§ 6.56 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Patricia Hornsby-Smith)
I beg to move,That the National Insurance (Earnings) Regulations, 1960, a draft of which was laid before this House on 27th January, be approved.These Regulations, which are subject to affirmative Resolution, were laid and published on 27th January, and provide for an operative date of 21st March to allow time for the completion of the administrative arrangements, which involve, among other things, the printing and distribution of some 5 million leaflets.
The purpose of the Regulations is to increase the amount which can be earned without loss of benefit by retirement pensioners and widow beneficiaries subject to the earnings rules of the National Insurance Scheme. They are proposed to be made under a power given by Section 2 of the National Insurance Act, 1956, which permits alteration of the scale of deductions on account of earnings and is limited to this purpose.
The increase follows a pledge given in the Gracious Speech on 27th October. A fortnight afterwards preliminary draft regulations were referred to the National Insurance Advisory Committee which, after allowing the necessary time for representations to be received from interested bodies, reported to the Minister on 15th January. The Regulations were laid before Parliament on 27th January. There has, therefore, been no delay.
The Regulations, which will be debated in both Houses during the course of this week, will, if passed, come into operation on 21st March. The question at issue tonight is the level provided by the earnings rules, which can, as now proposed, be amended by Regulation. The question of whether there should, or should not be, an earnings rule, is a much wider issue which does not fall within the ambit of the Regulations, and which would require legislation, and would challenge the long-accepted principle of the 1946 Act.
1029 The general principle underlying the earnings rule is that National Insurance benefits are not intended for those who can support themselves by their own earnings. In particular, retirement pensions are not paid automatically at the minimum age of 65 for men and 60 for women. They are paid to men under 70 and women under 65 only if they have retired from regular employment. Thus, apart from some 45,000 pensioners who fall to have their pensions reduced within the limits set by the earnings rule, there are also some 400,000 people of retirement age who have chosen to continue in full employment, earning increments but forgoing their pensions and those of their wives for the time being, until retirement. Without the limits imposed by these Regulations, they, too, would qualify for full pension together with their wages.
The retirement principle on which these Regulations are based stems from the Beveridge Report and its aim, which is frequently forgotten, is to concentrate the available resources in the form of better benefits for those who most need them. The earnings rule is a necessary complement to this retirement principle, since without it it would be difficult to prevent a person going through the motions of retirement in order to get his pension and then returning again to full employment and wages.
Similarly, the long-term widows' benefits under the National Insurance Scheme are not paid, like those under the old contributory pensions Acts, automatically on widowhood, but only to those classes of widows who cannot be expected to support themselves by their own earnings, that is, to women widowed when over 50 and those left with young children.
As a corollary of this principle, the earnings rule ensures that if a woman within these categories is in fact able to support herself, the benefit is withdrawn. These fundamental principles of the Beveridge scheme and the 1946 Act have been accepted by all post-war Governments. The alternative would, among other things, necessitate substantially higher contributions.
The last time the earnings limits were raised was in April, 1959; from 50s. to 60s. a week for pensioners and from 60s. to 80s. a week for widowed mothers. 1030 For earnings over those limits the pension is reduced by 6d. in the 1s. for the first £ earned and thereafter by 1s. for each 1s. earned. Under these new draft Regulations, it is proposed to raise the level of earnings at which the rule begins to operate to 70s. instead of 60s. a week for retirement and widow's pensions and to 100s. instead of 80s. for widowed mothers' allowances. The deduction of 6d. for each 1s. earned for the first 20s. and 1s. for each shilling earned thereafter continues to apply to earnings above the new limits.
In the case of retirement pensioners, the rule applies only to men under 70 and women under 65 whose pensions are subject to retirement, while in the case of widowed mothers' allowances, the deductions are made only from the personal part of the widowed mother's allowance, the payments for her children being made whatever the mother's earnings. Those children's allowances, which are 5s. higher than for other dependent children under the National Insurance Scheme, are 20s. for the first child and 12s., in addition to family allowances, for others. Thus, a widow with three children receives £3 2s. for her children, regardless of her own allowance or earnings. It is not, I think, generally appreciated that the earnings taken into account are net earnings—after deduction of reasonable expenses which are incurred in connection with employment. These may include such things as fares, overalls and, in the case of a widowed mother, payments for the care of her children while she is at work.
These Regulations, the House will know, have been considered and approved in draft by the National Insurance Advisory Committee, whose Report has been laid before Parliament together with the draft Regulations.
The main justification for the changes made in 1959 was that since the Advisory Committee's 1956 Report on the Question of Earnings Limits for Benefits average full-time earnings had risen by 15 per cent. in the case of men and nearly 16 per cent. in the case of women. Moreover, the National Insurance Act, 1959, improved the pension increments, which could be earned by postponing retirement, from 1s. 6d. for 25 contributions to 1s. for 12 contributions. This improvement reinforced the case for relaxing the earnings rule by giving a 1031 greater inducement to persons of pensionable age to continue in full-time work rather than to retire and rely on the pension supplemented by earnings from part-time work. In its Report approving the 1959 Regulations, the Advisory Committee said specifically that increases greater than those then proposed would not have been justified.
Since then, average earnings have increased, between October, 1958, and October, 1959, by about 5½ per cent. for men and 5 per cent. for women. Thus, these draft Regulations do more than adjust the earnings limits in respect of those changes. They provide an easement in the earnings rule and, as the Advisory Committee indicates in its Report, to this extent go beyond the Committee's previous recommendations. It is obvious from a reading of its Report that the Committee had some misgivings about whether the proposals go too far. The Committee says that it is anxious that its assent to this relaxation should not be taken as an indication that it no longer regards the earnings rule as important. Not unnaturally, the rule attracts a good deal of adverse criticism, although in the Committee's view mainly because its purpose is not well understood.
The fact must be faced, however, that an earnings rule is indispensable so long as pensions are subject to a retirement condition. It is not for us, in the context of this debate, any more than it was for the Committee, to argue the case for the retirement principle. We need only observe, as they did, that it is one of the fundamental elements of the National Insurance Scheme and that for us to depart from it would have far-reaching consequences for the whole scheme.
For those reasons, the Committee felt bound to say that in its opinion the earnings rule could not continue to be relaxed with impunity. As the Committee further pointed out, however, the extent to which the rules can be relaxed without jeopardising essential principles—which were contained in the 1946 legislation—is a matter of judgment and there is no exact point at which it can be said that the limit has been reached. In the Government's view, the earnings limits should be set as high as they possibly can, consistent with the 1032 purpose of the benefits to which they apply. The Government's judgment is that the proposed limits, while allowing the maximum freedom to earn, do not endanger the important principles underlying the benefits.
It is entirely reasonable that some retirement pensioners who have given up their ordinary work should desire to undertake part-time work, both to engage their interest and to augment their material comforts. It would clearly be wrong to discourage them unnecessarily by keeping the earnings limit any lower than is required to maintain the retirement principle. The question which the House has to decide in considering these Regulations is how high the earnings limit can be set without endangering the important retirement principle which it supports. In the Government's judgment, the limit could be somewhat higher than at present without material risk, and that is the reason for the increase recommended in the Regulations.
I must emphasise, however, that that does not mean that the new earnings limits would represent any departure from the fundamental principles laid down by the National Insurance Advisory Committee in 1956 and reaffirmed by the Committee in its Report on the 1960 Regulations in which it said:As long as people claiming retirement pensions are required to show that they have retired from regular employment, it would be unreasonable to allow those who have ostensibly retired to return to work and continue to receive their full pension in addition to their normal earnings. The pension must in practice, be reduced as soon as the pensioner's earnings correspond to a substantial amount of work, and the maximum amount of earnings allowed, plus the pension itself, must not approach too closely the amount which the pensioner could earn from full time work.There is no exact point at which it could be said that the amount of disregarded earnings had reached the limit which would jeopardise the retirement principle. Clearly, an increase of 10s. in the amount of disregarded earnings would make little difference in the case of male pensioners, when average earnings of men in full-time employment were £13 2s. 11d. a week in April, 1959. Since the Committee reported, figures of average earnings, for October, 1959, have become available and show an increase to £13 10s. 9d. a week.
1033 With the proposed limit of £3 10s. as the earnings which are disregarded, a man's pension would be extinguished as soon as his earnings reached £6 10s. Disregarding allowed expenses, this is less than half the amount of the average earnings figure for men, so that there would still be a strong inducement for men who could do so to stay in full-time work, especially in view of the improved pension increments. The amount of earnings wholly disregarded, £3 10s., would be just over one-quarter of average earnings and the Advisory Committee's criterion is therefore met.
As the Committee has always recognised, the position for women pensioners is very different. The average earnings of women in full employment in October, 1959, were £7 0s. 4d. a week. A very considerable number of women, particularly those with young children, do part-time work; and here the average earnings of part-time women employees were at April, 1959, £3 7s. 8d. a week. Thus, even with the present earnings limit, many women were able to do a substantial amount of work after 60 and receive their full pension in addition to earnings.
§ Mrs. Eirene White (Flint, East)
I am not quite clear about the precise period of work of the women to whom the hon. Lady has referred as earning £3 and some shillings.
§ Miss. Hornsby-Smith
Not whole-time. Generally speaking, it is half a day. Many women work half a shift in a factory.
§ Mr. James Dempsey(Coathridge and Airdrie)
Is it correct that the average earnings for women are £7 0s. 4d.?
§ The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter)
That is for full-time work.
§ Miss Hornsby-Smith
As I have said, with the present average earnings figure, many women are able to do a substantial amount of work after 60 and receive their full pension in addition to earnings. In the case of a widowed mother, she can earn under the proposed new 1034 limits £5 a week plus the expenses allowed—which can cover fares, and payments made to someone who looks after her children—and can still draw the 50s. personal part of her allowance, plus, of course, the allowances for her children. Thus, a widowed mother with three children, earning £5 net, would have, with her allowances, £10 12s. a week. A widowed mother under the proposed new Regulations will have to earn £8 net, compared with £6 10s. for a retirement or widow pensioner, before extinguishing her widowed mother's allowance entirely. We have thus come a long way, since the original earnings limit in the 1946 Act for widowed mothers—and at that time for widows—was 30s.
Comparing the lot of a widowed mother with three children in 1951, when the Conservative Party took office, with the provisions now being debated, the earnings limit has risen from 60s. to the now proposed 100s., while allowances which then totalled £2 15s. are now £5 12s., and are, in fact, 55 per cent. higher in real terms. Further, the more favourable earnings rule for widowed mothers applies not only to those widows with dependent children but also to those with children living at home who have started work and are still under 18 years of age.
It is not, I think, generally appreciated that the number of widows whose allowance or pension is affected by the earnings rule is comparatively small. There are about 145,000 women receiving the widowed mother's allowance. In June, 1959, less than one-fifth—under 29,000—of the widowed mothers were then having their personal benefit reduced as a result of the earnings rule. In fact, of course, the majority of widowed mothers prefer to do part-time work—which, generally speaking, is within the proposed £5 limit—so that they can be at home when their children return from school.
There are about 250,000 widow pensioners. In June 1959, about 20 per cent. were then having their pensions adjusted by virtue of the earnings rule.
With regard to women retirement pensioners, it is true that the new limit of £3 10s. gives them, comparatively speaking, a much higher limit than men, but both the Advisory Committee and the Phillips Committee have come to the 1035 conclusion that it would be impracticable to have a different earnings limit for women. Against this, the retirement rule, however, matters less for women because a much smaller proportion continue in full-time work after pension age, and most women qualify for pensions only on their husband's insurance. For these reasons, although the Committee was a little apprehensive about the rise in the earnings limit for women, it did not consider that it would of itself imperil the retirement principle.
I should now like to say a few words about what is known as the 12-hour rule, which is frequently confused in people's minds with the earnings rule. If one has a "retirement" pension, one can deal with it in one of two ways. One can ruthlessly and very clearly make the criterion complete retirement and make it impossible for anyone in receipt of pension to take any form of employment at all. That is obviously undesirable. Alternatively, as has been done since the 1946 Act came into force, one can draw the line less rigidly and define "retirement" as a state in which, although the pensioner is required to give up full-time employment, he is permitted to be engaged in employmentoccasionally or to an inconsiderable extent or otherwise in circumstances not inconsistent with retirement.This rough yardstick operates on the claiming of pension. The National Insurance Commissioner has held that work is not "to an inconsiderable extent" if it is engaged in for more than 12 hours a week or for more than a quarter of the hours normally worked in the occupation in question. Although in some circumstances work for a greater number of hours can be treated as "not inconsistent with retirement", in many cases, as is so frequently brought to our attention by hon. Members, the determining factor is the 12-hour rule. That is quite separate and distinct from the earnings rule. It is only after the act of retirement has taken place that the earnings rule comes into operation.
