derived from the Government's own tables.
    Thus, on top of 13s. 6d., if we add the full 4s. 4d., we have the actual figure

    725
    which would be paid actuarially to cover a pension for that young man entering the scheme at 18. He pays 5s. 10d. in excess of the actuarial cost of his basic pension plus his graduated pension. I know it may be that a young man would not be earning £15 a week but if, for example, he is earning £12 a week, he would start out by paying, on the basis of the Government's own calculations, 2s. 10d. more per week than he ought to be paying actuarially.
    We must remember that this is only the beginning of the scheme. In each quinquennial period, the costs will rise. If we take it that he is paying for his graduated pension not on the basis of 4¼ per cent. but on the basis of 5 per cent. —and he will be paying more than this—he will be paying 7s. 8d. at £15 a week in excess of the actuarial cost of his basic and graduated pension. The hon. Lady the Joint Parliamentary Secretary talked about not making people pay more today than they ought to be paying. Here is an example of how the youngster will he burdened from the start of his working life.
    We have heard a great deal about the emerging cost of pensions. The cost and the emerging deficit on pensions has been emerging ever since the Government took office, but the deficit has, I think, scarcely emerged clearly yet.
    Only in 1958, I think, was there a deficit. The Government have been taking care to see that the deficit did not emerge by increasing the contribution all the time in excess of the increase in benefits. As we know, while the benefit has gone up by two-thirds during the life of this Government, the contribution has gone up by 95 per cent. We have here a still greater addition in the contribution, which is to fall grievously heavily on the youngster starting out in his working life. He is being made to carry the burden, a burden which we as taxpayers have accepted in the past.
    The Government are getting out of the obligation by very heavily and disproportionately passing it on particularly to the shoulders of the youngsters. They think that he should be paying much more at this stage than his pension is worth. It is clearly a fraudulent swindle. I have given up hoping that the Minister will make any concession whatever to this side of the House, but I certainly hope that the people of the country will appreciate what is being handed to them as a so-called superannuation scheme.
    Question put, That "sixpence" stand part of the Bill:—
    The House divided: Ayes 208, Noes 173.

    Division No. 119.]

    AYES

    [8.10 p.m.

    Agnew, Sir Peter

    Burden, F. F. A.

    Cough, C. F. H.

    Aitken, W. T.

    Campbell, Sir David

    Graham, Sir Fergus

    Allan, R. A. (Paddington, S.)

    Chichester-Clark, R.

    Grant, Rt. Hon. W. (Woodside)

    Amery, Julian (Preston, N.)

    Cole, Norman

    Grant-Ferris, Wg. Cdr. R(Nantwich)

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Cooke, Robert

    Gresham Cooke, R.

    Arbuthnot, John

    Cooper-Key, E. M.

    Grimond, J.

    Armstrong, C. W.

    Cordeaux, Lt.-Col. J. K.

    Grimston, Hon. John (St. Albans)

    Ashton, H.

    Corfield, F. V.

    Grimston, Sir Robert (Westbury)

    Atkins. H. E.

    Craddock, Beresford (Spelthorne)

    Gurden, Harold

    Balniel, Lord

    Crosthwaite-Eyre, Col. O. E.

    Hall, John (Wycombe)

    Barber, Anthony

    Crowder, Sir John (Finchley)

    Harris, Reader (Heston)

    Barlow, Sir John

    Cunningham, Knox

    Harrison, Col. J. H. (Eye)

    Barter, John

    Currie, G. B. H.

    Harvey, Sir Arthur Vere (Macclesf'd)

    Batsford, Brian

    Dance, J. C. G.

    Harvey, John (Walthamstow, E.)

    Baxter, Sir Beverley

    Deedes, W. F.

    Hay, John

    Bell, Philip (Bolton, E.)

    de Ferranti, Basil

    Heald, Rt. Hon. Sir Lionel

    Bell, Ronald (Bucks, S.)

    Dodds-Parker, A. D.

    Heath, Rt. Hon. E. R. G.

    Bennett, F. M. (Torquay)

    Donaldson, Cmdr, C. E. McA.

    Henderson-Stewart, Sir James

    Bidgood, J. C.

    Doughty, C. J. A.

    Hesketh, R. F.

    Biggs-Davison, J. A.

    du Cann, E. D. L,

    Hicks-Beach, Maj. W. W.

    Bingham, R. M.

    Emmet, Hon. Mrs. Evelyn

    Hill, Rt. Hon. Charles (tutor.)

    Bishop, F. P.

    Errington, Sir Eric

    Hill, Mrs. E. (Wythenshawe)

    Body, Ft. F.

    Farey-Jones, F. W.

    Hinchingbrooke, Viscount

    Bossom, Sir Alfred

    Fell, A.

    Hirst, Geoffrey

    Bowen, E. R. (Cardigan)

    Fisher, Nigel

    Holland-Martin, c. J.

    Boyd-Carpenter, Rt. Hon. J. A.

    Fletcher-Cooke, C.

    Hope, Lord John

    Brewis, John

    Freeth, Denzil

    Hornby, R. P.

    Bromley-Davenport, Lt.-Col. W. H.

    Gammans, Lady

    Hornsby-Smith, Miss M. P.

    Brooman-White, R. C.

    Garner-Evans, E. H.

    Horobin, Sir Ian

    Browne, J. Nixon (Craigton)

    George, J. C. (Pollock)

    Howard, John (Test)

    Bryan, P.

    Gibson-Watt, D.

    Hughes-Young, M. H. C.

    Bullus, Wing Commander E. E.

    Glover, D.

    Hutchison Michael Clark (E'b'gh, S.)

    727

    Hylton-Foster, Rt. Hon. Sir Harry

    Marples, Rt. Hon. A. E.

    Shepherd, William

    Iremonger, T. L.

    Marshall, Douglas

    Simon, J. E. S. (Middlesbrough, W.)

    Irvine, Bryant Godman (Rye)

    Mathew, R.

    Smithers, Peter (Winchester)

    Jenkins, Robert (Dulwich)

    Maudling, Rt. Hon. R.

    Smyth, Brig. Sir John (Norwood)

    Jennings, J. C. (Burton)

    Mawby, R. L.

    Speir, R. M.

    Jennings, Sir Roland (Hallam)

    Maydon, Lt.-Comdr. S. L. C.

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Johnson, Dr. Donald (Carlisle)

    Milligan, Rt. Hon. W. R.

    Stanley, Capt. Hon. Richard

    Johnson, Eric (Blackley)

    Molson, Rt. Hon. Hugh

    Steward, Harold (Stockport, S.)

    Kerby, Capt. H. B.

    Morrison, John (Salisbury)

    Stoddart-Scott, Col. Sir Malcolm

    Kerr, Sir Hamilton

    Nairn, D. L. S.

    Storey, S.

    Kimball, M.

    Neave, Airey

    Studholme, Sir Henry

    Kirk, P. M.

    Nicholson, Sir Godfrey (Farnham)

    Summers, Sir Spencer

    Lambton, Viscount

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Taylor, Sir Charles (Eastbourne)

    Lancaster, Col. C. G.

    Noble, Michael (Argyll)

    Teeling, W.

    Leavey, J. A.

    Oakshott, H. D.

    Thomas, Leslie (Canterbury)

    Leburn, W. G.

    O'Neill, Hn. Phelim(Co. Antrim, N.)

    Thomas, P. J. M. (Conway)

    Legge-Bourke, Maj. E. A. H.

    Osborne, C.

    Thompson, Kenneth (Walton)

    Legh, Hon. Peter (Petersfield)

    Page, R. G.

    Thornton-Kemsley, Sir Colin

    Lindsay, Hon. James (Devon, N.)

    Pannell, N. A. (Kirkdale)

    Tiley, A. (Bradford, W.)

    Lindsay, Martin (Solihull)

    Partridge, E.

    Turton, Rt. Hon. R. H.

    Linstead, Sir H. N.

    Pike, Miss Mervyn

    Vane, W. M. F.

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Pilkington, Capt. R. A.

    Vickers, Miss Joan

    Loveys, Walter H.

    Pitt, Miss E. M.

    Vosper, Rt. Hon. D. F.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Powell, J. Enoch

    Wade, D. W.

    Lucas, P. B. (Brentford & Chiswick)

    Price, David (Eastleigh)

    Wakefield, Edward (Derbyshire, W.)

    Lucas-Tooth, Sir Hugh

    Price, Henry (Lewisham, W.)

    Wakefield, Sir Waved (St. M'lebone)

    McAdden, S. J.

    Profumo, J. D.

    Wall, Patrick

    Macdonald, Sir Peter

    Rawlinson, Peter

    Ward, Rt. Hon. G. R. (Worcester)

    Maclean, Sir Fitzroy (Lancaster)

    Redmayne, M.

    Ward, Dame Irene (Tynemouth)

    McLean, Neil (Inverness)

    Rees-Davies, W. R.

    Webbe, Sir H.

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Renton, D. L. M.

    Webster, David

    McMaster, Stanley

    Ridsdale, J. E.

    Williams, Paul (Sunderland, S.)

    Macpherson, Niall (Dumfries)

    Rippon, A. G. F.

    Williams, R. Dudley (Exeter)

    Maitland, Cdr. J. F. W. (Horncastle)

    Robertson, Sir David

    Wills, Sir Gerald (Bridgwater)

    Maitland, Hon. Patrick (Lanark)

    Roper, Sir Harold

    Wilson, Geoffrey (Truro)

    Manningham-Buller, Rt. Hn. Sir R.

    Russell, R. S.

    Woollam, John Victor

    Markham, Major Sir Frank

    Scott-Miller, Cmdr. R.

    Marlowe, A. A. H.

    Sharples, R. C.

    TELLERS FOR THE AYES:

    Mr. Finlay and Mr. Whitelaw

    NOES

    Ainsley, J. W.

    Fraser, Thomas (Hamilton)

    McCann, J.

    Allaun, Frank (Salford, E.)

    George, Lady Megan Lloyd(Car'then)

    MacColl, J. E.

    Allen. Arthur (Bosworth)

    Gibson, C. W.

    McKay, John (Wallsend)

    Awbery, S. S.

    Greenwood, Anthony

    McLeavy, Frank

    Bacon, Miss Alice

    Grenfell, Rt. Hon. D. R.

    MacPherson, Malcolm (Stirling)

    Bence, C. R. (Dunbartonshire, E.)

    Grey, C. F.

    Mahon, Simon

    Benn, Hn. Wedgwood (Bristol, S.E.)

    Griffiths, David (Rother Valley)

    Mann, Mrs. Jean

    Blackburn, F.

    Griffiths, Rt. Hon. James (Llanelly)

    Marquand, Rt. Hon. H. A.

    Blenkinsop, A.

    Griffiths, William (Exchange)

    Mayhew, C. P.

    Blyton, W. R.

    Hale, Leslie

    Messer, Sir F.

    Boardman, H.

    Hamilton, W. W.

    Mikardo, Ian

    Bowden, H. W. (Leicester, S. W.)

    Hannan, W.

    Mitchison, G. R.

    Bowles, F. G.

    Hastings, S.

    Moody, A. S.

    Boyd, T. C.

    Hayman, F. H.

    Morris, Percy (Swansea, W.)

    Braddock, Mrs. Elizabeth

    Henderson, Rt. Hn. A. (Rwly Regis)

    Morrison, Rt. Hn. Herbert (Lewis'm, S.)

    Brockway, A. F.

    Herbison, Miss M.

    Mort, D. L.

    Brown, Thomas (Ince)

    Hewitson, Capt. M.

    Moss, R.

    Butler, Herbert (Hackney, C.)

    Hobson, C. R. (Keighley)

    Moyle, A.

    Butler, Mrs. Joyce (Wood Green)

    Holman, P.

    Neal, Harold (Bolsover)

    Callaghan, L. J.

    Houghton, Douglas

    Noel-Baker, Francis (Swindon)

    Carmichael, J.

    Howell, Denis (All Saints)

    Noel-Baker, Rt. Hon. P. (Derby, S.)

    Castle, Mrs. B. A.

    Hoy, J. H.

    Oram, A. E.

    Champion, A. J.

    Hughes, Cledwyn (Anglesey)

    Oswald, T.

    Chapman, W. D.

    Hughes, Emrys (S. Ayrshire)

    Owen, W. J.

    Coldrick, W.

    Hughes, Hector (Aberdeen, N.)

    Padley, W. E.

    Collick, P. H. (Birkenhead)

    Hunter, A. E.

    Paget, R. T.

    Corbet, Mrs. Freda

    Irvine, A. J. (Edge Hill)

    Palmer, A. M. F.

    Crossman, R. H. S.

    Irving, Sydney (Dartford)

    Pargiter, G. A.

    Cullen, Mrs. A.

    Isaacs, Rt. Hon. G. A.

    Parker, J.

    Darling, George (Hillsborough)

    Jay, Rt. Hon. D. P. T.

    Parkin, B. T.

    Davies, Harold (Leek)

    Jenkins, Roy (Stechford)

    Paton, John

    Davies, Stephen (Merthyr)

    Johnson, James (Rugby)

    Pearson, A.

    Deer, G.

    Jones, Elwyn (W. Ham. S.)

    Plummer, Sir Leslie

    Diamond, John

    Kenyon c.

    Popplewell, E.

    Dodds, N. N.

    Key, Rt. Hon. C. W.

    Price, Philips (Gloucestershire, W.)

    Ede, Rt. Hon. J. C.

    King, Dr. H. M.

    Probert, A. R.

    Edelman, M.

    Lawson, G. M.

    Pursey, Cmdr. H.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Lee, Frederick (Newton)

    Randall, H. E.

    Edwards, Robert (Bilston)

    Lee, Miss Jennie (Cannock)

    Rankin, John

    Evans, Albert (Islington, S.W.)

    Lever, Harold (Cheetham)

    Redhead, E. C.

    Finch, H. J. (Bedwellty)

    Lever, Leslie (Ardwick)

    Reeves, J.

    Filch, A. E. (Wigan)

    Lindgren, G. S.

    Reid, William

    Fletcher, Eric

    Logan, D. G.

    Roberts, Albert (Normanton)

    Foot, D. M.

    McAilster, Mrs. Mary

    Roberts, Goronwy (Caernarvon)

    728

    729

    Robinson, Kenneth (St. Pancras, N.)

    Strachey, Rt. Hon. J.

    White, Mrs. Eirene (E. Flint)

    Rogers, George (Kensington, N.)

    Summerskill, Rt. Hon. E.

    Wilkins, W. A.

    Royle, C.

    Swingler, S. T.

    Willey, Frederick

    Silverman, Julius (Aston)

    Sylvester, G. O.

    Williams, David (Neath)

    8ilverman, Sydney (Nelson)

    Taylor, Bernard (Mansfield)

    Williams, Rev. Llywelyn (Ab'tillery)

    Slater, Mrs. H. (Stoke, N.)

    Taylor, John (West Lothian)

    Williams, Rt. Hon. T. (Don Valley)

    Sinter, J. (Sedgefield)

    Thomson, George (Dundee, E.)

    Williams, W. R. (Openshaw)

    Smith, Ellis (Stoke, S.)

    Thornton, E.

    Willis, Eustace (Edinburgh, E.)

    Snow, J. W.

