HC Deb 04 April 1960 vol 621 cc3-4
2. Mr. Houghton

asked the Minister of Pensions and National Insurance whether he will take steps under the provisions of Section 36 (4) of the National Insurance Act, 1946, to transfer such sums from the National Insurance (Reserve) Fund as may be necessary to increase National Insurance benefits by 10s. a week immediately and pending the next review of contribution rates and amounts of benefit provided for in Section 40 of the National Insurance Act, 1946.

Mr. Boyd-Carpenter

No, Sir.

Mr. Houghton

Is the right hon. Gentleman aware that the last quinquennial review was in 1954? Will he confirm that we may expect another one soon? If so, why cannot the enormous reserve in this fund be used to tide over, between now and consideration of the next quinquennial review, an increase in pensions to an amount which would enable retirement pensioners at least to carry on on a decent standard of life?

Mr. Boyd-Carpenter

I think the last part of the hon. Gentleman's supplementary question arises on his next Question. On the first part, I understand that the Government Actuary is well forward with his work.

3. Mr. Houghton

asked the Minister of Pensions and National Insurance to what extent the need to increase benefits without increasing contributions and Exchequer grants is among the contingencies for which the National Insurance Fund balances are being maintained at over £350 million and the national Insurance (Reserve) Fund at over £1,160 million; and for what other purposes these funds are maintained at such a high level.

Mr. Boyd-Carpenter

As the hon. Member is aware, National Insurance is on a contributory basis, and it would be wholly inconsistent with this to provide for a permanent increase in benefits to be financed by using up the accumulated reserves of the Funds. These are, in any event, far too small relative to expenditure to enable this to be done for any length of time. The main function of the Funds is to provide a contingency reserve against temporary fluctuations of benefit expenditure, for example in the case of epidemics, and to provide some relief to contributions out of the interest paid on the moneys in these Funds.

Mr. Houghton

Is the right hon. Gentleman aware that, in paragraphs 174 and 175 of the Phillips Report, it was suggested that this enormous reserve Fund could be justified more to meet an unemployment emergency than anything else? Is it the right hon. Gentleman's opinion that that is the real justification for this enormous reserve? If not, why cannot it be used to tide over an increase in current benefits?

Mr. Boyd-Carpenter

I think that it has never been previously suggested that it should be used for this purpose. It is far too small. The best summary of this is in the Government Actuary's Report for 1950–51 to the hon. Gentleman's right hon. Friend.