Though, strictly speaking, it is the level of the limit and not the principle of the earnings rule which is the point in issue tonight, we have to bear in mind that if the limit is put too high it would, at any rate for the lower-paid worker, be tantamount to aban- 1036 doning the earnings rule principle altogether.
The effect of this limit is not only that a small number of retirement pensioners have their pensions decreased, though no decrease is made for their wives, but also, as I have said, that 400,000 people who have reached retirement age but who remain in full employment, do not while still so employed qualify for a pension at all, nor do their wives. Thus, the indirect effect of the limits that are imposed under these Regulations is more important than the direct impact on the comparative few whose earnings are touched by the earnings rule.
Bearing all these points in mind, I believe the increases proposed in these Regulations conform to the basic principles laid down in the Beveridge Report and enshrined in the 1946 Act. They represent a real easement in terms of money for the admittedly limited but not inconsiderable number of people to whom they directly apply. They are deliberately more generous in respect of the widowed mother for whom the House has always expressed special concern.
I hope, therefore, that the House will give approval to the Regulations tonight.
§ 7.19 p.m.
§ Mr. Douglas Houghton (Sowerby)
First, I congratulate the hon. Lady the Joint Parliamentary Secretary upon her clear statement of the Regulations—it is a complicated subject—and welcome her on behalf of my hon. Friends to our debates on National Insurance questions. Happily, she was spared the treadmill of the Standing Committee on the Pensions (Increase) Bill, which dealt with the graduated pensions scheme. However, I have no doubt that there are many chores in store for her, to put it no higher, on the administration side of the graduated pensions scheme, and I shall be very surprised if she has not many worries on her mind at the present time.
The hon. Lady has said that we were debating similar draft Regulations less than a year ago—actually, on 18th March, 1959—so that this is the second time within a year that we have been discussing draft Regulations made possible under Section 2 of the National 1037 Insurance Act, 1956. We are not without advice on this difficult question of the earnings rule. In 1956, we had Command Paper 9752, a very long and informative report from the National Insurance Advisory Committee, entitled, "The Question of Earnings Limits for Benefits", a very comprehensive survey of the whole subject, and it was arising from that Report that the 1956 Act was passed.
I should mention in passing that Professor Titmuss and Miss Spelman, both members of the National Insurance Advisory Committee at that time, wrote a dissenting note from the recommendations of their colleagues on the Committee. I think it is only right to point out that Professor Titmuss has carried his dissent not only to the Report of the National Insurance Advisory Committee of 4th March, 1959, but also to the more recent report of that Committee of 27th January, 1960. He dissents from the present structure of the earnings rule and argues in his dissenting note the case for very drastic alteration of the whole arrangement. I think it is proper that I should mention this, because when referring to the Report of the National Insurance Advisory Committee we had to take account of the rather unusual circumstance in which one member of it has persistently dissented since 1956.
What do these Regulations propose to do? The hon. Lady has described to us their effects in terms of the lifting of the earnings which beneficiaries can have without penalty upon their rate of benefit. Since a year ago, we must remember in discussing the effect of these Regulations, we have altered the limit of earnings for retirement pensioners and widows from 50s. to 70s., and for widowed mothers from 60s. to 100s. In the course of three changes, we shall have widened the favourable difference in the earnings rule, in the case of the widowed mother, as compared with the childless widow and the retirement pensioner, from 10s. to 30s. in favour of the widowed mother. If my arithmetic is correct, that means that by the time these Regulations are approved we shall have increased the earnings limit for widows and retirement pensioners by 40 per cent within a year, and, in the case of widowed mothers, by 66 per cent. within a year.
1038 The House will agree that that increase in the earnings limit goes far beyond any increase in the level of earnings during that period. In fact, the hon. Lady pointed out that, since 1956, earnings have risen 15 per cent. in the case of men and 16 per cent. in the case of women. These percentage increases in earnings have to be put alongside the percentage increases in the earnings limits that we are now asked to approve.
§ Miss Hornsby-Smith
If the hon. Gentleman will forgive me, and if I understood him rightly, he has said that the 15 and 16 per cent. gave rise to the present increases, but those were the percentages that justified the 1959 rises, and the figures now are 5 per cent. and 5½ per cent.
§ Mr. Houghton
I beg the hon. Lady's pardon. The average earnings then, have risen about 20 per cent. over that period, and we propose to lift the earnings limit by double that percentage in the case of retirement pensioners, and more in the case of widowed mothers.
The National Insurance Advisory Committee, in paragraph 4 of its recent Report, notices that—The proposals in the present draft Regulations, though they would increase the earnings limit by similar amounts"—that is, similar to those of 1959—are different from those we considered last year in that the relevant circumstances have not changed substantially since that time, We take it, therefore, that it is the Government's deliberate intention to make the earnings rules more generous than they are at present.I think the House will agree that that must be the inspiration behind the change which is now proposed.
The hon. Lady said that a pledge was given in the Gracious Speech. That is quite true. A pledge was given during the General Election, if I remember correctly, on this question, and another pledge was given at the same time—that of keeping the level of benefits under careful and constant review. One would ask what has happened to that pledge, which certainly is not before the House at the present moment.
The National Insurance Advisory Committee looking at the proposed level of the earnings limits, was naturally concerned whether these new limits would prejudice the maintenance of the 1039 principle of retirement, and said in paragraph 6:How far the earnings rule can be relaxed without jeopardizing the retirement principle is, of course, a matter of judgment; there is no exact point at which it can be said that the limit has been reached.I think there has been a general feeling that some easement of the earnings rule would be justified, and it would certainly be welcome. The National Insurance Advisory Committee gave the impression in its Report that it believes that it is about as far as we can go for the present without weakening the retirement principle, and the Committee point a warning in paragraph 7:We are bound to say that the earnings rule could not continue to be relaxed with impunity.We all agree with that. Whether we are adherents or abolitionists of the earnings rule, we all agree with what Professor Cairncross, who is an abolitionist, said in his dissenting note to the Phillips Committee Report, in paragraph 15 on page 88:The retirement condition appears to command widespread support, the earnings rule equally widespread dislike, but the two are inseparable and stand or fall together.None would dispute that. If the earnings limits go, the retirement principle goes, and if the retirement principle goes, increments for postponed retirement go as well. In fact, the retirement pension would then become a birthday present, irrespective of work or wages, which is something which very few social security schemes in the world today grant to their beneficiaries. Earnings rules are not absolutely universal, but they are widespread indeed in social security systems in the Commonwealth, in the United States and mostly in countries in the Soviet bloc.
What is worrying my right hon. and hon. Friends about all this is that the lifting of the earnings limits may in the Government's mind weaken to some extent the case for a higher level of retirement and widows' benefits. We believe that the pressure for the removal of the earnings rules and the case for relaxing them now spring from the fact that the pensions are too low. We believe that the real issue is not the level of earnings to be exempted from reduction, but the level of benefit. It is not that the earnings limits are too low; it is the fact that the benefits are too low that lies 1040 behind the upward movement that we are asked to approve tonight.
I hope that this is not an unfair judgment of the Government's approach to social security benefits. My own conviction is that, by the improvement of National Assistance scales, by widening the scope of National Assistance, and by lifting the earnings limits, they hope to escape any need to raise the level of benefits. It rather looks as if the aim of the Government is to let those pensioners earn more who can, give better National Assistance to those who cannot, and let personal savings and vocational pension schemes take care of the rest. I hope that we can learn from the Minister a little more about what lies behind the proposals which he is asking the House to approve. There must be some reason for this which goes beyond the desire to ease the difficulties and anomalies of the earnings rules. I firmly believe that there is a wider strategy behind these proposals.
I turn now to widowed mothers, with whose bereavement and problems the whole House has very deep sympathy. At this point, may I express my great regret that my hon. Friend the Member for Manchester, Exchange (Mr. W. Griffiths) is not able to be with us tonight. He is unfortunately suffering from the effects of an accident. I mention my hon. Friend particularly because he has a Private Member's Bill dealing with widowed mothers and earnings rules which was not reached the other Friday.
Generally, a distinction is drawn between widows without young children and widowed mothers. That is why widows without young children are grouped with retirement pensioners for a lower earnings limit than widowed mothers. Another important distinction is that in the case of widowed mothers there is no retirement condition. Whereas only about 5 per cent. of retirement pensioners come up against the earnings rule, about 20 per cent. of those receiving widows' benefits suffer some reduction in their pensions on account of earnings. The draft Regulations give the widowed mother a still wider margin before the rule applies, and we understand fully that she can now earn up to £5 a week without penalty and up to £6 a week with a deduction of 10s.
The National Insurance Advisory Committee had something to say on this 1041 question in paragraph 10 of its recent Report. It referred to those widowed mothers whom we must not overlook in this debate, namely, those who cannot go out to work and who will get no benefit from the higher level of earnings limit and, indeed, would get no benefit from its complete abolition. However much we sympathise, as we do, with the widowed mother who is able to go out to work, we must not ignore the widowed mother who is tied to the house by her family responsibilities, struggling to bring up her children, and who must either manage on what she has or go to the National Assistance Board. There are many such widows.
I have not been able to discover just what proportion of widowed mothers, as distinct from widows generally, have to apply to the National Assistance Board for additional help. The figure is 20 per cent. for all widows, as the hon. Lady pointed out. I should be interested to hear what proportion of widowed mothers have recourse to National Assistance. If anything like 20 per cent. of them do, it means that 20 per cent. go to the National Assistance Board, another 20 per cent. avoid going to the National Assistance Board because they can go out to work, and the plight of the remainder we do not know.
I have said before in debates on this subject that the House has not defined its position in relation to widows' benefits. What is the benefit supposed to be for? If it is to provide an adequate standard of life for the widow, with additional benefits for her children, so that in total she may have enough to live on, to bring up her family decently and happily without being forced out to work, the level of benefit is not enough. We take our stand on this principle, that the widowed mother should have a benefit adequate for her needs. She should not be forced out to work or to the National Assistance Board. She should be given free choice in the matter of work.
I am the last person to suggest that widowed mothers do not feel at many times the need for association with others, at work and elsewhere, and wish to escape for a short time perhaps from the tedium of the home. None of us would wish to place restraints on the widowed mother who feels that she can do a useful job of work and at the same 1042 time look after her family efficiently and well. I have no doubt that at present a good deal of the case behind the movement for the abolition of the earnings limit for widowed mothers springs from the inadequacy of the widowed mothers' benefits.
Order. I admire greatly the hon. Gentleman's skill, but as this debate will obviously continue, I think that I had better indicate to the House my view about this matter. I do not think that it would be in order in this debate to urge the increase of a rate of benefit in any field. On the other hand, no doubt the rate of benefit is in order here in so far as it has a bearing upon the problem to what level the disregards should be permitted to rise. I apologise for having had to interrupt the hon. Gentleman, but I foresaw that other hon. Members would range too widely, although he would not.
§ Mr. Houghton
I am very much obliged to you, Mr. Speaker. We are always in this difficulty when discussing draft Regulations of this kind, and I know that I must not trespass too much on your indulgence in stressing the inadequacy of benefits. I was making the point—in fact, I have made it—that in part the proposals for lifting the earnings limits rest on the unduly low level of the benefits paid. I am sure the House would agree that lifting the earnings rule is no substitute for the adequacy of benefits.
I asked a question about the size of the problem in relation to the widowed mother having to seek additional assistance. The draft Regulations will help a great many more retirement pensioners, widows and widowed mothers to keep all they earn. If these limits were a little higher more people would keep all that they earned but, as the right hon. Lady pointed out, and as the Committee reminded us, we have to keep the thing in balance and have regard to the principle of retirement, which is a fundamental part of the National Insurance Scheme as we have it today.
We on this side of the House will give our approval to these draft Regulations. We welcome the easement that they will give in many quarters, but we are bound to have the reservation in our minds that it would be better to tackle and define our attitude towards the main issue of 1043 the general level of benefits than to concentrate unduly our efforts and attentions on the marginal relief.
§ 7.41 p.m.
§ Mr. Julian Ridsdale (Harwich)
Like the right hon. Lady, who made an excellent speech in opening this debate, I was spared the treadmill of the National Insurance Committee. Had I been a member of that Committee, I would have been able to grasp more quickly some of the poignant things that have been said about earnings limits for benefit in Cmd. 9752, to which the hon. Member for Sowerby (Mr. Houghton) referred.