    Tomney, F.

    Woof, R. E.

    Sorensen, R. W.

    Viant, S. P.

    Yates, V. (Ladywood)

    Soskice, Rt. Hon. Sir Frank

    Warbey, W. N.

    Zilliacus, K.

    Sparks, J. A.

    Watkins, T. E.

    Spriggs, Leslie

    Weitzman, D.

    TELLERS FOR THE NOES:

    Stewart, Michael (Fulham)

    Wells, Percy (Faversham)

    Mr. J. T. Price and Mr. Simmons.

    Stones, W, (Consett)

    Wheeldon, W. E.

    Mr. Deputy-Speaker (Sir Gordon Touche): Mr. Lawson. The Amendment to page 7, line 29.
    Miss Margaret Herbison: On a point of order. Should it not be the Amendment in page 7, line 6, to leave out from "rate" to the second "and" in line 9 and to insert:
    "specified in paragraph (b) (iii) of subsection (1) of section one of this Act, the units shall he such amounts (being the same for women as for men and not exceeding the amount of seven pounds ten shillings) as may be specified by order of the Minister"
    Mr. Deputy-Speaker: That is not selected.
    Miss Herbison: Why not, Mr. Deputy-Speaker? Is there not a possibility of our being given the reason? It is the only Amendment we have down affecting women who are covered by the Bill.
    Mr. Deputy-Speaker: We cannot discuss why it was not selected. It is a matter for Mr. Speaker.
    Mr. Lawson: I must confess that I was rather surprised at being called now, Mr. Deputy-Speaker.
    I beg to move, in page 7, line 29, to leave out "half" and to insert "quarter".
    The subsection as it stands means that when a person reaches retiring age and has been paying graduated contributions those graduated contributions will be assessed into the number of units which he will have paid by that time. Remember, a unit means a unit of £15; £7 10s. a side from the employer and the employee. There will be an assessment as to the number of units which his total graduated contributions add up to. Where there are odd parts, fractions, those fractions may be added together to make a single unit. If there is something left over, the question whether it will be treated as a unit will depend on its
    730
    amount. If it amounts to half a unit or more than a half it will be treated as a single unit, and there will be paid in respect of that unit when that person has retired a sum of 6d. a week.
    The Amendment proposes to delete the word "half" and to insert "quarter", so that when the units are calculated and it is found that a fraction is left over amounting to one-quarter or more it will be treated as a complete unit, and 6d. a week pension will be paid on it. There are excellent reasons for proposing this. As the Bill stands, if the odd amount comes to anything less than £7 10s., that is, assuming a unit to be £15, that is lost to the contributor, and the contributor is already paying an excessive amount. It seems to us, therefore, that the margin should be half of £7 10s. and that the unit should be treated accordingly. When the unit comes to cost not £15 but rather more than £18 10s., as it will in time, half of that will be £9 5s. but as the Bill stands the contributor might have paid £9 2s. 6d. and that would be lost to him.
    It seems to us, therefore, that the least that can be done in respect of this part of the Bill is to give the contributor the benefit where there is an odd sum over reaching as much as one-quarter of the total value of the unit, and give him 6d. pension in respect of it, as a result of its being treated as a complete unit.
    Mr. Ellis Smith: I beg to second the Amendment.
    Mr. Vane: When, in the administration of the scheme, we come to the odd fractions of bricks which will arise, according to the calculations which were explained to us quite correctly a moment ago from the benches opposite, we are faced with finding a way to deal with these fractions. To most of us two alternatives present themselves. The

    731
    first is that the odd small amounts should be refunded. The second is that some form of rounding-up should be adopted. On reflection, I am sure that most hon. Members will agree that rounding-up is usually the better way of dealing with these small fractions rather than an accurate calculation and a refund after a period of perhaps some months after the man has ceased active employment.
    Then there arises the question of the scale on which the rounding-up should be worked. The commonsense way would surely seem to be by half, because so many times in this world one treats more than half as a whole, and forgets about the small fraction that is less than half. When one thinks of the unit in which it is convenient to pay a pension, 6d. seems as small a convenient sum as one could probably consider in this connection.
    The hard-case picture is not justified, nor is it the whole story, because the pension as a whole is a good bargain. There is an average example in the White Paper and it was a surprise to many people, both inside and outside the House, to see what a very large fraction of that retirement pension was not covered by the contributions of the man and wife concerned. It is of the essence of a scheme like this that at the end of the day different people may have paid slightly more or less for their retirement pensions. It occurs in the main scheme the whole time. Therefore, there is nothing unusual in the fact that there is this small fractional difference that occurs in rounding-up.
    We must also look at the other side of the coin. Whereas there will be some who will have a fraction less there will be an equal number who will have a fraction more. On reflection, I think that the hon. Member for Motherwell (Mr. Lawson) will agree that to take the basis of the rounding-up at the half instead of at the quarter is the better way. The quarter would seem to me an unfair place to draw the line. Everybody can see the reasonableness of the halfway house, and it would seem appropriate in this case as it is so often in everyday life.
    Amendment negatived.
    Mr. Deputy-Speaker: Mr. Boyd-Carpenter.
    Mr. Lawson: There is a further Amendment, in page 7, line 29, at the end to insert:
    Where the fraction is less than sufficient to be treated as a whole unit the amount represented by the fraction shall be returned to the retired person in the form of a single payment within six weeks of his receiving his first graduated benefit.
    Mr. Deputy-Speaker: That Amendment was not selected.
    Mr. Lawson: I must not question Mr. Speaker's Ruling, but I confess that it baffles me why the one was selected and this one was not selected.
    Mr. Deputy-Speaker: We cannot discuss that.
    8.30 p.m.
    Mr. Boyd-Carpenter: I beg to move, in page 8, line 20, at the end to insert:
    (8) Notwithstanding that the provisions of the principal Act reducing the weekly rate of benefit in respect of the beneficiary's earnings are applied by this Act to graduated retirement benefit, the power of the Minister under section two of the National Insurance Act. 1956, to make regulations amending those provisions shall include power to provide that they shall not reduce the amounts payable as graduated retirement benefit, but that those amounts shall be payable as if it were a separate benefit not subject to the said provisions.
    The Amendment is tabled to carry out an undertaking which I gave in Committee. On an Amendment moved by an hon. Member opposite, which was fully discussed and attracted a good deal of sympathy, we discussed the application of the earnings rule to the graduated pensions payable under the Bill. On that Amendment I pointed out that to exclude the graduated pension from the earnings rule would result, in the early stages of the scheme, in a very small proportionate part of the total combined pension being exempted from the rule while all the rest was subject to it.
    That would be plainly unsatisfactory, and I suggested to the Committee that the best way of dealing with the matter was to give the Minister of the day power by Statutory Instrument to exclude the graduated pension in whole or in part from the operation of the earnings rule. I pointed out, too, that this would have the further advantage of being analogous to the powers we have already under the 1956 Act to do the same with the earnings rule regarding the flat-rate pension, and that if both these matters could be dealt

    733
    with by Statutory Instrument it might he convenient to be able to deal with them at some future date at the same time, and having a combined effect on the pension.
    It is proposed that the procedure should be by Statutory Instrument, subject to the affirmative Resolution procedure. Upstairs, that solution was approved on both sides of the Committee, and in implementation of the undertaking I have tabled this Amendment.
    Amendment agreed to.

    Clause 7. —(GENERAL PROVISIONS AS TO NON-PARTICIPATING EMPLOYMENTS.)
    Miss Herbison: I beg to move, in page 10, line 34, at the end to insert:
    "taking into account entitlement to widow's retirement benefit".
    Mr. Crossman: On a point of order, Mr. Deputy-Speaker. There are five of these Amendments all referring to the problem of widows' retirement benefit. It would be for the convenience of the House, therefore, if you could tell us which of the five you intend to call, so that we shall know on which to stage our major debate.
    Mr. Deputy-Speaker: I think it will be convenient to discuss all the five on this Amendment.
    Mr. Crossman: If I understand aright, then, we shall discuss with this Amendment those to Clause 8, page 13, line 11; page 13, line 27; page 13, line 30; and page 13, line 39.
    Miss Herbison: This Clause deals with non-participating employments; that is to say, conditions under which a man may contract out of the Government scheme or under which an employer may contract his employee out of the Government scheme. We feel that a man or his employer should be able to contract out of the Government scheme only if there is a sufficient guarantee that there is benefit for his widow on his death. We feel that unless this is done the employer ought not to be able to contract the employee out of the scheme. I am sure that the Joint Parliamentary Secretary will be aware of the position of many widows in this country. There are many such friends of mine whose husbands were in what
    734
    might be termed a private occupational scheme which made provision for a pension for the man when he retired from work but which, on the death of that man, made no provision for his widow. There might also be the case of a man who had died before reaching retirement age, and again there was no retirement pension for his widow.
    During the years that I have represented North Lanarkshire in the House, time and time again widows have come to see me at my home or at the interviews which I give at four centres in my constituency each month. These are among the most pathetic cases that have been brought to my notice. They are women who have perhaps been used to a fairly comfortable life. They are women whose husbands were in jobs which gave them, their wives and their families a fairly comfortable way of living, and these men were in pension schemes. However, when the husbands died those widows found themselves translated from a comfortable way of living to absolute penury. Many of them are of an age when it is impossible for them to find work even if they were fit to work. They are of an age when there is no employment for them.
    If we are to allow employers to contract their employees out of the Government scheme, an essential condition of allowing such contracting-out is that provision should be made for widows. Any scheme which does not make provision for widows will carry on this unfortunate situation in which women who have had a comfortable way of life are plunged into penury and misery with no hope of a job. It is for those reasons that we place such importance on our Amendments.
    Mr. Lawson: I beg to second the Amendment.
    The Bill makes great play of the term "equivalent pension benefits". Most of us now know what the phrase means. It means that where a man or woman is contracted out of the State scheme, the employer must guarantee that the person will build up pension rights equivalent to those that a person in the State scheme earning £15 a week would accumulate.
    In the pension rights that a person in the State scheme builds up there is a

    735
    certain provision for his widow whereby if he dies she gets part of the graduated benefits that he has built up. That is in addition to her basic pension. There is in the Bill for those who are contracted out—that is, for those in a private scheme—although there is the guarantee of equivalency with what a man earning £15 a week could obtain within the State scheme, no guarantee that the widow shall receive any advantage from the graduated benefits built up. By our Amendments we are trying to ensure that there is genuine equivalency.
    Bad though the graduated part of the State scheme is, it gives the widow part of the benefits which her husband has built up. That is not the case with a private scheme. The private employer makes provision for the equivalent of the benefit that a £15-a-week man could receive, but he need make no provision for the man's widow, and if the man dies, the employer has no obligation towards the widow. We should be very wrong if we did not ask for this situation to be remedied.
    We ask that there should be genuine equivalency, and that where an equivalent pension is guaranteed for a person taken out of the State scheme there shall be equivalence in that the private scheme shall make some provision for the widow such as the State scheme does. I cannot see how in logic we can escape from that. The benefit is a very poor one indeed. We are insisting here that there shall be genuine equivalency and that the widow shall get the benefit which she would get under the State scheme.
    Mrs. Harriet Slater: At the beginning of the debate today we were told by the Joint Parliamentary Secretary that one of the purposes of the Bill was to encourage occupational pension schemes. This Amendment is to ensure that schemes to which encouragement is given shall at least measure up to the provision which is in the State scheme.
    Widows, as well as the old people, are among the worst hit at present. All that we are asking for is that when the Government make it possible for an employer to contract out of the State scheme and provide a scheme of his own for his employees, the same pro-
    736
    tection shall be afforded to the widow, poor though it is, as in the State scheme.
    We think that this is something on which the Government should give way. They have given way on one or two little things this afternoon, not to us but to their hon. Friends. This is in the interest of the womenfolk who, when their husbands die, are left in a much worse position, as my hon. Friend the Member for Lanarkshire, North (Miss Herbison) has said. Very often they are not able to go out to earn their own living, or they find it extremely difficult to get a job because women do not have the same rights of opportunity as men.
    The good husband or parent makes provision in the event of his death for those dependent upon him. He does not leave his widow stranded. We are now asking that the State shall provide the same kind of protection and insist that private employers at least write this into their occupational schemes, in the same way that the Government have a moral obligation to write it into the State scheme. That is all we are asking for in this Amendment.
    Mr. Vane: If I took five seconds to stand up to reply, it was a great deal less than hon. Members opposite needed to decide which of them was to move the Amendment.
    Mr. Ellis Smith: That is very provocative.
    Mr. Vane: I do not think that it is provocative.
    Mr. E. G. Willis: It was done effectively.
    Mr. Vane: I was about to say so.
    The suggestion that some provision for widows should be added to the test of equivalency before contracting out can be accepted is undoubtedly attractive at first sight. If the development of occupational schemes was still in its infancy and the field was very much clearer than it is now there would be far stronger arguments for it. We are not now dealing with some pioneering venture in occupational insurance, but with many established schemes which have developed on the lines on which their members wanted them to develop and which have covered a very wide part of the total field.
    8.45 p.m.
    Miss Herbison: The hon. Gentleman said that the schemes were not in their infancy and that they had been developed in the way which their members wanted them to develop. Surely he knows that that is not the case. The many thousands in the teaching profession have long been fighting to have benefits for widows and the Government have always been against them. That very big scheme has not developed in the way that its members would have liked.
    Mr. Vane: I was not referring only to teachers, although I know that case. I was speaking generally. If the hon. Lady studies the many private schemes, she will find that many options have not been taken up. It is the facts of the situation which we now have to face.
    It has been represented over and over again, and with a large measure of truth, that the graduated scheme which we are now proposing is a great deal smaller than the pension schemes of many industries. The scale is a great deal smaller. We consider that when it comes to contracting out the test of equivalency must be simple and something which should fit in with the world of occupational schemes as we find it. It is not the purpose of this Bill to try greatly to change the basis of the many occupational schemes which have been built up by people in the way that they wanted to see them grow. We want to see something running in parallel and not in conflict with appropriate occupational schemes.
    Speeches to that effect were made many times from hon. Members opposite in Committee and I am sure that not many hon. Members—although there may be some—would like to see the range of occupational pension schemes curtailed.
    Mrs. Slater: Do the Government not take the view that if they have better ideas than those which exist in some occupational schemes they should encourage them and ensure that they come up to the Government scheme and, as he said, run parallel and not in conflict with it? They will run in conflict if the Amendment is not accepted.
    Mr. Vane: The hon. Lady has not got it quite right, because her idea of
    738
    encouragement seems to be to have some power of compulsion. That cannot correctly be described as encouragement.
    The test we have chosen is simple. It is that there should be equivalency at the maximum. That means that many people will have something more than they would have been able to claim if they had been members of the State scheme. The Amendment asks that the equivalency test should be carried further and that there should be some provision for widows analogous to the provisions in the State scheme and that those provisions should be made compulsory before a private scheme is accepted as appropriate for contracting out.
    If the hon. Lady studies the development of private schemes—and there are many very good schemes in existence which have the support of people in different industries—she will find that they have been built up on a much bigger scale than the Scheme which we are now considering. The people concerned have paid more and have wanted something on those lines. The hon. Lady will find, however, that very few have provisions for widows which could match exactly those in the Bill.
    Without an immense amount of research one cannot say accurately how many schemes would qualify for contracting out according to present rules, but from the information that we have about 90 per cent. would fail the test because provision for widows exists in many schemes in different ways. There may be an option, and a man may be able to contribute towards widow's benefit at his own choice. This would perhaps mean that after he was married and had the responsibility of a wife to support he would think about changing his basis of membership.
    There are many complications which would make this simple comparison not really quite so simple if hon. Members started putting it into operation. If this provision were put into the Bill contracting out, which many hon. Gentlemen and hon. Ladies want to see, would be virtually impossible and the whole process of development would be changed.
    Mr. Crossman: Why?
    Mr. Vane: Because it has been built up on different lines. At this juncture, if one does not want contracting out, one can start applying this kind of test which many private occupational schemes will not be able to satisfy. If one does not want contracting out one can press for other tests as well. If hon. Members want to see contracting out of good schemes, which we all have in mind and which can provide for their members' benefits in excess of the State scheme, there is no purpose in pressing for tests on equivalency which, clearly, they would not be able to satisfy.
    In addition, there is the complication which arises—and I have touched on this generally—because of the different provisions which different schemes may have now or in the future for the provision of widows' benefits. If there is a test at all it must be reasonably exact and fair, such as the scale that we have provided for in the State scheme. This will not be easy to satisfy without substantial modification of those schemes even where some provision for widows' benefit is now in existence.
    As to the general development, there is no doubt that the provision for widows' benefits in the private field is expanding. I saw some papers in connection with one of the bigger private schemes, this morning. Its trustees had sent a circular to members suggesting that they should elect to be put on a different basis to provide some benefit for their widows. I am told this happens in many schemes, but where a free choice exists it is surprising, and rather unfortunate, how few people have taken it up. If we want contracting out of good schemes to go ahead we must make this test of equivalency simple and of such a nature that everyone understands it.
    Superficially, it might seem simple to add the second test of equivalency of widows' benefits. In fact, it is far from simple and would have far-reaching effects on contracting out. I therefore advise the House not to accept the Amendments, because in practice the result would be very different from that which the supporters of the Amendments would like.
    Mr. Marquand: The Joint Parliamentary Secretary has spoken at greater length than the Minister or his hon. Friend the other Joint Parliamentary Secretary spoke when we discussed this matter in Committee, but his reply is just as unsatisfactory as those then given by his colleagues. The requirement of equivalence is laid down in the Bill. It is provided that the service in the scheme which is allowed to contract out must provide for retirement benefits by way of pensions which are, on the whole, as favourable as the right to benefit to be derived from graduated contribution in the national scheme. That is a very easy test to apply.
    The right to benefit in the national scheme, provided by the Bill, includes the right to widows' retirement benefit. It is clearly defined in Clause 5. There can be no difficulty about being exact in this matter. Even the hon. Member implied that he thought it was obvious that it was only fair that the widows' retirement benefit contained in the national scheme should, if possible, be included in the contracted-out scheme. He thought the difficulty would arise in terms of definition, but the definition is clear in the Bill. The woman concerned must have reached the age of 60, must be retired, and must receive 6d. by way of pension for every Is. to which her dead husband would have been entitled. That is as exact a definition as one could wish for.
    The other argument on which he seeks to rest his case is that private schemes find it difficult to provide benefits of this kind. We know that this is so by what the hon. Member for Horsham (Mr. Gough) told us in Committee. He explained that widowhood was rather a difficult risk to assess and he said:
    "Unfortunately, in this unpredictable world we can never say when a male human is going to get married, or what age his spouse will be, and often we have a man in his fifties who decides to get married to a bright young thing in her early thirties. That can play ducks and drakes with any actuarial studies. It is well known amongst private firms that provision for widows' pensions is most difficult."—[OFFICIAL REPORT, Standing Committee A, 25th March, 1959; c. 699.]
    It is accepted that this is difficult; we do not deny it. But even the hon. Member for Horsham went on to say that some private schemes succeeded in including widows' retirement benefit.

