Commons Sitting of 15 November 1960

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  EAST AFRICA

    Economic and Political Unity
    Mr. Wallasked the Secretary of State for the Colonies what proposals he has for increasing the economic unity of the East African Territories and for encouraging greater political unity.
    The Secretary of State for the Colonies (Mr. Iain Macleod): In July this year I appointed a Commission under the chairmanship of Sir Jeremy Raisman to consider the present arrangements in East Africa for a Common Market area, for economic co-ordination between Territories and for fiscal uniformity. With permission, I will circulate the terms of reference in the OFFICIAL REPORT. I hope to receive the Commission's report in the near future.
    Without wishing to anticipate the recommendations of the Commission, I have every hope that the result of its inquiry will be to strengthen further the present arrangements for economic co-operation between these Territories. I have noted with interest a number of statements bearing on the possibility of a federation. Whether it will be judged practicable or expedient to lay definite plans for a political association of this nature, and whether it would be right for Her Majesty's Government to take any initiative in this matter would depend very considerably on local public opinion in the Territories themselves.
    Mr. Wall: Will my right hon. Friend undertake to give special consideration to the views of such statesmen as Mr. Julius Nyerere, and will he also bear in mind that as the four Territories of East Africa move forward towards independence at different speeds it may become
    176
    increasingly difficult to forge some form of federal link?
    Mr. Macleod: I am very conscious of that. Mr. Nyerere is coming to this country in two days' time, when we shall be having discussions with him. I am sure that we shall discuss this, among other matters, with him.
    Mr. Brockway: Does the right hon. Gentleman appreciate that any hope of federation of these Territories will depend on their advance to responsible self-government? If he is to have conversations with Mr. Nyerere about this matter, is he not aware that Mr. Nyerere asks for responsible self-government for these Territories if federation is to be realised?
    Mr. Macleod: It may well be that Mr. Nyerere will put that point of view to me.
    Sir H. Oakshott: Would not my right hon. Friend agree that the suggested movement towards economic unity referred to in my hon. Friend's Question would, if extended to the political field, give a very much broader hope for the stability of East Africa than appears at the present time?
    Mr. Macleod: I think that is so, and here, as everywhere else, I think it important to keep economic and political advance moving together.
    Following are the terms of reference of East African Fiscal Commission:

    (a) To examine arrangements at present in force in East Africa for a common market area, for economic co-ordination between Territories and for fiscal uniformity with regard to measures now taken—

    (i) To facilitate interterritorial trade in products of local agriculture and manufacturing industries and to develop such industries in East Africa.

    (ii) To secure uniformity in fiscal and financial matters including methods used to allocate yields from customs, excise and income taxes between Territories.

    (iii) To provide the East Africa High Commission with revenue necessary to meet the costs of services administered by the Commission for the benefit of the Territories and to apportion the cost of such services between the Territories.

    (b) To consider the advantages and disadvantages generally of the present arrangements and whether or not those arrangements are economic and are fair to the interests of each of the individual Territories; and to make recommendations for any necessary adjustments, additions or modifications to them.

  FIJI

    Burns Commission (Report)
    Mr. John Hallasked the Secretary of State for the Colonies if the study of the Burns Commission's Report on the economic development of Fiji has been completed; and if he will make a statement.
    Mr. Iremongerasked the Secretary of State for the Colonies when he expects to receive the views and recommendations of the Fiji Government on the Burns Commission's, Report.
    The Under-Secretary of State for the Colonies (Mr. Hugh Fraser): The Report is to be debated in Legislative Council early in December. In the light of the debate the Fiji Government will prepare their recommendations. My right hon. Friend expects to receive these by the end of the year.
    Mr. Hall: Has my right hon. Friend considered, as a possible contribution towards solving the economic problems of Fiji, consulting with his right hon. Friend the Minister of Defence about the raising of two or three Fiji battalions?
    Mr. Fraser: No, Sir, not I think at this stage. It is important to see how we go on the Burns Report.
    Mr. Stonehouse: In view of the great delay in considering this Report, which came out in February, is there not now an urgent need, in view of the Fiji sugar crisis and what is stated in paragraph 246 of the Commission's Report, to revise the Commonwealth Sugar Agreement of 1951 in order to allow Fiji a higher export quota?
    Mr. Fraser: I gather that because of the various movements in the world—Cuba, etc.—there is a higher potential for Fijian exports. As to delay, there had to be appropriate consultation with the Fijian local authorities, and that has taken place.

  KENYA

    Television
    Mr. John Hallasked the Secretary of State for the Colonies if the Committee appointed by the Government of Kenya to examine the possibility of starting a television service in Kenya has yet
    178
    reported; and if he will make a statement.
    Mr. H. Fraser: The Commission's Report was published by the Kenya Government on 15th January this year. I am arranging for a copy to be sent to my hon. Friend.
    The Kenya Government are still examining the many complex problems involved in introducing television into Kenya.
    Mr. Hall: Can my right hon. Friend give me any idea as to why it is taking the Kenya Government so long to make up their mind about this?
    Mr. Fraser: No, Sir. As far as we are concerned, it is a very complex problem. The amount that my right hon. Friend and the Kenya Government quite rightly spent out of C.D. & W. funds largely on the improvement of radio communications has been over £¼ million in the last two years.
    Colonel Beamish: Will my hon. Friend bear in mind the value of television in education? It is greatly under-estimated so far, and it may have a very important application indeed in Kenya, not only for education in the schools but for adult education as well.
    Mr. Fraser: I am fully aware of that, and I hope that the Kenya Government will make up their mind.

    Jomo Kenyatta
    Mr. Stonehouseasked the Secretary of State for the Colonies if he will arrange for the early release of Mr. Jomo Kenyatta.
    Mr. Iain Macleod: I would refer the hon. Member to my reply to the hon. Member for Eton and Slough (Mr. Brockway) on 8th November.
    Mr. Stonehouse: Will not the Colonial Secretary admit that, although he is now doing so well in so many fields, on this particular issue he is being very unrealistic? Is he not aware that leading political figures in the African groups want Mr. Kenyatta to be released, and that many Europeans now also agree that if there is to be unity in Kenya, Mr. Kenyatta must be allowed to return to civil life? Would not the right hon.

    179
    Gentleman revise his position on this matter?
    Mr. Macleod: As I said last week, it is a matter to which I give constant thought, and I do not think that my attitude is at all unrealistic. Again, as I said last week, there are very deep feelings indeed held on both sides about Kenyatta by people of all races. I am content to leave the matter to the judgment of the Governor.
    Mr. Wall: Would not my right hon. Friend agree that a number of Africans do not believe that Kenyatta was mixed up with Mau Mau but that all the available evidence goes to show that he was directly responsible for it? Would he not agree that Kenyatta's release now might strike a blow against future confidence in Kenya?
    Mr. Macleod: I am very anxious, as I said earlier, to recognise the difficulty of this position, and not try to make it worse either way round. It is, of course, true that very many Africans indeed do not accept the evidence, which appeared conclusive to most of us, that has been produced of Kenyatta's complicity in these matters.

    White Highlands
    Mr. Stonehouseasked the Secretary of State for the Colonies if he will make a statement on the future of the White Highlands of Kenya, and the funds which Her Majesty's Government are proposing to make available for development and land guarantee.
    Mr. Iain Macleod: The policy of Her Majesty's Government and the Kenya Government is that racial and tribal barriers to land tenure should be abolished and that the basis of management and tenure of all agricultural land should be similar so far as local factors permit. Proposals to accomplish this policy were contained in two Kenya Sessional Papers, copies of which I have placed in the Library. Legislation based on the recommendations is now in preparation.
    As regards the latter part of the Question, I would refer the hon. Member to my reply to him on 20th July. An International Bank mission is now in Kenya to consider that Government's plans.
    Mr. Stonehouse: While thanking the Colonial Secretary for the first part of his reply, and congratulating him upon the change in approach to the White Highlands, may I ask him if he is not aware that the financial provisions are far from adequate for the situation in Kenya today? Will he consider the establishment of a land bank which will be able to provide money for farmers to buy their way into farms in the White Highlands and to open up undeveloped land and provide guarantees for European farmers, who believe that they have been misled by some of his predecessors?
    Mr. Macleod: The hon. Member is wrong on the first point. The question of the Kenya land policy dates back to long before the time when I became the Secretary of State, and it has been pursued by successive Secretaries of State in this country and by the Kenya Government over the years. On the second point, I am always anxious to draw a distinction between resettlement and development, on the one hand, for which one can attract international finance, and plain schemes of compensation, on the other, for which, I assure the hon. Gentleman, one cannot. It is important to keep the emphasis on the first throughout.

  WEST INDIES

    United States Bases (Talks)
    Mr. Brockwayasked the Secretary of State for the Colonies if he will make a statement on the discussions with representatives of the Governments of Trinidad, Antigua, Jamaica, and St. Lucia, and of the United States of America regarding the future of the United States-leased base at Chaguaramas and three United States bases in Antigua, Jamaica, and St. Lucia.
    Mr. C. Royleasked the Secretary of State for the Colonies if he will make a statement on the progress of the talks on the United States bases in the West Indies.
    Mr. Iain Macleod: As was announced on 9th November, the first stage of the tripartite talks about United States bases in The West Indies between delegations representing the United States, the United Kingdom and the West Indies has been satisfactorily concluded, and the second stage will begin in Tobago on 28th of this

    181
    month. The text of the communiqué agreed by all delegations and issued at the close of the first stage is being circulated with the Official Report.
    Mr. Brockway: While I welcome the fact that these discussions have led to the agreement that when independence is gained for the Federation the people there will have free opportunity to negotiate, will the right hon. Gentleman press the Government of the United States at least to release the base at Chaguaramas so that it can become the capital of the Federation?
    Mr. Macleod: I am sure that the hon. Gentleman has seen the communiqué, from which, perhaps, I may quote. It states:
    "The representatives of the United States declared their readiness to release unconditionally the major part of the area which they at present hold."
    The main base is at Chaguaramas, and it is about that base that talks will begin on 28th November, but I would not like to put a gloss on a communiqué that has been agreed between different countries.
    Mr. Royle: Would the Colonial Secretary accept an expression of appreciation that these talks are taking place? Can he say whether he can trace from the representatives of the United States a very different outlook on these matters, and that there is real hope of the bases being returned to The West Indies? Further, can he say who will represent Her Majesty's Government at the talks at Tobago?
    Mr. Macleod: The head of the United Kingdom delegation will be my hon. Friend the Parliamentary Secretary. I should like to make it clear that, as was acknowledged by everyone there, the success of the talks was in large measure due to the very forthcoming attitude adopted by the United States delegation, headed by their ambassador in London. We owe them very much, indeed.
    As to the other matters, the bases, with the exception of Chaguaramas, are all largely de-activated now, and consideration of these matters will obviously be concentrated on Chaguaramas in the next round of talks. The West Indies, for their part, made it clear that they were willing and anxious to co-operate in defence matters, and I welcome that very much.
    Following is the communiqué:
    WEST INDIES BASES CONFERENCE
    FIRST STAGE SATISFACTORILY CONCLUDED
    The Conference on West Indies bases, which opened at Lancaster House, London, on 3rd November, concluded its first stage to-day (Tuesday, 8th November). At this stage—the first of three—delegations representing the United States, the United Kingdom and The West Indies discussed in broad outline the review of the 1941 Leased Bases Agreement. Representatives of the unit territories of The West Indies were present from Antigua, Jamaica, St. Lucia, Trinidad and Tobago, as well as observers from Barbados.
    The talks have been held in an atmosphere of cordiality and very satisfactory progress has been recorded. There was acceptance by all parties of the basic principle that The West Indies, when independent, would have the right to form its own alliances and to conclude such agreements as it thought fit regarding military bases on its soil. It was, however, agreed that the review of the 1941 Leased Bases Agreement should proceed on the basis that The West Indies, in the exercise of such right, would be both willing and anxious to co-operate in whatever would strengthen mutual security and contribute to the continuing defence of the Western Hemisphere as part of the defence of the democratic world. All parties agreed that if this objective was to be achieved, an early and amicable conclusion of the review of the 1941 Leased Bases Agreement was desirable.
    The representatives of the United States declared their readiness to release unconditionally the major part of the areas which they at present hold under the 1941 Agreement, seeking to retain only those which are essential to the discharge of their responsibilities in the field of world-wide and hemispheric defence.
    The United States and United Kingdom delegations re-affirmed their continuing interest in assisting towards the economic development and stability of The West Indies during the difficult period following the attainment of independence.
    It was agreed that the second stage of the Conference would consist of a series of talks to be held in the individual territories in The West Indies in which the United States hold bases under the agreement. In that series of talks, each individual territorial government will appear in its own right to present its own views. The Federal Government will be represented at all these talks.
    It was decided that the first of the talks in the second stage would be held in Trinidad and Tobago on the Island of Tobago starting on the 28th November. It is intended that subsequent meetings will be held in St. Lucia, Antigua and Jamaica.
    At the request of the Conference, the Secretary of State for the Colonies (Mr. Iain Macleod) has agreed to invite the Governor of Trinidad and Tobago (Sir Solomon Hochoy) to preside at the Tobago meeting. For subsequent meetings, the Secretary of State has agreed to invite the Administrator of St. Lucia

    183
    (The Earl of Oxford and Asquith), the Administrator of Antigua (Mr. I. G. Turbott) and the Governor of Jamaica (Sir Kenneth Blackburne) to preside in their respective territories.
    November 8, 1960.

  SEYCHELLES

    Electoral List
    Mr. Allaunasked the Secretary of State for the Colonies what is the adult population of the Seychelle Islands; and how many of them appear on the current electoral list.
    Mr. H. Fraser: The total adult population is 21,468. About 11,000 are qualified to register, but only 2,308 persons have actually registered.
    Mr. Allaun: Is not there something seriously wrong when roughly nine out of ten people are not registered to vote? Has not the Colonial Secretary said recently that, with very minor qualifications, all those above 21 years of age have the right to vote? Is it not the case that, apart from the property qualifications, the registration notices are printed in English, which very few can read, and that they are in highly legalistic language?
    Mr. Fraser: I do not think that that is true, but I will certainly investigate it. If course, it is impossible to force people to register. Eleven thousand people could have registered, but only 2,308 have.

  NORTHERN RHODESIA

    Legal Profession (Committee)
    Mr. Biggs-Davisonasked the Secretary of State for the Colonies what steps are being taken by the Government of Northern Rhodesia to give more scope to properly qualified lawyers to practise in the Protectorate.
    Mr. Iain Macleod: The Government of Northern Rhodesia intend to set up a Committee, under the chairmanship of the Chief Justice, to inquire into the means of promoting the entry and participation of local persons in the legal profession, to ensure that in future the profession will be adequate to meet the Territory's increasing needs.