In the short time that I have been in politics, I have always found that it is a battle between doing what is ideally right and what is practically possible. Unfortunately, sometimes the Government have to compromise and bear on the side of doing what is practically possible. When one is in opposition one can bear much more on the side of what is ideally right. I support the Government because I realise that a difficult compromise has to be made on the earnings limit. It is important to keep the earnings limits what they are. If they were abolished the cost would be over £100 million, and there are other benefits, and other people, like the widowed mothers to whom the hon. Member for Sowerby referred, to whom that money could be paid.
With those general remarks, I come down to the detail of the Report of the Committee. I was disappointed in the Report, because I do not think the Committee understood the position, especially in areas where there is high seasonal employment followed by high unemployment; areas where unemployment may be three times as high in the winter months as it is in the summer months. For example, in Clacton-on-Sea the rate of unemployment in summer is under 2 per cent., but in the winter it is between 5 and 6 per cent.
The only way of helping the pensioner in those areas is by either averaging or aggregating earnings. Under the present system, if a pensioner works for 13 weeks—the only period during which he can get work—he is able to earn a disregard of £45 10s. In areas of high steady employment, a pensioner is able 1044 to earn over the year a disregard of £182. It is all very well in Yorkshire, Lancashire, and London, but there are other places in the country where, in the winter months, the employment rate is not as high as it is in the industrial areas.
The pensioner who lives in an area where there is not a great deal of employment is in an unfair position. What did the Committee say about this? It said that it had examined the question of averages but it had not altered its view from the detailed report it made in 1956 on the earnings limit in Cmd. 9752. I have studied the Report, and the Committee's case against averaging and aggregating earnings. As far as I can make out, its case was based on one main consideration, though there were supplementary considerations as well. The main consideration which I wish to point out to the Minister, was that even where a pensioner gained on balance, he might be left without either pension or earnings at the end of the averageing period. This, the Committee says, is because pensions, like other benefits under the National Insurance Scheme, are a provision against expenditure week by week. The Committee says that the pensioner might be left in debt to the Fund at the end of the averaging period.
But what does it matter if the pensioner is left in debt to the fund at the end of the averaging period? Does the Committee feel that the pensioner will not save up to meet that debt? In seasonal areas this is a problem which pensioners have had to face all their lives. The reason why a pensioner in a constituency like mine works is so that he may have a reserve to pay off his other commitments, such as an increase in the rates, or a rise in the price of other commodities such as coal and light. I hope that the Minister will deal with this aspect tonight. The Minister must give the pensioner who lives in these areas of seasonal employment the opportunity to earn and put something aside for the winter months when perhaps he faces an increase in prices. I hope that when the Minister reconsiders this problem he will consider it from a human angle and realise that there are people in outlying parts of the country who are like squirrels and put away their nut for the winter. They put their money away 1045 for the winter and against the rainy day that is coming along.
This argument that the Committee has put forward looks very learned in the Report. Indeed, the Committee seemed to put up some arguments only in order to shoot them down again, but I hope that before they report again members of the Committee will come to areas such as I have been talking about and examine this problem against the background of the very high unemployment rates in the winter months. It could possibly be argued that the Government are using this matter of averaging to help themselves.
When I approached the Board of Trade and suggested that in an area such as mine where there is a high seasonal unemployment the Government should consider introducing some light industries, I was told that the rate of employment has to be averaged to include the summer months, when the rate is high. The result is that my constituents are deprived of the opportunity of additional earnings in the winter. But paradoxically the Minister says that we cannot average pensioners' earnings. No wonder the unfortunate pensioner finds his position very disconcerting.
The Minister has had to consider this problem before when I have presented it to him, but I hope that he will consider it again and that perhaps he can get round the problem of averaging where unemployment is above a certain figure for eight or nine months of the year.
I hope that he will be able to do something more for the pensioners who find themselves in the predicament where they are unable to earn as they do in Lancashire, Yorkshire, London and the industrial areas; for the average wages in an area such as mine are not £13 but £8 a week, and the position of these people is much nearer the margin than is the position of many other people in the country. We say thanks to the Minister for a small relief, but I trust that he will look into the problem again and see whether he cannot do something more to help such pensioners as I have mentioned.
§ 7.52 p.m.
§ Mrs. Eirene White (Flint, East)
I wish very much indeed that we were discussing tonight not the question of the earn- 1046 ings rule but a Bill to increase the basic rates of benefit, because I am quite convinced that the people fully accepted after the Conservative Government were returned to power that they would pay some attention to what I think was on our side the most effective political argument in the social service field, which was this matter of the basic pension.
I am perfectly aware that I cannot discuss this at any length, but it is only right to make clear that anything I say of the matter of earnings rules—and I think that I speak for all my hon. Friends—presupposes our very strong preference for something quite different from these Regulations, in other words, a Bill dealing with basic rates. I am fortified in this in dealing with a subject which I specially wish to mention tonight—the position of the widowed mother. It has been discussed on a number of occasions before in the House, but I make no apology for raising it again.
Paragraphs in the Report of the National Advisory Committee concerning the widowed mother very properly make the point that what is really needed is an increase in the amount of benefit, because that would be of assistance not only to the widowed mother who goes out to work and is affected by the earnings rule, but to the widow who, for some reason or other, stays at home to look after her children. I agree with my hon. Friend the Member for Sowerby (Mr. Houghton) that one would vastly prefer to have an increase in benefit which would benefit all widowed mothers, whether they go out to work or not, to any alteration in the earnings rule. However, the draft Regulations before us deal only with the earnings rules and they follow the principle, which has been established now since my right hon. Friend the Member for Warrington (Dr. Summerskill) was Minister, of making a difference between the allowance for widowed mothers and that of other beneficiaries.
We are now in a situation where the widowed mother can earn up to £5 a week, that is, 30s. more than other beneficiaries, before any deductions are made. But I must say again what I said frequently in the House when these matters have been before us, that this question of the widowed mother should be treated on a different basis altogether 1047 and that merely to give her rather more favourable terms, which we do once again in these Regulations, does not meet the situation.
There is no question here of retirement. It is not that that principle is in any way relevant to any widowed mother, and therefore any arguments one may use about the necessity of an earnings rule in order to prove retirement have no relevance to this category of pensioner. One is dealing with a woman who, by definition, has to look after dependent children as well as herself. She has, therefore, to be a substitute in the family for the father who normally would be supporting the children. But that is not the whole story. About one-third of married women are at work anyway.
The suggestion which underlies so much of the discussion of this matter—that a mother who loses her husband has not been working before and therefore what she has to do is to try to make up for her husband's earnings only—is not the whole story, because frequently she was herself already earning something. She is faced with a situation in which she is earning something and then her husband dies and his income is no longer there to sustain the family and she has to meet the needs of a family which is already accustomed to a certain standard of living. She is then told, "We will allow you to do this up to a certain point, but beyond that you are penalized". The point comes after £5, plus the various allowances, at which she is deprived of her earnings, and if she is a highly-paid person she may go beyond that point and be able to keep the income again.
In considering the widowed mother, one ought to face the fact squarely that she was already earning and that she has to try to bridge the gap caused by her husband's death. This suggestion that her earning powers should be limited is not a wise one. It is remarkable that one-fifth of the widowed mothers concerned are affected by this earnings rule. That is a considerable proportion. Therefore, I suggest that there is here a serious social problem. It does not satisfy me in the least to be given figures of average earnings of £7 4s. in one case and about £3 in another.
1048 This is not the position of many women who are trying to keep up a standard of living for their children and who feel that the National Insurance which their husband has paid really is an insurance. I am perfectly well aware that there is a difference of opinion in official circles about this and that it is not really the principle behind this arrangement to regard it as an insurance in the ordinary sense of the word, but there is no doubt that many widows regard it as an insurance and that they feel that the community owes them something for the loss of the breadwinner in the family.
There is that psychological element about it, but, apart from that, I have always argued that the woman who has children to look after should be encouraged to keep every penny she earns so that she has to earn for the least possible time and is not put in the position where, in order to earn something extra for her family because of the reductions under the earnings rule, she has to spend more time and more effort outside the home trying to earn extra.
Although the earnings limit has now been raised quite substantially, of course it still will not affect the position of a number of women who are able and willing to add fairly substantially to their family incomes. If there were not this large number we should not have 29,000 who have been affected by the earnings rule. I do not know how many of these will be excluded by the proposed raising of the limit. One cannot tell. I do not know whether the Minister, when he replies, can give any indication of what he expects under the Regulations before us, but I am sure that he is very well aware that on this question of the widowed mothers there is very strong feeling indeed.
There is, of course, the other injustice and anomaly in this matter to which Mrs. Jeger, when she was Member for Holborn and St. Pancras, South and gave very great attention to this subject, consistently drew attention, and that is the differentiation between the widowed mother coming under the National Insurance Regulations and the widow who may be drawing a pension because her husband died as a war casualty or through industrial illness or injury. One has this anomaly, which socially has 1049 really no justification whatsoever, of widows who may be living next door to each other, and in precisely the same circumstances, but because the husband of one died in the war or as the result of industrial injury or sickness she is completely free of earnings limitation, while the other one, whose husband died in different circumstances, but who has Precisely the same social needs, and whose children have exactly the same social needs, has to forfeit a proportion of her earnings.
There is really no rhyme or reason why there should be this simple distinction between two widows with children living side by side, whether the husband was killed on the way to work, or after he reached the factory, when the needs of the two women and of their children are the same, and when, I would suggest, the social requirements of the community are just the same.
It is really most disappointing, after the discussions which have gone on for the past few years, and after all the representations which have been made, that the Government still insist on keeping this earnings rule for this category of persons, who are really so different in their needs from the other categories we are dealing with.
The Advisory Committee points out:We find it difficult to reconcile these limits with the view that the widowed mother's personal allowance is provided because she is unable to support herself by her earnings, but if this concept is abandoned we see no other objective criterion by which to decide at what level the limit of earnings should be fixed.It is not just the woman we take into account when we discuss the widowed mother. We are surely thinking of the family situation as a whole. It is because of that that those of us who have campaigned for a long time now for the removal of the earnings rule for widowed mothers are deeply disappointed that the Government have not taken this opportunity, which they very easily could have taken, to deal with this problem.
What they have done is to keep the differential, to extend the various allowances which are made for disregard, to extend the age up to which children should be regarded as dependent. In other words we have every kind of little adjustments here and there, but all the time the Government refuse to face the 1050 really basic fact that an earnings rule is quite unsuitable for the circumstances of widowed mothers.
I repeat that the really serious thing about this is that the widowed mother should be encouraged to earn as much as she can in as short a time as possible and no deductions whatever should be made. She has enough to do as it is to try to support her family, and not merely financially, but also by keeping her children as little bereft as possible by the absence of their father. It is a considerable strain upon her personally, not merely financially.
In those circumstances it is surely against social policy, it is against common sense, it is against the public interest, that we should say to such a woman, "For no justifiable reason, but just because there happens to be a differential under National Insurance so that other people have to have an earnings rule, therefore you have to have an earnings rule, too."
I appeal to the Minister to think of this yet again. He knows perfectly well that the general body of opinion in the country would be with him if he were to take the opportunity not just of making a little extension here and there, not just nibbling at the problem, as he is, but to say once for all, "We recognise that widowed mothers are in a different position, and we will, therefore, not have these relatively minor differences but will abandon the earnings rule for them altogether."
That, I repeat, is no substitute for an adequate basic benefit—
§ Mr. Deputy-Speaker (Major Sir William Anstruther-Gray)
The hon. Lady makes me anxious lest she should go out of order when she seeks to relate this to the question of an adequate basic benefit.
§ Mrs. White
I was merely referring to that, but it is an essential part of my argument that what the Government propose is not a substitute for an adequate basic benefit, and I do not think that one can logically complete that argument without stating that fact. I do not propose for a moment to develop it, but I think it is only fair, in speaking for myself and others, including my hon. Friend the Member for Manchester, Exchange (Mr. W. Griffiths) who is so 1051 regrettably unable to be with us, to make it perfectly clear that in our vehement opposition to the earnings rule for widowed mothers we have not lost sight of the needs of the other widows who cannot go out to earn at all.
§ 8.8 p.m.
§ Mr. Arthur Tiley (Bradford, West)
I am very grateful for the opportunity of following the hon. Lady the Member for Flint, East (Mrs. White). I usually follow her in cinema debates. Now I am glad to follow her in a wider interest and possibly more important subjects. I, too, think it is a great pity—I agree with her—that we are debating this subject from 7 p.m. onwards. I hope pensions have not been put into the category of half-day subjects in this new Parliament.