    741
    All that this description of the difficulties involved in assessing the risk of widowhood amounts to is to say that only group insurance can be covered, and that individual insurance cannot easily do so. But good private schemes and quasi-governmental schemes exist which cover this risk, and we say that in view of the known facts about widowhood—in view of the fact that under our present pension law widows get a pretty raw deal and have to live for years on end on a pension which is no more than the pension provided for short-term difficulties like unemployment and sickness; in view of the fact that many widows are obliged to resort to National Assistance, and in view of all the difficulties from which widows undoubtedly suffer, we say that the State should now come forward with a new proposal for including widows' benefit, however small.
    The Government should say that they will not permit schemes to contract out which do not do at least as well as that. We must insist upon this. It will not do to say that the contracting-out schemes should be allowed to avoid this obligation which is now being undertaken in the State scheme. As I have said earlier, the contracted-out schemes have big advantages in that the members of such schemes avoid the major part, if not the whole, of the obligation to meet the emerging cost of pensions. By contracting out they avoid the greater part of this obligation, which falls upon millions of those who are not able to contract out.
    9.0 p.m.
    As those contracted-out schemes are so highly privileged under the terms of the Bill, it is not too much to ask that, by methods of group insurance which have proved to be satisfactory and which the best private schemes employ, they should come up to the level of the best in this respect and provide this small addition to the pensions of widows whose husbands have contributed in some way under the terms of these schemes towards an insurance but have died before they could benefit from it. The husband pays contributions to the scheme, and where he dies before receiving benefit his widow should be entitled to this small amount provided
    742
    in the national scheme of half the amount to which her husband would have been entitled by his contributions.
    In view of the surrounding circumstances and the difficulties which widows have to meet in our community, to which I have frequently referred, I advise my hon. Friends that if the Minister persists in his refusal they should divide the House.
    Mr. Ede: I regret having to delay the House for a few minutes, but when I listened to my hon. Friend the Member for Lanarkshire, North (Miss Herbison) describing the interviews which she has with her constituents who are implicated in the Amendment, I felt bound to confirm from my own constituency the number of harrowing cases of women who were married to men in receipt of reasonably good salaries which kept them out of some of the earlier contributory schemes but who come to me—on each occasion I visit my constituents I am sure to meet at least one and sometimes more—because they are faced with the fact that up to the present pensions schemes have left them out. They are faced with a humiliation in their way of life which is far more severe on a woman than on a man. I write to the Minister knowing the answer which he will give me. It always expresses sympathy with the woman and says that this matter may be dealt with in some amending Act. Let us be quite certain that we shall increase the number of women who will be in this position in the future if an Amendment on these lines is not accepted.
    I do not believe that the difficulties of persuading the private schemes to extend their benefits in this direction are as great as the Joint Under-Secretary tried to make out. All I know is that in such schemes as those for local government officers, where this provision operates, the number of people who wish to join on this basis grows every year. I believe that we should set the example in this matter, otherwise a large number of women will be in a position in which no man ought to wish to see a self-respecting woman.
    Such a woman has served the family well, and it is owing to some unfortunate circumstance, on the death of her

    743
    husband or a few years later after she has lived on the little capital which he could leave her, that she finds herself having no claim on the community at all except through the National Assistance Board. I very much regret
    that the Minister made such a speech in reply to my hon. Friend.
    Question put, That those words be there inserted in the Bill: —
    The House divided: Ayes 167, Noes 205.

    Division No. 120.]

    AYES

    [9.7 p.m.

    Ainsley, J. W,

    Henderson, Rt. Hn. A. (Rwly Regis)

    Pargiter, G. A.

    Allaun, Frank (Salford, E.)

    Herbison, Miss M.

    Parker, J.

    Allen, Arthur (Bosworth)

    Hewitson, Capt. M.

    Parkin, B. T.

    Allen, Scholefield (Crewe)

    Hobson, C. R. (Keighley)

    Paton, John

    Awbery, S. S.

    Holman, P.

    Plummer, Sir Leslie

    Bacon, Miss Alice

    Houghton, Douglas

    Popplewell, E.

    Bence, C. R. (Dunbartonshire, E.)

    Howell, Denis (All Saints)

    Price, J. T. (Westhoughton)

    Benn, Hon. Wedgwood (Bristol,S.E.)

    Hoy, J. H.

    Price, Philips (Gloucestershire, W.)

    Blackburn, F.

    Hughes, Cledwyn (Anglesey)

    Probert, A. R.

    Blenkinsop, A.

    Hughes, Emrys (S. Ayrshire)

    Pursey, Cmdr. H.

    Blyton, W. R.

    Hughes, Hector (Aberdeen, N.)

    Randall, H. E.

    Boardman, H.

    Hunter, A. E.

    Rankin, John

    Bowden, H. W. (Leicester, S.W.)

    Irvine, A. J. (Edge Hill)

    Redhead, E. C.

    Bowles, F. G.

    Irving, Sydney (Dartford)

    Reynolds, G W.

    Braddock, Mrs. Elizabeth

    Isaacs, Rt. Hon. G. A.

    Roberts, Albert (Normanton)

    Brockway, A. F.

    Jay, Rt. Hon. D. P. T.

    Roberts, Goronwy (Caernarvon)

    Brown, Thomas (Ince)

    Jenkins, Roy (Stechford)

    Rogers, George (Kensington, N.)

    Butler, Herbert (Hackney, C.)

    Johnson, James (Rugby)

    Royle, C.

    Butler, Mrs. Joyce (Wood Green)

    Jones, Elwyn (W. Ham, S.)

    Silverman, Julius (Aston)

    Callaghan, L. J.

    Kenyan, C.

    Slater, Mrs. H. (Stoke, N.)

    Carmichael, J.

    Key, Rt. Hon. C. W.

    Slater, J. (Sedgefield)

    Castle, Mrs. B. A.

    King, Dr. H. M.

    Smith, Ellis (Stoke, S.)

    Champion, A. J.

    Lawson, C. M.

    Snow, J. W.

    Chapman, W. D.

    Lee, Frederick (Newton)

    Sorensen, R. W.

    Coldrick, W.

    Lee, Miss Jennie (Cannock)

    Soskice, Rt. Hon. Sir Frank

    Collick, P. H. (Birkenhead)

    Lever, Leslie (Ardwick)

    Sparks, J. A.

    Corbet, Mrs. Freda

    Lewis, Arthur

    Spriggs, Leslie

    Cronin, J. D.

    Lindgren, G. S.

    Stewart, Michael (Fulham)

    Grossman, R. H, S.

    Logan, D. G.

    Stones, W. (Consett)

    Cullen, Mrs. A.

    McAlister, Mrs. Mary

    Strachey, Rt. Hon. J.

    Darling, George (Hillsborough)

    McCann, J.

    Summerskill, Rt. Hon. E.

    Davies, Harold (Leek)

    MacColl, J. E.

    Sylvester, G. O.

    Davies, Stephen (Merthyr)

    McKay, John (Wallsend)

    Taylor, Bernard (Mansfield)

    Deer, G.

    McLeavy, Frank

    Taylor, John (West Lothian)

    Diamond, John

    MacPherson, Malcolm (Stirling)

    Thornton, E.

    Dodds, N. N.

    Mahon, Simon

    Tomney, F.

    Ede, Rt. Hon. J. C.

    Mann,Mrs. Jean

    Viant, S. P.

    Edelman, M.

    Marquand, Rt. Hon. H. A.

    Warbey, W. N.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mayhew, C. P.

    Watkins, T. E.

    Edwards, Robert (Bilston)

    Messer, Sir F.

    Weitzman, D.

    Evans, Albert (Islington, S.W.)

    Mikardo, Ian

    Wells, Percy (Faversham)

    Finch, H. J. (Bedwellty)

    Mitchison, G. R.

    Wheeldon, W. E.

    Fitch, A. E. (Wigan)

    Moody, A. S.

    White, Mrs. Eirene (E. Flint)

    Fletcher, Eric

    Morris, Percy (Swansea, W.)

    Wilkins, W. A.

    Foot, D. M.

    Morrison,Rt.Hn.Herbert(Lewis'm,S.)

    Willey, Frederick

    Fraser, Thomas (Hamilton)

    Mort, D. L.

    Williams, David (Neath)

    George, Lady Megan Lloyd(Car'then)

    Moss, R.

    Williams, Rev. Llywelyn (Ab'tillery)

    Gibson, C. W.

    Moyle, A.

    Williams Rt. Hon. T. (Don Valley)

    Greenwood, Anthony

    Neal,Harold (Bolsover)

    Williams, W. R. (Openshaw)

    Grenfell, Rt. Hon. D. R.

    Noel-Baker, Francis (Swindon)

    Willis, Eustace (Edinburgh, E.)

    Grey, C. F.

    Noel-Baker, Rt. Hon. P. (Derby, S.)

    Woof, R. E.

    Griffiths, David (Rother Valley)

    Oram, A. E.

    Yates, V. (Ladywood)

    Griffiths, Rt. Hon. James (Llanelly)

    Oswald, T.

    Zilliacus, K.

    Griffiths, William (Exchange)

    Owen, W. J.

    Hannan, W.

    Padley, W. E.

    TELLERS FOR THE AYES:

    Hastings, S.

    Paget, R. T.

    Mr. Pearson and Mr. Simmons.

    Hayman, F. H.

    Palmer, A. M. F.

    NOES

    Agnew, Sir Peter

    Barter, John

    Bossom, Sir Alfred

    Aitken, W. T.

    Batsford, Brian

    Bowen, E. R. (Cardigan)

    Allan, R. A. (Paddington, S.)

    Baxter, Sir Beverley

    Boyd-Carpenter, Rt. Hon. J. A.

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Bell, Philip (Bolton, E.)

    Brewis, John

    Arbuthnot, John

    Bell, Ronald (Bucks, S.)

    Bromley-Davenport, Lt.-Col. W. H.

    Armstrong, C. W.

    Bennett, F. M. (Torquay)

    Brooman-White, R. C.

    Ashton, H.

    Bidgood, J. C.

    Browne, J. Nixon (Craigton)

    Atkins, H. E.

    Biggs-Davison, J. A.

    Bullus, Wing Commander E. E.

    Balniel, Lord

    Bingham, R. M.

    Burden, F. F. A.

    Barber, Anthony

    Bishop, F. P.

    Chichester-Clark, R.

    Barlow, Sir John

    Body, R. F.

    Cole, Norman

    Cooke, Robert

    Howard, John (Test)

    Page, R. G.

    Cooper, A. E.

    Hughes-Young, M. H. C.

    Pannell, N. A. (Kirkdale)

    Cooper-Key, E. M.

    Hutchison, Michael Clark (E'b'gh, S.)

    Partridge, E.

    Cordeaux, Lt.-Col. J. K.

    Hylton-Foster, Rt. Hon. Sir Harry

    Pike, Miss Mervyn

    Corfield, F. V.

    Iremonger, T. L.

    Pilkington, Capt. R. A.

    Craddock, Beresford (Spelthorne)

    Irvine, Bryant Godman (Rye)

    Pitt, Miss E. M.

    Crosthwaite-Eyre, Col. O. E.

    Jenkins, Robert (Dulwich)

    Powell, J. Enoch

    Crowder, Sir John (Finchley)

    Jennings, J. C. (Burton)

    Price, David (Eastleigh)

    Cunningham, Knox

    Jennings, Sir Roland (Hallam)

    Price, Henry (Lewisham, W.)