    African Apprentices (Training)
    Mr. Swinglerasked the Secretary of State for the Colonies what steps are
    184
    being taken by his Department to enable African apprentices to be trained in industry for the higher technical and skilled jobs in Northern Rhodesia.
    Mr. Iain Macleod: The provisions of the Apprenticeship Ordinance were extended to include Africans in 1958, and as a result of the Northern Rhodesia Government's expanding secondary and technical education programme increasing numbers of Africans are reaching the educational standards required for apprenticeship. The selection of apprentices is however a matter for employers This year both Rhodesia Railways and the Copper Mining Companies have announced plans for the advancement of Africans, who will henceforth receive the same training, and enjoy equal access to all jobs in those industries with Europeans.
    Mr. Swingler: Does the Colonial Secretary realise that that is not quite the point? It is good news that the employers and trade unions have agreed on the advancement of Africans in industry to the higher jobs, but is he aware that the educational facilities to enable them to train for those higher jobs do not exist? What action will his Department take, or will he persuade the Federal Government to take, to enable Africans to have the higher technical education necessary to enable them to take advantage of the facilities for advancement?
    Mr. Macleod: The whole House will at least welcome what I said at the end of my remarks. We are all very glad to see this advance. I did not read the hon. Member's Question as asking whether these facilities were adequate. He is aware, for example, of the facilities at Hobson College, Lusaka, and the great number of trade schools which exist. The Northern Rhodesian Government, the Federal Government, and Her Majesty's Government, are always seeking ways in which we can expand these facilities.

  ADEN

    Industrial Relations (Conciliation and Arbitration) Ordinance
    Mr. Brockwayasked the Secretary of State for the Colonies when he authorised the enactment of the Industrial

    185
    Disputes and Compulsory Arbitration Ordinance, which makes all strikes illegal, passed by the Legislative Council of Aden on 15th August, 1960.
    Mr. Iain Macleod: The Governor of Aden had my full support in introducing and assenting to the Industrial Relations (Conciliation and Arbitration) Ordinance, 1960. This legislation does not make all strikes illegal.
    Mr. Brockway: Is the Colonial Secretary aware that, despite his statement that this legislation does not make all strikes illegal, that is the view of the trade union movement in Aden, that the trade unions are supported by the International Confederation of Free Trade Unions in that interpretation, and that the I.C.F.T.U. proposes to take the matter to the I.L.O.? Will he look again at this very serious matter?
    Mr. Macleod: There is no doubt whatever that all strikes are not illegal. They are not illegal where wage councils have been created; they are not illegal where a collective agreement has been concluded and a certificate issued by the President of the Court; they are not illegal where the Crown is not prepared to accept arbitration, and they are not illegal where, in the opinion of the Industrial Court, an employer or association has not acted in good faith. There can be no doubt in that matter. I have, of course, looked at the point of view of the representations, particularly in relation to our obligations under the I.L.O. Convention, and I am satisfied that they do not conflict.

  COLONIAL TERRITORIES

    United Kingdom Forces (Deployment)
    Mr. B. Harrisonasked the Secretary of State for the Colonies what consultations he has had with the Minister of Defence, regarding the possibility of withdrawing units from strategic points in the Territories under his control.
    Mr. Iain Macleod: I am in constant touch with my right hon. Friend on questions concerning the deployment of United Kingdom Armed Forces in Colonial Territories.
    Mr. Harrison: Can my right hon. Friend say whether we may take it from that reply that there is no intention to reduce the number of troops that are in Hong Kong, Kenya or The West Indies?
    Mr. Macleod: No, but from that answer "No" my hon. Friend must not take it that it is the intention so to do. This is a very grave matter indeed, and if my hon. Friend wishes me to answer it, I should like him to put down a separate Question on the subject.

  ST. HELENA

    Constitution
    Mr. C. Hughesasked the Secretary of State for the Colonies what steps he is taking to provide for constitutional reform in St. Helena; and if he will make a statement.
    Mr. H. Fraser: The Governor has made it clear to the parties concerned that my right hon Friend is prepared to arrange for the present nominated Advisory Council to be replaced by one consisting of eight elected, two nominated official and four nominated unofficial members if these proposals are generally acceptable.
    Mr. Hughes: Is it not the case that these proposals have been in the Colonial Office for some considerable time but have not yet been implemented? Can he give some indication of the cause of the delay, and the substance of any objections that have been made?
    Mr. Fraser: I think that it is a question of consulting. As the hon. Gentleman knows, St. Helena is a small place, and it is a question of personalities trying to work out the problems that arise. I have every confidence that, with the help of the hon. Gentleman and others interested in St. Helena, these differences of opinion will be resolved, and the Constitution will go forward.
    Mr. Hughes: How long does the hon. Gentleman think it will be before these proposals are put into effect?
    Mr. Fraser: It entirely depends on whether we can reach agreement. If we cannot reach agreement, things will have to stay as they are at the moment.

  RHODESIA AND NYASALAND

    African Civil Servants (Training)
    Mr. Fisherasked the Secretary of State for the Colonies what consideration has been given to the establishment of schools of Civil Service administration for qualified Africans in Nyasaland and Northern Rhodesia, respectively.
    Mr. Iain Macleod: The Nyasaland Government are at present considering the Report of a special Committee which has just reviewed the whole problem of training local officers for increased participation in senior Civil Service appointments. One of the Committee's recommendations is for a school of administration The Northern Rhodesian Government have agreed in principle to financial assistance being given for pre-service and in-service training for all races in the Civil Service, and are now formulating plans for courses for all grades and for increasing the number of scholarships for degree and diploma courses
    Mr. Fisher: Does my right hon. Friend agree that the establishment of such schools is very desirable, and indeed almost essential, in the context of the gradual transference of power to an African majority? If the Report which he mentions is accepted, how long does he estimate it will be before such schools could be established and put into operation?
    Mr. Macleod: I very much agree about the importance of this matter. I had the Report only a few days ago. It will be published as soon as possible. Although I cannot set a date for the implementation of any of these matters, in which decisions in principle have not yet been taken, I will certainly treat them as matters of urgency.

    University Graduates (Employment)
    Mr. Fisherasked the Secretary of State for the Colonies what is the current annual number of university graduates from Nyasaland and Northern Rhodesia, respectively, who take up employment in their Territories after the completion of their university courses.
    Mr. Iain Macleod: In Northern Rhodesia, four African graduates took
    188
    up employment in 1958 and six in 1959. There are at present 39 Africans taking university degree courses.
    In Nyasaland, annual figures are not available, but out of a total of 34 African graduates, 30 have taken up employment in the Territory. There are 40 Nyasalanders at present taking degree or professional courses.
    I regret that comparable figures for non-African graduates are not immediately available.
    Mr. Fisher: Does my right hon. Friend agree that these numbers are somewhat inadequate in view of the need which exists for qualified Africans in politics, the public service and the professions in these two Territories? Has he any proposals for setting up secondary education, which must be the basis upon which a university education can follow?
    Mr. Macleod: These figures are small, although they are increasing. We try to provide help through such means as C.D. & W. grants. I am convinced that the two most important matters in all of these problems is African agriculture, on the one hand, and African education, on the other hand.
    Mr. G. M. Thomson: Is the right hon. Gentleman aware that these figures for university graduates from two countries, each of them about the size of Scotland, underline the desperate urgency of getting more university graduates quickly? Will he promise that he will earnestly tackle this problem, otherwise his plans for the future of these Territories will meet great difficulties?
    Mr. Macleod: It is not just a question of getting university graduates. We cannot simply create people at that stage. We must have a sound secondary education on which to draw.

  MALTA

    Constitution
    Mr. Awberyasked the Secretary of State for the Colonies if the Blood Commission on the Malta Constitution has completed its work; and when he expects to make a statement on the position.
    Mr. Iain Macleod: No, Sir. I expect to receive the Report about the end of the year, and the Government will consider its recommendations urgently.
    Mr. Awbery: Is the Minister aware that, because of the terms of reference, the Nationalist Party and the Labour Party of Malta have refused to give evidence and that his conclusions will therefore be based on the evidence of about 10 per cent. of the population of Malta? What does he propose to do to correct this?
    Mr. Macleod: I doubt whether the hon. Member is quite right, because those parties refused to give evidence before they saw the terms of reference and they could scarcely have been decided by that. I very much hope that they will give evidence, and I can say the same as the Prime Minister said about the terms of reference of the Monckton Commission—they are free in practice to receive evidence from any quarter, and I hope that they will do so.
    Mr. Woodnutt: Does my right hon. Friend agree that, as he has already stressed the importance of economic and political advancement going together, and as Malta is definitely not economically viable, it would be of considerable help to him, the House and the people of Malta if he extended the terms of reference of the Blood Commission or appointed another Commission to go thoroughly into the present economy of Malta and to report?
    Mr. Macleod: Certainly the economic factor, particularly as it concerns the dockyard, is of the first importance, but I do not think that it would be wise to extend the terms of reference of the Blood Commission in the way suggested. I should like from them—and I am sure we shall get a good one—a blueprint for the next stage of constitutional advance in Malta.

  SOUTHERN CAMEROONS

    One Kamerun Party (Arrests)
    Mr. R. Edwardsasked the Secretary of State for the Colonies, in view of the fact that leaders of the One Kamerun Party in the Southern Cameroons have been arrested and many members of this organisation detained by the British
    190
    authorities, thus preventing normal political activities in connection with the 1961 plebiscite, if he will take immediate steps to release them.
    Mr. Iain Macleod: Such arrests as have been made in the Southern Cameroons are in accordance with normal legal process and I could not intervene unless some irregularity were shown.
    Mr. Edwards: Is the Secretary of State aware that many hon. Members have received cables protesting against the arrest of national and local leaders of the One Kamerun Party? Does he not agree that the British authorities should be above the political battle and should allow normal facilities for all parties, left, right and centre, so that they can function effectively in the conduct of the plebiscite?
    Mr. Macleod: Certainly. We are indeed above the political battle and, as my Answer was meant to make clear, nobody has been arrested in this party for political activities or because of their membership of the O.K.P. One or two people have been arrested. I believe, through normal legal processes.

  SIERRA LEONE

    African Congress Party (Memorandum)
    Mr. R. Edwardsasked the Secretary of State for the Colonies when he received representations from the Sierra Leone African Congress Party urging the necessity for a general election prior to the declaration of independence; what reply he has sent; and if he will make a statement.
    Mr. Iain Macleod: Copies of a memorandum addressed to the Sierra Leone Government and of that Government's reply rejecting the memorandum were sent to me recently for information. I see no reason to intervene.
    Mr. Edwards: Does not the right hon. Gentleman agree that it is a good practice to have a general election before independence? This was the practice in Nigeria and Ghana. Does he not agree that the results of the recent municipal elections in Freetown indicate that the Coalition Government has not much support in Sierra Leone and that it might be

    191
    a good thing to have a general election in order to educate the people in that election in the principles of self-government?
    Mr. Macleod: I do not think that that is an accurate assessment of the situation in Sierra Leone. When the people, headed by the Premier, came to the constitutional conference, there were 25 representatives, and 24 of them agreed that there should not be a general election before independence. I accepted that point of view. The one person who dissented and who did not sign the report, Mr. Siaka Stevens, is the person who has been putting forward the request for an election, but I do not think it has much support in Sierra Leone.

  NORTH BORNEO, SARAWAK AND BRUNEI

    Hospital, Medical and Educational Services
    Mr. Sorensenasked the Secretary of State for the Colonies what mutual arrangements exist between North Borneo, Sarawak and Brunei in respect of the training of nurses and teachers, and also in the provision of hospital, medical and educational services.
    Mr. H. Fraser: In view of the number of trainees each Territory has its own training arrangements for teachers and nursing staff. There is close co-ordination of medical and education services—including training—between North Borneo and Sarawak. Generally the Brunei Government prefers to make its own arrangements, but there is some exchange of hospital services with Sarawak.
    Mr. Sorensen: Does not the hon. Gentleman agree that it is highly desirable to promote as much integration as possible between these three somewhat similar Territories, particularly in view of the great resources of Brunei? Is any progress being made in that desirable direction?
    Mr. Fraser: As the hon. Member knows, there are problems in this matter. Brunei tends to look rather elsewhere, but there are certain geographical problems. Meetings of the directors of education and the health service take place annually.

  HONG KONG

    Housing
    Mr. Sorensenasked the Secretary of State for the Colonies what further progress has been made in the provision of housing in Hong Kong; what is the approximate number of persons remaining in the squatter settlements; and to what extent immigration from beyond the border is continuing.
    Mr. H. Fraser: During the year ended 30th September, schemes financed by the Government provided accommodation for about 65,000 people and there was an important addition from private enterprise; about 600,000 people remain in squatter areas; immigration appears to be at a considerably reduced rate.
    Mr. Sorensen: Does not the hon. Gentleman agree that this seems to be a relative slowing up of the provision of housing, notwithstanding much good work that has been done, and can he say whether what, I assume to be the case is, in fact, correct?
    Mr. Fraser: If we take the decade between 1949 and 1959, the average provision was of accommodation for 40,000 people. For the next year or the next four years, it will be rising to nearly 100,000, and more and more attention will be given to private enterprise building.
    Mr. Ridsdale: Is my hon. Friend aware how impressed we have been after visiting Hong Kong with what the Hong Kong Government have done and are doing to absorb this enormous inflow of refugees, and what a strain it is putting on the Hong Kong economy?
    Mr. Fraser: Yes, Sir.

    Social Services
    Mr. G. M. Thomsonasked the Secretary of State for the Colonies if he is satisfied with the level of social services in Hong Kong; and what steps he proposes to extend their scope in the future.
    Mr. H. Fraser: With an annual increase in population still running at over 100,000 a year, the task of providing services is one of outstanding difficulty. Nevertheless, I think the hon. Gentleman will agree, very remarkable

    193
    progress indeed has been made. There are plans for further expansion in housing, education, medical facilities and social welfare.
    Mr. Thomson: Despite what the hon. Gentleman has just said, is it not the case that Hong Kong is relatively a very wealthy Colony, and that in no part of the world for which we are responsible are there greater disparities between wealth and poverty? Can he promise that something more will be done than is being done?
    Mr. Fraser: I think that the Government of Hong Kong are clearly aware of their responsibilities; indeed, they have discharged them in a most astonishing way over the last twenty years.