§ Mr. Houghton
The hon. Gentleman will remember that the last time he took part in a debate of this kind it began at 10.18 p.m. and finished at 12.14 in the morning, so we are slightly better off this time.
§ Mr. Tiley
I thank the hon. Member for Sowerby (Mr. Houghton) for that helpful support.
We had some notable debates in the last Parliament on this vast subject. I can remember seeing the same two familiar faces in the same two familiar places, and I can well remember at the conclusion of many debates the hon. Member for Coventry, East (Mr. Crossman) saying with great passion at that Dispatch Box for a period of two years, that we must let the country decide, that we must go to the country and ask it for its decision on pensions. We continued our pensions debates throughout the whole of October and we find that the country has given an overwhelming vote of confidence to my right hon. Friend. We seem to have had innumerable hours to spend in the House since we came back to discuss the affairs of the Scots and it is a great pity that we should be discussing pensions only from 7 p.m. onwards.
The hon. Lady the Member for Flint, East has made some important points. I read Mrs. Jeger's recent article in the Guardian. There are certain anomalies in connection with the earnings rule concerning beneficiaries amongst the widowed mothers, but the argument for 1052 its complete removal, bearing in mind the cost of the earnings rule, to benefit those few simply does not hold good.
I shall not be allowed to develop this theme, I know—
§ Mr. Tiley
—because it would be out or order—but I believe that the total cost of £100 million which would be required to remove the earnings rule would give the benefit to those who now can earn most. We should certainly apply our thought and the money which is available to those widows who are incapable of working because of ill health or of family ties with young children.
I would say to the hon. Member for Sowerby that the Government's policy remains the same—that is, that the resources of the nation should be channelled into those directions where the need is greatest. That is the policy for which we have stood and that is the policy we pursue. That is why the hon. Lady the Member for Flint, East said that the country expected that by this time we would have been discussing pension increases. Of course, that is what the people expected from a Conservative Government. They know our history and our record and they know full well that this question—
§ Mr. Willis
On a point of order. I do not quite follow why it was out of order for my hon. Friend the Member for Flint, East (Mrs. White) to discuss the basic pensions but it seems now to be in order.
§ Mr. Deputy-Speaker
I quite appreciate the hon. Member's point of order. The House knows how close to the margin of right or wrong we get in these debates and I hope that the hon. Member for Bradford, West (Mr. Tiley) will bear that in mind.
§ Mr. Tiley
I am sorry, Mr. Deputy-Speaker. I felt that it would be out of order, but I had the feeling that it would make my speech a little more interesting. We must remember that our back benches are a little less in strength than formerly, because my hon. Friend the Member for Leeds, North-East (Sir K. Joseph) has now moved to a more exalted station and we must, therefore, do our best with the Members who remain.
1053 I was sorry to hear the hon. Member for Sowerby, who makes such great and notable speeches on these occasions, pour a little disparagement upon those who go for National Assistance benefit. The hon. Member for Flint, East instanced the case of a widow who can go out to work and whose earnings, because she has a pension from a certain source, are not affected, whereas another widow with children who lives nearby cannot have the same benefits.
We must make it clear throughout the whole of our pensions debates that there is no smear in going for National Assistance. The country makes this added benefit available to those who cannot help the position in which they find themselves. I know that the hon. Member for Sowerby would not wish to disparage the National Assistance Board—
§ Mr. Houghton
Why, then, does the hon Member say that I did? I did not, I had no intention of so doing, and I hope that the hon. Member will not pursue this. What I was saying was that under the National Insurance scheme, people should have an adequate pension as of right and should not be forced to go to the National Assistance Board for their needs. That is what I said. It is no disparagement.
§ Mr. Houghton
No. I did not waggle my hand and grimace as the hon. Member is doing. He is importing prejudice into what I said. My words were not intended to convey that meaning. I ask the hon. Member to keep smiling, to keep his arms still and not to waggle 1hem and grimace as if there was an intention to import prejudice into my remarks.
§ Mr. Tiley
The hon. Member will notice that I am waggling my right hand.
I ought to declare, as I always do, my interest in pensions because of my connection with the pensions insurance market. I merely declare it because of a remark I wish to make later in this short speech. One of the greatest advantages 1054 of the Welfare State, a real advantage to the community, has been that we all live nearer to each other's problems. Through the medium of social legislation, there is a greater awareness of sufferings, sacrifices and injustice and there is a greater feeling in the community of responsibility for them. We are in the Welfare State together. We must either advance together or retreat together. Social legislation has probably made a greater influence in that sector of community living than the churches have been able to achieve in this generation.
It is, therefore, necessary to examine each problem in its broader aspect and not narrowly. There is, of course, a defect in the social services to which many people point, and this ought to be said. When we bear in mind that the average wage throughout the country is now approximately £14 a week for men—
§ Mr. Tiley
Yes, it is in the Report—it would be a good thing if husbands gave a little more attention whilst they are living to the needs of their families. If a man takes unto himself a wife and begets children, he has a responsibility for them first and foremost. It is right that somebody should say this. As the prosperity of all classes increases, more and more people should be encouraged to accept this personal responsibility. It is not an expensive thing to do. The cost of a couple of packets of cigarettes each week would remove from a family care and worry of a financial kind that death may bring.
The broad problem is looked at by the National Insurance Advisory Committee, not from a party angle. The members of the Advisory Committee are not the Minister's lackeys. They are his advisers and they have accepted the Government's intention with a little disquiet. They say. for instance:We take it, therefore, that it is the Government's deliberate intention to make the earnings rules more generous than they are at present.I am very glad that the hon. Member for Sowerby, on behalf of his right hon. and hon. Friends on the benches opposite, is prepared to accept that principle, because it surely is right that when there is need for older people who can do so 1055 to work in industry, and when men are fitter in these days, as undoubtedly they are, beyond the age of 65, it should not be the business of Government legislation to hamper the fact that they can still make a contribution to meeting our industrial problems.
There follow in the Report some wise words about the earnings rule.We have explained in our previous reports the earnings rule is necessary, so far as retirement pensions are concerned, in order to support the retirement principle.I believe, as do all those who take a forward view of the pensions problem, that eventually we shall see the earnings rule disappear, though this may take forty or 50 years. However, it will only go completely when there is no need for people to work in the later years of their lives. It will only go when, through State or private schemes or private savings, people can hope to enjoy a happy life in old age without the need to work. I believe that this position will come about in an expanding prosperity in a growing community, and as private savings and private schemes and the Government pension scheme increase their value.
Therefore, it is right that before this moment arrives we must continue to make these improvements, and the Minister has a splendid record over pensions. As has been pointed out, my right hon. Friend has come to the House twice in the space of a year to make an improvement in this respect. I hope he will look at the twelve-hour rule because a definite direction is needed from the Minister. The rule is completely out-of-date. The National Insurance Advisory Committee is obviously uncomfortable about its present interpretation, and it is causing a great deal of disquiet in the minds of old people who know that they are working more than twelve hours.
We all welcome the change for the widowed mothers. I agree with the hon. Lady the Member for Flint, East who made such a powerful plea in this respect. She pointed out that what we are able to award from the industry of our country should be directed into the channel where the need is greatest. We have just received the Report of the Albemarle Committee on the Youth Service in England and Wales which means so much to young people—
§ Mr. Deputy-Speaker (Sir William Anstruther-Gray)
Order, order. No, indeed, it would be out of order to discuss the Albemarle Report, but to make a passing reference to it is permissible.
§ Mr. Tiley
Thank you, Sir. I thought the hon. Gentleman was agreeably moved by my words but I can see that I was sadly mistaken.
The impact of crime and juvenile delinquency stems from the fact that so many mothers go out to work. [Laughter] If hon. Gentlemen opposite laugh at that, they will not believe anything. The impact on home life and the break-up of so many homes is largely due to the fact that so many widowed mothers and mothers are having to go out to work, and it is one of the principal causes of the juvenile delinquency in our country. So what we have to offer, and what we give by way of benefits, should be directed to ensuring that widowed mothers with children are adequately pensioned so that they need not go out to work and can perform their prime duty of looking after their children.
We welcome the improvements which my right hon. Friend has made. I am glad this change is taking place and I am glad to support it. I am glad also that the Regulations included an explanatory note, because I was able to understand them.
§ 8.24 p.m.
§ Dr. Horace King (Southampton, Itchen)
I am tempted to make passing reference to all the subjects to which the hon. Gentleman the Member for Bradford, West (Mr. Tiley) made passing reference, but I will mention only one. I thought the hon. Gentleman was singularly unfair to my hon. Friend the Member for Sowerby (Mr. Houghton) by suggesting that he was seeking to import an emotional disparagement into the discussion when referring to the National Assistance Board.
1057 The hon. Gentleman has attended many debates on this topic in the House of Commons and knows the high opinion which both sides of the House have of the National Assistance Board and the work it does. My hon. Friend was simply mentioning what would seem to be almost a platitude, that if any considerable part of this community has to have its basic income supplemented by National Assistance, there is something the matter with the basic figure. My hon. Friend was making that point as regards the widows, many of whom have to go to National Assistance because of the inadequacy of their basic pension.
These Regulations are one more example of the keen and detailed and lively interest shown by the Minister of Pensions in the task he has undertaken on behalf of the Government. Although we differ fundamentally on many aspects of the work of his Department, and on certain basic principles, this is another example of a piece of useful work. I was glad that the hon. Lady the Joint Parliamentary Secretary, in ably introducing the Regulations, defended the fact that we must abandon the retirement principle, but that we are accepting the Regulations which increase permitted earnings and not abolishing the limit. This is not out of expediency, not because it would cost more to abolish them, but because there is something good in maintaining the retirement principle itself.
We do not want people to work all their lives; at least, we do not want people to have to work all their lives. The conception of honourable leisure in old age is not something that we want lightly to throw aside. We on this side of the House want all the pensioners in the country some day to enjoy the prosperity in their old age of living, as super-annuitants do, on the income received from adequate superannuation. A combination of retirement and part-time work, undertaken to provide extra funds, but which can be dropped at any time, is not an unhappy combination. We believe, however, that every time we increase the earnings limit, every time we move towards the abolition of the earnings rule, we are making more difficult the achievement of an adequate basic rate of pension. This is the reason why we approach the Regulations not grudgingly but critically.
1058 The Regulations do a number of things. First they translate a little more accurately the permitted earnings into modern values. When the permitted earnings were first set into the insurance Measures of my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) money was worth far more than it is today. As the Joint Parliamentary Secretary has pointed out, there must also be a rise in the permitted earnings to correspond to some extent with the rise in the average wage of the workers of the country. In addition, we should, as the Regulations do, ease a little the permitted earnings of a pensioner but, as my hon. Friend the Member for Sowerby pointed out, we must be careful how far we go along that line. Indeed, in the figures that we have before us we go about as far as we can without endangering the whole principle of retirement pensions.
Ever since we introduced the conception of which this is an extension there has been a fear, in respect of certain features of pensions, non-retirement and part-time earnings after retirement, that the pensioner, with the amount of money the Minister allows him to earn plus his pension, could undercut those who are seeking to maintain their own wage when that is all they have to enjoy. That danger may have gone to some extent, but many workers still think it exists. There is also the danger that if we make it too easy for a man to draw a pension without retiring it may jeopardise the prospects of promotion for those coming behind.
We are worried about the cost of abolition of the earnings rule, and of every advance in the permitted earnings, not because we object to increasing the amount of money which the Exchequer must provide, if that money is to go where it is most needed but because we would rather increase the basic pension Moreover, even as we look at these Regulations we must consider the danger that the extra incentives to go on working after the retiring age has been reached may encourage people who are not physically fit to go on working and shorten their lives, and in some professions it may much more seriously encourage people to go on working when they are no longer really capable of working and thereby do inadequately the job they are trying to do.
1059 In these Regulations we are considering not all pensioners but only those who are physically fit to go on with part-time work. Not all old-age pensioners can continue at the job they were doing, and after the age of 65 they are by no means strong enough or even willing to continue in part-time work, especially of the hard, physical kind. For such pensioners these Regulations provide nothing.
Every time the earnings limit is raised, therefore, we are anxious lest this step will benefit only a group of pensioners, and will deflect the attention of the country from the real needs of all old-age pensioners. At the present time the best way of benefiting pensioners is not this, but by an increase in the basic pension. I hope the Minister will be able to tell us how many of those reaching retiring age will benefit from the relaxation which he has permitted in the earnings rule.