    Currie, G. B. H.

    Johnson, Dr. Donald (Carlisle)

    Profumo, J, D.

    Dance, J. C. G.

    Johnson, Eric (Blackley)

    Rawlinson, Peter

    Deedes, W. F.

    Kerby, Capt. H. B.

    Redmayne, M.

    de Ferranti, Basil

    Kerr, Sir Hamilton

    Rees-Davies, W. R.

    Dodds-Parker, A. D.

    Kimball, M,

    Renton, D. L. M.

    Donaldson, Cmdr. C. E. McA.

    Kirk, P. M.

    Ridsdale, J. E.

    Doughty, C. J. A.

    Lambton, Viscount

    Rippon, A. G. F.

    du Cann, E. D. L.

    Lancaster, Col. C. G.

    Roper, Sir Harold

    Emmet, Hon. Mrs. Evelyn

    Leavey, J. A.

    Scott-Miller, Cmdr. R.

    Errington, Sir Eric

    Leburn, W. G.

    Sharples, R. C.

    Farey-Jones, F. W.

    Legge-Bourke, Maj. E. A. H.

    Shepherd, William

    Fell, A.

    Legh, Hon. Peter (Petersfield)

    Simon, J. E. S. (Middlesbrough, W.)

    Finlay, Graeme

    Lindsay, Hon. James (Devon, N.)

    Smithers, Peter (Winchester)

    Fisher, Nigel

    Lindsay, Martin (Solihull)

    Smyth, Brig. Sir John (Norwood)

    Fletcher-Cooke, C.

    Linstead, Sir H. N.

    Speir, R. M.

    Freeth, Denzil

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Cammans, Lady

    Loveys, Walter H.

    Stanley, Capt. Hon. Richard

    Garner-Evans, E. H.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Steward, Harold (Stockport, S.)

    George, J. C. (Pollok)

    Lucas, P. B. (Brentford & Chiswick)

    Stoddart-Scott, Col. Sir Malcolm

    Gibson-Watt, D.

    Lucas-Tooth, Sir Hugh

    Storey, S.

    Clover, D.

    McAdden, S. J.

    Studholme, Sir Henry

    Glyn, Col. Richard H.

    Macdonald, Sir Peter

    Summers, Sir Spencer

    Go ugh, C. F. H.

    Maclean, Sir Fitzroy (Lancaster)

    Taylor, Sir Charles (Eastbourne)

    Graham, Sir Fergus

    McLean, Neil (Inverness)

    Thomas, Leslie (Canterbury)

    Grant, Rt. Hon. W. (Woodside)

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Thomas, P. J. M. (Conway)

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    McMaster, Stanley

    Thompson, Kenneth (Walton)

    Gresham Cooke, R.

    Macmillan,Rt.Hn.Harold(Bromley)

    Thornton-Kemsley, Sir Colin

    Grimond, J.

    Macpherson, Niall (Dumfries)

    Tiley, A. (Bradford, W.)

    Grimston, Hon. John (St. Albans)

    Maitland, Cdr. J. F. W.(Horncastle)

    Turton, Rt. Hon. R. H.

    Crimston, Sir Robert (Westbury)

    Maitland, Hon. Patrick (Lanark)

    Vane, W. M. F.

    Gurden, Harold

    Manningham-Buller, Rt. Hn. Sir R.

    Vickers, Miss Joan

    Hall, John (Wycombe)

    Markham, Major Sir Frank

    Vosper, Rt. Hon. D. F.

    Harris, Reader (Heston)

    Marlowe, A. A. H.

    Wade, D. W.

    Harrison, Col. J. H. (Eye)

    Marples, Rt. Hon. A. E.

    Wakefield, Edward (Derbyshire, W.)

    Harvey, Sir Arthur Vere (Macclesf'd)

    Marshall, Douglas

    Harvey, John (Walthamstow, E.)

    Mathew, R.

    Wakefield, Sir Wavell (St. M'lebone)

    Hay, John

    Maudling, Rt. Hon. R.

    Wall, Patrick

    Heald, Rt. Hon. Sir Lionel

    Mawby, R. L.

    Ward, Rt. Hon. G. R. (Worcester)

    Heath, Rt. Hon. E. R. G.

    Maydon, Lt.-Cmdr, S. L. C.

    Ward, Dame Irene (Tynemouth)

    Hesketh, R. F.

    Milligan, Rt. Hon. W. R.

    Webster, Sir H.

    Hicks-Beach, Maj. W. W.

    Molson, Rt. Hon. Hugh

    Webster, David

    Hill, Rt. Hon. Charles (Luton)

    Morrison, John (Salisbury)

    Williams, Paul (Sunderland, S.)

    Hill, Mrs. E. (Wythenshawe)

    Nairn, D. L. S.

    Williams, R. Dudley (Exeter)

    Hinchingbrooke, Viscount

    Neave, Airey

    Wills, Sir Gerald (Bridgwater)

    Hirst, Geoffrey

    Nicholson, Sir Godfrey (Farnham)

    Wilson, Geoffrey (Truro)

    Holland-Martin, C. J.

    Nicholson, N.(B'n'm'th, E. & Chr'ch)

    Woollam, John Victor

    Hope, Lord John

    Noble, Michael (Argyll)

    Hornby, R. P.

    Oakshott, H. D.

    TELLERS FOR THE NOES:

    Hornsby-Smith, Miss M. P.

    O'Neill, Hn. Phelim (Co.Antrim,N.)

    Mr. Bryan and Mr. Whitelaw.

    Horobin, Sir Ian

    Osborne, C.

    Mr. Lawson: I beg to move, in page 11, line 35, to leave out "both" and to insert "concurrently".
    This Amendment is merely a change of words. It is not in any way a change in the sense of the subsection, which reads:
    "Where a person is in any income tax year employed both in a non-participating employment and in another employed contributor's employment. …"
    Despite what the Parliamentary Secretary may say subsequently, I insist that 99 people out of 100 reading Clause 7 (5) would think that "both" meant in that year; it might be perhaps the first six months working at one job and the second six months working at another
    746
    job. "Concurrently" means at one and the same time, and to substitute that for the word "both" would make the meaning quite clear.
    9.15 p.m.
    The Parliamentary Secretary will probably accept this Amendment, but I must admit to some disappointment. The Standing Committee had twenty-five meetings, during which we spent a lot of time and effort trying to understand the Bill. This subsection was particularly difficult to understand by anyone—including, I think, the hon. Lady the Parliamentary Secretary herself. We were, however, given an undertaking that the Minister would

    747
    look at the Clause to see if it could be made clearer.
    I do not think that he has done so. Had he done so, he could not but have agreed that the word "both" would be taken by most people to mean both in one year and not both at one and the same time. I am sorry that even such a small promise as that has not been fulfilled. Had the Minister kept his promise, we should not have had to spend time on this Amendment.
    Mr. Reynolds: I beg to second the Amendment.
    Miss Pitt: I am not surprised to find this Amendment on the Notice Paper as the Clause is very complicated and the wording is a little difficult to understand. However, I must tell the hon. Member for Motherwell (Mr. Lawson) that his interpretation is wrong. He believes that the wording means both at one and the same time, and that, therefore, the word "concurrently" would serve. In fact, what it means is both in the same Income Tax year.
    I explained in Committee that the purpose of this subsection was to enable a refund to be made to a man who had two or more employments, one of which was non-participating. For his nonparticipating employment, he will be treated as if the maximum graduated contribution had been paid, so that any graduated contribution paid by an employee who has two employments, beyond the prescribed annual amount, would be refunded to him. That is, in the main, what this subsection provides, but there is a further point that I must now explain.
    The hon. Gentleman has said that "concurrently" is clearer than "both", but although, in the main, the subsection will deal with concurrent employment—as I explained to him in Standing Committee, and have repeated today—it is also designed to cover cases where non-participating employment—contracted-out employment is, I think, the simpler expression—precedes or follows double participating employment in the same Income Tax year. That will be very rare, but there could be a case where a man first had a spell of contracted-out employment, then gave it up, and, in the same Income Tax year, took on double
    748
    employment which was participating. That is what this fine point is intended to cover.
    The effect of the Amendment, if it were accepted, can be shown by an example. A man might, in the first six months, be in non-participating or contracted-out employment and, if he left it, he would be treated as having the benefit of the maximum graduated contributions of the scheme. In the second six months, he could be in double participating employment, earning £15 a week in each job. If the Amendment were accepted, the result would be that he would have to pay, in that second six months alone, graduated contributions on each of his two jobs with £15 earnings, resulting in his paying in that period the equivalent of twelve months' contributions, despite the fact that he had a transfer payment, or payment in lieu for the first six months of the year for his contracted-out employment. Under the Amendment he would not be entitled to the refund because his nonparticipating employment earlier in the year would be disregarded.
    All this sounds very technical, but I hope I have said sufficient to show the hon. Gentleman that his doubts arise from a misunderstanding of what I admit is a very complicated piece of drafting, though it does cover the points which each of us has in mind.
    Mr. Lawson: May I ask the hon. Lady to read what she said in Committee on precisely this point? May I also advise her that the Amendment which I have tabled is the precise interpretation of what she said in Committee? It is, therefore, clear that she herself did not understand the subsection with which she was dealing.
    Miss Pitt: No, I cannot accept that. I dealt with the point raised at the time and that related to the main purpose of this subsection. The hon. Gentleman has led us on with his Amendment to a minor point which again I have now explained to the House.
    Amendment negatived.
    Mr. Ian Mikardo: I beg to move, in page 13, line 8, at the end to insert:
    (9) For the purposes of this section no superannuation scheme shall be a scheme for equivalent pension benefits which excludes or

    749
    purports to exclude any person from qualifying for retirement benefits by way of pension if and so long as he is a member of a trade union.
    This is a simple point which, I should think, will arouse no controversy because I cannot imagine that the right hon. Gentleman will find it difficult to accept this Amendment; nor can I imagine that any hon. Member opposite would wish to oppose it. The simple point is that since it seems clear that the employer will have the right to do the selection, so to speak, of alternative schemes, he should not be able to select a scheme which discriminates against trade unionists in his employment.
    I should be out of order if I attempted to anticipate an Amendment standing in the name of the right hon. Gentleman, which we are to discuss later, and I therefore content myself by merely saying that even if that Amendment were passed it would not alter the basic fact that the final decision might be made against the views and desires of employees. That would make it doubly serious if a scheme were in operation and were recognised which did discriminate against members of a trade union on the ground of their membership of a trade union and on no other ground.
    There is already a quite widely used superannuation scheme—widely used in the engineering industry, at any rate—which is an estimable scheme in very many ways and has, as far as I can see, only one thing wrong with it, namely, that its constitution provides that benefits derived from this scheme may not be paid to any member who is a member of a trade union. It is a membership organisation. Membership of it is denied to a member of a trade union. and if a member of the superannuation society becomes a member of a trade union, he is ipso facto required to resign from and lose all his benefits in the superannuation society.
    It is clear that that sort of arrangement and that comparatively small scheme could be extended. Its provisions could be extended so as to make itself, so to speak, a candidate for being treated as an alternative to the national scheme. Hon. Members opposite have very often paid tribute—and we have been glad to hear it—to the trade union movement, and have said how valuable
    750
    it is to have a responsible trade union movement.
    Nothing infuriates trade unionists today more than this kind of discrimination. It smacks of the first half of the nineteenth century, not of the second half of the twentieth century. It would be quite out of keeping with the spirit of the times and with attempts to put forward progressive legislation if anything of the sort were to stand.
    I do not know whether the sponsors of the particular scheme 1 have mentioned would desire to have it treated as an alternative. If they did, they could presumably make such alterations in their arrangements as were required to make the scheme a candidate for consideration as a scheme for equivalent pension benefits. It is to guard against those dangers that my right hon. Friends and hon. Friends and I have put down this Amendment.
    I am sure that the Minister himself would have provided for this condition to be put in the Bill if the thought had occurred to him. We are very glad to be of service in bringing the matter forward since the thought has not occurred to him. I have never been so confident of the Government accepting an Amendment moved from the Opposition benches as I am in this case.
    Mr. B. T. Parkin: I beg to second the Amendment.
    I have very little to add to what my hon. Friend the Member for Reading (Mr. Mikardo) has said. He thought that the Minister would, no doubt, accept the Amendment and suggested that the thought might well not have passed through his mind if his attention had not been called to the fact that there is at least one scheme in existence of the kind referred to by my hon. Friend. Anyone looking at the Notice Paper might well ask why people are wasting their time putting down an Amendment like this because no one in his right mind would draw up such a scheme which contained the condition about which the House has been told.
    That is the situation, however. It is understandable, and this is no time to argue the merits of the other society's scheme. It is, at least, understandable that, generations ago, it was thought right to try to keep a certain category

    751
    of worker outside the conflicts which often took place between employees and management. But the whole trend of climate and opinion in these days has changed very much. Every political party urges each one of its members to belong to a trade union if he possibly can. Every political party recognises that the trade union movement as a whole is an integral and accepted part of our whole life and the wise administration of government in this country. Every political party admits that if we are to have more productivity, greater efficiency and better understanding in industry these things can come only through a better measure of understanding throughout industry.
    This old notion is a hang-over from the past. Now that there has to be an answer "Yes" or "No", we should like to have an assurance on this matter of quite important principle, and we ask the Minister to accept the Amendment and to ensure, in due course, that the Registrar and those responsible for seeing through the new scheme will be in tune with what one can claim to be unanimous public opinion.
    Mr. Boyd-Carpenter: First, I congratulate the hon. Member for Reading (Mr. Mikardo) on moving an Amendment in a debate which hitherto has somewhat resembled a closed shop confined to former members of Standing Committee A, and also on his ingenuity in bringing into our discussions on the National Insurance Bill his concern, which I know he has pursued in other directions on a number of occasions, in regard to a particular friendly society. I am the more sorry that the confidence which he expressed, I am sure, with complete sincerity, that his Amendment had but to be moved to be accepted proves to be unfounded.
    It is the fact, of course, that National Insurance has under all Governments not been used or not been allowed to be used as a vehicle for the regulation of industrial relations, however desirable such regulation might be. That has been the fact under all Governments, and it would be a very serious innovation to introduce into the contracting-out provisions relating to National Insurance a provision of this kind.
    752
    9.30 p.m.
    The House will, I think, realise that when I point out that a provision of this kind is certainly not the only unfortunate or invidious condition that one could imagine. If we were to use the contracting-out provisions of this Bill in order to regulate a certain aspect of industrial relations—I suggest to the House that that would be a most unfortunate departure from practice in National Insurance—we could not stop here. We should have to take the case, no doubt, of schemes which refuse entry to people on grounds of colour, race—[HON. MEMBERS: "Hear, hear."]—political views—[HON. MEMBERS: "Hear, hear."]—or for not being trade unionists. I notice that hon. Members do not cheer that. The fact remains that though they cheered the earlier, not the last, example, the only one which they picked out is this one.
    The fact that that has never been done, not only in respect of this particular category—I agree with the hon. Member for Reading it is very rare; there is only one friendly society which he has in mind and which I also have in mind—but that none of the others has ever been put forward in this context in all our long discussions of this Bill, I think is an indication that those who have been very much concerned over many years with National Insurance questions have accepted the view I put a few moments ago, that this is not really the right method of dealing with this problem.
    May I put it to the hon. Member for Reading in another way? If he feels that he would like to use this method to deal with the practice which he deplores, it is, of course, a singularly ineffective method. It would not affect any scheme unless that scheme applied to contract out. That, I think, discloses that this is really an attempt to deal with the matter by a back way, on a side issue.
    We are not concerned in a National Insurance Bill to regulate private schemes, still less to regulate industrial relations, save in so far as it is necessary to do so to secure the objective that those who are contracted out shall be secured a pension at least as good as they would have had if they had not been contracted out. That is the limit