    Salaries (Tax)
    Mr. G. M. Thomsonasked the Secretary of State for the Colonies what plans there are to increase Government revenue in Hong Kong by means of a tax on salaries.
    Mr. H. Fraser: A tax is already levied on salaries.
    Mr. Thomson: Can the hon. Gentleman say how he squares his last Answer with the fact that salary tax in Hong Kong has never risen to more than 12½ per cent. of salaries and is generally very much smaller than Income Tax in this country?
    Mr. Nabarro: Jolly good.
    Mr. Fraser: The main object, surely, is to see that the revenues of Hong Kong remain buoyant, and it is the intention of the Government to see that they remain buoyant, so that money can be found for these enormous services which have to be overcome. The hon. Gentleman is aware that between 1957 and this year actual Government expenditure and revenue will have risen from 509 million dollars to 668 million dollars.
    Mr. Longden: Does not my hon. Friend agree that Hong Kong is a shining example of self-help throughout the Commonwealth——
    Mr. Ellis Smith: Not very shining.
    Mr. Longden: —and is coping with enormous difficulties with tremendous courage and efficiency, almost wholly out of its own resources?
    Mr. Fraser: Yes. Sir; I agree with my hon. Friend.
    Mr. Rankin: Should not the revenues of Hong Kong also be brought into relation with the social and other needs of Hong Kong, which are dreadfully behind those in the Western world?
    Mr. Fraser: The hon. Gentleman is doubtless aware from the figures of what the Hong Kong Government are doing—building accommodation for 100,000 people a year, pushing forward with 215,000 and more new places in schools in the last five years, and providing hospital beds, which have risen from 7,000 and are expected to number 11,000 in the next few years.

  SCOTLAND

    Grey Seals, Orkney
    Mr. Grimondasked the Secretary of State for Scotland how many grey seals were destroyed in Orkney this year; and why this destruction was necessary.
    The Joint Under-Secretary of State for Scotland (Mr. Gilmour Leburn): Between 1st September and 5th November, 164 seals were shot in Orkney during an experimental cull undertaken by the Department of Agriculture and Fisheries for Scotland. The experiment was undertaken, in view of the widespread complaints of damage done by seals to salmon and marine fisheries, to establish the most humane and practicable methods of controlling the grey seal population, pending the result of further investigation about the nature and extent of the control needed.
    Mr. Grimond: May I ask the hon. Gentleman if there is any evidence that these colonies of grey seals are in the places from which the main attacks on salmon are made? Do I understand that it is not suspected that grey seals spread disease among sea fish, as opposed to fresh water fish?
    Mr. Leburn: There is some strong evidence that these seals are causing damage to salmon. On the second part about disease, I should like to look into that question, as there is not enough information available at the moment.
    Sir C. Thornton-Kemsley: Is my hon. Friend aware that these engaging and discriminating creatures eat almost entirely salmon and sea trout, and that there is ample evidence of this in the recent Report made by Dr. Bennet Rae, of the Marine Laboratory, Aberdeen, and published by the Department of Agriculture for Scotland? Is not my right hon. Friend right in seeking to limit the increasing population of grey seals?
    Mr. Leburn: The first point I should like to make is that this was an experiment that was authorised to establish the most effective means of control. On the other point made by my hon. Friend, I accept that there is some strong evidence of damage to fisheries by seals, and it is for this reason that further investigations are going on.

    Anderson Drive, Aberdeen
    Mr. Hector Hughesasked the Secretary of State for Scotland if he is aware that Anderson Drive, Aberdeen, which was constructed as a by-pass in a rural area outside the City is now surrounded by thickly populated areas and no longer serves its purpose as a by-pass and that many accidents, fatal and otherwise, have occurred there; and if he will now take urgent steps to prevent such accidents by introducing a speed limit or underground or overhead crossings there.
    The Joint Under-Secretary of State for Scotland (Mr. R. Brooman-White): Anderson Drive is a classified road and a recommended ring route. The provision of underground or overhead crossings or the imposition of a speed limit are matters for the consideration of the Town Council in the first instance. My right hon. Friend is, however, prepared to give favourable consideration to any application from the Town Council for a speed limit of 40 m.p.h. on this length of road.
    Mr. Hughes: Will not the Minister agree that this is a classic case of a by-pass having outgrown its safety and usefulness? Surely, this must be a common problem, and will he, in conjunction with the Minister of Transport or whatever authority is the relevant authority, take steps to see that this problem is solved by a speed limit, an
    196
    overhead or underground crossing, or in some other way, so as to stop the great loss of life which occurs on Anderson Drive?
    Mr. Brooman-White: Nobody would want to be complacent about the accident rate, but I think that the initiative must come in the first instance from the Town Council.

    Minister of State (Visit to Scandinavia)
    Mr. Hector Hughesasked the Secretary of State for Scotland if he will make a statement on the visit of the Minister of State for Scotland to Scandinavia in September of this year, indicating what avenues for further trade between Scandinavia and Scotland were explored, and with what results.
    Mr. Brooman-White: My noble Friend spent nine days in Sweden discussing ways of increasing trade and tourism between our two countries. He was accompanied by a representative of the Scottish Council (Development and Industry) which is now following up some 40 inquiries directly resulting from the visit. He was also accompanied, for part of the time, by a representative of the Scottish Tourist Board, which is now giving consideration to some 15 suggestions for increasing the tourist trade. These are in addition to the many inquiries which could be dealt with on the spot.
    Mr. Hughes: If these instances to which the Minister referred are genuine, will he send me a list of the firms so that firms in Aberdeen and the northeast of Scotland can make actual contact with the persons referred to in his Answer?
    Mr. Brooman-White: The Scottish Council is doing just that, and is notifying specific industries of inquiries in which it was thought they might have an interest.

    Linthouse Tunnel (Blow-out)
    Mr. Rankinasked the Secretary of State for Scotland if he will make a statement on the blow-out which occurred recently in the Linthouse tunnel.
    Mr. Brooman-White: On 22nd October when the north drive of No. 1 tunnel had reached a point roughly below the back wall of the car-ferry recess on the north bank a blow-out occurred at the tunnel face. Pressure was lost and water entered the tunnel, but the reserve compressor plant was immediately brought into use and all personnel were safely evacuated. Repair work was begun almost immediately but will take some weeks to complete. I understand that tunnelling at this point is likely to be resumed in about a month's time.
    Mr. Rankin: Is not the hon. Gentleman aware that after this accident, which might well have been a disaster, it was stated at management level that the blow-out had been anticipated? If it was anticipated, what action was taken by the management to prevent it occurring?
    Mr. Brooman-White: It was realised that they were reaching a very dangerous patch, and precautions were taken. It is very satisfactory that, as a result of the precautions, when an accident occurred there was no loss of life.

    Universities
    Mr. Rankinasked the Secretary of State for Scotland what approaches have been made to him on the matter of another university for Scotland.
    Mr. Brooman-White: Apart from the references made to this subject in the debate on 7th November, my right hon. Friend has received letters from the right hon. Member for East Stirlingshire (Mr. Woodburn), my hon. Friend the Member for Ayr (Sir T. Moore), the hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson), the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes), the Editor of the Glasgow Herald, the Campaign Committee for the Proposed University of East Stirlingshire, the Royal Burgh of Dumfries, and the Royal Burgh of Inverness.
    Mr. Rankin: Is the hon. Gentleman aware that the recent Report of the University Grants Committee has indicated that by the mid 1960s there ought to be between 170,000 and 175,000 places in
    198
    British universities? In view of the great activity going on in England in the establishment of new universities, of the fact that applications for more universities are being encouraged, and of the approaches in Scotland which the hon. Gentleman has just announced, what steps is he taking to impress Scotland's needs on the Chancellor of the Exchequer and the University Grants Committee?
    Mr. Brooman-White: There is also great activity in Scotland, as my Answer indicated. My right hon. Friend is in touch with the University Grants Committee, and will keep in touch with it, about Scotland's specific needs.
    Mr. Rankin: On a point of order. I asked a direct question, namely: what is the Secretary of State doing? Why should the hon. Gentleman evade it?
    Mr. Speaker: That is not a point of order.
    Sir M. Galpern: In view of the ample evidence already available, will the hon. Gentleman indicate whether the Scottish Office, as represented either through the hon. Gentleman or through the Secretary of State, is satisfied that there is a definite and urgent need for a fifth university?
    Mr. Brooman-White: The matter is under review by the University Grants Committee, and it is its job to advise the Chancellor of the Exchequer on the expansion of university facilities in general. My right hon. Friend is closely in touch with the Committee about the specific problems of Scotland.
    Sir T. Moore: As a result of the persuasive letter which my hon. Friend received from the hon. Member for Ayr, will he bear in mind that Ayr is peculiarly well suited in every way for the university when it has been finally approved?
    Mr. Brooman-White: All these representations will be recorded.
    Mr. Rankin: On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise this matter on the Adjournment at the earliest opportunity.

    Hospitals, Kirkcaldy (Waiting Lists)
    Mr. Gourlayasked the Secretary of State for Scotland the number of persons awaiting admission to the hospital in Kirkcaldy for general surgery at the latest available date and on the corresponding date in 1959, respectively.
    The Joint Under-Secretary of State for Scotland (Mr. T. G. D. Galbraith): The number of persons awaiting admission to Kirkcaldy General Hospital for general surgery was 259 on 30th September, 1960, and 274 on 30th September, 1959.
    Mr. Gourlay: Is the hon. Gentleman aware that those figures do not reflect the correct position in Kirkcaldy, since many people in the area are treated in Edinburgh hospitals? In view of the circumstances, does he not agree that the suggestion to provide private beds in Victoria Hospital would be against the best interests of the community at large?
    Mr. Galbraith: I agree with the hon. Gentleman that they do not give the present situation, because they do not take account of the new buildings in the Victoria Hospital which were opened at the beginning of last month. Over the next few months there will be a distinct improvement.
    Mr. Gourlayasked the Secretary of State for Scotland the number of persons awaiting admission for medical treatment to Victoria Hospital, Kirkcaldy, at the latest available date, and on the corresponding date in 1959, respectively.
    Mr. Galbraith: The number of persons on the general medicine waiting list was six on 30th September, 1960, compared with one on 30th September, 1959. The corresponding figures for the geriatric waiting list were 61 and 62 respectively.
    Mr. Gourlay: Those figures reflect the very favourable position in respect of medical beds, but is the hon. Gentleman aware that some of the consultants in Fife are pressing to have private beds provided in the new Victoria Hospital? As the provision of such beds would lead to queue jumping according to one's financial means, will the hon. Gentleman oppose any suggestion of providing private beds in that hospital.
    Mr. Galbraith: I will look into the matter.

    Road Improvements
    Mr. Manuelasked the Secretary of State for Scotland if he will adopt a national road plan for road improvement works throughout Scotland; and if he will list priority improvement schemes within the national plan.
    Mr. Brooman-White: In his statement of 28th July my right hon. Friend indicated the Government's plans for road expenditure in Scotland in the next few years and named the principal projects which would receive priority.
    Mr. Manuel: Is the hon. Gentleman aware that there is growing anxiety among Scottish local authorities and many other people generally in Scotland regarding the lack of a national road plan? Is he aware that many people think that the Secretary of State's programme is merely nibbling at the problem? Could not the Secretary of State look at the picture as a whole and decide on priorities after having arrived at a plan for Scotland? The priorities should cover the roads on which an increasing number of accidents and loss of life are taking place, and the many roads where the volume of traffic carried today makes them unsuitable to serve the purpose for which they were originally intended.
    Mr. Brooman-White: If the hon. Gentleman will look at my right hon. Friend's previous reply, he will see that it showed a very substantial increase of expenditure and indicated the roads to which priority would be given. We must keep a certain degree of flexibility.
    Mr. Manuel: On a point of order. Owing to the most unsatisfactory nature of the reply, I beg to give notice that I shall take an early opportunity to raise this matter on the Adjournment.

    A.8 Road (Dual Carriageway)
    Mr. Willisasked the Secretary of State for Scotland what proposals he has for speeding up the work of making the whole length of the A.8, between Edinburgh and Glasgow, a dual carriageway.
    Mr. Brooman-White: As my right hon. Friend informed the House on 28th July, the reconstruction of this road is one of the main items in the programme from next year onwards.
    Mr. Willis: Is the hon. Gentleman aware that, while it might be one of the main items in the programme, it still is not being proceeded with fast enough? Is he aware that this is the most dangerous road in the United Kingdom? It has a very high casualty rate. Will he increase the amount of money to be spent next year and do this job urgently?
    Mr. Brooman-White: We are trying to get on with it, but the hon. Gentleman will realise that one of the main difficulties is not simply building a dual carriageway, but catering for the excessive number of side roads entering the main road.
    Miss Herbison: Is the Joint Under-Secretary aware that the reply given by the Secretary of State was that it will take six years to complete this dual carriageway? Is he also aware that not a week passes without fatal accidents occurring on this road, particularly on the Newhouse-Salsburgh-Harthill stretch? The Government could complete the whole of this road in a great deal less than six years.
    Mr. Brooman-White: I must stress again that the chief problem to which attention is being paid is, as the accident record shows, the excessive number of side roads entering the main road. We hope to make as rapid progress as we can on that.

    By-Pass Road, Musselburgh
    Mr. Willisasked the Secretary of State for Scotland what representations he has received concerning the provision of a by-pass for Musselburgh; and what reply he has made.
    Mr. Brooman-White: A request has been received from Musselburgh Town Council to proceed immediately with the construction of a by-pass of the town, but I cannot at present forecast when it will be possible to fit this scheme into the roads programme.
    Mr. Willis: Is the hon. Gentleman aware that at times it is almost impossible to cross this road in Mussel-burgh? Does he not think that the Government should proceed with this scheme with a great deal more urgency than they are showing at present? Does he not think that Government expenditure on roads in Scotland for next year
    202
    should be increased, and not left at the same level as this year?
    Mr. Brooman-White: What we do think is that it would be right to wait for the county development plan to be approved before considering the detail of this proposal.

    Forth Road Bridge
    Mr. Woodburnasked the Secretary of State for Scotland what arrangements are being made to ensure maximum visibility in all weather conditions for road users on the new Forth Road Bridge and its approaches.
    Mr. Brooman-White: A wide range of methods will be used which have been proved effective elsewhere. They will include lighting on the bridge itself and white lines, reflecting studs, reflectorised traffic signs and light coloured kerbing on the approach roads.
    Mr. Woodburn: Is the Minister asking the Minister of Transport the result of his experiments in illuminated and other forms of kerbs? Will he make sure that this road is at least safe in all kinds of weather, both in respect to the approaches and also to the actual crossing of the bridge?
    Mr. Brooman-White: As the right hon. Gentleman knows from his previous Question on the matter, tests are going on with these kerbs, but I cannot give any indication of the final outcome of these tests.
    Mr. Strachey: Is the hon. Gentleman aware that what some of us are more concerned with is that the Tay Road Bridge will be visible at all.
    Mr. Woodburnasked the Secretary of State for Scotland whether the Forth Road Bridge is proceeding according to schedule; and when he expects it to be finished.
    Mr. Brooman-White: I understand that work on the Forth Road Bridge is proceeding on schedule. The contract for the main structure is due to be completed at the end of 1963, and there is at present no reason to believe that this date will not be met. The contracts for the approach roads and viaducts are being phased to meet this date.
    Mr. Woodburn: Is it true that tenders have been let on old-fashioned specifications for the approaches to the bridge, and that the Minister now has no room to manoeuvre?
    Mr. Brooman-White: I am not aware of that fact, but I will certainly look into the matter.