I would say that almost none of these considerations about retirement apply to widows. No matter how much we raise the basic pension it can never provide an able-bodied childless widow with her previous standard of living. I welcome that part of the provisions which raises the amount which a widow, and especially a widowed mother, can earn. I pay tribute to the Minister for the dramatic increases he has made in the widowed mother's pension and the allowance which he gives to the children of the widowed mother, but dramatic as those increases are they are still not adequate; hardship still exists for widowed mothers and their children.
I regard motherhood, during the time when the children are young, as a full-time job. I am distressed at the tendency for many mothers to go out to work when they should be looking after their children, and I am particularly unhappy about the child who has lost his or her father and whose mother, driven by the exigencies of economics, has to go out to work, so that he really loses both parents. The problem of widows, although to some extent met by these Regulations, cannot be completely met; more widows are seeking jobs than there are jobs available for them. I sometimes wish that we could earmark some jobs for them, just as I sometimes wish we could earmark jobs which able-bodied men are doing but which could 1060 be done by disabled men. A widow who has given her beauty, youth and energy to the job of looking after her husband and bringing up her family finds it much more difficult to be attractive enough to gain employment when she goes on to the employment market.
I welcome the increase in the limit to £5 for another reason. It has been my experience that when widows have gone out to work they have sometimes had to work at cut rates, because there is a limit to the wage they can accept under the Statute and they work more hours for the same money for fear of losing the jobs. At any rate, this provision will benefit some widows, since it will mean that they will not find themselves employed on sweated labour.
Again, however, the improvements that the Regulations make in the condition of widowed mothers who can earn wages are no substitute for an adequate basic pension. I once more appeal to the House and to the Minister to give further consideration to the question of how far we should recognise the economic and spiritual disaster of widowhood; how far we should recognise the needs of widowed mothers, and the need to limit the necessity of their having to go out to work to supplement their basic pension. We have done this for the war widows—and rightly so—but I believe that every committee examining this question has failed to grasp the gravity of the problem. I suggest that the Minister should set up another committee, composed of more women than men, and with some widows on it. So far this House has not done justice to the widow and the fatherless.
§ 8.38 p.m.
§ Dame Irene Ward (Tynemouth)
Some very powerful speeches have been made about the earnings rule. I always listen with great attention to what is said by the hon. Member for Sowerby (Mr. Houghton) and my hon. Friend the Member for Bradford, West (Mr. Tiley), because I consider that they are both experts in their own spheres. Even though I am a supporter of the Government I enjoy hearing experts argue against Ministers who, to some extent, are dependent upon the advice given them by their civil servants and, in this case, the advice of the National Advisory Committee.
1061 My general comment is that every time we debate Regulations of this kind the pattern of the debate seems exactly the same. Though there are slight variations according to the recommendations embodied in the new Regulations, always the same pattern emerges. No one, perhaps not even the members of the Advisory Committee, ever takes very much notice of the informed opinion revealed in such a debate as this, or discusses the various problems arising from the general pattern which has continued to operate since the 1946 Act.
I fully understand the need for maintaining the earnings rule, and I think that is generally accepted. But I wish that at some stage in our proceedings we could discern from the recommendations of the Advisory Committee to the Minister that problems which have been discussed by various hon. Members have penetrated into the minds of the members of the Committee and as a result there is a change in the pattern of discussion.
I support what was said by my hon. Friend the Member for Harwich (Mr. Ridsdale) on the question of aggregations. In addition to representing a county borough, which is not so much affected by the new Regulations. I represent a seaside resort, and among my constituents there are a number of inshore fishermen. This problem of seasonal occupations is a very difficult one. I do not know, nor do I know how I can discover, whether members of the Advisory Committee—to whom we all owe a great debt of gratitude for their constant service and the advice they tender to the Minister from time to time—live in seaside resorts such as are represented by my hon. Friend the Member for Harwich and myself. I suspect that a great many of them live in the vicinity of London or in some industrial area. The whole question of retirement pensions and the earnings rule is focussed on the industrial areas and these fringe parts of the country get little recognition. Their problems are small in relation to the problem as a whole, but in these parts of the country they are very important.
Time after time we raise these problems and the same old arguments are advanced. We never seem to advance forward an inch. Is it not possible to make an experiment? I was delighted to hear my hon. Friend the Member for 1062 Harwich say that he hoped that between now and any future amending of the Regulations some member of the Committee would come to Harwich and examine the situation there. But it is not just a question of going to Harwich or to Whitley Bay. It needs someone who lives in the area and who knows the general pattern of life which goes on there year after year and season after season.
I am bitterly disappointed that once again, as it seems to me, my right hon. Friend feels obliged to accept what is stated by the Committee and that these people to whom I have referred are to be left in their unfortunate and very difficult circumstances. I do not know what arguments can be put forward about this, except to say that the House of Commons is supposed to be a place where grievances are remedied. These grievances to which I refer have been discussed for years, until everyone is thoroughly sick and tired of them, and yet still my right hon. Friend accepts what is said by the Advisory Committee. Because the Advisory Committee takes the view which it does, we get no further forward. I am extremely worried about that.
That takes me to my next point about the widowed mother. My right hon. Friend would have great success if he could now say, on the decision of the Advisory Committee, coupled with the way in which it expresses its suggestions about the widowed mother, that he will now set up a committee composed of people who have a greater interest in this matter, who come from different parts of the country and have special knowledge of it to go into the whole question. I put this view to my right hon. Friend. The widowed mother who can go out to work and is in the fortunate position of having the earnings rule relaxed in relation to her allowance, could also have a private income. I am not quite so concerned about the position of the widowed mother as about the effect of this Regulation on the children of the widowed mother. I think that psychologically very important.
I hope I shall not be out of order, Mr. Deputy Speaker, when I say that I think this House is in great difficulty in discussing matters of this kind because we are never able to discuss them over a very wide field. One of the difficulties 1063 in being a Member of Parliament is that one rather dislikes using one's personal experiences. I suppose it is a natural feeling that one would much rather not draw on one's own life and the way in which one has lived it, yet sometimes personal experiences can be used to help to drive home a point.
Of course, it was years and years ago, as would be noticeable to everyone, that my mother was left a widow. When I was a quite small child my father died of T.B. and my mother was left a widow with a very small income. I happened to come of a family who were in very good circumstances, that is, the uncles and cousins. I well remember when I went to the same school as my cousins. When the question came of taking part in an expedition or a party abroad, or taking part in all this wonderful extension of life which children now enjoy, if one happened to be the daughter of a widow, one had to say no, whereas the wealthier members of the community could say yes.
I have experienced that and I know what it means. Sometimes there is a tremendous danger of giving children a feeling of inferiority complex. They wonder why they should be deprived of some of the great advantages which come to other children. As the whole tendency of Government policy today is to bring about as happy an equality as we can, it seems extraordinary that in this new recommendation about the earnings rule it is the widowed mother who can go out to work and whose children will have the great advantage, whereas the widowed mother who stays at home and does not allow her children to become "latchkey children" is to be deprived of any increased benefit.
This is very clearly brought out by the recommendation of the Advisory Committee, which I congratulate on having got so far. Whether that will penetrate to the mind of the Minister when he discusses these matters with the Chancellor of the Exchequer and with the Cabinet, I do not know.
We have to make up our minds whether we want to encourage widowed mothers to go out to work and earn or whether we want to encourage them to stay at home and look after their children.
1064 I was discussing this today with someone very interested in the subject. He explained that when a widowed mother goes to work it is necessary for the school teachers to have two addresses. They must have the address and telephone number of the factory in order to contact the mother if the child is taken ill at school, because if the child has to be sent home from school she will find no one at home if her mother is out at work. I recognise that this argument also applies to mothers who are not widowed. The fact remains that the school teacher has to have the child's home address and also the address and telephone number of the factory. If anything happens to the child at school and the teacher wishes to contact the mother, she has to telephone the factory, and the mother must leave the factory to go home in order that her child should not be sent from school to an empty house.
All these matters are very important when we are deciding whether the recommendation is sound. I cannot discuss the general situation of the widowed mother and her allowances in this debate, but I want to put on record one paragraph from the Report of the National Insurance Advisory Committee. The Minister, of course, knows what is in the Report, but I have a great belief in HANSARD, which is read by almost all social workers as well as by many other people. The report of this debate will be read much more widely than the Report of the Advisory Committee. In arguing the case it is, therefore, important to state what the National Insurance Advisory Committee said in advising the Minister. The Report reads:There have been many suggestions that the earnings rule for widowed mothers should be abolished and any relaxation of the rule will doubtless be widely welcomed. A relaxation of this rule will, however, mainly benefit widows whose family circumstances permit them to undertake a substantial amount of work, or whose work is relatively well paid. It will not help the widow who cannot readily leave her children and go out to work. We should accordingly prefer to see any additional expenditure on this benefit go to increasing the basic allowances for the mother or her children.
§ Mr. Deputy-Speaker
I am afraid the hon. Lady is going a little further than 1065 she should, because we are discussing the Regulations and not the Report of the Advisory Committee.
§ Dame Irene Ward
I fully understand that, but I am bound to say that every other hon. Member has referred to the Report. The Minister takes his stand on the Report. It is a little difficult, therefore, if the information contained in it, on which the Minister asks us to accept the Regulations, cannot be quoted for inclusion in HANSARD. At a fairly late stage in the speech of the hon. Member for Sowerby (Mr. Houghton), Mr. Speaker drew attention to the fact that we must be very careful to keep within the terms of order. It is a little hard on back benchers to have him permitted to deploy his case and then, when they want to deploy their case, they cannot even read out what is contained in the Report. Though, of course, I bow to your Ruling, Mr. Deputy-Speaker, I am bound to say—
§ Mr. Deputy-Speaker
I do not want to rise on a point of order which is not a true one. My anxiety is that the hon. Lady should not urge any increase in the basic rate of benefit.
§ Dame Irene Ward
I was not going to urge that. I was merely pointing out what the Advisory Committee said. I would like to get that in HANSARD. There are two alternatives. Either I can quickly finish and say nothing more, or, if the Minister has anything to say about the Committee's Report, I can cause an interruption so that it will be recorded in HANSARD.
If you, Sir, will allow me to finish this sentence so that it will be in HANSARD, I will bring my comments to an end. I will not then urge anything in the way of action, except that the Minister should bear in mind what his own Committee says. The Committee says:It will not help the widow who cannot readily leave her children and go out to work. We should accordingly prefer to see any additional expenditure on this benefit"—this is the money we are voting—go to increasing the basic allowances for the mother or her children. We understand, however, that the amount which the relaxation of till: earnings rule would cost would not be enough to improve the basic allowances significantly. In these circumstances we do not feel able to object to the proposed relaxation.1066 I am sorry the Committee did not feel it could make some further substantial recommendation. Hon. Members have been in order in suggesting that we could have a committee to look into this whole matter so that we should have a chance of considering this subject more widely before the Minister emerges again with new regulations.
I am, of course, delighted that he has been able to introduce these Regulations, but they are not very happily based in relation to the Report, so I ask my right hon. Friend not to skate round everything when he is replying. Now that I have this in HANSARD, I will not carry out the interruption.
Various people have referred to the General Election. We said that we intended to improve the standards of those people who were not so well off, the small fixed income group, so that they might share in prosperity. This is a very important issue. Thank you, Sir, for not ruling me out of order again. I hope my right hon. Friend will pay attention to what is said in the Report so that we can ensure that the widowed mother who stays at home and looks after her children is not deprived of essentials which the widowed mother who can go out to work may be able to provide for her children.
I hope my right hon. Friend will be able to say that he will have this matter examined and that those who carry out that examination will be people who know some of the facts of life.
§ 9.0 p.m.
§ Mr. James Dempsey (Coatbridge and Airdrie)
I recognise that it is becoming more and more difficult to confine oneself to the subject of the debate, because of the several departures from the subject which have already been made. However, I shall do my best to confine my remarks to what are described as the National Insurance (Earnings) Regulations, 1960.
The Regulations deal with the relaxation of earning limits and if I confine myself to that one aspect of National Insurance, I hope that it will be understood that I am not in any way detracting from the general argument of the Opposition on the need for bringing pensions up to proper living standards for all kinds of pensioners.
1067 Some hon. Members have discussed even crime and juvenile delinquency and I regret that juvenile delinquency has been attributed to the fact that many mothers go out to work. Some of us know of families where mothers do not go out to work and where there is still juvenile delinquency.