    753
    to which we are, I think, entitled to go on this Measure in regulating and dealing with private pension schemes.
    Those hon. Members who were in the Standing Committee will recall that we discussed this in another context more than once and that I did make the point that though there may well be a case for considering further control over private pensions schemes, a National Insurance Bill is not the vehicle for it, nor is the Minister of National Insurance the Minister departmentally concerned. We have, therefore, gone only as far as we have in this Bill, in allowing this provision for contracting out, in order, as we have said time and again, to secure a proper future for the expansion of the private schemes in the case of those who prefer them, we should not seek to go further and to control or regulate the private schemes.
    What really the hon. Gentleman is, with characteristic ingenuity, trying to do by this Amendment is to seek to legislate for the one aspect of the private schemes, in a Bill which is neither intended nor suitable for the purpose, and to do so by a method which could be frustrated if the scheme in question did not apply to contract out. As far as I know, the scheme as it stands at present would not be eligible to contract out and the Amendment really is unlikely to affect it in that way.
    Therefore, whilst I congratulate the hon. Member on his ingenuity, I would point out to him that if we were to seek to use the Bill to regulate private schemes and deal with any other discriminations, which the House has agreed are at least as serious as those to which the hon. Member refers, we should have to go a great deal further than the hon. Member proposes. The fact that he has not proposed that illustrates and underlines that this is neither the right place nor the right time to seek to deal with the problem, and I must recommend to the hon. Member that if he wishes to pursue that matter it is not with a National Insurance Bill nor with a Minister of National Insurance that he should concern himself.
    Mr. Grossman: Unlike my hon. Friend the Member for Reading (Mr. Mikardo). I was not surprised by the
    754
    Minister turning this Amendment down, because we had heard him in Committee and had realised that his view on contracting out and ours differs in one basic particular. The right hon. Gentleman seems to think of contracting out as something which should be made as easy as possible, something solely concerned with seeing that as many private schemes as possible carry on, with no new kind of obligation imposed upon them.
    The right hon. Gentleman did not deal with my hon. Friend at all. The issue that we on this side of the House raise is a great issue of principle, because never in the history of National Insurance have we permitted private employers to undertake what is an essential part of a State social welfare service. In future, after this Bill, there will be imposed for the first time on certain private employers the job of providing part of the old-age pension of millions of people. Part of the State old-age pension is to be provided by them. Therefore, the expression "contracting out" is highly misleading. We should talk about contracting into a grave obligation. Unlike the Minister, we feel that we should make it difficult to contract out for any employer who does not undertake to set the highest possible standard.
    The real parallel here is with the State's traditional attitude to giving contracts. If one gives contracts to employers one seeks to encourage a high standard of behaviour by the employers, and one does not think it outrageous of the State to insert into contracts clauses by which employers must behave decently. It is not at all outrageous to suggest that when employers have the privilege of contracting out and taking over part of the responsibility they should be told that they will not be allowed to contract out if, for instance, they indulge in racial discrimination. It is outrageous that it should be suggested by the Minister that the Registrar should be permitted by him, under regulations, to allow a friendly society or an employer to contract out even if there is racial discrimination.
    We have moved the Amendment because we knew of the case which has been mentioned and we said, "Let us test the Minister and let us see whether

    755
    he understands the job we have to do with employers in expecting a certain standard from them when they contract out." The same applies to widows. We believe that it should be laid down as one condition governing contracting out that schemes should be compelled to provide not less than the pitiable widow's benefit provided by the Minister's scheme, but the Joint Parliamentary Secretary says, "Not at all." We shall want to make it difficult for 90 per cent, of employers. We believe that the 90 per cent, of employers are not doing the duty which they should be doing of providing a widow's benefit in addition to the ordinary benefit.
    In the same way, we say that we believe it would be useful if this miserable Bill did one thing; if it set a certain standard in respect of conditions of contracting out. We think that the Registrar should be instructed in the Bill not to give a certificate for any schemes
    which discriminated against trade unionists. We have had a useful debate, for we have had here confirmed in the rather more public position on the Floor of the House what we all learned upstairs—the extraordinary failure of the Minister to appreciate the gravity of the principle of contracting out.
    We would have liked the right hon. Gentleman to set a standard to employers. We would have liked him to impress on employers that, so far from making it easy, we want to make it difficult for an employer other than a good employer to take this obligation on instead of the State. Therefore, I have no hesitation in advising my right hon. and hon. Friends, if the Minister refuses to give way, to go into the Lobby on this Amendment.
    Question put, That those words be there inserted in the Bill: —
    The House divided: Ayes 163, Noes 198.

    Division No. 121.]

    AYES

    [9.41 p.m.

    Ainsley, J. W.

    Gibson, C. W.

    Mahon, Simon

    Allaun, Frank (Salford, E.)

    Greenwood, Anthony

    Mann, Mrs. Jean

    Allen, Arthur (Bosworth)

    Grenfell, Rt. Hon. D. R.

    Marquand, Rt. Hon. H. A.

    Allen, Scholefield (Crewe)

    Grey, C. F.

    Mayhew, C. P.

    Awbery, S. S.

    Griffiths, David (Rother Valley)

    Mikardo, Ian

    Bacon, Miss Alice

    Griffiths, Rt. Hon. James (Llanelly)

    Mitchison, G. R.

    Bence, C. R. (Dunbartonshire, E.)

    Griffiths, William (Exchange)

    Moody, A. S.

    Benn, Hn. Wedgwood (Bristol, S.E.)

    Hale, Leslie

    Morris, Percy (Swansea, W.)

    Blackburn, F.

    Hamilton, W. W.

    Morrison,Rt.Hn.Herbert(Lewis'm,S.)

    Blenkinsop, A.

    Hannan, W.

    Mort, D. L.

    Blyton, W. R.

    Hayman, F. H.

    Moss, R.

    Boardman, H.

    Henderson, Rt. Hn. A. (Rwly Regis)

    Moyle, A.

    Bowden, H. W. (Leicester, S.W.)

    Herbison, Miss M.

    Neal, Harold (Bolsover)

    Bowles, F. G.

    Hobson, C. R. (Keighley)

    Noel-Baker, Francis (Swindon)

    Braddock, Mrs. Elizabeth

    Holman, P.

    Noel-Baker, Rt. Hon. P. (Derby,S.)

    Brockway, A. F.

    Houghton, Douglas

    Oram, A. E.

    Brown, Thomas (Ince)

    Howell, Denis (All Saints)

    Oswald, T.

    Butler, Herbert (Hackney, C.)

    Hoy, J. H.

    Owen, W. J.

    Butler, Mrs. Joyce (Wood Green)

    Hughes, Cledwyn (Anglesey)

    Padley, W. E.

    Callaghan, L. J.

    Hughes, Emrys (S. Ayrshire)

    Paget, R. T.

    Carmichael, J.

    Hughes, Hector (Aberdeen, N.)

    Palmer, A. M. F.

    Castle, Mrs. B. A.

    Hunter, A. E.

    Pargiter, G. A.

    Champion, A. J.

    Irvine, A. J. (Edge Hill)

    Parker, J.

    Chapman, W. D.

    Irving, Sydney (Dartford)

    Parkin, B. T.

    Coldrick, W.

    Isaacs. Rt. Hon. G. A.

    Paton, John

    Collick, P. H. (Birkenhead)

    Jay, Rt. Hon. D. P. T.

    Plummer, Sir Leslie

    Corbet, Mrs. Freda

    Jeger, George (Goole)

    Popplewell, E.

    Crossman, R. H. S.

    Jenkins, Roy (Stechford)

    Price, J. T. (Westhoughton)

    Cullen, Mrs. A.

    Johnson, James (Rugby)

    Price, Philips (Gloucestershire, W.)

    Darling, George (Hillsborough)

    Jones, Elwyn (W. Ham, S.)

    Probert, A. R.

    Davies, Harold (Leek)

    Kenyon, C.

    Pursey, Cmdr. H.

    Davies, Stephen (Merthyr)

    Key, Rt. Hon. C. W.

    Randall, H. E.

    Deer, G.

    King, Dr. H. M.

    Rankin, John

    Diamond, John

    Lawson, G. M.

    Redhead, E. C.

    Dodds, N. N.

    Lee, Frederick (Newton)

    Reynolds, G. W.

    Ede, Rt. Hon. J. C.

    Lee, Miss Jennie (Cannock)

    Roberts, Albert (Normanton)

    Edelman, M.

    Lever, Leslie (Ardwick)

    Roberts, Goronwy (Caernarvon)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Lewis, Arthur

    Rogers, George (Kensington, N.)

    Edwards, Robert (Bilston)

    Lindgren, G. S.

    Royle, C.

    Evans, Albert (Islington, S.W.)

    Logan, D. G.

    Silverman, Julius (Aston)

    Finch, H. J. (Bedwellty)

    McAlister, Mrs. Mary

    Simmons, C. J. (Brierley Hill)

    Fitch, A. E. (Wigan)

    McCann, J.

    Skeffington, A. M.

    Fletcher, Eric

    MacColl, J. E.

    Slater, Mrs. H. (Stoke, N.)

    Foot, D. M.

    McKay, John (Wallsend)

    Slater, J. (Sedgefield)

    Fraser, Thomas (Hamilton)

    McLeavy, Frank

    Smith, Ellis (Stoke, S.)

    George, Lady Megan Lloyd(Car'then)

    MacPherson, Malcolm (Stirling)

    Snow, J. W.

    757

    Sorensen, R. W.

    Taylor, Bernard (Mansfield)

    Williams, David (Neath)

    Soskice, Rt. Hon. Sir Frank

    Taylor, John (West Lothian)

    Williams, Rev. Llywelyn (Ab'tillery)

    Sparks, J. A.

    Thornton, E.

    Williams, Rt. Hon. T. (Don Valley)

    Spriggs, Leslie

    Warbey, W. N.

    Williams, W. R. (Openshaw)

    Stewart, Michael (Fulham)

    Watkins, T. E.

    Woof, R. E.

    Stones, W. (Consett)

    Weitzman, D.

    Yates, V. (Ladywood)

    Strachey, Rt. Hon. J.

    Wheeldon, W. E.

    Zilliacus, K.

    Summerskill, Rt. Hon. E.

    White, Mrs. Eirene (E. Flint)

    Sylvester, G. O.

    Willey, Frederick

    TELLERS FOR THE AYES:

    Mr. Pearson and Mr. Wilkins.

    NOES

    Agnew, Sir Peter

    Grimond, J.

    Medlicott, Sir Frank

    Aitken, W. T.

    Grimston, Hon. John (St. Albans)

    Milligan, Rt. Hon. W. R.

    Allan, B. A. (Paddington, S.)

    Grimston, Sir Robert (Westbury)

    Molson, Rt. Hon. Hugh

    Amory, Rt.Hn. Heathcoat (Tiverton)

    Gurden, Harold

    Morrison, John (Salisbury)

    Arbuthnot, John

    Hall, John (Wycombe)

    Nairn, D. L. S.

    Armstrong, C. W.

    Harris, Reader (Heston)

    Neave, Airey

    Ashton, H.

    Harrison, Col. J. H. (Eye)

    Nicholson, Sir Godfrey (Farnham)

    Atkins, H. E.

    Harvey, Sir Arthur Vere (Macclesf'd)

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Balniel, Lord

    Harvey, John (Walthamstow, E.)

    Noble, Michael (Argyll)

    Barber, Anthony

    Hay, John

    Oakshott, H. D.

    Barlow, Sir John

    Heald, Rt. Hon. Sir Lionel

    O'Neill, Hn. Phelim (Co. Antrim,N.)

    Barter, John

    Heath, Rt. Hon. E. R. G.

    Osborne, C.

    Batsford, Brian

    Hesketh, R. F.

    Page, R. G.

    Baxter, Sir Beverley

    Hill, Rt. Hon. Charles (Luton)

    Pannell, N. A. (Kirkdale)

    Bell, Philip (Bolton, E.)

    Hill, Mrs. E. (Wythenshawe)

    Partridge, E.

    Bell, Ronald (Bucks, S.)

    Hirst, Geoffrey

    Pike, Miss Mervyn

    Bennett, F. M. (Torquay)

    Holland-Martin, C. J.

    Pilkington, Capt. R. A.

    Bidgood, J. C.

    Hope, Lord John

    Pitt, Miss E. M.

    Biggs-Davison, J. A.

    Hornby, R. P.

    Powell, J. Enoch

    Bingham, R. M.

    Hornsby-Smith, Miss M. P.

    Price, David (Eastleigh)

    Bishop, F. P.

    Horobin, Sir Ian

    Price, Henry (Lewisham, W.)

    Body, R. F.

    Hughes-Young, M. H. C.

    Profumo, J. D.

    Bonham Carter, Mark

    Hutchison, Michael Clark(E'b'gh, S.)

    Rawlinson, Peter

    Bossom, Sir Alfred

    Hylton-Foster, Rt. Hon. Sir Harry

    Redmayne, M.

    Bowen, E. R. (Cardigan)

    Iremonger, T. L.

    Rees-Davies, W. R.

    Boyd-Carpenter, Rt. Hon. J. A.

    Irvine, Bryant Godman (Rye)

    Renton, D. L. M.

    Brewis, John

    Jenkins, Robert (Dulwich)

    Ridsdale, J. E.

    Bromley-Davenport, Lt.-Col. W. H.

    Jennings, j. c. (Burton)

    Rippon, A. G. F.

    Brooman-White, R. C.

    Jennings, Sir Roland (Hallam)

    Roper, Sir Harold

    Browne, J. Nixon (Craigton)

    Johnson, Dr. Donald (Carlisle)

    Scott-Miller, Cmdr. R.

    Bullus, Wing-commander E. E.

    Johnson, Eric (Blackley)

    Sharples, R. C.

    Burden, F. F. A.

    Kerby, Capt. H. B.

    Shepherd, William

    Chichester-Clarke, R.

    Kerr, Sir Hamilton

    Simon, J. E. S. (Middlesbrough, W.)

    Cole, Norman

    Kimball, M.

    Smithers, Peter (Winchester)

    Cooke, Robert

    Kirk, P. M.

    Speir. R. M.

    Cooper-Key, E. M.

    Lambton, viscount

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Cordeaux, Lt.-Col. J. K.

    Lancaster, Col. C. G.

    Stanley, Capt. Hon. Richard

    Corfield, F. V.

    Leavey, J. A.

    Steward, Harold (Stockport, S.)