    Housing (Circular No. 33)
    Mr. Manuelasked the Secretary of State for Scotland how many local authorities have made returns to him arising from the issue of Circular No. 33, dated 23rd May, 1960.
    Mr. Galbraith: The circular invited authorities which contemplated building subsidised houses for purposes outside the defined categories of special need to submit appreciations of the housing situation in their area. Such appreciations have so far been submitted by 69 authorities.
    Mr. Manuel: That is a very small number out of the total of about 132 housing authorities in Scotland. Can the Joint Under-Secretary indicate the number of local athorities which have applied and which he has permitted to build for grossly overcrowded families, families with sublet apartments, and families living in unfit houses not in the town centre, listed in the circular as special needs, requiring his approval before local authorities can undertake such building?
    Mr. Galbraith: This circular has not led to the withholding of approval for any tenders which have been submitted up to date.

    Woollen Industry (United States Tariffs)
    Mr. Hoyasked the Secretary of State for Scotland what representations he has received from the Scottish woollen industry regarding the increases in duty proposed by the United States of America; and what action he is taking in the matter.
    Mr. Brooman-White: My right hon. Friend has received no representations. As regards the latter part of the Ques-
    204
    tion, I would refer the hon. Member to the Answer given on 10th November to my hon. Friend the Member for Shipley (Mr. Hirst) by my right hon. Friend the President of the Board of Trade.
    Mr. Hoy: It may be that the manufacturers concerned have not had time to write to the Secretary of State, but is the hon. Gentleman aware that these men are expressing grave concern about this very large increase in import duties, which can have an extremely harmful effect on the Scottish woollen industry? What steps is the Secretary of State taking jointly with the President of the Board of Trade to make it known to the American authorities how we feel about this matter?
    Mr. Brooman-White: As the previous Answer indicated, the new arrangements are an improvement, but we are still not satisfied with them and we hope to have some further negotiations on the subject.

  HOUSING (MINISTER'S SPEECH)
  Mr. Frank Allaunasked the Prime Minister if the speech by the Chancellor of the Duchy of Lancaster, on 29th October, regarding the ending of the national housing shortage, represents the policy of Her Majesty's Government.
  The Prime Minister (Mr. Harold Macmillan): Yes, Sir.
  Mr. Allaun: Did not the Chancellor, and later the Minister of Housing and Local Government, say that a national housing problem no longer exists, and that only a purely local problem remains? Is not that a cruel affront to the millions whose lives are being wrecked? I challenge the Prime Minister to go to any big city and say that the housing problem no longer remains. Can he name a single one?
  The Prime Minister: My right hon. Friend was drawing attention to the fact that the national problem had been largely solved—[HON. MEMBERS: "Where?"]—and that what we now had to concentrate on was a number of local problems. This point was made in very

  205
  similar words by the hon. Member for Fulham (Mr. M. Stewart) in the debate on 2nd May.
  Mr. Gaitskell: Will the Prime Minister say how a national shortage can exist in a sense that it is not an accumulation of local shortages, and how the position has changed when, in every large city, we still have very long waiting lists?
  The Prime Minister: I think it is within the knowledge of the House that whereas some years ago this was the most terrific, pressing problem, and our biggest problem, in many parts of the country and in some authorities it has now very largely been satisfied. [HON. MEMBERS: "Where?"] It is for that reason that authorities such as that of the hon. Member who put down the Question are now concentrating on what one might call not houses for general purposes but for slum clearance, the pulling down of old houses, the renovation of some of them and the building of houses for old people.
  Mrs. Slater: Does not the Prime Minister realise that every large city not only has a slum clearance problem but also an overcrowding problem? Does he not know that every large city has a long waiting list of people who have not an earthly chance of a house while the Government pursue their present policy? Is not this a national problem?
  The Prime Minister: The chance of a house is as good as it has ever been, because we are building 300,000 houses a year, which we were told some years ago was beyond the capacity of this nation.
  Mr. Gaitskell: Can the Prime Minister name a single large city where a housing shortage does not exist today? How can he say that the use of many new houses for slum clearance purposes, to absorb people from slum clearance areas, does not constitute a housing shortage?
  The Prime Minister: Perhaps I can put the matter better in the words used by the hon. Member for Fulham. He said:
  "It seemed to me, looking over the record of the debates, that these points in particular emerged. First, that although housing is a serious problem in many parts of the kingdom, it is becoming a regional problem."—[OFFICIAL REPORT, 2nd May, 1960: Vol. 622, c. 702.]

  CYPRUS (QUESTIONS TO MINISTERS)
  Mr. Biggs-Davisonasked the Prime Minister which Member of Her Majesty's Government is now responsible for answering Questions on relations with the Republic of Cyprus.
  The Prime Minister: My right hon. Friend the Secretary of State for Commonwealth Relations.

  CABINET MINISTERS (OFFICIAL SECRETS ACTS)
  Mr. Ginsburgasked the Prime Minister whether, in the light of the recent case of Churchill v. Nabarro in the High Court, he will clarify the regulations governing the conduct of Cabinet Ministers under the Official Secrets Acts in their relations with journalists.
  The Prime Minister: The conduct of Cabinet Ministers in these matters is governed by the Official Secrets Acts and by the Privy Councillor's Oath.
  Mr. Ginsburg: Is the Prime Minister aware that the question which goes to the heart of this action, of whether Cabinet secrets were reported verbatim or not, reflects gravely on the honour of Ministers? Is not he aware that it is a cause of grave disquiet in the country, and will not he hold an inquiry.
  The Prime Minister: I think it would be undesirable for me to comment on statements, allegations or suggestions made during that case, especially as I understand that a right of appeal still exists.

  THE FAR EAST
  Dame Irene Wardasked the Prime Minister in view of the need to ensure greater support from countries in the Far East, as well as from those in Africa, for the foreign policy of Her Majesty's Government, if he will arrange to visit the Far East at an early date.
  The Prime Minister: I am grateful to my hon. Friend for this suggestion, which I have noted.
  Dame Irene Ward: While considering the proposal, will my right hon. Friend bear in mind the fact that many people,

  207
  including many of our official people right throughout the Far East, take the view that with our preoccupation with African problems, the problems of the Far East are being overlooked? Does he realise how welcome would be a visit from him in order that the people can see that aspects affecting both Africa and the Far East receive full consideration?
  The Prime Minister: As I believe the House knows, I had very much hoped to make a visit to Malaya, because I would then have succeeded, as Prime Minister, in visiting every Commonwealth country. If I were able to fit that visit in, as I hoped, it would give me an opportunity to go to other countries in the Far East.
  Mr. Healey: Is the Prime Minister aware that a visit by him to the Far East would probably do more harm than good, unless Her Majesty's Government show the courage of their convictions about the seating of the Peking Government in the United Nations?
  The Prime Minister: I rather thought the hon. Member would say that. That is why I was so careful about it.
  Mr. Shinwell: Has the Prime Minister observed that suggestions have been made to him by hon. Members on both sides of the House to go to the Far East, Moscow, Washington and elsewhere? In fact, they do not seem to like his presence in this assembly.
  The Prime Minister: I should feel that a rather wounding question if it were not for the fact that the right hon. Gentleman spends so much time, in his questions, in hoping that I have more time to answer my Questions every week.
  Mr. Rankin: Is the right hon. Gentleman coming back?

FORD MOTOR COMPANY, DAGENHAM
Mr. H. Wilson(by Private Notice) asked the Chancellor of the Exchequer what information has been received about the proposed take-over bid by Ford Motors, of Detroit, for British-owned minority shares in Ford Motors of Dagenham and whether he will make a statement.
The Chancellor of the Exchequer (Mr. Selwyn Lloyd): I have seen what has appeared in the Press, but no application for exchange control consent has yet been received. I am unable to say more today. I will, however, make a statement as soon as possible, I would hope not later than Monday.
Mr. Wilson: In coming to a decision, will the right hon. and learned Gentleman bear in mind that this £129 million take-over bid would mean that half the motor car industry in this country would be owned by wholly-owned subsidiaries of American interests? Secondly, does he realise that if this deal goes through there will be a real danger that all production and employment in this country will be sacrificed not only to Detroit but, as the Financial Times suggested this morning, to the West German subsidiary of Fords of Detroit?
Mr. Lloyd: The right hon. Gentleman is correct in indicating that there are certain factors to be taken into account. Of course, this is not a take-over bid 55 per cent. of the equity of Fords, Dagenham, is already held by the American company and another 15 per cent., I believe, is in other United States hands. I quite agree that a factor which has to be taken into consideration is the effect which this decision might have one way or another on the development of the Ford undertaking in this country, but, of course, the subsidiary in Germany is wholly owned.
Mr. Lindsay: Does my right hon. and learned Friend appreciate that anxiety on this subject is not confined to any particular part of this House? Will he give an assurance that he will not take a decision about Treasury permission before hon. Members have an opportunity of expressing to him their points of view?
Mr. Lloyd: I am, of course, quite prepared to hear the views of hon. Members of the House. I have already written to my hon Friend on that matter, as I feel there are many factors to be taken into account. I have no more to say today.
Mr. Parker: Would the right hon. and learned Gentleman make a particular point of looking into the reasons why, already owning more than half the capital of the Dagenham company, the

209
American company should want to own a further amount of capital? Is it not possible that the pressure of British shareholders in the past has led the British company to push for markets in Germany, Europe and America, and may not that pressure be removed if British shareholders no longer hold shares in the company?
Mr. Lloyd: I think that we have to take into consideration the effect that this decision might have on the development of this undertaking in this country, but I repeat that the German subsidiary is wholly-owned.
Mr. Cleaver: Is my right hon. and learned Friend aware that a point of principle is involved, namely, how much the control of a very large industry might fall into the hands of foreign nationals? Would he arrange for a debate to take place in the House before the Government make a decision?
Mr. Lloyd: The question of a debate is not for me, but I would point out that 55 per cent. of the equity is already in the hands of the American company.
Mr. Gaitskell: Is the right hon. and learned Gentleman aware that there is a good deal of anxiety on both sides of the House precisely for that reason? Can he explain why, if the parent company already has complete control over the subsidiary company, it wishes to buy up the remaining shares? Is there not a possibility that the motive for doing this is to divert trade to Ford subsidiary companies in other countries to the detriment of people over here? Will the Chancellor look into that very carefully before he comes to a conclusion on the matter?
Mr. Lloyd: I agree that is a matter to be taken very carefully into account, but I should have thought that the inference was perhaps the other way. The German subsidiary is wholly-owned, and I should have thought that one of the possible dangers was the diversion of development to that subsidiary.
Mr. Edelman: While recognising the Government's dilemma, is it not the case that if the deal goes through it will be a sell-out not only of British Ford, but of the whole British motor industry, which will effectively come under
210
American control? In view of the size of the temptation which is being offered by American Ford, will not the Chancellor take steps to prevent the transaction going through and thus putting British shareholders beyond the temptation of their own friends?
Mr. Lloyd: I am not certain that I follow what the hon. Member says. In fact, the control of this company is already in the hands of the parent company.
Mr. Nabarro: Would my right hon. and learned Friend bear in mind that the motor industry as a whole may shortly become the beneficiary of £9 million of public moneys for expansion purposes, a part of which is to go to Ford? Having regard to that implication, coupled with the widespread anxiety all over the country, including my constituency very largely, about short-time working in the industry, could we not have a debate on the whole of the problem and not a debate confined only to this question of the American acquisition of British Ford capital?
Mr. Lloyd: As I have said, the question of a debate on the motor industry is not for me, but I have indicated the factors which I think we have to take into account in arriving at this decision.
Mr. A. Lewis: In supporting the request for a debate in the House, may I ask the Chancellor also to bear in mind the fact that there are thousands of British workers whose livelihood may well depend upon his decision in this matter? Before coming to any conclusion, will the Chancellor give an assurance that he will discuss this with the appropriate trade unions, the Confederation of Engineering and Shipbuilding Unions, who represent the interest of the workers in the industry? Surely the workers ought to be consulted, and consulted through their appropriate trade unions.
Mr. Lloyd: I will certainly take into consideration the hon. Member's suggestion, but I would point out that we have to consider the effect of this decision one way or the other upon the development of the industry. It might well be that to give the answer one way might have the effect of preventing the development of this company in this

211
country and diverting the development to Germany.
Sir A. V. Harvey: When my right hon. and learned Friend is considering the matter, will he take into account the experience of Canadian companies who have factories similarly placed and now regret having given complete control over to the Americans?
Mr. Lloyd: I would remind my hon. Friend that effective control is already in the hands of the Americans.
Mr. Gaitskell: Can the Chancellor not tell us, if that is the case, what is the motive of the Ford Motor Company in making this proposal?
Mr. Lloyd: I understand that all their subsidiaries overseas are, in fact, wholly owned, except this.
Mr. Emrys Hughes: Does this not indicate that the Americans are so satisfied with the Government for having given them bases in this country that they are now prepared to take over the whole country?
Mr. Driberg: On a point of order, Mr. Speaker. With very great respect, I think that you are not aware—there is no reason why you should be—that a large part of Dagenham is in my constituency as well as in that of my hon. Friend the Member for Dagenham (Mr. Parker) and that many of the workers concerned are constituents of mine. I have been seeking to catch your eye, and I wonder whether I might have an opportunity to put a supplementary question?
Mr. Speaker: The hon. Member was not the only one trying to catch my eye. I agree that that point was not in my mind, and I regret it. I have heard the Minister say that he is to make a statement by Monday. I really think that we should proceed with the business.
Mr. Driberg: But it was on that very matter, Mr. Speaker, that I wished to put a new point to the Chancellor, if I might be allowed to do so: that is, that he has not answered the first question put to him from the other side of the House. When he makes a statement, may I ask him not to present the House with a fait accompli, but to give the House an oppor-
212
tunity of expressing its views before he takes a decision? Could I have an answer to that?
Hon. Members: Answer.
Mr. Speaker: I do not think that any question was then technically asked. If the hon. Member desires to ask that question, I will call him for that purpose. Mr. Driberg.
Mr. Driberg: May I now ask the right hon. and learned Gentleman——
Mr. Lindsay: On a point of order, Mr. Speaker. I asked my right hon. and learned Friend whether he would give an assurance that he would hear our views before a decision was taken. He replied that he had written to me on this subject. To write and say that he would be glad to have a talk about the matter is not at all the same thing. I again wish to press my right hon. and learned Friend for an undertaking that no decision will be made until he has heard the views of hon. Members.
Mr. Speaker: That is not a point of order. Mr. Driberg.
Mr. Driberg: I am grateful to you, Mr. Speaker, because I really wish to ask the same question. May I ask the Chancellor of the Exchequer directly: will he give an undertaking that he will not take a decision before he makes his statement on Monday, or whenever it is, and that, in consultation with the Leader of the House, he will seek to ensure an opportunity for a debate, in which the House can express its view, before he takes a decision?
Mr. Lloyd: As I have said, the question of a debate is a matter for my right hon. Friend the Leader of the House.
As regards taking a decision about this matter, I certainly could not give an undertaking that I would not take a decision without a debate in the House. I will, of course, take into consideration all the points which have been put today. I will take those into consideration and come to a decision. Then, if the House does not approve it, the House has its own course.
Mr. H. Wilson: As I understood it, Mr. Speaker, you precluded further questions on the ground that the Minister proposed to make a statement not later