The Minister is going in the right direction in making this adjustment, but I hope that he will not conclude that enough has been done to permit him to indulge in smug complacency. It must be remembered that although the allowances for a widowed mother are to be increased from 80s. to 100s. a week, an increase in earnings of 10s. will prejudice her entitlement to those allowances and after that figure, for every shilling she earns, 1s. will be deducted from her entitlement to pension.
The Parliamentary Secretary said that the average earnings of women were now £7 0s. 4d. a week, but it does not necessarily follow that those are the average earnings of widowed mothers who are working. We have no figures to justify such a contention.
If one studies areas where women are employed, one will find that many women earn more than £7 a week. That is especially true of the industrial belts of the country and in such areas a concession of 20s. a week is largely wiped out because of earnings. I hope that the Minister is fully congnisant of the actual earnings of widowed mothers. No one will deny that a widowed mother finds rearing a family a costly business.
I am not unmindful of the substantial increase given to the dependants of widowed mothers, but in dealing with this problem we must not forget a fundamental factor. We seem to deal with this in terms of monetary influences and forget the important qualification that we are trying to compensate a woman and perhaps some children for the loss of a father, and, of course, no amount of money could compensate any child for the loss of its father. I honestly believe that a case can be made out for devising some scheme whereby we can look forward to the day when the earnings rule will not be applied to a widowed mother. If we cannot accomplish it in one year, I appeal to the Minister and his Joint Parliamentary Secretaries to apply their minds to 1068 phasing the eventual abolition of the earnings rule over a period of years. It is certainly an ideal towards which all of us should strive.
I have been studying very carefully just what is envisaged in the Regulations. I am willing to concede that the Regulations should be welcomed by all hon. Members and that the Minister is taking a step in the right direction, but I appeal to the right hon. Gentleman to realise that the Regulations are not an end in themselves but are only a means to an end, and the end must be the eventual elimination of the earnings rule.
I ask the Minister to look once again at the earnings rule in relation to retirement pensions. He suggests that a person who is in employment will be allowed to earn 70s. a week. I hope I have the figure right.
§ Mr. Dempsey
That is, in essence, an increase in the earnings rule of 10s. a week. It is not unusual to calculate National Insurance benefits in terms of daily quantities. That is, indeed, done in almost every aspect of our National Insurance system. I would point out that 10s. per week really means only that we are allowing the retirement pensioner to earn 1s. 8d. a day. Surely that is an infinitesimal allowance for a retirement pensioner.
I was earnestly hoping that the right hon. Gentleman would take into consideration not merely the views of the National Insurance Advisory Committee but some of the views of the local insurance advisory committees. I was a member of a very active local insurance advisory committee for many years, and I can assure the right hon. Gentleman that we always appreciated the courtesy that we received from him and his excellent staff of officers in Lanarkshire. In co-operation, help, guidance and assistance they are wonderful people, and no one could ask for better.
I feel that some of the views which have been expressed by local insurance advisory committees in years gone by should have been given some consideration. I honestly believe that if those views had been given sufficient consideration the right hon. Gentleman might have made a braver effort than 1069 merely to increase the earnings allowance by 10s. a week. I ask the right hon. Gentleman to appreciate that most of the persons for whom I am appealing have been paying insurance contributions for many years—some for 20 or even 30 years—and the least they might expect in return is something more tangible than 1s. 8d. a day or 10s. a week.
I hope that the right hon. Gentleman, when replying, will be able to give me some logical reasons why he has, as Minister, arrived at the increased allowance of 10s. a week. I recognise that he has difficulties, that he has an insurance fund which has to be solvent, that he has to have regard to the views of his National Insurance Advisory Committee and that he has a host of other considerations. Frankly, however, retired pensioners, people who have in one field or another, or perhaps in both the industrial and the military fields, given their life to the country, ought when they reach the twilight of their career to be able to look forward to much more than a paltry 1s. 8d. a day increase in the actual earning allowance before their pension becomes prejudiced.
I earnestly appeal to the right hon. Gentleman and his Parliamentary Secretaries to look at the matter in that light, and to try to do their very utmost to ensure that in these Regulations they will provide reasonable allowances with which pensions might become more enjoyable for these sections of society.
I conclude by saying that I have heard all sorts of arguments in the Chamber tonight, both for and against, and that I respect the difficulties with which the Minister is confronted. Such difficulties exist only to be overcome, and I am convinced that where there's a will there's a way. I think that the Minister has the will to overcome these difficulties, and to ensure that the earnings allowances for people coming within these categories of retirement pension will be much greater than the figures proposed in these Regulations.
§ 9.12 p.m.
§ Mr. Percy Browne (Torrington)
I have listened to the whole of this debate, and I have been amazed at the wide range which it has succeeded in covering, considering that we are supposed to be talking about one specific point.
1070 It appears that none of us likes the earnings rule, but that all agree that in the circumstances it is better that we should concentrate help where it is most needed; that is, on those who cannot work because of a lack of employment, sickness or family commitments. A lot has been said about widowed mothers, and I will say no more, except that I am perfectly certain that my right hon. Friend, who has brought such a human touch to his very difficult job, will bear in mind the remarks made by the National Insurance Advisory Committee in paragraph 10 of its Report.
I should like to mention two specific points. The first is one which was dealt with by my hon. Friend the Member for Bradford, West (Mr. Tiley), when he spoke of the 12-hour rule in the retirement conditions. It is all very well for my right hon. Friend and the Parliamentary Secretary to talk about the average wages throughout the country, but in the West Country, in places like those my hon. Friend the Member for Harwich (Mr. Ridsdale) mentioned, the average wages are nearer £8 per week than £13. It means that a man has to work probably for half a week, or for twenty-four hours, in order to earn his £3 10s., and, of course, the discrepancy is even greater in the case of women. While we must have some sort of yardstick, I wonder if my right hon. Friend would consider raising the limit perhaps to twenty hours. Although I realise that many of his officers are lenient in the interpretation of this rule, it would help many pensioners if the limit could now be raised to twenty hours.
I have to join forces again with my hon. Friend the Member for Harwich in riding a hobby horse which we have both been riding for some time. It concerns the problem of seasonal employment and the question of averages. Here again, in places with seasonal employment, such as we have in North Devon, where wages are low, a man may get work for only four months of the year, and probably earn £8 per week during that time. If he could average those earnings over the year his pension would not be extinguished or touched at all, but, as it is, he will lose his pension entirely for those four months.
This horse is said by my right hon. Friend to be a non-starter, although I can tell him that even odder horses than 1071 this have won races. He says that it is a non-starter, first because every pensioner would have to report any earnings made during any week irrespective of whether they came up to the earnings limit and, secondly, because at the end of the year the pensioner might owe the Exchequer money. My right hon. Friend having been given this example of places of high seasonal unemployment, will he, as my hon. Friend the Member for Tynemouth (Dame Irene Ward) suggested, try a pilot scheme to find if it is possible to do something about it?
Every other subject about which I wished to speak has been touched on. I think that I can get away with it in the last few moments if I say that when my right hon. Friend takes a bite at the cherry he should look at the basic retirement pension.
§ 9.16 p.m.
§ Mr. Charles Mapp (Oldham, East)
There has been one very useful contribution from the hon. Member for Tynemouth (Dame Irene Ward) in regard to aggregation. Apart from the general merits of the document before us, I felt on a second reading of it that in terms of departmental neatness, friction and difficulties to persons qualifying there was a case for aggregation of earnings on its merits without necessarily taking into account the seasonal employment feature. That only reinforces the need for aggregation rather than taking the literal words in the First Schedule about earnings in the previous week.
Being confined to talking about the earnings limitation means that one must deal with this on a most unsatisfactory basis. What astounds me—I appreciate that I have been a Member of the House of Commons for only a few months—is that these Regulations will authorise the Minister to make variations in the schemes, but they do not give any information about the costs involved. The House is being asked to agree to a series of apparent improvements without having any basic information with which to test the priorities of such improvements. The Committee in making a Report of this kind should reinforce hon. Members with the degree and extent of the finances involved.
I now turn to the question of widowed mothers. I am particularly interested in this subject. I had hoped that a 1072 figure might have been forthcoming in which we did not necessarily take the earnings ceiling from them altogether but left it so high as to be nearly insignificant. Widowed mothers should be left entirely out of the context of retirement regulations. The word "retirement" is pure irony when applied to widowed mothers. They are quite separate and should have absolutely separate treatment.
Today we heard an announcement by the Minister of Aviation. I do not wish to be controversial but to draw attention to the rather niggardly approach of the Minister and the Government to the problem that we are discussing. In the other subject about which we heard this afternoon, and to which I have just referred, the expenditure of public money assumed a totally different pattern. I do not wish to be out of order, but I wish to say that the House should keep a balance in regard to its priorities.
Though I do not like the word, I suppose our society today could be regarded as affluent. It is a society that can allow for margins and can afford to plan ahead with some degree of confidence—perhaps with reservations here and there. This afternoon the Government announced their plans for one of the major industries of this country. I am therefore entitled to say to the Minister and to the Government that widowed mothers, above all others, are entitled to some reward from our society for their loneliness and their great work in keeping and maintaining their families. We should be far more generous to them than we have been in the past.
I am not denying that the Minister is progressive. If we could divide these Regulations into two parts, one part of which dealt with widowed mothers, I would vote against the Government tonight. However, as the Bill is intended to deal with the general picture I am bound to give it limited support.
May I conclude by criticising a detail of the Bill? The irony is that the incidence of 6d. being taken off each 1s. for the first 20s. and then the deduction of 1s. for 1s. after that, disposes of the standard rate of pension. As I see it, if a widowed mother with one child now earns £5 10s. her pension is reduced from 50s. to 45s. With the child's allowance figure her income is £8 7s., 1073 of which she earns £5 10s., but she must earn more than £8 before she gets a single penny for her additional activities. I beg the Minister to consider spreading the deduction more fairly. Instead of a deduction of 6s. per 1s. for the first 20s., I would suggest 3d. per 1s. I cannot see any justification for deducting 1s. for 1s. That should be changed and in that case it should be 6d. for 1s. without any ceiling.
Special circumstances apply in the case of widowed mothers and this severity on the part of the Government is not justified. I beg the Minister to look at this again.
§ 9.24 p.m.
§ Mr. Peter Emery (Reading)
While welcoming the Regulations, which raise the level of the earnings rule, I would like to refer to the matter of the 12-hour rule, to which my right hon. Friend the Parliamentary Secretary referred in opening the debate. My right hon. Friend said that this rule applied only when somebody was retired. In logic, of course, that is true, but it must be realised that before people start to draw their retirement pension, they consider ways in which their pension can be supplemented.
It must also be realised that most people, quite rightly desire to supplement their pension and would much rather do so by having a part-time job than by going to the National Assistance Board. This we would all wish to encourage. Therefore, when people consider whether they should start drawing their pension, they consider how to supplement it.
Rightly or wrongly, most people do not realise that the 12-hour rule has exceptions. From the information that many people are given before they begin to draw their pension, they learn only of the operation of the 12-hour rule. They do not realise that there can be appeal against it and they are deterred from drawing their pension because of it. It is, therefore, true to say that the rule applies even before people become pensioners.
I would enlarge my argument by saying that many people find it increasingly difficult to obtain the type of part-time employment which we would want them to have when they are limited to twelve hours and to twelve hours alone. I 1074 would like my right hon. Friend the Minister, when he replies, to say whether it is not within his power to direct his officials throughout the country to treat this matter slightly more sympahetically and to relax it a little more wherever possible.
I do not necessarily urge my right hon. Friend immediately to extend the limit to twenty hours, as did my hon. Friend the Member for Torrington (Mr. P. Browne), although I would, perhaps, suggest fifteen hours. Cannot my right hon. Friend understand the difficulty that may well arise among people who hope to be able to earn the 70s. The Regulations make allowance, but there are many who are not of the requisite calibre to obtain a job allowing them to earn 5s. 10d. an hour? That is a rate which they cannot expect to earn, and that is the rate which is envisaged by the figure of 70s. under the 12-hour rule.
I think particularly of some of the people who live alone. It is of great service to them to have a part-time job to help them going during their retirement. I know of somebody who is appealing and who wants to work only fifteen hours, three hours a day over a five-day week, as a waitress. This would allow her to work from, say, midday until three o'clock. That is a sufficient period during the week for her to have a reasonable job and to do a service in an area in which there is a great labour shortage. As well she will be useful to the community and creating an interest for herself. In this type of case, there is great need of understanding not only by the Minister, but by his officials, in dealing with this type of problem.