    Craddock, Beresford (Spelthorne)

    Leburn, W. G.

    Stoddart-Scott, Col. Sir Malcolm

    Crosthwaite-Eyre, Col. O. E.

    Legge-Bourke, Maj. E. A. H.

    Storey, S.

    Crowder, Sir John (Finchley)

    Legh, Hon. Peter (Petersfield)

    Studholme, Sir Henry

    Cunningham, Knox

    Lindsay, Hon. James (Devon, N.)

    Summers, Sir Spencer

    Currie, G. B. H.

    Lindsay, Martin (Solihull)

    Taylor, Sir Charles (Eastbourne)

    Dance, J. C. C.

    Linstead, Sir H. N.

    Thomas, Leslie (Canterbury)

    Deedes, W. F.

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Thomas, P. J. M. (Conway)

    de Ferranti, Basil

    Loveys, Walter H.

    Thompson, Kenneth (Walton)

    Dodds-Parker, A. D.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Thornton-Kemsley, Sir Colin

    Donaldson, Cmdr. C. E. McA.

    Lucas-Tooth, Sir Hugh

    Tiley, A. (Bradford, W.)

    Doughty, C. J. A.

    McAdden, S. J.

    Turton, Rt. Hon. R. H.

    du Cann, E. D. L.

    Macdonald, Sir Peter

    Vane, W. M. F.

    Emmet, Hon. Mrs. Evelyn

    Maclean, Sir Fitzroy (Lancaster)

    Vickers, Miss Joan

    Errington, Sir Eric

    McLean, Neil (Inverness)

    Vosper, Rt. Hon. D. F.

    Farey-Jones, F. W.

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Wade, D. W.

    Finlay, Graeme

    McMaster, Stanley

    Wakefield, Sir Wavell (St. M'lebone)

    Fisher, Nigel

    Macmillan, Rt.Hn.Harold(Bromley)

    Wall, Patrick

    Fletcher-Cooke, C.

    Macpherson, Niall (Dumfries)

    Ward, Rt. Hon. G. R. (Worcester)

    Freeth, Denzil

    Maitland, Cdr.J.F.W.(Horncastle)

    Ward, Dame Irene (Tynemouth)

    Gammans, Lady

    Maitland, Hon. Patrick (Lanark)

    Webbe, Sir H.

    Garner-Evans, E. H.

    Manningham-Buller, Rt. Hn. Sir R.

    Webster, David

    George, J. C. (Pollok)

    Markham, Major Sir Frank

    Whitelaw, W. S. I.

    Gibson-watt, D.

    Marlowe, A. A. H.

    Williams, R. Dudley (Exeter)

    Glover, D.

    Marples, Rt. Hon. A. E.

    Wills, Sir Gerald (Bridgwater)

    Glyn, Col. Richard H.

    Marshall, Douglas

    Wilson, Geoffrey (Truro)

    Graham, Sir Fergus

    Mathew, R.

    Woollam, John Victor

    Grant, Rt. Hon. W. (Woodside)

    Maudling, Rt. Hon. R.

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Mawby, R. L.

    TELLERS FOR THE NOES:

    Gresham Cooke, R.

    Maydon, Lt.-Comdr. S. L. C.

    Mr. Edward Wakefield and

    Mr. Bryan.

    Clause 9.—(FURTHER PROVISIONS AS TO PAYMENTS IN LIEU OF CONTRIBUTIONS.)
    Miss Pitt: I beg to move, in page 16, line 16, after the first "of", to insert:
    "or as to the graduated contributions attributable to".
    This is a technical Amendment to remedy a small drafting omission in the Bill. It deals with the case of someone who continues in work in contracted-out employment after minimum retiring age. When he leaves that work, if for some reason—it would be a very unusual case—the pension earned in the contracted-out employment were not paid, then a payment in lieu to the National Insurance fund would become due. Under the Bill that payment in lieu would be translated into contributions paid at the maximum rate for the whole of the years of the contracted-out employment whereas the payment that we should receive would cover only the years up to the age of 65, the age of entitlement to pension.
    As I said, such an occasion would be very rare, but the effect of the Amendment in these circumstances would be that the graduated contributions credited would be treated as covering the exact period for which the payment in lieu was calculated. I hope the House will accept the Amendment.
    Amendment agreed to.

    Clause 13.—(ADJUDICATION AND ADMINISTRATION.)
    Mr. Boyd-Carpenter: I beg to move, in page 20, line 44, at the end to insert:
    (c) for enabling the registrar to defer the issue or variation of such a certificate so as to enable the relevant election to be further considered in the light of any representations made by persons to whom notice of the election is required by regulations to be given or by organisations representing any such persons.
    This Amendment was put down as the result of a discussion in Committee and to meet an undertaking which I gave there. We had a debate upstairs on the situation which might arise in the event of an application for a certificate for contracting out by an employer being objected to, or opposed by, a number of his employees. We had a very wide-ranging discussion on the general principles involved. There was some fundamental difference as to whether the
    760
    ultimate decision being with the employer was a view which could and should be sustained.
    I am satisfied that the only practical method of handling this problem is for the application to be made by the employer, and, as I said in Committee and as was generally agreed in Committee, it is not only obvious that no sane employer would decide to press the matter against the wishes of a substantial number of his employees, but it is also a matter in which the normal process of industrial discussion and negotiation should take place.
    In Committee, the point was put to me that that process of discussion and negotiation might not be able to take place once an application had been made to the Registrar, if the Registrar on such application felt that he had no discretion but forthwith to issue a certificate. It is our desire that there should be time for discussion and reflection. On examining the text of the Bill, it seemed clear that the doubt which I expressed in Committee as to the effect of the Bill as framed was well-founded, in other words, under the Bill as it stands, if the conditions prescribed are in fact satisfied, the Registrar will have no option but forthwith to issue a certificate.
    In implementation of the undertaking which I gave, I have put down this Amendment, which will make it quite clear that in these circumstances the Registrar has power to defer the grant of a certificate so as to allow those processes of discussion between employers and employed to take place. I think myself, and I think that it was generally the view of the Committee, that it is extremely unlikely that any serious division of opinion will arise at this stage.
    As the House will be aware, before an employer applies to the Registrar for a certificate, under conditions to be prescribed under regulations to be made under the Bill, he will have to give notice of his intention to those concerned. That will give them a chance to express a view and for discussions to take place.
    As I have said on several occasions during our discussions, pension schemes are regarded by sensible employers as part and parcel of industrial relations,

    761
    and the last thing that any sensible employer would want in this connection is to do something which would cause trouble, difficulty and disagreement among those whom he employed.
    The situation with which the Amendment is designed to deal will therefore be rare, but I think on further consideration that it is wise to provide for it and to give the Registrar the flexibility and freedom of manoeuvre which will enable him to defer his decision on the certificate when he is made aware of the fact that there is a difference of opinion. That is what the words of the Amendment are designed to do, and I am advised, in fact do.
    Mr. Crossman: The Amendment uses the words:
    "relevant election to be further considered".
    Does that mean to be further considered by the Registrar?
    Mr. Boyd-Carpenter: It is clear that the purpose of the deferment is to allow the election to be considered by the parties.
    Mr. Crossman: Even at this late hour, I think that we should spend a few minutes on this Clause. I want, first, to thank the Minister for keeping his word and for carrying out as far as he possibly could the undertaking which he gave in Committee. However, as he said, he has been prepared to make a concession on an issue on which there was a fundamental difference between the two sides of the Committee and which was also mentioned on Second Reading. You will recall, Mr. Speaker, that the question of what we call "the right of option" for those contracting out for the individual was a matter which was raised on Second Reading and which was clearly of major importance.
    My hon. Friends and I are in some difficulty because, while not questioning your wisdom, Mr. Speaker, you decided not to call an Amendment on which we would have raised the issue of Clause 12. I must point out to the House that it is Clause 12 which gives the employer the sole right of election. The Minister was very candid about it. As the Bill stands, it is the employer who decides whether to apply for the certificate and it is on the employer's application that the Registrar decides.
    762
    Although I appreciate what the Minister has done—he has written in some slight further guarantees and has guaranteed that there will be a postponement if there is positive evidence of grave dissatisfaction in an industry—the further consideration is to be by the parties concerned and our difficulty is that the employer will still have the final decision. What we are seeking is the right of joint decision.
    In this connection, I must say that the Committee stage of the Bill was of very great value to us. It enabled us to think out the matter and to see how extremely difficult is the matter of contracting out and of permitting the right of option. Some people—I was certainly one—two or three years ago started with the view that we should insist on the individual being permitted complete freedom to opt in and out of State or private schemes as often as he liked. I think we have been convinced that the type of individual who was to-ing and fro-ing would do it in a State scheme or a private scheme. That kind of individual idiosyncrasy could not be tolerated in any rational scheme of superannuation.
    10.0 p.m.
    Equally, we have managed to convince the Minister that merely to give the employer the right of election is a grave risk. I shall come later to deal with the kind of business about which I think the Minister is rather optimistic. It is not only the employer. There are other classes which lay down the right of being in or out of a scheme. In the Civil Service, for example, a Minister can be appointed to decide for all the employees of the Department. Whether school teachers are to be in or out is to be decided not by the school teachers or local authorities, but by the fiat of one Minister. Whether all Ministry of Health officials and anybody working with the Ministry of Health are to be in or out is to be decided by the Ministry of Health, or the Minister of Health.
    This is an extreme concentration of decision. The fact that in the Amendment the Minister has tried to come some way to our side shows that we have persuaded him that it was an extremely dangerous thing to give this tremendous power of decision on contracting out. On the other hand, we have come towards

    763
    the Minister in one particular. I recognise that it is not practicable to say that the first decision shall not be that of the employer. After all, it is his scheme and his money, and he has ultimately to decide. In putting it informally to the Minister it may be sensible to say that there should be no right of consultation or ballot unless and until after an interval there has been evidence of dissatisfaction among those in the scheme.
    I appreciate the thought the Minister has given to this matter, but nevertheless he grossly underestimates the possible differences between employee and employer for one simple reason. The Minister talks as though the interests of all employers will be identical, but the more we study the Bill the more we realise that, by and large, the better off employee would be interested in contracting out and the worse off employee would be interested in contracting in, and there would be a wide band where it would be doubtful whether it was in the interests of the employee to be in a Government scheme or a private scheme. This is part of the trouble of the Government plan. There will be this wide band of workpeople, stretching from the £9 to £12 a week level, where it may be extremely difficult to tell whether it is in the interests of a group of employees to be in or out.
    Let me consider the position in a firm grading down from £15 to £8 a week. I must emphasise to the House that the employer will have the power to say: "You in; you out; you in; you out". It will not be a single decision of all in or all out. The employer will have the power to adjudicate between individual employees or groups of employees being in or out. I think the Minister will agree that I am fairly interpreting the meaning of his Act.
    Mr. Boyd-Carpenter: The hon. Gentleman has referred to the right of the employer to adjudicate, but the necessary conditions for contracting out include the provision that such a man must have preserved to him the right, if he is contracting out, of the equivalent to the money earned in the State scheme over the period.
    Mr. Crossman: The scheme has the conditions laid down in the Act, but I
    764
    have consulted actuaries, and situations will arise where it will be difficult for employers to decide whether it is best to have their employees in or out. It has been made clear that the interests of the employer may by no means coincide with the interests of the employee as to whether they are inside or outside the State scheme. It is that kind of problem where we feel that something better than merely saying that discussions must take place is essential. For the first time we are giving private employers the right to carry out a social service previously undertaken by the State. If we give them that right and deny to those employees the benefits of the State scheme, we must be absolutely certain that they are benefited by being in the employer's scheme, and the best way of knowing that is to allow them to have the right of option.
    Although we agree that the individual right of option is hopeless, we believe it to be essential to write into the Clause an implication that the election should take place by the employer and the employee, and not merely by the employer. Although we appreciate the Minister's efforts, because we want to register our disapproval and feel that we have not got a satisfactory solution on this vital issue, I advise my hon. Friends to record their vote in the Lobby if the Minister does not give way.
    Mr. Mikardo: I intervene to utter only one sentence. I would point out to the right hon. Gentleman that half an hour ago he made a case against my Amendment on the ground that it was inappropriate, in a National Insurance Bill, to cover questions of industrial relations and fifteen minutes later, he made a speech arguing for his Amendment on the grounds that it was good for industrial relations; it therefore follows that if there was any validity in the right hon. Gentleman's first speech he was talking out of the back of his neck a few moments ago.
    Mr. T. Brown: It is true to say that the Minister has honoured the undertaking he gave in Committee, but if I remember rightly he then said there would be a time limit. The Amendment provides for no time limit. If the Registrar is to have the power indefinitely to withhold the issue of a certificate, or to

    765
    vary its terms, it will be to the disadvantage both of the employer and the employee. Will the Minister extend the undertaking he gave? If he will not do that, will he provide for a time limit in the regulations governing the duties of the Registrar? There should be a time limit either of six or twelve months, while negotiations are taking place. If
    it is left an open question negotiations could go on indefinitely, to the disadvantage of the State, the employer and the employee.
    Question put, That those words be there inserted in the Bill:—
    The House divided: Ayes 184, Noes 147.

    Division No. 122.]

    AYES

    [10.8 p.m.

    Agnew, Sir Peter

    Gresham Cooke, R.

    Molson, Rt. Hon. Hugh

    Aitken, W. T.

    Grimond, J.

    Morrison, John (Salisbury)

    Allan, R. A. (Paddington, S.)

    Grimston, Hon. John (St. Albans)

    Nairn, D. L. S.

    Arbuthnot, John

    Grimston, Sir Robert (Westbury)

    Neave, Airey

    Armstrong, C. W.

    Gurden, Harold

    Nicolson,N.(B'n'm'th,E.&Chr'ch)

    Ashton, H.

    Hall, John (Wycombe)

    Noble, Michael (Argyll)

    Atkins, H. E.

    Harrison, Col. J. H. (Eye)

    O'Neill, Hn.Phelim(Co. Antrim, N.)

    Balniel, Lord

    Harvey, Sir Arthur Vere (Macclesf'd)

    Osborne, C.

    Barber, Anthony

    Harvey, John (Walthamstow, E.)

    Page, R. G.

    Barlow, Sir John

    Heald, Rt. Hon. Sir Lionel

    Pannell, N. A. (Kirkdale)

    Barter, John

    Heath, Rt. Hon. E. R. G.

    Partridge, E.

    Batsford, Brian

    Hesketh, R. F.

    Pilkington, Capt. R. A.

    Baxter, Sir Beverley

    Hill, Rt. Hon. Charles (Luton)

    Pitt, Miss E. M.

    Bell, Philip (Bolton, E.)

    Hill, Mrs. E. (Wythenshawe)

    Powell, J. Enoch

    Bennett, F. M. (Torquay)

    Hirst, Geoffrey

    Price, David (Eastleigh)

    Biggs-Davison, J. A.

    Holland-Martin, C. J.

    Price, Henry (Lewisham, W.)

    Bingham, R. M.

    Hope, Lord John

    Profumo, J. D.

    Bishop, F. P.

    Hornby, R. P.

    Rawlinson, Peter

    Body, R. F.

    Hornsby-Smith, Miss M. P.

    Redmayne, M.