213
than Monday. In view of the doubt now thrown on the position by the Chancellor's statement, namely, that he may be making a final decision and announcing it in the House without giving hon. Members a further opportunity even by questions to put their point of view, would it not be right that hon. Members on both sides of the House, who have a very great concern, should have the right to press this matter further this afternoon, unless, of course, the Chancellor will give an assurance that he intends to give further consideration to the views which may be put before him by hon. Members?
Mr. Parker: Mr. Speaker, may I seek to move the Adjournment of the House on this matter, in view of the fact that the Chancellor refuses to make any definite reply about whether he will make a statement to the House before a decision is reached?
Mr. Speaker: Will the hon. Gentleman be good enough to write out his Motion and bring it to me?
Dame Irene Ward: Could I ask something in the meantime, Mr. Speaker?
Mr. Speaker: No.
Dame Irene Ward: Should I now be in order, Mr. Speaker, in asking for your guidance for a moment?
Mr. Speaker: As the hon. Lady knows, I am not here to give guidance or rule upon hypothetical situations.
Dame Irene Ward: No; I do not mean that.
Mr. Speaker: The hon. Member for Dagenham (Mr. Parker) asks that leave be given, under Standing Order No. 9, to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, the refusal of the Chancellor of the Exchequer to give an assurance to the House that a debate will take place before a decision is reached on the sale of the Ford Motor Company, of Dagenham.
I cannot hold that that is within the Standing Order. As I understand it, the present position is that the Minister has not yet received any application at all for consent in this matter. It would be quite beyond any precedent of which I
214
have ever heard to move the Adjournment under the Standing Order on the refusal of a debate.
Mr. H. Wilson: On a point of order, Mr. Speaker. While, obviously, no one wishes to contest that Ruling in any way, may I ask for your help in this matter, to protect the rights of the House, because of the Chancellor's indication that he may decide this without any further opportunity for hon. Members to put a point?
May I mention the precedent here of the British Aluminium deal last year, which had several features in common with this? On that occasion, although there had been a Question of this kind and an Answer of that kind, and although a Question stood on the Order Paper, the Treasury, through its public relations office, indicated what the decision was to the Press at that time before a statement was made in the House.
In view of the fact that there is feverish speculation going on on the Stock Exchange in Ford shares today, and the discount on them represents the element of odds as to whether the Chancellor will give a decision one way or another, could we have an assurance that any statement to be made will be made in this House of Commons and not by a statement to the Press?
Mr. Lloyd: I certainly give that assurance.
Mr. Driberg: Further to that point of order, Mr. Speaker. With very great respect to you, Sir, I think you indicated that your reason for rejecting my hon. Friend's Motion for the Adjournment was that the Minister had shown that he had not yet received any application. May I put to you, with great respect, that the right hon. and learned Gentleman did not at any point deny that he was expecting this application to arrive? It may already be waiting in his office. It is clearly not just a canard: this is something which will happen unless the Minister refuses permission for it to happen. That is why we in the House are so worried about it and why our constituents, also, are extremely worried about it.
Mr. Speaker: I am obliged to the hon. Gentleman. I entirely understand the point that he makes, but it does not assist me. There is no suggestion that it is a

215
canard. It is the fact, on the information before me, that an application has not yet been received.
Mr. H. Wilson: Further to that point of order, Mr. Speaker. On the assumption that the application is coming to the Chancellor, as the Chancellor plainly believes, if it were to come overnight would that mean that you were precluded now from refusing a similar request for a debate tomorrow if the Chancellor has by that time the application before him?
Mr. Speaker: I ruled on the written Motion submitted to me this day in the circumstances as I know them and am now equipped with that knowledge. I say nothing about other circumstances or other Motions on other days.
Mr. S. Silverman: Further to that point of order, Mr. Speaker. May I put this point to you? It is clear from what has transpired so far that there is an immediate danger that an industry or part of an industry in this country which is partly subsidised out of public funds may be allowed to pass to a foreign owner without the House of Commons having any opportunity of being consulted before it happens. Would not that be a definite matter of urgent public importance?
Mr. Speaker: All I have done is to rule upon the Motion submitted to me, not on some other one. I think that the matter really is difficult in connection with the Standing Order until an application has been received.
Mr. H. Wilson: Further to that point of order, Mr. Speaker. Would not the appropriate thing be for the Chancellor to seek your leave to make a statement in the House, even if it is only one sentence, as soon as he has the application, and before he decides upon it, so that we may have an opportunity to try our luck once again in submitting to you a Motion which might then be in order?
Mr. Speaker: There must be some limit to these observations, courteously addressed to me, which are not meant for me.
Mr. Brockway: Further to that point of order. May I submit to you, Mr. Speaker, that not only are the constituents of Dagenham involved? This com-
216
pany has large works in other parts of the country, including my constituency, Eton and Slough. May I ask you, if an application is made by tomorrow in this matter, whether we may have the opportunity of moving the Adjournment when the House meets tomorrow?
Mr. Speaker: I would not rule on any hypothetical situation. No one would expect me to do so. If the hon. Gentleman makes an application at any time in some other circumstances and other words, it will be my duty to consider it, and I will do so to the best of my ability.
Mr. Gaitskell: Could the Chancellor of the Exchequer make the statement when he has received the application, as my right hon. Friend asks?
Hon. Members: Answer.
Mr. A. Lewis: On a further point of order, Mr. Speaker. May I draw your attention to the fact that in the midday newspaper it is stated that Sir Patrick Hennessy, who is managing director of Fords, at Dagenham, was asked what his view is in this matter, and stated that an approach had been made to the Treasury, that the Treasury's reply was awaited, and that until the reply was received it would be improper for him to make any statement. In view of that, would you, Mr. Speaker, give further consideration to the matter if I produced to you the newspaper containing the report?
Mr. Speaker: I accept what the hon. Gentleman says about what is in the newspaper. It does not assist me in this matter.
Mr. Driberg: On a point of order. With great respect, Mr. Speaker, it seemed to me that the Chancellor was about to rise and seek to catch your eye the last time but one that you, Sir, rose. I am quite sure, as you also must be, that he would not wish even to seem to evade the question put to him by my right hon. Friends on the Front Bench.
Mr. Speaker: There must be some end to this. It is curious how one gets a different impression through the eyes. I thought that at that moment the Chancellor of the Exchequer looked extremely stable.
Mr. Lipton: On a point of order, Mr. Speaker. May I seek to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely, the danger of the British Ford undertaking being sold without this House first having the opportunity of discussing the matter?
The argument that I want to submit in support of the Motion is this. The refusal of the Chancellor of the Exchequer to make any statement at present indicates what is, in my submission, a perilous situation so far as this House is concerned. I would, therefore, ask you, Mr. Speaker, to give favourable consideration to the terms of the Motion which I am seeking to move.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a definite matter of urgent public importance, namely, the danger of the British Ford undertaking being sold without this House first having the opportunity of discussing the matter.
I cannot get this Motion either within the rules governing the matter. The facts disclosed do not at this moment reveal Ministerial responsibility. That is the basic difficulty.
Mr. H. Wilson: On a point of order. In view of the immobility of the Chancellor of the Exchequer and his refusal to inform the House that he will make a statement as soon as this application is submitted to him so that the House can determine its action. I should like to give notice that I shall seek at an early hour tomorrow to table a further Private Notice Question so that the right hon. and learned Gentleman will have to tell the House whether or not he has had the application
Mr. S. Silverman: On a point of order. In view of the fact that today's Private Notice Question was accepted at the Table, that the Chancellor of the Exchequer accepted responsibility and answered the Question, and that there has been a whole series of supplementary questions and answers, can you help the House, Mr. Speaker, to understand why the facts do not disclose any Ministerial responsibility?
Mr. Speaker: The hon. Member has fulfilled his delightful function of inducing the Speaker to give reasons. There is not any real dilemma. Until the answer is given, the Chair is not in a position to know whether or no such an application has been made. It is on that fact that the issue of Ministerial responsibility now turns. I am not going to argue about this matter.
Mr. Silverman: With great respect, Mr. Speaker, the right hon. and learned Gentleman refused to give an assurance that he would not decide this matter in a sense which meant parting with this undertaking without first giving the House an opportunity of discussing the matter. In those circumstances, it seems a little difficult to understand why the Minister's answer does not disclose acceptance by him of responsibility.
Mr. Speaker: I am not prepared to argue about the matter. If the hon. Gentleman will do me the courtesy of looking at what I last said to him, he will see that the point that I am making is, right or wrong, perfectly clear.

COMPLAINT OF PRIVILEGE
Mr. G. Thomson: On a point of order, Mr. Speaker, I desire to raise a question of Privilege. It concerns a letter in The Times today from Mr. Randolph Churchill referring to a statement in this House by the hon. Member for Kidderminster (Mr. Nabarro), which appears in HANSARD for Wednesday, 9th November, c. 1065.
The hon. Member for Kidderminster, in interrupting my hon. Friend the Member for Newton (Mr. Lee), said:
"The hon. Member should be careful. He must realise that free speech means that one may call a spade a spade, but not a coward a coward."—[OFFICIAL REPORT, 9th November, 1960; Vol. 629, c. 1065.]
In the letter to which I have referred. Mr. Randolph Churchill said:
"Unless Mr. Nabarro's words have no meaning at all, they were a plain reference to my recent action for slander against him, in which the jury awarded me £1,500 for the very word about me which he has chosen to repeat in the House of Commons Surely this is an exceptionally gross abuse of privilege of Parliament?"
I would respectfully submit to you, Mr. Speaker, that if this statement by Mr. Randolph Churchill in The Times is

219
untrue, there seems to be a prima facie breach of Privilege on the part of Mr. Randolph Churchill. If, on the other hand, what he says is true, then I would submit to you, Mr. Speaker, that the hon. Member for Kidderminster is himself in breach of the privileges of this House. I hold no brief whatever for the opinions of Mr. Randolph Churchill, but surely it is a serious position if a private citizen who has won an action for slander against a Member of this House can find the slander repeated here.
Our privileges in this House are, or should be, a precious protection through this House of the public liberty of the individual. If we allow our privileges to be frivolously abused, it brings them into discredit and, I submit, harms both Members of this House and members of the public. I beg to submit this matter to you, Mr. Speaker.
Copy of newspaper handed in.
Mr. Speaker: I have 24 hours to consider this. I will take them and rule tomorrow.

BILL PRESENTED
  LOCAL AUTHORITIES (EXPENDITURE ON SPECIAL PURPOSES) (SCOTLAND)
  Bill to amend section three hundred and thirty-nine of the Local Government (Scotland) Act, 1947, with respect to the purposes for which payments may be made thereunder, presented by Mr. John Maclay; supported by Sir Edward Boyle, Mr. T. G. D. Galbraith, and Mr. Brooman-White; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 14.]
ORDERS OF THE DAY

  NATIONAL INSURANCE BILL
  Order for Second Reading read.
  4.0 p.m.
  The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): I beg to move, That the Bill be now read a Second time.
  The object of this Bill is to implement that part of the proposals that I announced in this House on 2nd November which relate to National Insurance and to industrial injuries. The other parts of that statement we shall seek to implement in other ways; the war pensions section by Amendments of the Royal Warrant, and the National Assistance proposals by regulations, a Motion to approve which in draft has recently been tabled.
  This is the second occasion on which I have had the privilege of moving a Measure of this sort, and it is the fourth occasion since my right hon. Friend the Member for Woodford (Sir W. Churchill) formed his Government in 1951 that proposals of this kind have been put forward; but this particular body of proposals is in some ways distinct and different from those three preceding ones. It is different because this is a series of proposals not in any appreciable measure designed to compensate pensioners and others for a diminution in the value of their pensions owing to rising prices. On the contrary, it is a series of proposals in substantial measure to increase the real standard of those provisions, certainly predominantly so, and to a far greater extent than the three preceding Measures.
  We start on the basis that the proposals that became law in January and February of 1958 raised the benefits to the highest level, in real terms, achieved before then. We start on the basis that thanks to a very high measure of stability of prices since then, the Index of Retail Prices today stands, in round figures, at only two points above the level of January, 1958. The 1958 improvements have in overwhelming measure retained their value, and these proposals are, therefore, built as a further advance in standards on that foundation.