I am sure that if there is any way in which my right hon. Friend can deal with that kind of problem, it would have the agreement of Members on all sides and would be welcomed particularly by pensioners. In welcoming these proposals, the only thing that would please the pensioners more would be if the overall rates pension rates were to be given a general increase.
§ 9.30 p.m.
§ Mr. R. H. S. Crossman (Coventry, East)
I should like first of all to support very strongly what the hon. Member for Reading (Mr. Emery) has just said about the 12-hour rule. I would remind the 1075 House of what my hon. Friend the Member for Sowerby (Mr. Houghton) quoted originally on this subect, and refer again to the Advisory Committee and how strongly once again it is on the side of those of us here who are urging that quite obviously as the average wage rises so does the discrepancy in the application of this rule. All of us on this side would like to hear an assurance from the Minister that even if the rule cannot be abolished it will be revised.
We have had again as we always do have on this subject an extremely good and well-informed debate, and tonight we have had the pleasure of having some new people with us and the pleasure of seeing the right hon. Lady at that Box speaking on the subject. I would thank her for the really admirable introduction which she gave us to the debate because she presented us with the facts succinctly and clearly. I know perfectly well how difficult it is to be accurate and consistently precise, as she was.
I shall not prolong the debate very long myself because I think this is a debate in which the back benchers, in addition to my hon. Friend the Member for Sowerby, have made the overwhelming majority of points to which we should like the Minister to reply. I should like to take up a point made by my hon. Friend the Member for Oldham, East (Mr. Mapp) who spoke last on this side. He expressed something we all on this side feel, and that is our difficulty that we are not, of course, going to oppose the Regulations—we are going to support the Regulations—but there are things in them with which we profoundly disagree. More than that, for although we support the Regulations themselves, the policy behind them is one which fills us with very grave and increasing alarm.
If it is possible I should like to reinforce what my hon. Friend the Member for Sowerby said because this is the point of view on which we want to conclude in debating with the Minister. We all agree with what is done here. It is the circumstances in which it is done, and the policy and the general framework within which it is done, to which we object. Every debate we have on this subject shows more unanimous agreement of doubt about 1076 the whole principle of the retirement rule and the earnings rule applied to the overwhelming majority of the widowed mothers and all widows.
The retirement rule, the earnings rule, is something fundamental to our present scheme, it is always said. I have never understood why this should be so. It seems to me to be only something in the scheme. How can one say it is fundamental when it applies to women up to 65 and to men up to 70 and not after that? This cannot be fundamental. What is true is that it would cost money to abolish it. It would cost—what is it?—I think the Minister told us last time about £100 million to abolish it in toto, a very considerable charge.
We, therefore, see it from two points of view, that we should like to see it continued, and secondly, from the point of view of what priority we would give to abolishing it, if we have to weigh up the cost of benefiting the pensioners in other ways. I want to look at it from both those points of view in considering the limit.
From the point of view of principle, I must say that I would think that we have now completely outgrown the psychology and philosophy which insisted on the retirement rule. I have just been reading—it is coming out next month—the new life of Ernest Bevin. We all know that he was one of the first who thought out the philosophy of retirement pensions in relation to retirement. He did that as a trade union leader faced with mass unemployment in the 'thirties, and essentially he felt that any pension scheme must be in relation to retiring as early as possible from industry because of the prevalence—almost the predominance as it was then in those days—of unemployment.
I would suggest that the whole necessity of the earnings rule is coupled with the fear of unemployment. When one thinks in terms of a fully employed economy there is not the intrinsic reason for the necessity of the retirement rule or the earnings rule. We are glad to see that the T.U.C. and those who are concerned with the trade unions are no longer expressing the fears they were expressing ten years ago about abolishing the earnings rule. This fear, which was a real and horrible fear even ten years ago, is now no longer there.
1077 Once again we are getting into the climate where we ought to be considering looking forward beyond the earnings rule—to put it quite bluntly—to the kind of pension which the middle-class and professional people have taken for granted for themselves.
Let us not forget that there are no retirement or earnings rules for civil servants or for people on private superannuation. These are not rules which they think of. When the better-off sections of the population think of their old age, they are not burdened by these conditions. That is why we were glad in the superannuation scheme put forward from this side of the House to look forward and say that intrinsically in that scheme people got the money and qualified for it at a certain age, just as is the case in an ordinary industrial or life insurance policy.
We would say, "You earned it. It is yours. You have it." That seems to me the aim we have today. This has been achieved already in New Zealand. I hope, therefore, that we shall not have too much talk about how fundamental earnings rules and retirement rules are. They are not fundamental at all. They were brought in because of that fear of unemployment in the 1930s.
When I look at the Minister's work in the last ten years in connection with retirement and earnings rules, I have to thank him for a reductio ad absurdum of the retirement rule, firstly, by changing it twice in twelve months and secondly by frankly saying that there was no reason except that he wanted to help people a bit. That is why he changed National Assistance last September—not, as he would say, that there was a case for it but because he wanted to be more generous. I am interested in the Government wanting to be more generous about National Assistance; and if they are more reluctant about pensions and the earnings rule it may be because pensions cost a little more to increase. But we are getting to the point where those of us who do not much like the earnings rule find that the Government, by amending the Regulations, are producing this reductio ad absurdum which is already reached in the case of the widowed mother. We have gone through the ceiling, as it were, with generosity of treatment.
1078 The hon. Lady the Parliamentary Secretary was very candid, and so was the Committee, in pointing out that we have reached a point where the concession is so high that it makes it ridiculous and administratively burdensome to continue any kind of earnings rule in the case of the widowed mother. She is the first person to qualify by pushing up through to the top. We hope that before long the widow will follow suit as the Government find that this is a cheap way of giving largesse, because the cost of this sort of concession is a negligible fraction of what the benefit would cost if the pension were increased.
But the result of doing it in this way is to increase the anomalies enormously. I was very interested in what the hon. Lady the Member for Tynemouth (Dame Irene Ward) said. I agreed with her except for what she said about a committee. She is not usually so kind to the Minister as she was in her remarks tonight, but surely we have had enough committees. We know all the facts about widowed mothers and widows.
It would be a very dangerous illusion to suppose that the fact that the committee had discussed something made it in order on this occasion.
§ Mr. Crossman
I am afraid that the intervention of the hon. Lady has now embarrassed me in the course of my speech. I suggest to her that we do not need to investigate the problem any more. The point is now reached when we can do something or not do something. We shall reach the point, perhaps in the next two years, when the Minister will find himself constrained by his generosity to start legislating to get rid of the ceiling instead of merely raising the ceiling on every occasion. As he does it, as his Committee has pointed out, so the anomalies increase.
It is important to get clear what is wrong with the kind of thing we are doing this evening. This was put admirably by Professor Titmuss in the minority Report of the National Insurance Advisory Committee of 1956. I will read two or three sentences of his objection to what we are doing this 1079 evening, which Professor Titmuss made with great premonition then. He wrote:With the addition of a complicated incentive scheme … we foresee more public misunderstanding and confusion; more inconsistencies in regard to the respective and changing situations of husbands and wives; more possibilities of evasion, and much more detailed administrative work.That was said about the original ideas. We are now modifying them, and each time we pass Regulations we impose great administrative burdens for less and less real results. The Professor continued:The Committee has not, in our opinion, sufficiently considered the relationship of the earnings rule and the computation of earnings to other types of public and private pensions. This is another source of public confusion …If it was a source of public confusion in 1956 it has grown a great deal in the last three years into an even larger source. Professor Titmuss continued:… because of the rapid spread of these pensions in recent years they would seem to be partly responsible for the sense of injustice expressed in some of the written evidence we have received … we believe that the Committee's proposals, superimposed on an already complex system, will add greatly to the burden of administrative work. … One representation received by the Committee from an individual put the present problem in these terms: 'The great mischief of this limitation is that nobody understands the reason for it. … Elderly women refuse urgently needed work "so as to be on the safe side"' … Apart from this, there is evidence to suggest that the present system of rules is accompanied by widespread deceit and evasion.This was all written in 1956, and since then we have had one increase in the basic pension, two changes in the rules and one increase of National Assistance. All these changes are increasing the complexity, increasing the sense of injustice, and making the situation more and more absurd. We want to bring home to the Minister this feeling. I believe that the country is now ready for another step to be taken and added to the Statute Book, because the Minister should take notice of the fact that the anomalies have increased.
My last point is that the alarm and dislike of doing things this way is increased by the grave suspicion of the Government's motives for behaving in this way. In January, 1958, we had the increase of pension to 50s. and a promise that the pension would be reviewed. Since then we have had, in the spring of last year and again today, these two 1080 increases in the alleviations of the earnings rule, and in between the increase of National Assistance. In all cases we have been told expressly that the improvements are not justified by any increase in average earnings, they are genuine concessions.
We were told this in the case of the National Assistance Regulations. We were told that the improvement was greater than was required by the cost of living but that the Government were genuinely giving a share of the rising national prosperity. I say to the Minister that the people on National Assistance get a share of the rising national prosperity, the tiny minority of pensioners who earn are given a share in the rising national prosperity, but the great number of people on pension who, through no fault of their own, do not earn and who are not on National Assistance, do not get any share of the rising national prosperity.
The Minister is condemned out of his own mouth, for if he can concede that everybody on National Assistance deserves a share of the rising national prosperity and gets it by an improved rate; if the widowed mother deserves her share and gets it; if those who are earning deserve their share and get it, why do not those who are not earning and who deserve their share get it?
I can tell the Minister why. It is because they are the great majority, because they are the overwhelming number, and it costs a lot of money.
§ Mr. Crossman
We know the figure. By a curious accident, it is roughly £100 million for the 10s. suggested. We know that the ancillary benefits take the figure to £180 million.
I have been listening carefully to the hon. Member, and I shall be glad if he can explain how the subject to which he is now referring relates to these Regulations. In fairness to other hon. Members, I cannot otherwise allow him to continue.
§ Mr. Crossman
I should be very ashamed if I could not do so, Mr. Speaker. I am discussing the Government's motives in raising the standard of National Assistance and giving specific benefits to those who earn, on the ground 1081 that they should share in the rising national prosperity, without giving corollary benefits to those who do not earn. I indicated the Government's policy of doing things on the cheap, and leaving out the great majority of pensioners.
This is the vital matter which the House must discuss. Before we decide to agree to the Regulations we must realise that, although we want to improve the conditions of those who earn, the Regulations prove the case for an immediate rise in the basic rate of pension.
I am trying very hard to judge the rightness of the proposition which the hon. Member puts, with ingenuity. [Laughter] I am being quite serious. I understand that the Regulations relate to those who earn, and I have great difficulty in seeing how it is possible to relate the issues arising out of them to what might be done for persons who do not earn. The Regulations seem merely to raise the level of earnings to be disregarded. I will hear the hon. Member further if he wants to urge his argument.
§ Mr. Crossman
I did not want to prolong my speech, Mr. Speaker. It would be a lengthy process to explain the relationship between our obligations to pensioners who do not earn and our obligations to those who do. We have discussed this matter at length this evening, and I can leave it there, simply summing up our argument by saying that we are glad the Government have conceded substantial increases to those on National Assistance and some slight alleviation in the intolerable situation of those who can earn, but we would remind them that in doing this they are doing a very cheap and easy thing, a thing which makes nonsense of the pensions system and which, soon, they will not be able to carry on. They will not for ever be able to postpone the case for a 10s. increase in the old-age pension.
§ 9.47 p.m.
§ The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter)
This has been an extremely interesting debate. I heard every minute of it. It was interesting for the artistic shades and contrasts which were to be detected in it. There was the contrast between the approach of the Advisory Committee, 1082 whose Report I can sum up as suggesting that we were going too far, if anything, and the comments of certain hon. Members to the effect that we were not going far enough. There was also a very interesting contrast between the approach of the hon. Member for Sowerby (Mr. Houghton), who opened for the Opposition, and that of the hon. Member for Coventry, East (Mr. Crossman), who wound up for them, in regard to the retirement principle and the earnings rule.
There is a form of navigational instrument by which, if one wants to steer a safe and prudent course, one takes a bearing from one angle and then a bearing from another, and steers between them. If that be our navigational procedure in conducting these Regulations I think that they have a good chance of coming safely to port. Despite the baits dangled enticingly before me by both hon. Members on the Opposition Front Bench, I do not wish to be led into a lengthy disquisition upon Government social policy as a whole, which I am sure you would rule out of order, Mr. Speaker; nor do I wish to be led into discussing all kinds of other matters. I would only say that these proposals are put forward on their merits for reasons that I will attempt briefly to explain in a moment. They do not in any degree qualify or diminish undertakings and pledges given by Her Majesty's Government with respect to other matters.