    Bonham Carter, Mark

    Horobin, Sir Ian

    Rees-Davies, W. R.

    Bossom, Sir Alfred

    Hughes-Young, M. H. C.

    Renton, D. L. M.

    Bowen, E. R. (Cardigan)

    Hutchison, Michael Clark(E'b'gh, S.)

    Ridsdale, J. E.

    Boyd-Carpenter, Rt. Hon. J. A.

    Hylton-Foster, Rt. Hon. Sir Harry

    Roper, Sir Harold

    Brewis, John

    Iremonger, T. L.

    Scott-Miller, Cmdr. R.

    Bromley-Davenport, Lt.-Col. W. H.

    Irvine, Bryant Godman (Rye)

    Sharples, R. C.

    Bryan, P.

    Jenkins, Robert (Dulwich)

    Shepherd, William

    Bullus, Wing Commander E. E.

    Jennings, J. C. (Burton)

    Simon, J. E. S. (Middlesbrough, W.)

    Burden, F. F. A.

    Johnson, Dr. Donald (Carlisle)

    Smithers, Peter (Winchester)

    Chichester-Clark, R.

    Johnson, Eric (Blackley)

    Speir, R. M.

    Clarke, Brig. Terence (Portsmth, W.)

    Kerby, Capt. H. B.

    Spens, Rt. Hn. Sir P. (Kens'gt'n.S.)

    Cole, Norman

    Kerr, Sir Hamilon

    Stanley, Capt. Hon. Richard

    Cooke, Robert

    Kimball, M.

    Steward, Harold (Stockport, S.)

    Cooper-Key, E. M.

    Kirk, P. M.

    Stoddart-Scott, Col. Sir Malcolm

    Cordeaux, Lt.-Col. J. K.

    Lambton, Viscount

    Storey, S.

    Corfield, F. V.

    Leavey, J. A.

    Studholme, Sir Henry

    Craddock, Beresford (Spelthorne)

    Leburn, W. G.

    Summers, Sir Spencer

    Crosthwaite-Eyre, Col. O. E.

    Legge-Bourke, Maj. E. A. H.

    Taylor, Sir Charles (Eastbourne)

    Cunningham, Knox

    Legh, Hon. Peter (Petersfield)

    Thomas, Leslie (Canterbury)

    Currie, G. B. H.

    Lindsay, Hon. James (Devon, N.)

    Thomas, P. J. M. (Conway)

    Dance, J. C. G.

    Lindsay, Martin (Solihull)

    Thompson, Kenneth (Walton)

    Deedes, W. F.

    Linstead, Sir H. N.

    Thornton-Kemsley, Sir Colin

    de Ferranti, Basil

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Tiley, A. (Bradford, W.)

    Dodds-Parker, A. D.

    Loveys, Walter H.

    Turton, Rt. Hon. R. H.

    Donaldson, Cmdr. G. E. McA.

    Lucas-Tooth, Sir Hugh

    Vane, W. M. F.

    Doughty, C. J. A.

    Macdonald, Sir Peter

    Vickers, Miss Joan

    du Cann, E. D. L.

    Maclean, Sir Fitzroy (Lancaster)

    Vosper, Rt. Hon. D. F.

    Emmet, Hon. Mrs Evelyn

    McLean, Neil (Inverness)

    Wade, D. W.

    Errington, Sir Eric

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Wakefield, Edward (Derbyshire, W.)

    Farey-Jones, F. W.

    McMaster, Stanley

    Wakefield, Sir Wavell (St. M'lebone)

    Fell, A.

    Macmillan,Rt.Hn.Harold(Bromley)

    Wall, Patrick

    Finlay, Graeme

    Macpherson, Niall (Dumfries)

    Ward, Rt. Hon. G. B. (Worcester)

    Fisher, Nigel

    Maitland, Cdr.J.F.W. (Horncastle)

    Ward, Dame Irene (Tynemouth)

    Fletcher-Coolie, C.

    Maitland, Hon. Patrick (Lanark)

    Webbe, Sir H.

    Freeth, Denzil

    Manningham-Buller, Rt. Hn. Sir R.

    Webster, David

    Gammans, Lady

    Markham, Major Sir Frank

    Williams, R. Dudley (Exeter)

    Garner-Evans, E. H.

    Marlowe, A. A. H.

    Wills, Sir Gerald (Bridgwater)

    George, J. C. (Pollok)

    Marples, Rt. Hon. A. E.

    Wilson, Geoffrey (Truro)

    Gibson-Watt, D.

    Mathew, R.

    Woollam, John Victor

    Glover, D.

    Maudling, Rt. Hon. R.

    Glyn, Col. Richard H.

    Mawby, R. L.

    TELLERS FOR THE AYES:

    Graham, Sir Fergus

    Maydon, Lt-Comdr. S. L. C.

    Mr. Brooman-White and

    Grant, Rt. Hon. W. (Woodside)

    Medlicott, Sir Frank

    Mr. Whitelaw.

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Milligan, Rt. Hon. W. R.

    NOES

    Ainsley, J. W.

    Hamilton, W. W.

    Palmer, A. M. F.

    Allaun, Frank (Salford, E.)

    Hannan, W.

    Pargiter, G. A.

    Allen, Arthur (Bosworth)

    Hayman, F. H.

    Parker, J.

    Allen, Scholefield (Crewe)

    Henderson, Rt. Hn. A. (Rwly Regis)

    Paton, John

    Awbery, S. S.

    Herbison, Miss M.

    Plummer, Sir Leslie

    Bacon, Miss Alice

    Hobson, C. R. (Keighley)

    Popplewell, E.

    Bence, C. R. (Dunbartonshire, E.)

    Holman, P.

    Price, J. T. (Westhoughton)

    Benn, Hn. Wedgwood (Bristol, S.E.)

    Houghton, Douglas

    Price, Philips (Gloucestershire, W.)

    Blackburn, F.

    Howell Denis (All Saints)

    Probert, A. R.

    Blenkinsop, A.

    Hoy J. H.

    Pursey, Cmdr. H.

    Blyton, W. R.

    Hughes Cledwyn (Anglesey)

    Randall, H. E.

    Boardman, H.

    Hughes Emrys (S. Ayrshire)

    Redhead, E. C.

    Bowden, H. W. (Leicester, S.W.)

    Hughes, Hector (Aberdeen, N.)

    Reynolds, G. W.

    Bowles, F. G.

    Hunter, A. E.

    Roberts, Goronwy (Caernarvon)

    Braddock, Mrs. Elizabeth

    Irvine, A. J. (Edge Hill)

    Rogers, George (Kensington, N.)

    Brockway, A. F.

    Irving, Sydney (Dartford)

    Silverman, Julius (Aston)

    Brown, Thomas (Ince)

    Jay, Rt. Hon. D. P. T.

    Skeffington, A. M.

    Butler, Mrs. Joyce (Wood Green)

    Jeger, George (Goole)

    Slater, Mrs. H. (Stoke, N.)

    Carmichael, J.

    Jenkins, Roy (Stechford)

    Slater, J. (Sedgefield)

    Castle, Mrs. B. A.

    Johnson, James (Rugby)

    Smith, Ellis (Stoke, S.)

    Champion, A. J.

    Jones, Elwyn (W. Ham, S.)

    Snow, J. W.

    Chapman, W. D.

    Kenyon, C.

    Sorensen, R. W.

    Coldrick, W.

    King, Dr. H. M.

    Soskice, Rt. Hon. Sir Frank

    Collick, P. H. (Birkenhead)

    Lawson, G. M.

    Sparks, J. A.

    Crossman, R. H. S.

    Lee, Frederick (Newton)

    Spriggs, Leslie

    Cullen, Mrs. A.

    Lever, Leslie (Ardwick)

    Stewart, Michael (Fulham)

    Davies, Harold (Leek)

    Lewis, Arthur

    Stonehouse, John

    Davies, Stephen (Merthyr)

    Lindgren, G. S.

    Stones, W. (Consett)

    Deer, G.

    Logan, D. G.

    Strachey, Rt. Hon. J.

    Diamond, John

    McAlister, Mrs. Mary

    Summerskill, Rt. Hon. E.

    Dodds, N. N.

    McCann, J.

    Sylvester, G. O.

    Ede, Rt. Hon. J. C.

    MacColl, J. E.

    Taylor, Bernard (Mansfield)

    Edelman, M.

    McKay, John (Wallsend)

    Taylor, John (West Lothian)

    Edwards, Rt. Hon. Nest (Caerphilly)

    MacPherson, Malcolm (Stirling)

    Thornton, E.

    Edwards, Robert (Bilston)

    Mahon, Simon

    Warbey, W. N.

    Evans, Albert (Islington, S.W.)

    Mann, Mrs. Jean

    Watkins, T. E.

    Finch, H. J. (Bedwellty)

    Marquand, Rt. Hon. H. A.

    Weitzman, D.

    Fitch, A. E. (Wigan)

    Mayhew, C. P.

    Wheeldon, W. E.

    Fletcher, Eric

    Mikardo, Ian

    White, Mrs. Eirene (E. Flint)

    Foot, D. M.

    Mitchison, G. R.

    Wilkins, W. A.

    Fraser, Thomas (Hamilton)

    Moody, A. S.

    Willey, Frederick

    George, Lady Megan Lloyd(Car'then)

    Morris, Percy (Swansea, W.)

    Williams, David (Neath)

    Gibson, C. W.

    Moyle, A.

    Williams, Rev. Llywelyn (Ab'tillery)

    Greenwood, Anthony

    Noel-Baker, Francis (Swindon)

    Williams, W. R. (Openshaw)

    Grenfell, Rt. Hon. D. R,

    Noel-Baker, Rt. Hon. P. (Derby, S.)

    Woof, R. E.

    Grey, C. F.

    Oram, A. E.

    Yates, V. (Ladywood)

    Griffiths, David (Rother Valley)

    Oswald, T.

    Zilliacus, K.

    Griffiths, Rt. Hon. James (Llanelly)

    Owen, W. J.

    Griffiths, William (Exchange)

    Padley, W. E.

    TELLERS FOR THE NOES:

    Hale, Leslie

    Paget, R. T.

    Mr. Pearson and Mr. Simmons.

    Mr. Deputy-Speaker (Sir Charles MacAndrew): The last Amendment, in the name of the hon. Member for Motherwell (Mr. Lawson), has not been selected by Mr. Speaker. Third Reading, what day?
    Mr. Lawson: On a point of order. The Amendment in my name deals with a matter which is most important to Scotland. The Bill is an insult to Scotland and—
    Mr. Deputy-Speaker: Order. Mr. Speaker has not selected that Amendment.
    Mr. Lawson: Further to that point of order. How are we who are Scottish Members of Parliament to deal with a Measure which deliberately insults Scotland? Are we not allowed to put this matter right?
    Mr. Deputy-Speaker: Not tonight, anyway.
    Bill to be read the Third time Tomorrow.

  HIGHLANDS AND ISLANDS (ELECTRIFICATION)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Legh.]
  10.17 p.m.
  Mr. J. Grimond: We have all too little opportunity to discuss any nationalised industry in Parliament. Indeed, these industries were brought under public control before there were any plans for exercising that control effectively. Until some other system of running these industries is devised it is the duty of Members of Parliament both to examine the performance of those industries and to represent the views of our constituents concerning them. It is desirable to give publicity to what those industries have been doing and intend to do, and in cases such as electricity, where there are difficulties for some people who require it, to discuss the help that should be given. I want, therefore, tonight to discuss electricity in the North of Scotland and to give the Government an opportunity of explaining what form that help can take.
  An Adjournment debate is an inadequate way of doing this, but it is the only way open to a backbencher. Therefore, I am taking this opportunity to say something about the North of Scotland Hydro-Electric Board and its recent Report. From that Report it seems that the Board has completed the development of about one-quarter of the estimated usable water power resources in the Highlands. Presumably, therefore, the Board has calculated that the remaining three-quarters can be developed economically. It is noticeable, however, that the Board already shows a deficiency of revenue of about £724,000, which includes a loss of about £112,000 for the past year.
  As people in the Highlands are greatly interested in the future development of the Board, my first request to the Government is that they should tell us how they see this future developing. Do they envisage the remaining three-quarters of the water potential being harnessed? Do they consider that this can be done profitably, and is it still
  770
  the intention to give every Highland district a supply of electricity?
  Obviously, I have not time tonight to go into the Board's operations throughout the Highlands. However, it is worth putting on record that it is still active and that it is both bringing in new sources for the production of electricity and new schemes for its distribution.
  There is one scheme in particular about which I should like to ask a question, and that is the scheme for the use of peat at Altnabreac. One of the curiosities of nature which emerges from the Report is that, although 1958 was an abnormally dry year over most of the Highlands, it appears to have been an abnormally wet summer at Altnabreac. This interfered with the drying of peat. Is the Board now rather pessimistic about the results of this scheme, or does it think that it can develop ways of using peat which could be useful in other parts of the Highlands? In many parts of the Highlands—indeed, in some parts of my own constituency, in Shetland—there are large unused deposits of peat. Does the Board hold out any hope of being able to develop them in places like Yell?
  There is in the Report some reference to industry. It will be remembered that when the Board was set up it was hoped that bringing cheap electricity to the Highlands would encourage industry to move up North at the same time. Unfortunately, this hope has not been fulfilled. I cannot this evening get on to the subject of Highland development in general, but if the Government have any plans for its development it is extremely important that the question of electricity should be taken into account.
  I come now to distribution. This is what really worries people at present throughout the outlying areas of the Highlands and Islands. Their worries fall under two heads: first, when will those districts, houses and holdings still without electricity get it; and, secondly, what will they have to pay?
  I must speak largely about my own constituency, because that is what I know about. But my experience can be paralleled by every Highland Member. I have more questions about electricity than any other single subject.