  221
  It may help the House, in considering these proposals, to have in mind the enormous scale of National Insurance provisions in these days. The total cost of National Insurance benefits in the current year, on the present basis, is £972 million, of which £665 million goes to pensions. On top of that, there is the industrial injury provision which now runs at an annual cost of £55 million—a total, in the current year, for those two schemes of £1,027 million.
  If the House is good enough to approve the proposals in the Bill, those figures will rise next year to a total, for National Insurance benefits, of £1,134 million, of which £776 million will go for pensions. The industrial injuries figure will rise to £64 million. That means that the total for the two schemes will be £1,198 million.
  Equally—and this is, perhaps, important as part of the background—the bargain presented to the individual pensioner will be appreciably improved. The House may remember that in the White Paper "Provision for Old Age", that I laid in the autumn of 1958, I gave, by way of illustration, what was the capital value of a pension coming into payment for a man aged 65, with a wife of 60, retiring at that time.
  If the House approves the Bill, the figures for that bargain will require revision upwards, and I will, if I may, give the House the revised figure. If these measures are approved, a National Insurance contributor retiring in April at the age of 65, with a wife of 60, will get a pension whose capital value is £3,000. If he has contributed for pension as long as he possibly could—that is, since 1926—he and his employer together will have contributed towards pension some £300, a sum which, on a reasonable actuarial calculation, would purchase a pension of 9s. a week, as opposed to the 57s. 6d. single and 92s. 6d. married that it is proposed to provide.
  Before I turn to the main issues of the Bill, which are, of course, contributions and benefits, I should like to deal quickly with the one other item in the Bill that is quite unrelated to them. I refer to the provision in Clause 3, which deals with the so-called "12-hour rule". Perhaps I could explain how that has arisen.
  222
  Section 20 of the National Insurance Act, 1946, lays down the conditions for retirement; that is to say, the conditions that a National Insurance contributor has to satisfy if he is a man under 70—under 65 for a woman—before becoming eligible for pension and having retirement accepted. The section provides that men and women can be treated as retired, even if they are working, provided that they do so
  ". . only occasionally or to an inconsiderable extent or otherwise in circumstances not inconsistent with retirement."
  That is the condition for establishing retirement, and three possible means of satisfying it are provided.
  The National Insurance Commissioner, the independent judicial authority who decides cases under the scheme, has, as the House knows, construed "to an inconsiderable extent" as meaning—in a great many cases, at any rate—that the contributor, the proposed pensioner, does not intend to work for more than 12 hours a week. It is not for me to comment on that as a legal construction of the Statute, but it does, as I think hon. Members on both sides of the House know, give rise, in practice, to some difficulties, particularly in the light of, and perhaps as the result of, the two increases in the earnings limits that have come about in the last eighteen months.
  There has arisen this very practical difficulty, now that the earnings limit for a retirement pensioner is at 70s. a week, that to earn that while working less than 12 hours a week involves, if my mathematics are right, an hourly rate of approximately 6s., which is a good deal higher than that applicable to a good many of these cases. The problem has been how to reconcile a retirement condition construed in terms of the hours that a man intends to work with the earnings limit after retirement set out in terms of actual earnings.
  What Clause 3 proposes to do, therefore, in the light of that difficulty and of the fact that the National Insurance Advisory Committee, in reporting on the regulations under which the last earnings limit increase was made earlier this year, drew attention to this difficulty, is to provide that where someone intends, not other than occasionally, to earn more than the amount laid down at any time as being the amount for the earnings

  223
  limit, such employment shall be within the condition permitting retirement. It shall not be ruled out on the ground of "to an inconsiderable extent." In other words, the restrictive effect of the 12-hour rule will be abolished.
  This is, I think, a useful provision. The need has become the more acute as a result of the increases in the earnings limit. We have had a situation in which a person contemplating retirement has been tempted to underestimate his forecast of the number of hours he proposes to work—a very real temptation, in many cases. We have thought it desirable to deal with it in the Bill, although, apart from that, the Bill is, as the House knows, what is colloquially called a rates Bill, dealing with the rates of benefit and contribution.
  We will discuss the Clause further when we come to Committee, but as the point is rather extraneous to the main purpose of the Bill I thought that I would take it up now before coming to the main provisions.
  Mr. G. W. Reynolds: The right hon. Gentleman has drawn attention to a Clause which will abolish something already in the basic Acts. When dealing with this, a little earlier, he mentioned that a pensioner retiring on 1st April would get a pension of the capital value of £3,000; and that the maximum amount to be paid would be £300; and he said that the actuarial pension would be 9s. a week. He was referring to 1st April next year. Is he aware that his own Act of 1959 completely abolished the actuarial basis of the computation of benefits, and that, although I repeatedly asked him to do so, he refused to break down the figures because of the fact that the whole actuarial basis was done away with and that we were going over to the assessment method. Having gone over to the assessment method, would he explain why he is still using the actuarial basis? I am sorry to have taken so long to put this point.
  Mr. Boyd-Carpenter: I am sorry if I misled the hon. Gentleman. It must be my fault. He is absolutely right in saying that by the 1959 Act we placed National Insurance on a pay-as-you-go rather than an actuarial basis.
  224
  The reason why I referred to the 9s. as being the pension which could have been earned for £300 was simply to illustrate the value of the bargain looked at from the point of view of the pension provision—simply by way of illustrating that fact. I certainly did not wish to mislead the hon. Gentleman, and, indeed, I am sure that I did not, into thinking that the Measure was on an actuarial basis.
  I now come to the proposals in respect of benefits. It is proposed to increase the single rate of the main benefits, retirement pension, unemployment, sickness, widowhood, by 7s. 6d., and the married rate by 12s. 6d. On 2nd November, when I made my statement, the hon. Gentleman the Member for Sowerby (Mr. Houghton)—I make no complaint about it—raised the question whether this was enough, and the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), in a somewhat more irritable way, referred to a belated and grudging concession. I think, therefore, that I should spend a minute or two in discussing these particular figures and in applying different tests to them.
  Let me take, first, the test of the proposal of right hon. and hon. Gentlemen opposite. Their proposal, if I understand it aright, was for a 10s, increase, which, on the face of it, appears to compare favourably with our proposal for 7s. 6d. But the House will remember that the proposal of hon. Gentlemen opposite was 10s. for a single person and 10s. for a married couple. Our proposals are for 7s. 6d. for a single person and 12s. 6d. for a married couple.
  I would have thought that any serious social student who is concerned to operate our National Insurance in the most socially sensible way would really feel that it was much more appropriate to make higher provision for a married couple than to make the same provision both for a married couple and for a single person.
  Mr. Ellis Smith: Who has ever doubted that?
  Mr. Boyd-Carpenter: I am glad that the hon. Gentleman appears to be with me on this point.
  Mr. J. T. Price: Clay pigeon shooting. That is what this is.
  Mr. Boyd-Carpenter: I have not put up clay pigeons, but if the hon. Gentleman understood clay pigeons he would know that they come down of their own gravity.
  The percentage increase which these proposals represent is 15 per cent. on the single and practically 16 per cent. on the married rate. That amounts to a quite substantial improvement against other tests which the House may care to apply, apart from the test of the proposals of hon. Gentlemen opposite.
  Since the last National Insurance increases in January, 1958, wage rates have risen 6 per cent., a considerably smaller increase. The House may say. "One has to take rates of earnings." I am not sure that that is right, because they tend to fluctuate more.
  Mr. Ellis Smith: Hear, hear
  Mr. Boyd-Carpenter: I am glad to have the hon. Gentleman with me.
  Mr. Ellis Smith: Too true.
  Mr. Boyd-Carpenter: In taking the comparison with wage rates, there the straight comparison is between 15 per cent. and 6 per cent.
  Mr. Ellis Smith: This is very important. This comparison is constantly being made in the House. During the whole of our history we have made calculations upon wage limits. Anything earned above that is because of the extra effort of those receiving the higher earnings.
  Mr. Boyd-Carpenter: I am most grateful to the hon. Gentleman for his help. I was seeking to put this comparison on wage rates. I am glad to have him with me on that comparison.
  Mr. John Cronin Mr. John Cronin (Loughborough) rose——
  Mr. Boyd-Carpenter: I hope that the hon. Gentleman will forgive me if I do not give way. I have given way twice already, and we had already lost half an hour of the time for our debate. If I go on giving way at this stage perhaps no one else will get into the debate, apart from the hon. Gentleman the Member for Sowerby.
  The figure for total disposable income has increased over the same period and
  226
  seems material in this connection. It is 9½ per cent up over the period.
  Therefore, I think that most of the tests—the cost of living test; as I said, the cost of living has moved very little, only two points—the rates of wages test, the disposable income test, do, I think support the point I was seeking to make, that this is a substantial and solid improvement in standards.
  Indeed, it has been criticised in certain circles, I think more outside the House than in, on the ground that we ought not to have made an overall increase of this sort at all. I accept, in response to those critics, the fact that some of this increased provision will go to a number of pensioners who are by no possible standard in need. In reply to the critics, I would say that that would by no manner of means conclude the matter, and for three reasons.
  In the first place, as the House knows, my right hon. Friends and I were committed at the General Election to giving pensioners a share in increasing prosperity. The word used was "pensioners", and it applied without qualification, as I understand, to all pensioners. I am not trying to make a party point of this. I think that the House will agree with me that it really is important, in matters of this sort, that pledges of this kind should be honoured.
  Then there is the fact that all the recipients, or practically all of them, are almost, as a matter of definition, not working. They are therefore, in substance, in the fixed income groups, and it is certainly a platitude of our social discussions today that the fixed income groups have not shared to anything like the same degree as the working groups in the massive improvement in standards which has taken place in recent years. Therefore, what this Measure amounts to is a compulsory transfer from a working generation earning at an unprecedented level to a retired generation which, whether well or badly off, is in this fixed income group which has done relatively less well; and this is a socially sound proposal.
  Then there is a third fact, which has been mentioned in the House, and it is an important one. That is, that those now retired spent most of their working lives in two wars and the inter-war depression and have had more difficulty in making provision for old age than

  227
  this present working generation; and on top of that they did not have, as the present working generation has in increasing measure, the benefit of a large number of private occupational schemes.
  It seems to me right in present circumstances to make this overall increase, though, since sensible social policy is empirical and designed to deal with a particular need of a particular situation, it does not necessarily mean that social policy will in future follow the same path. But, granted these circumstances, and for the three reasons that I have sought to give to the House, it seems to me that on this occasion the case for an overall increase is extremely strong.
  I am glad to see the right hon. Member for Middlesbrough, East (Mr. Marquand) on the Front Bench opposite. He and I, over the years, have disagreed on a good many matters in connection with National Insurance, but I think that we have achieved a considerable measure of agreement in the concern that we have both sought to show for the needs of the widowed mother. My own view, and the right hon. Member has expressed a similar one, is that in our society generally the widowed mother is, on the whole, in the most difficult position of all. It is for that reason that in 1956, by the Family Allowances and National Insurance Act, we increased by 5s. the provision made in respect of each of the widowed mother's children.
  As no improvement was made at that time in the rates for other children under National Insurance, that introduced a differential of 5s. in favour of the widowed mother's children. The National Insurance (No. 2) Act, 1957, operating the 1958 changes, preserved that differentiation and at present, apart from her own allowance of 50s., a widowed mother receives by way of National Insurance and family allowances 20s. for her first and second child and 22s. for the third and subsequent children.
  The Bill proposes an increase of 5s. in respect of each of a widowed mother's children as compared with 2s. 6d. in respect of other children covered by the Bill, as well as the standard increase of 7s. 6d. for the widowed mother herself. That will have the effect of raising the differential in respect of the widowed mother's child to 7s. 6d. and the actual
  228
  figures, including family allowance, to 25s. for the first and second child and 27s. for the third and subsequent children. Looking back at the start of the scheme in 1948, one can see real progress, for the 1948 figure was 7s. 6d. for the first child, and 5s. family allowance for each of the others.
  This is the largest proportionate increase in cash terms in any part of National Insurance and, taking the period for which we have been responsible from 1951 onwards, it means, not in cash but in real terms, that the provision for the children of the widowed mother has gone up by 90 per cent. for the first child, 153 per cent. for the second and 174 per cent. for the third and subsequent children. These are increases which I hope the House will think right.
  I make no apology, in a contributory scheme, when one proposes increases in benefit, for proposing, at the same time, increases in contribution. If the scheme is to be a proved contributory scheme, then if benefits rise so, inescapably, must contributions. The Bill therefore proposes an increase of 1s. 6d. a side in the National Insurance contribution, with an offsetting decrease of 1d. a side in respect of the industrial injuries contribution. The net increase in the overall contribution which affects most people, is 1s. 5d. a side, or 2s. 10. in all.
  The right hon. Member for Huyton, on 2nd November, the day when I made my statement, said
  "… the Government have to put up the contribution of the lowest-paid workers in the country."—[OFFICIAL REPORT, 2nd November.1960; Vol. 629, c. 189.]
  That, of course, is quite untrue. The overall contribution in respect of the lowest-paid worker, on £9 a week or less, will continue to be the same as it is now. Indeed, his own contribution, inside that, actually goes down by 2d. from 9s. 11d. to 9s. 9d. whereas his employer's goes up by a corresponding 2d.
  Mr. Douglas Houghton: If a person earning under £9 a week is in non-participating employment, what the right hon. Gentleman has just said will not apply. There will be an increase in the present contribution in his case.
  Mr. Boyd-Carpenter: Yes, but the right hon. Member for Huyton and the hon. Member for Sowerby are not

  229
  entitled to assume that the Government are imposing this on the lower-paid workers unless and until they can show that a substantial number of those lower-paid workers have been contracted out. There is no indication so far that any substantial number of workers are likely to be in that category. The right hon. Member for Huyton was quite wrong—perhaps the date of 2nd November explains this.
  In return for this improvement in benefits, an increase is made, except for the lower-paid workers. Hon. Members who went through the marathon Standing Committee on the National Insurance Act, 1959, may remember that, with considerable reiteration, hon. Members opposite said that nothing was being done for those earning £9 a week or less. If the Bill is approved, the net effect will be that the £9 a week worker will receive increased benefits without an increased contribution—indeed, with a small reduction in his own contribution. I hope, therefore, that we shall hear no more about doing nothing for the lower-paid worker.
  I do not know whether it is suggested that the maintenance of the present contribution imposes too high a load upon the workers. If it is, it is interesting to examine how the scheme has developed. The original contribution—the flat-rate contribution—paid by the lower-paid and others will have risen to 198 per cent. from 4s. 11d. to 9s. 9d., whereas the flat-rate benefits that are properly set against it will, if the Bill receives approval, go up to 220 per cent. and 221 per cent. of the 1948 rates. In other words, the proportionate increase in contribution paid by such workers is less than the proportionate increase in their benefits.
  Mr. George Lawson: The right hon. Gentleman knows, of course, that he is taking from the graduated contribution a huge sum every year for which no benefit will be paid to those who pay those contributions. In other words, there is a disguised and, I would say, a dishonest subsidy of the right hon. Gentleman's present rate of benefit. Will he tell us about this?
  Mr. Boyd-Carpenter: I will tell the hon. Member a great deal, and, in particular, that he could hardly have got
  230
  more wrong the provisions of the National Insurance Act, 1959. If I were to pursue the hon. Member's remarks into that matter, I should incur the disapproval of the Chair, because we are discussing the 1960 Bill, but by his intervention the hon. Member has indicated that he does not appreciate that what I was talking about in response to the intervention of the hon. Member for Sowerby was the £9 a week worker, who does not pay the graduated contribution. Therefore, the point which the hon. Member for Motherwell (Mr. Lawson) now makes is not on this matter at all.
  The House will notice that the increase proposed for the flat-rate minimum contribution and for the contracted-out contribution is the same net 1s. 5d. a side, and that the graduated contributions of the 1959 Act and the provisions for contracting out are not altered or affected in any way. There is consequently no reason whatever why decisions which have been or are being taken by those concerned as to whether or not to contract out under the 1959 Act should be affected in one way or another. The relative position remains completely unchanged. I am glad to say, in parenthesis, that this seems to have been recognised very clearly outside, and the process—it would be out of order if I went into it—appears to be going smoothly and at an accelerating speed.
  I mentioned the industrial injuries contribution. The House may remember that the Government Actuary's quinquennial review of the finances of the Industrial Injuries Scheme disclosed that the contributions being imposed were greater than the estimate of what was needed for the scheme. As the hon. Member far Islington, North (Mr. Reynolds) will recall, the Industrial Injuries Scheme is on an actuarial basis. We therefore took the Government Actuary's advice, and the result has been the quite agreeable one that, while increasing—as the Bill proposes to do—industrial injury benefits—the increase in the 100 per cent. rate will be to 97s. 6d.—it has been possible, at the same time, to reduce the industrial injuries contribution by 1d. a side. That is owing to the fact that the actuarial forecasts in the past of the finances of the scheme turned out to be unduly conservative—spelt, I would point out, with a small "c".