The policy embodied in them is simple to describe. It is, while retaining the retirement principle which, as was clearly said by an hon. Member opposite earlier, necessitates an earnings rule, to seek to use the powers which Parliament gave us in the 1956 Act to secure that the limit is fixed at no lower figure than is necessary to safeguard the purpose of the rule. And, as the Advisory Committee properly said in its Report, there is no hard and fast mathematical or statistical method of saying what is exactly the right point. As the Committee says, it is a matter of judgment. And so I willingly acknowledge that if in applying our judgment to this matter we have erred, we have erred on the side of generosity. I do not think that is altogether a bad thing.
I do not think I am called upon tonight, despite the temptations dangled before me, to debate the retirement 1083 principle in general. In the first place, we cannot deal with that by Regulations. It is a matter of statute and, when the time comes, it will be dealt with by legislation. Here, if the House approves, we are engaged in exercising powers of delegated legislation relating solely to the amounts to be fixed.
Here I wish to pay tribute to my hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) whose initiative in bringing forward a Private Member's Bill in 1956 has given us the power to proceed by this quick and expeditious procedure in a way which previously would have involved legislation.
On the general question of the retirement principle I would only say something at which the hon. Member for Coventry, East himself hinted. Whatever the broad principles being discussed—no doubt they would make a fascinating subject for debate—there is—I pick up the hon. Gentleman's words—a serious question of priorities. It is accepted that complete abolition would cost the National Insurance Fund about £100 million a year. Apart from any question of principles, and I am not in any sense throwing them overboard, but from a practical point of view, if £100 million more were available for the beneficiaries of National Insurance, almost I would have thought the last direction in which the money could properly be used would be in paying full pensions to those who are making substantial earnings. The claims of others are so far ahead of them that I do not need to take up any time in dealing with that matter.
May I deal with some of the general points which have arisen in this debate, because my right hon. Friend the Joint Parliamentary Secretary so clearly expressed the effect of these Regulations and the policy we are following that I should be guilty of tedious repetition were I to go over that ground again. I wish specifically to attempt to answer the points which have been made in the debate.
My hon. Friend the Member for Harwich (Mr. Ridsdale) and my hon. Friend the Member for Torrington (Mr. P. Browne) and my hon. Friend the Member for Tynemouth (Dame Irene Ward) all raised—not, as they will recall, for 1084 the first time—the question of the possibility of some spread of the earnings rule to deal with the difficulties, which we all acknowledge, of seasonal employment in certain coastal areas. My hon. Friend the Member for Harwich has argued this with great force and persuasiveness on a good many occasions. But I am bound to say that it appears to me that the Advisory Committee is right for the reasons it set out fully in 1956, and with great brevity—I think my hon. Friend almost complained of the brevity—in its Report which I laid the other day in connection with these changes in the earnings rule.
I concede at once that some workers would benefit; but my hon. Friend must, I think, concede that others would lose; because one of the merits of the present rule is that however much a pensioner earns in a particular week it does not prejudice his pension save in the week immediately following, and at no other time Therefore, I shall not weary the House with the calculations. While my hon. Friend can show, quite rightly and fairly that some workers would benefit, others would lose and would be left—this is a serious matter—facing certain weeks with neither earnings nor National Insurance benefits. I do not think it is a complete answer to say that his constituents are so prudent as to be certain that they would save to deal with the contingency. When we are dealing with what is, after all, an important payment towards weekly maintenance spread universally throughout the country, I do not think we can take the chance of leaving people in some weeks without either earnings or benefit.
There is the further very real difficulty, as any mathematical calculation in this respect makes clear, that in any average all the earnings have to be taken in. At present, if a pensioner earns less than £3 a week—or, after the House has approved the Regulations, £3 10s.—he or she does not have to take steps to report those earnings. Any earnings would have to go into the average, however, and would have to be reported. That would be an intolerable burden to place on pensioners of quite modest earnings.
I now come to what is colloquially called the 12-hour rule, referred to by the Committee and referred to also by 1085 my hon. Friend the Member for Torrington, the hon. Member for Coventry, East, my hon. Friend the Member for Bradford, West (Mr. Tiley) and my hon. Friend the Member for Reading (Mr. Emery). There is, I think, a little confusion about the 12-hour rule. It is not an additional limitation affecting the earnings of those who have retired; it is one of the alternative tests of retirement. It arises from the construction which the National Insurance Commissioner, who is the ultimate authority on the construction of the National Insurance Acts, places upon certain words in Section 20 of the Act of 1946. Perhaps I might quote those words:notwithstanding that he is engaged or intends to engage in a gainful occupation, if he is engaged or intends to engage therein only occasionally or to an inconsiderable extent or otherwise in circumstances not inconsistent with retirement.The 12-hour rule is a construction placed by the Commissioner on one of these—I was about to commit the solecism of saying "three alternatives"—three possible tests of retirement, the one of "an inconsiderable extent". I emphasise, as my hon. Friend the Member for Reading made clear, that it is not the only test and there are certainly cases in which retirement has been accepted when the pensioner is intending to work for a longer period, because the statutory authorities have found that he is within the predominant condition of "not inconsistent with retirement"
That is the background. This is a matter which arises at the retirement stage and not when retirement, as a process, has been gone through. The Report refers to this problem and, as I told the hon. Member for Sowerby some months ago when he put down a Question on the matter, there is certainly a possibility that this quite long-standing problem could be aggravated by the increase in the earnings limit embodied in the present Regulations. As I told the hon. Member, I think it was on 2nd November, I intend to keep a close eye on this. The Advisory Committee asked me in the light of the new rates to look at it afresh, and that I propose to do.
The hon. Member for Southampton, lichen (Dr. King) asked me for the numbers affected by the changes in these Regulations. He will appreciate, for he knows a lot about these subjects, that 1086 any figures which I can give him are only approximate and are based substantially on those who are having pension either reduced or, in the ultimate case, eliminated as a result of the existing rule. They do not make allowance for any changes in the amounts of work done.
Of the retirement pensioners, other than the late-age entrants, about 45,000 will be affected. Among the late-age entrants there will be about 50,000. Because of the special factors which apply to them, and the very generous terms on which they receive their pension, their position is a little different; that is why I gave the figure separately. The figure for widows is about 50,000, and for widowed mothers it is about 25,000.
My hon. Friend the Member for Bradford, West, the hon. Member for Itchen and several others, notably the hon. Lady the Member for Flint, East (Mrs. White), spoke of the general position of the widowed mother. These Regulations embody, within the framework which I have been attempting to set out, our approach to her special problems. While maintaining the principle of an earnings limitation for reasons about which I shall say a word in a moment—we raise the figure for her substantially above that provided for retirement pensioners. Indeed, we raise it to an extent which caused the hon. Member for Coventry, East, unlike the hon. Lady the Member for Flint, East, to feel that we were virtually abolishing the earnings limit in this case.
I agree entirely on this subject with what was said in the Advisory Committee's Report in a passage which, with her habitual dexterity, my hon. Friend the Member for Tynemouth succeeded in quoting. As she said, she quoted it with some determination in order to put it in HANSARD. The effect of that passage was that the Advisory Committee saw the limitations of what we could do by way of adjustment of the earnings limit. In fact, the Advisory Committee indicated that it would rather see the available money spent on the rates of benefit.
I shall incur your disapproval, Mr. Speaker, if I go further than to say, as the hon. Member for Itchen said in a most generous speech, that that concentration on the rates of benefit in respect 1087 of widowed mothers is on record as conspicuously a feature of the policy which this Government have pursued. The increases there have been quite out of line with those over the remainder of the National Insurance field. As the hon. Member knows, this has been a matter of deliberate policy. But that is no reason why we should not also make, if we can, a substantial alleviation in respect of that limited number who earn. This is my argument on these Regulations.
I do not propose to lay down any general principles as to whether a widowed mother ought or ought not to go out to work, although one hon. Member invited me to do so. That is a decision for her to take in the light of her circumstances—the age, number and health of her children, her own health, where she lives and so on. There is an infinite variety of circumstances. It is for her to decide and not for Governments to lay down a principle either way. By raising the limits to £5 we propose to give what I think the House will agree is a very substantial relief.
May I put it this way? She will be able to earn £5 in future, without any diminution of her pension, draw on top of that her personal allowance, £2 10s., and if there are, as in the case quoted by my right hon. Friend, three children, another £3 2s. on top of that, which brings her up, without suffering any diminution of pension, to £10 12s. a week.
§ Dr. King
The right hon. Gentleman says that he believes that whether a widow should or should not go out to work is a matter for her own deliberate choice. Does he not realise that it is the view of many, including everybody on this side of the House, that economic necessity still drives mothers out to work who want to stay at home and look after their children?
§ Mr. Boyd-Carpenter
I have tried, within the rules of order, to express a great deal of sympathy, backed by a practical demonstration of our policy, with all that the hon. Member has said, but I do not think I can pursue that argument further. I must confine myself to what we are doing on the narrow front in respect of the minority who both go out to work and have fairly substantial earnings.
1088 Another way of looking at the figures is that before the personal allowance is wholly lost, the earnings must go up to £8. It is important also to recognise that whatever the widowed mother earns does not affect at all the additional provision for her children.
§ Dame Irene Ward
Would my right hon. Friend give an explanation? He say that it is not for the House to decide whether a widow should go out to work or not, and I agree. When we want to recruit nurses we increase their salaries to make nursing more attractive. Why should we not, in the case of widowed mothers whom we think might stay at home and look after the children, also pay something towards helping them in exactly the same way as we do in recruiting people to various forms of work?
§ Mr. Boyd-Carpenter
The difficulty is, as my hon. Friend knows, that we are discussing earnings rules Regulations. I have said all that I can say within the rules of order on the rates of benefit without incurring the same sort of difficulty as the hon. Member for Coventry, East; and, of course, I lack his skill and adroitness in skirting the inner perimeter of the rules of order. The fact remains that this is a substantial increase when looked at against the average earnings of the women in industry, the figure which my right hon. Friend gave as £7 0s. 4d. a week. The kind of figures I have quoted show that we are giving very substantial relief.
It would be very difficult—and here again we come up against the general principle—to go very much further than that. There would be very real difficulties in having any earnings limit for widowed mothers separately from the main structure of the scheme.
After all, she does not stay a widowed mother for ever. At 50 she may become a widow pensioner. At 60 she becomes a retirement pensioner. There would be very real difficulty in applying extra restrictions on her earnings at the moment of her transition from a widowed mother to a widow or retirement pensioner—at a time when she was receiving less from the National Insurance scheme.
We must look at the machinery of this scheme as a complete whole, and we cannot, as the hon. Lady the 1089 Member for Flint, East urged us so eloquently and persuasively, deal separately with the widowed mother from the point of view of principle; but we are certainly doing so by the amount, as she herself recognised.
§ Mrs. White
Am I correct in deducing, by comparison with the right hon. Lady's figures, that there are now only 4,000 widowed mothers who will be affected—the difference between 25,000 and 29,000—and that we are coping with all these Regulations and difficulties for those women who would be primarily nurses, teachers and so forth?
§ Mr. Boyd-Carpenter
I am glad that, think the hon. Lady can draw any such deduction. I gave the figures of the numbers at present affected and I was not suggesting that would primarily reduce the numbers. The numbers will be very much as I suggested in reply to the hon. Member for Itchen
§ Mr. Boyd-Carpenter
I am glad that ill the hon. Lady so misunderstood me, I have had the opportunity to be de-misunderstood.
The hon. Lady asked why we should have an earnings limit for the National 1090 Insurance widow pensioner when we did not have such a limit for the war widow or the industrial injury widow. The schemes are on different bases. The House has always accepted priority for the war pensioner, which is why the rates of pension for the war widow are higher. The industrial injury widow has inherited the fact that the Industrial Injuries Acts replace the rates payable in respect of injured and dead workers under the old workmen's compensation scheme. The fact that there are different histories for the schemes and thus different provisions does not throw very much light on the problem with which we have to deal.
The debate has shown that the House as a whole is well-disposed to this further relaxation. It is no bad thing for a Minister in commending a policy to the House to know that some would pull him one way and some the other, because he can at any rate rest on the hope that both will pull the Regulations, not on to the Statute Book, but into the law of the land.
§ Question put and agreed to.
That the National Insurance (Earnings) Regulations, 1960, a draft of which was laid before this House on 27th January, be approved