  771
  I should like to start by saying that the Board has done a remarkable job. I, and I am sure most people in the Highlands, would give unstinting praise for a great deal which it has achieved. In particular, I should like to place on record my appreciation and that of my constituents for the work of the Board's staff. The Board's representatives have a difficult job. They have to meet all sorts of demands and fend off various criticisms. They do not control policies, which are laid down by the Board, but they have to try to hold the balance fairly between different would-be consumers.
  Certainly, in Orkney and Shetland the Board's representatives have done this with great skill. I have always met with both courtesy and efficiency from the local representatives. Further, we should remember the maintenance work done in the Highlands, and done often in very difficult conditions of cold and gale. If I appear, therefore, to be a critic—a reasonable and friendly critic. I hope—of the Board's policy, I am not unmindful of its achievements and difficulties.
  Following up my general question about the degree of future expansion of the Board, I should like to ask some specific questions about Orkney and Shetland. In Orkney, there are certain pockets on the mainland still unconnected. A very high proportion of the mainland is connected, but there are certain farms and groups of farms which still want electricity. For instance, there are parts of Deerness St. Ola, Sandwick and Harray. In Shetland, the Northmavine and Mossbank schemes are nearly, if not quite, complete, but there is no electricity in Eshaness.
  In Shetland, I am told that there are only 40 or 50 houses on the mainland which would take electricity and have not got it, apart from such districts as Eshaness, where there are no schemes at all, which is a remarkable achievement. Naturally, the people who have not got electricity are very concerned about when they will get it. Among the consumers not yet connected are many on go-ahead and highly productive farms whose activities are greatly hampered by the lack of electricity. There is also, in Sandwick, in Orkney, a public hall
  772
  that has been hoping to get electricity for many years.
  There is a feeling in some parts of my constituency that electricity has been brought to other places more inaccessible and less productive than the excellent County of Orkney, where, as I say, many excellent farms are still dependent on oil lamps. In fact, some of my constituents have been heard to wonder, when they look round the West Highlands, whether a determination to help oneself and to add to the national wealth is always adequately rewarded.
  Apart from the mainland, there is the question of the outlying islands. I must impress on the Government and on the Board how important it is to demonstrate that these are not forgotten, and how important it is to demonstrate, further, that they are not being put off to an indefinite future. Some of the islands have excellent land, but they are being steadily depopulated, and amongst the causes of the depopulation is the lack of such things as electricity. A demonstration by the Hydro-Electric Board that it is determined to help these communities would have a great effect. Here I must remind the Government and the Board that under the original Act the Board was charged with the duty of supplying electricity to all ordinary customers.
  I have a feeling that the Under-Secretary of State may refer to what is known as the Calor gas scheme. It is true that that has its advantages, but I must say at once that, as I understand it, this scheme was always intended to be a temporary stop-gap. My constituents were assured that its introduction did not mean that they would never get the light. Any attempt by the Government or the Board to represent this scheme as an alternative to electricity will have the most depressing effect, and will spread considerable gloom in the outer Islands of both Orkney and Shetland.
  The Government know that I think that a great opportunity was missed when the Board and the Admiralty failed to make use of the plant at Lyness for civilian purposes, but we have been told that we may expect the joining up of Shapinsay. When is this likely to happen? And what about islands like Yell and Whalsay, both of which are big and prosperous? Incidentally, can

  773
  the Government assure us that the Board has examined the possibility of using local generators? I have been told that they are not economic, and that ultimately all the islands will be joined up to supplies by cable, but it will be interesting to have it on record that investigation has been carried out and that the latter is considered to be the most economical method—if that is so.
  I want to say a word about the charging system. I have always criticised the present system and its predecessors. I believe that it was a mistake on the part of the Board to put such heavy charges on to those who were given electric light under later schemes. Under earlier schemes, a great many people—and the majority of those near the main centres—were joined up free to the main transmission lines. Then costs rose, and under more recent schemes heavier and heavier charges have been made.
  Any local manager—and this is certainly confirmed by Mr. Walls and Mr. Stephen—will say that the charge schemes have led to a considerable amount of trouble. In my view, it would have been fairer to raise the charges over the whole area rather than to put the extra costs so heavily on those who came in late. I admit that the Board has had to face very heavy extra expense—I should be the last to deny that—and, of course, even with these charges, the Board suffers loss when it joins up isolated farms or crofts. The fact remains, however, that these charges arc an extremely serious matter for many people in the North.
  I could give endless examples of complaints and questions that reach me. For instance, nine farms in St. Ola, in Orkney, want electricity. One, half a mile from the distribution line, has been asked for £380, and many farms have to pay heavy sums. Small crofters in Shetland have been asked to pay hundreds of pounds, which they cannot afford. I understand that the latest terms for the connection of new customers from diesel generating schemes are based on a contribution of 28 quarterly payments—which vary according to the number of rooms in the house, or the number of arable acres—together with 28 line rental payments.
  On a farm of up to 50 acres, I understand that the total payment for each of
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  28 quarters is £10 17s. 1d. which, over the period, adds up to a very considerable sum for a small croft to meet. The domestic charge on a house of up to five rooms is £3 9s. 7d. per quarter for 28 quarters, and the prices rise if holdings or houses are bigger. I should like to know whether these charges, which take the place of the guarantee which I think is asked under the hydro-electric schemes proper, are equivalent to the charges in the rest of Scotland. To many people these charges mean that they cannot afford electricity at all. As I say, I do not want to suggest that there is not a genuine difficulty here. If, as I think, a mistake was made in the first place, as I think there was, by putting so much expense on the late-corners, the question is: what can be done now? What can the Government suggest?
  The Board has suggested to the Government that some assistance in the installation of electricity in scattered areas should be given, as is now given in Scandinavia. Have the Government any response to make to that proposal? If not, have they any alternative to suggest? As far as I know, assistance to some extent can now be obtained under two schemes. The county councils, under the Housing Acts, can give a grant if a man wants to have his house brought up to an adequate standard in every way and, in the process, installs electricity and wires his house. But what this grant can he stretched to cover seems to me a little doubtful.
  Further, assistance can be obtained under the Livestock Rearing Act for farmers or crofters who get a comprehensive scheme approved. I think that these methods of assistance should be more widely known, and I would urge people faced with heavy charges for electricity to examine them closely. But there is no doubt that they do not meet the whole difficulty and, indeed, not by any means all the people who would like to have electricity can qualify for these grants.
  Particular sufferers seem to be the small crofters and owner-occupiers of buildings for which comprehensive schemes are not feasible. I would ask the Government to consider whether this assistance can be extended to certain categories of people now excluded, and possibly be made to cover the heavier costs of laying the lines from the main transmission cable.

  775
  Another difficulty which has arisen in the Highlands is over the agreement of people in an area to come into a scheme when it is proposed. In Unst and in certain parts of the mainland of Shetland I have had representations from people whose crofts have not been joined up to the light because of the refusal of their predecessors or neighbours to say they will take it. This causes a certain feeling of injustice.
  I am far from blaming the Board entirely for this situation, but I would urge the Board to give its local representatives every encouragement to explain and advise most fully their intentions and the cost, and see that these matters are properly understood, so that the people are not given too optimistic or pessimistic a view of the likelihood of light coming. I think I can say that in Orkney and Shetland the local managers do their best in this respect. Nevertheless, there are these complaints and there is often failure to understand what is involved in a particular scheme. Some people have complained that they have wired their houses at great expense and then have found that they cannot get the light.
  I dare say that the Government will say that most of these points should be taken up through the consultative council. I have no desire to criticise the council. I know that the local representatives in Orkney and Shetland do a difficult job. But as long as the chairman of the council, who is meant to bite the Board, so to speak, is himself a member of it, the public will not have any great faith in its independent judgment. It is not fair to people on the council that they should be expected to act as watchdogs of an organisation with which they are so intimately connected.
  I trust the Government tonight will give us as much information as possible about the future intentions of the Board, and that they will be able to give rather more comfort than the last time when I raised this matter to the justifiable anxieties in many parts of the Highlands, lest the people who have not got light are excluded from the benefits of electricity either by the slowing down of future work or by excessive charges.
  10.34 p.m.
  The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson): The House will be grateful to the hon. Member for Orkney and Shetland (Mr. Grimond) for choosing a subject for this debate which is of interest to all Members for rural constituencies, and particularly to those in the North of Scotland. It is a subject in which he has taken a particular interest.
  I am sure that the House would like me to start by making a reference to the right hon. Thomas Johnston, formerly a distinguished Member of the House, who is to lay down the chairmanship of the North of Scotland Hydro-Electric Board at the end of this month. As Secretary of State, Mr. Johnston was the architect of the Hydro-Electric Development Act, 1943, and to a large extent he has been responsible for the work of the Board that has been carried out so far.
  No fewer than 34 hydro-electric power stations built since the war, another 14 under construction, and supplies of electricity carried to 90 per cent. of the potential consumers in the Board's district are an indication of the achievement of the Board under his chairmanship. Today, the Board's reputation in the Highlands stands very high. As the House knows, Mr. Johnston will not end his connection with the Board after this summer for the Board has asked him to continue his efforts, in conjunction with it, to attract industries to the Board's district.
  I need hardly say that this arrangement has the very warm approval of my right hon. Friend the Secretary of State. I am sure that all Members will wish to take this opportunity of expressing appreciation of the services of Mr. Johnston and wish him success in this important work. Also, I know that the House will wish to say to Lord Strathclyde, the Board's new Chairman, that he enters his new responsibilities with the confidence of all those Members who knew him here.
  As the hon. Member said, the Board has done a remarkable job. He paid a tribute to the local representatives, with which all on this side would wish to be associated. To quote the last Report of the Board, it has
  "carried the benefits of electricity to more than 90 out of every 100 people in its area."

  777
  I am informed that the proportion of persons connected is even slightly higher in the Highland area proper, that is, in the seven crofting counties, than it is in the rest of the Board's district.
  In view of the great physical difficulties and the great expense of providing electricity in that area, this is a very creditable achievement. Indeed, it is partly a measure of that achievement that the demand for electricity from those areas which have not got it—the 10 per cent. that is left—is so pressing. I can well understand why people in those districts, seeing how much the Board has done, expect that they too should be able to share in this amenity. But I would say to the hon. Member that, if the Board were to accept his invitation and give a demonstration in one island, it would be very quickly chased to carry that demonstration into many other islands, also.
  The House will understand that, for the most part, the areas which are still to be connected are just those areas where the provision of electricity is most difficult and most expensive. What are they? They fall broadly into two categories. First, there are those areas where distribution schemes are already in hand or planned. These distribution schemes are well scattered over most of the Board's district. In the hon. Member's constituency, they include, on the Shetland mainland, the area from Voe to Moss Bank, which he mentioned, and from Delting to Hillswick and North-maven; and on the Orkney mainland, the districts of Deerness, West Birsay, Sandwick, Heddle and Stenness.
  As the hon. Member said, work is well advanced at Moss Bank, and he will be glad to know that a start is to be made any day now at Deerness. It is not possible for me to say exactly when supplies will be provided in all the other districts for which distribution schemes are planned, or in what order; but, broadly speaking, I hope—and it is a hope, not a promise—that most of them should be provided with electricity within the next four years. The Board has indicated its intention of discussing this problem of the rural consumer and its future plans with the Secretary of State in the near future.
  These distribution schemes, together with new connections elsewhere—as in
  778
  new housing schemes, for example—should bring in an extra 16,000 consumers in the whole of the Board's district, and the proportion of potential consumers who will then have supplies will rise from the present 90 per cent. to about 93 per cent.
  Of the remainder, there are some, probably in the region of 10,000 who, for one reason or another, either do not want a supply or live in premises unsuitable for connection. That leaves about 12,000 potential consumers, mostly people living either in very remote communities on the mainland or on islands where there is no distribution at present to which they could be linked and no convenient or obvious source of supply. Supplying such islands, therefore, means not only carrying out a distribution scheme, but also providing means of generation, perhaps by installing a special diesel generator, as the hon. Member suggested, or by connecting one island to another by an undersea cable.
  Which is done depends to a very large extent on the remoteness of the island. I will refer to the question of costs later, but the House will appreciate that giving supplies of electricity to these very remote areas is bound to be a very costly business indeed, as well as involving technical difficulties. The average cost now is £500 per connection. Of course, this is tending to rise as we do more and more of the less difficult tasks.
  This brings me to the second matter which the hon. Gentleman has raised, the question of connection charges. When the Hydro-Electric Board was first formed, in 1943, it was its intention to connect consumers without charge or guarantee if they were located within reasonable distance of the main distribution lines.
  Before I deal with the point, I should like to deal with the question the hon. Gentleman asked about potential water resources in relation to potential demand. In 1944, a list of possible schemes was prepared, and in that the estimated annual output was 6,274 million units. There are already in operation schemes with an average output of 2,293 million units. These schemes, together with that under construction at Loch Awe and the other schemes at present under construction and being

  779
  surveyed, amount in all to about 4,000 million units, which is just under two-thirds of the original estimated potential. As against that, demand has been increasing in the North of Scotland district at a rate of about 10 per cent. per annum.
  The hon. Gentleman asked about the experimental station for peat. The latest information I have is that the testing of this plant and its auxiliary equipment was entering its last stage and the commissioning tests were expected to take place before the end of this month. Until the preliminary work has been completed in this excellent peat area I should not like to forecast whether or how the lessons learned from that scheme would be carried out in practice in the islands or elsewhere.
  On the question of charges, the Hydro-Electric Board, as the hon. Gentleman mentioned, at first intended to connect consumers without charge if they were located within reasonable distance of the main distribution lines. Since then the Board's district has increased and costs have risen steeply, and, accordingly, it has had to alter its policy of free connection and to arrange for new consumers in outlying areas to make some contribution towards the cost of connecting them to the electricity supply. The figures which the hon. Gentleman quoted for Orkney and Shetland accord with my information for new group schemes. Of course, the figure of £3 9s. 7d. and line rental combined seems a lot, but if my arithmetic is correct it works out at just over 9d. a day for seven years; and that is not for ever.
  I am glad that the hon. Gentleman gave publicity to this matter. He asked whether these charges were equivalent with those of other parts of the country. They are roughly equivalent, but the difficulty is that if we did as he suggested should have been done—if one were to spread these charges over the rest of the North of Scotland district—they would not then be equivalent charges for connection, simply because the distances in the Highlands are so much greater. Connection charges as opposed to tariff charges are bound to be higher. Any Government subsidy, as the hon. Gentleman knows, would require legislation.
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  The burden of the suggestions that the right hon. Member has made is two-fold: first, that the process of electrification should be speeded up; and, secondly, that connection charges should be reduced. I will deal with those two points.
  I should make it clear that decisions on this question are matters for the Board and not for my right hon. Friend or the Government. The Board has certain powers and duties and is responsible for carrying them out, subject only to general directions. The power of general direction does not enable my right hon. Friend to instruct the Board in what order connections should be made, or what charges should be levied for connection or supply. Nor would it be reasonable to give a general direction that would conflict with any of the obligations that are laid upon the Board by statute. That would clearly lead to an impossible situation.
  It has never been seriously thought that the Board would supply electricity to absolutely everyone in its district. Its Act limits its responsibilities in this matter to providing supplies of electricity "so far as practicable", and what is practicable includes counting the cost. This has always been perfectly clear. The reason why the Board has been able to do so much uneconomic work, including uneconomic distribution work, and including 15 islands apart from the mainlands of Shetland, Orkney, Lewis and Harris, is the margin of profit it makes from the provision of relatively cheap electricity. But the Board is obliged to run its undertaking so as to avoid making a loss, and, therefore, there is a limit to the amount of uneconomic work it can take on and still meet this obligation.
  The provision of supplies to these remote rural areas and particularly to the islands is, as I have said, a very expensive business and the Board will only be able to undertake it as when its financial resources are sufficient to carry the additional losses. Its expenditure on new distribution was £2·45 million in 1958, and it is expected to rise to £3·1 million in 1959. About one-third of this expenditure is for new rural development. But for every additional expenditure of £1 million, the Board has to face

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  servicing charges alone of about £160,000 each year thereafter.
  That is apart altogether from generation costs, yet most of the new distribution would have to be on the islands where there are no hydro-electric schemes and power is provided from diesel plants. The Board's Report shows that diesel electricity costs two and a half times as much to produce as hydroelectricity—1·7d. per unit compared with 0·7d. Yet the tariff is almost the same, so there is an initial disadvantage to the
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  Board of about 1d. per unit sold in the diesel areas. These are difficult obstacles to overcome, and as the House is aware, the Board have at present an accumulated deficit——
  The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at thirteen minutes to Eleven o'clock.