  231
  I come now to the question of the Exchequer contribution as proposed in this Measure. This is determined under the formula laid down in Section 1 (3) of the 1959 Act. Broadly, its effect is that the Exchequer contribution will amount to a quarter of the total of what is paid in flat-rate contributions by insured persons and their employers in Class I, and to one-third of that paid by those in Class II. Therefore, it moves automatically if one moves the employers' and workers' contributions.
  As hon. Members will remember, in the 1959 Act—apart from that formula—there was a minimum under which in no circumstances would that contribution be less than £170 million a year. That was introduced to secure a good financial start for the new scheme. In fact, had that minimum provision not been given, the formula would have produced an Exchequer contribution of £152 million. The effect of these proposals is to raise the Exchequer contribution with the others. It raises it on the formula by £35 million, from £152 million to £187 million; but as the £170 million was in as a minimum, anyhow, the immediate effect of that change is an increase in the Exchequer contribution for National Insurance of £17 million, to the figure of £187 million.
  I say "the immediate effect", because the House will appreciate that, as the scheme goes on and revenues rise, the whole thing will rise above the floor of £170 million, and, as a result, after a few years the whole £35 million will become evident as an additional charge in respect of National Insurance.
  The reduction in the industrial injury contribution from the contributors also brings into play the original formula of the Industrial Injuries Act, 1946, for determining the Exchequer contribution to the Industrial Injuries Fund. That was fixed as a proportion of the other contributions and will, therefore, come down by £1¾ million as a result of the reduction in these contributions.
  It has been suggested outside this House—by, I think, some hon. Members—that the particular change which the House is considering in this Bill should not have been financed under the formula of the 1959 Act—that is, on the partnership of employer, worker and
  232
  Exchequer according to the predetermined formula—but should have been solely financed by the Exchequer. I do not know whether that view is to be advocated today. If it is, my right hon. Friend, when she replies to the debate, will, of course, be prepared to deal with it. I will only say at this stage that it would, in our view—the view of hon. Members on this side of the House—be a very serious threat to the whole working of our system of National Insurance.
  If one were to destroy the formula of the 1959 Act under which the solvency and the buoyancy of the scheme are assured, under which contributions of all three supporters of it move with the cost of it, I am sure that one would be going back to the unfortunate position of the scheme as it was before the 1959 Act came into operation. If one makes the scheme increasingly tax-supported, one inescapably—as the T.U.C. has recognised—undermines its other important feature, the payment of benefit as of right without proof of need or test of means, because one could not, in my judgment, justify further burdening the taxpayer, including the poorer taxpayer, to pay additional benefits to some people in the scheme who were perhaps better off than the person one was taxing to help.
  Therefore, one is dealing with something, I think, enormously important in maintaining this contributory basis of the scheme, and one is dealing also with something enormously important in dealing with the financial foundations which we hope the 1959 Act will provide for a very long time to come for the finances of National Insurance, and that is connected very much with these proposals. It is plainly—to put it no higher than that—very much easier to come forward with these proposals on the basis of a National Insurance Fund which is to be put in balance than it would be to come forward with them against the background of a National Insurance Fund incurring heavy and increasing deficits.
  I leave the argument there. I will make only this comment, that I do not believe that if right hon. Gentlemen opposite had been on this side of the House as the result of the General Election, and if they had sought to carry out their own pledge to increase pensions, they would have done it in very much of a different way. Indeed, it is difficult to

  233
  see how they could have done so in the light of the pledges which they gave not to increase Income Tax and to reduce Purchase Tax.
  I come now to the point on which a certain amount of argument may well develop—the proposed dates of operation of the increases in contributions and benefits. I will seek now to give our point of view on this, and then at the conclusion of the debate my right hon. Friend will try to answer points which may be raised—that is, on the basis that I do not convince the House so much in advance as to lighten her task, a matter which I know she herself would enormously regret.
  It is proposed that these changes, both in contributions and benefits, should take effect at the beginning of next April at the same time as the graduated contribution under the 1959 Act come into payment—that the whole operation should take place as one. So far as concerns the time actually to be taken, it is perfectly true—I concede this at once—that the time we propose to take—from, as it were, the announcement on 2nd November to the date of operation—is appreciably longer than in 1957–58. It is also the fact that it is very much in the bracket of the times taken on the other occasions when these improvements have been made—of the 20–24 weeks in 1951, the 24 weeks in 1952, or the 21 weeks in 1954–55. It is, in fact, if I have worked it out aright, 22 weeks, and so it is very much in that bracket.
  I would stress—I hope that hon. Members will give due weight, whatever their views on it may be, to this matter—that this is a change made in wholly different circumstances from those of the other changes. It is not in any sense a rescue operation designed to compensate pensioners for pensions whose value had already been eroded. If there were a case for highly speedy action in their case, it would, of course, have been in 1951 when it is significant that prices were getting out of hand and the Index of Retail Prices rose by 7 per cent. between the announcement and the operation of the changes. It is not such an operation. It is a raising-of-standards operation. On the other hand, the numbers involved are greater than ever; there were 4 million pensioners in 1951
  234
  and there are 5½ million now. If we include widow pensioners with retirement pensioners, there are nearly 1 million more today than when we made the changes in 1957–58.
  But I am not resting my argument solely on the administrative problem, though it is serious, not only because of these increased numbers but also because both my Department and employers are concerned at the same time in making preparations for the very considerable changes which are involved in bringing the 1959 Act into operation. As I say, however. I am not resting my case solely by any means on that administrative point, though I am saying to the House that for administrative reasons alone it would certainly not be possible to do this operation as quickly as we did it in 1958.
  We come back to the question that what is in issue between us is only a very few weeks—say, for the purpose of argument, six weeks. Against that, there are some very important considerations to which I ask the House to give weight. It clearly would not be a good idea to raise contributions, say, five or six weeks before they were to be altered again at the beginning of April. It would cause great trouble to employers and, for the lower-paid worker whom I was discussing a few moments ago, it would mean that his contribution would rise above its present level and then fall. I therefore think that we must rule out any idea of moving contributions before April. I think that there is a very great objection to moving benefits separately from contributions, because in that way we should in some measure undermine not only the insurance concept of the scheme but also to, some extent the discipline of the direct and immediate relationship between contributions and benefits.
  I am not saying that that reason is necessarily compelling by itself, although I think it important. I will put it this way—that I should not like to see it done that way unless there were completely compelling reasons. I hope that the House will take it that that is a fair way of stating the matter, and certainly that is my approach.
  But hon. Members may say, "There are compelling reasons". I am afraid that they do not carry me with them when they say that because, as I have

  235
  said, this is not a mopping up operation after an inflation. The 1958 values have in substance been maintained, and when they started they were the highest ever. They are still higher than they were at any point before 1958. There is therefore not the same atmosphere of a rescue operation.
  Mr. J. J. Mendelson: They are not high enough.
  Mr. Boyd-Carpenter: I take the point which the hon. Member has in mind, and perhaps it would save time if answered him now.
  As regards the relief of need, which applies in the strict sense to only a certain section of the pensioners, the full current provisions for National Assistance remain in operation, and the House knows that the National Assistance Board takes particularly into account the needs of older people. The House knows, too, that it is not merely a question of scale rates and that in respect of the supplementation of retirement pensioners, some two-thirds have discretionary additions. If the hon. Member is thinking about fuel, the fact remains that fuel is taken into account by the National Assistance Board in its general assessment of need. There is also what the Board calls an allowance for exceptional fuel requirements. The Board's Annual Report demonstrates that this was being paid in about 293,000 cases at the beginning of this year—and that was in mid-winter.
  We therefore come to the conclusion——
  Mr. Mendelson: There is one other point.
  Mr. Boyd-Carpenter: If the hon. Member catches your eye, Mr. Deputy-Speaker, no doubt he will be able to make his point, and my right hon. Friend will reply. We have plenty of time to discuss these matters. I am trying to bring my remarks to a conclusion, and I hope that the hon. Member will forgive me for not giving way.
  We therefore come to the conclusion that the very great advantages of principle and of practice are in favour of making this change at the beginning of April. There is the further practical consideration that it is not until the
  236
  beginning of April that the 1959 Act will put the scheme on a solvent basis. Until then it is running at a heavy deficit. The deficit on the current year looks like being about £94 million. I do not think that one is entitled to add to that deficit for the sake of what, as I have explained to the House, is a matter of a few weeks one way or the other, unless such a compelling case of urgency can be made as to justify very exceptional steps indeed. For the reasons which I have given—and the House can differ about this, and probably will—it is our view that those extreme circumstances do not arise, and that therefore the right, sensible and practical way to do this is to make it operate all in one, with the 1959 Act, from the beginning of April.
  It is useless to deny that these improvements will impose some additional burden on the generation at work, and they would do so whatever device we employed for the purpose, Fundamentally, it does not make any difference whether we do it by a mixture of contribution and Exchequer charge, as we propose, or by placing it wholly on the Exchequer, as may be suggested, for, in economic terms, what happens when we increase the provision for the old, the disabled and the widowed is that we transfer it from somebody else, from the people of working age. In truth and in fact it is a transfer anyhow, and these contributions which we seek to increase in a sense only give a precise financial indication of what is an inevitable process anyhow.
  But I do not believe that this prosperous generation will grudge this improvement to the older generation or to the disabled. I think that they will accept this responsibility in the confident hope that, when their own time comes to retire, their successors as a working generation will be prepared to accept a similar load and a similar burden for them, in a way thus demonstrating the continuing nature of our society.
  Particularly having in mind the words of the right hon. Member for Huyton—"belated and grudging"—I do not want to present these proposals to the House with any concealment of the fact that this will impose on our community, and, in particular, our working generation,

  237
  quite a considerable load. I do not believe that it can be done in any other way. But I think that it will be done cheerfully and with a feeling that it is right. It is perhaps appropriate that we should at this moment be taking steps in the spirit of the Fifth Commandment at a time when so many people seem to spend so much time discussing breaches of the Seventh.
  4.50 p.m.
  Mr. Douglas Houghton: I am sure the whole House is grateful to the Minister for his very full and lucid explanation of the Bill's proposals. He has told us all about the Bill and its benefits, without acknowledging that they are belated and inadequate. I know the right hon. Gentleman will feel a little hurt at hearing that right at the outset of my speech, especially in view of his comments in the last few minutes about some remarks of my right hon. Friend the Member for Huyton (Mr H. Wilson).
  Any improvement in benefits is welcome, however small, and we are glad that the Government have felt able to introduce the Bill, however much it falls short of our desires. Later, I shall say that the benefits proposed are inadequate, and I shall say that the right hon. Gentleman has taken all the wrong criteria, but before coming to that I want to deal with the delay.
  Why has it taken so long? Why have these people—6 million altogether—had to wait so long for the relief which is now so much overdue? It is likely that the Bill would never have been introduced but for the election pledge of the party opposite when stung into making it by the more positive policy of the Labour Party. [Laughter.] The right hon. Gentleman seems to be amused by that, but it is a fact that the election pledge by which he has laid such great store was not made until the last moment of the election and only after hon. Members opposite saw the strong appeal that the Labour Party pledge was making to this very large poorer section of our community.
  However, it has taken two debates since then—the most recent initiated by my hon. Friend the Member for St. Helens (Mr. Spriggs) on 20th May—to get the Bill; the Government have
  238
  shuffled and stalled for a year. I do not believe that the Government had any intention of introducing the Bill and making it operative from a date earlier than the beginning of April. The beginning of April was the date if there was to be a date, and the right hon. Gentleman has jobbed back in order to fix the date of the announcement of the progress of the Bill.
  To delay these benefits until the first week in April is intolerable. "He gives twice who gives quickly." It is nonsense for the Minister to say that there is no impelling reason for bringing the date forward. There is. These people have been left behind. It will be more than three years since the last increase by the time these benefits are payable at the beginning of April.
  I am very glad the right hon. Gentleman has not taken refuge in administrative difficulty, because we should not have believed him if he had.
  Mr. Frank Allaun: The Minister gave administrative difficulties as one of the reasons. If Little-woods can deal with millions of clients every week at a few days' notice, surely there is no administrative difficulty in the Government's way in giving this money earlier.
  Mr. Houghton: There is probably a great deal in that, except that the Ministry of Pensions and National Insurance does not happen to be a football pool.
  I repeat that I am glad that the right hon. Gentleman has not stressed the administrative difficulties as the reason for the delay. I realise that in 1954 and 1952 the period taken to bring the changes into operation was much the same as now.
  Mr. Boyd-Carpenter: And 1951.
  Mr. Houghton: And 1951. But in 1958, as the right hon. Gentleman said, the Ministry got a move on and it was less than three months between the Second Reading of the Bill and the operative date. The right hon. Gentleman was then in a hurry to coincide the effects of changes in National Insurance with already announced changes in National Assistance.
  The answer to the question of why these benefits are delayed until April is that the Government did not want them to date from an earlier time. They had

  239
  no intention of dating them from an earlier time, and the link between increased benefits and contributions is the probable reason for that. The Minister said a moment ago that he thought that it was wrong to move benefits without at the same time moving contributions, unless there was some impelling reason for doing so. I do not share that view. I think there is every reason for bringing forward the operative date of benefits, without necessarily having a corresponding change in contributions from the same date, if the beneficiaries are anxiously waiting for the relief which the changes will bring.
  We fully realise that, for financial reasons, the Minister wants to bring in changed contributions and especially the additional revenue from graduated contributions from the date of the increased benefits, but I stress the need of the 6 million who wait on the Minister's judgment of the fianancial and other factors involved. I agree that these proposals are raising standards, but a raising of standards can be overdue and urgently desired by people who have been left behind in conditions of increasing prosperity.
  Every week matters to these people. Christmas will come, the bad weather will come, the winter will come and even the spring will come before help and relief come. There is no reason why the Minister should not have brought forward the operative date. If he is troubled about the money, I suggest that it is already there. There was no need to bring forward the contributions to coincide with an earlier date of operation of the benefits. I agree that it would have been a great nuisance to have increased contributions for a few weeks and then to have changed them again in the first week of April, but what we are now discussing is a period of about eight weeks in February and March.
  The Minister has available, either in reserve or in a hidden nest egg, enough to cover increased benefits for that short period. I estimate that he has £286 million already hidden away under Section 1 (3, c) of the National Insurance Act, 1959. The right hon. Gentleman will remember that under the 1954 legislation there was a global sum of £325 million upon which he could draw, with
  240
  the consent of the Treasury, during the five years commencing 1955. In 1959, that position was changed and the unexpended portion of the £325 million was made still available to the Minister, with Treasury consent, for the two financial years 1961 and 1962. I estimate that only £39 million of the £325 million has already been spent, so that the right hon. Gentleman has £286 million upon which he could draw, quite apart from £1,500 million in the National Insurance Reserve Fund and the National Insurance Fund. With those resources at his disposal, it is mean-spirited to take refuge in other considerations as a reason for not bringing the operative date forward.
  That is all I shall say about that subject. In Committee we shall do our best to bring the date forward. I now want to deal with three groups of people who are left out of the Bill.
  I make no apology for coming back first to the 10s. widow, about whom Questions were asked yesterday. I thought the Minister gave some extraordinarily feeble answers to the Questions which were asked. His justification for doing nothing for the 10s. widows was:
  "… my reason is that to do so would be to increase indefensibly the disparity between these ladies with their reserved rights and widows otherwise similarly circumstanced who receive no pension."
  The Minister went on:
  "It is justifiable to continue to pay the 10s. as a reserved right, but I am quite certain that it would seem extremely unfair to what I might call a 'no-shilling' widow if we put a charge for an additional payment on the National Insurance contributions in order to increase the lead which the 10s. widow has."—[OFFICIAL REPORT, 14th November, 1960; vol. 630, c.16.]
  What I cannot understand is how it widens the gap between the "no-shilling" widow and the 10s. widow if all the right hon. Gentleman is doing is restoring the value of the 10s. It seems to me quite indefensible to have a reserved right, which in the conditions of the time was 10s. in purchasing value, and to whittle it away during a period of inflation so that it is worth much less than it was and to justify its retention on nominal money value only. We shall certainly seek to do something about the 10s. widows during the Committee stage. There are only 100,000 of them. They excite a great deal of sympathy, and we hope to put that sympathy to the test.

  241
  Next, the non-contributory pensioners, the over-70 pensions. Is not it shameful that there is actually a subsection of this Bill excluding them from the benefits of the Bill? Apart from the 2s. 4d. compensation which its recipients were given in 1958 for the withdrawal of the tobacco concession, the over-70 pension has remained at the original figure of 26s., with 42s. for a married couple, since 1946. We have been concerned about the 163,000 non-contributory pensioners, who, I think, are still sadly neglected under our social security scheme.
  Thirdly, the small band of so-called modified pensioners, there are only 12,000 to 13,000 of them. I asked the Minister a Question about them on 20th June. These are the late entrants in the scheme, before the present scheme began, who had previously been in excepted employment. Discrimination against such late entrants ceased in 1953, and these are the survivors of the earlier generation of modified pensioners who have their pensions cut down according to the length of time they have been contributing to the scheme. I sincerely hope that we shall be able to get rid of this grievance, too. There are a very small number of them, and the cost would be negligible. I think the Minister almost admitted that in his reply last June.
  Let me acknowledge straight away how grateful we are that the Minister has found it possible to remove the grievance of the so-called 12-hour rule. That has affected some constituencies more than others, especially those where women are employed in textile mills. Owing to their relatively lower rates of pay compared with the rates for men, the new earnings rule set a much higher wage than they could earn when working for less than 12 hours a week. This will be a very welcome change for those whom it affects.
  I come now to the general level of National Insurance benefits. Despite all the Minister has said about the criteria which he has looked at and the judgment he has exercised on the size of the share which these beneficiaries should have of the rising national income, I believe that the right hon. Gentleman has fixed the benefits to fit the contributions. There is no doubt that, in the changes which were due to take place at the beginning of April, the Minister saw a very con-
  242
  venient difference between the present level of flat-rate contributions and the new level for those who would be absorbed into the graduated scheme. He had there a margin which he has used for the purpose of financing the increased benefits in this scheme.
  In the case of women, he has taken up that gap absolutely, and in the case of men he has taken it up all but 2d. I think that coincidence is too remarkable for it to be unconnected with his decision about benefits. He wanted to avoid increasing contributions over the present level of flat-rate contributions leaving the graduated contributions unchanged. He has succeeded in so doing, and so successfully that the Exchequer contribution to finance the additional benefits is astonishingly small.
  Our approach to the question of the level of benefits is different from that of the right hon. Gentleman. We believe that we first have to decide the place which National Insurance shall have in our network of social security. There are still quite fundamental questions to answer about that. But the right hon. Gentleman, and his predecessor and the present Colonial Secretary, while asking these questions, have never answered them. They have, truly, increased benefits and they have searched round for any favourable criteria by which to justify them. But they have not defined what they believe should be the position of National Insurance in our scheme of social security. On 16th November, 1954, the right hon. Gentleman's predecessor said:
  "The question is, on what sort of income do we want these old people to have to rely? And to find the right answer to that is the problem which faces us again today, as it faced us in 1943. Do we want our old people dependent on a grant, to get which they must show need, or do we want them to receive an annuity earned by virtue of contributions paid into an insurance fund. That is the big issue."—[OFFICIAL REPORT. 16th November, 1954; Vol. 533, c. 236.]
  But the Minister never answered it. The present Colonial Secretary put the same question during his winding up speech on the Second Reading debate of the 1954 Bill on 9th December. He referred the House to paragraph 239 of the Beveridge Report, which he quoted, and which I will quote:
  "Any plan of social security worthy of its name must ensure that every citizen, fulfilling during his working life the obligation of

  243
  service according to his powers, can claim as of right when he is past work an income adequate to maintain him."
  The present Colonial Secretary in that debate asked:
  "Is that still our text, implying, as it does, contributions not only from the employer and the State, but from the employee as well? If that be not our text, exactly what are we prepared to put in its place?"—[OFFICIAL. REPORT, 9th December, 1954, Vol. 535, c. 1231.]
  The right hon. Gentleman never answered that question either. We have been without any disclosure from hon. Members opposite of what they believe should be the principle governing the level of National Insurance benefits.
  I see the hon. Member for Bournemouth, West (Mr. Eden) is present in the Chamber. As I understand it, he takes a view which is quite different from that of the Minister and quite different from the view of my right hon. and hon. Friends. He seems to share the view which has been plugged by the Economist over a number of years, that it would be wasteful of national resources to distribute benefits over the whole field of National Insurance beneficiaries in excess of the needs of many of them, and it would prefer—and I gather that the hon. Gentleman would, too—to use the needs test more freely and more widely to decide who shall get what. The argument runs that by so doing the benefits given to those in need would be more liberal than at present.
  We do not share that view. We are not in favour of bigger and better means tests. Indeed, unless I am very much mistaken, there are a number of right hon. and hon. Members opposite, and probably some behind me, too, who find the means test for university grants just as unpopular as the National Assistance beneficiaries find the means test for the benefits which they receive. Means tests to the middle classes seem to be no more acceptable than the means tests to those below them in the social or economic scale. I am sure the House will reject that concept, and I suggest that there are other means of achieving the purpose which perhaps the hon. Gentleman has in mind.
  There are two ways of meeting the priniciple of each according to his need. First, by the direct method of a means
  244
  test, which we reject. Secondly, by the more indirect method of taxation, and I wish to remind the House that taxation takes care of social benefits paid to those who have other resources open to them by making them pay a fairly heavy contribution to the Exchequer. Recently I asked the Financial Secretary to the Treasury to give me some figures to show the effect of taxation on National Insurance benefits paid to those who may have other vocational pensions or other income.
  I do not want to strain the patience of the House by going through the figures. The Question was answered on 10th November, and I will mention just two figures. In the case of a single person drawing the proposed new benefit of 57s. 6d, who had in addition a vocational pension of £10 a week, the tax he would pay on his National Insurance pension would amount to nearly £38 a year. In the case of a married man with no children receiving the proposed new benefit of £4 12s. 6d. a week, if he had a vocational pension of £10 a week on top, he would pay nearly £55 a year in tax on the National Insurance pension.
  I have taken the tax as applying to the top slice of income and applicable to the National Insurance benefit. Taxation can claw back from beneficiaries that part of what is paid out to them which, looking at the general scale of taxation, it is adjudged they should yield to the State. I hope, therefore, that we shall now be able to look at the standard of benefits which we should apply to the Bill.
  I think that we should in present conditions discard all out-of-date criteria. It is not enough for the Minister to say that wage rates have gone up by only 6 per cent. since the last increase, that the cost of living has gone up by only 2 per cent., and that disposable incomes have gone up by only 9 per cent. since then. I submit that those are not the criteria. Those of today are the economics of retirement, and the economics of prolonged sickness, and they must surely be related to the standard of life of those at work.
  I have not the slightest doubt that that is the basis to adopt; but, of course, there is the simple pragmatic test. One does not need to call in a statistician to advise on whether a person can live on

  245
  57s. 6d. a week. Hon. Gentlemen need only walk round their constituencies and ask a few old-age pensioners that question, and they will get the answer. If hon. Gentlemen say that disposable incomes have gone up by only 9 per cent. since last year and that the Government are increasing the pension by 15 per cent. or 16 per cent., in these days of four letter words it is conceivable that they will get a rude answer.
  I believe that we have to look at the standard of living of those still at work. I believe that the time has come for us in the 'sixties to begin to erect new signposts in this field of social welfare. One of these should point in the direction of distinctly higher minimum benefits under National Insurance, and that is the way we on these benches would like to go.
  I will put to the House a simple proposition. First, retirement should no longer be a period of pauperism. It should not bring the distasteful experience of the means teat to over 1 million people every year. That was never contemplated at the outset. We have deplored its continuance, but we have not got rid of this excessive proportion of those on National Insurance benefits who have to go to the National Assistance Board. Secondly, I suggest to hon. Gentlemen that retirement is difficult enough when income is cut by half, but it becomes desperate when it is cut by two-thirds. Thirdly, I suggest that the acceptance of a wage-related graduated scheme in the Act of 1959 implies also the acceptance of the principle of relating the flat-rate pension to some level of earnings. That is our three-pronged approach to the present position.
  If we look at the average earnings of all workers—men, women, boys and girls—for 1959, we find that, according to the Ministry of Labour Gazette of April, 1960, average earnings were £11 9s. 4d. a week. I do not agree with my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith), who interjected when the Minister was speaking, that wage rates only should be taken for the purpose of this comparison. There are so many payments over and above wage rates which are permanent and which are part and parcel of the standard of life of the workers today that it would
  246
  be quite misleading to take wage rates in preference to the general level of earnings.
  The proposed new benefit of 57s. 6d. for a single person is one-quarter of the average earnings of all workers in 1959. Suppose that 25 per cent. were raised to 30 per cent. That would raise the pension for a single person by another 11s. 6d. and would bring the new pension to £3 10s. In the minds of right hon. and hon. Gentlemen, is a pension of £3 10s. too high for a single person? Is it excessive? Is it a waste of national resources?
  Let us consider a married couple. The proposed new pension of 92s. 6d. for a married couple is 36 per cent. of the average earnings of all workers in 1959. Suppose that we raised it to one half. That would lift the pension to almost £5 15s. Is that too much for a retired couple to languish in in a society which is better off in 1960 than it has ever been before?
  The Trades Union Congress has represented to the Minister that the benefits under the National Insurance Scheme should be raised to the present level of National Assistance, plus an addition for the average allowance for rent. On the figures which the T.U.C. put to the Minister, that would give £3 8s. 6d. for a single person and £5 3s. 6d. for a married couple. Now that the National Assistance rates are to go up, the T.U.C. will probably say that the single person's pension should be £3 13s. and the married couple's £5 9s. 6d.
  The simple truth is that 57s. 6d. and 92s. 6d., notwithstanding an increase of 7s. 6d. and 12s. 6d., respectively, are manifestly inadequate if we look squarely in the face the economic problems of retirement today. I say quite definitely that the Minister must expect from hon. Members on this side of the House a much bolder approach to the question of social provision in this field. We hope to give him what the party opposite has always taken from us in this matter, that is, inspiration, because all inspiration for social change has come from my right hon. and hon. Friends. I wish that I had time to take the right hon. Gentleman through his social history when he would see how true that was. The truth of the matter is that we are much nearer to the people

  247
  who want social change than are right hon. and hon. Gentlemen opposite.
  Mr. John Eden: We started it long before the hon. Gentleman and his hon. Friends were on the scene.
  Mr. Houghton: With respect, some of them were in this field long before the hon. Gentleman, too.
  I have always said that the Tory Party is the most flexible political instrument the country has ever known, because, as someone said the other day, it not only steals one's clothes but one's bathing tent as well. The Tory Party is willing to advance along the path of reform and change far enough, but only far enough, to retain the economic, financial and political power. That really has been its history right from the start.
  I now come to the widowed mothers. We are obliged to the right hon. Gentleman for the improvement which he is proposing in the allowances to widowed mothers. But, here again, there is indecision on the part of the House about how we should approach the position of the widowed mother. Do we want her to stay at home and look after the children, do we want her to go out to work, or, again, do we want her to do a bit of both?
  The widow's allowances now certainly do not leave the widowed mother a freedom of choice, because the benefits are inadequate. Even with the increase in the children's allowances at the present time, the benefits which widowed mothers will receive will be quite inadequate to maintain themselves and their families. If the increase in the children's allowances were doubled and if the widow's pension were raised to £3 10s. a week, a widow with one child would get only £5 a week and a widow with two children only £6 11s. a week, including family allowances. Who is going to say that £6 11s. for a widow with two children is excessive social provision? It surely is not. The Bill provides for £4 2s 6d. for a widow and one child and £5 7s. 6d. for a widow with two children. That in our view, is not enough.
  Next I come to industrial injury benefits. It follows from my remarks that we believe that industrial injury benefits
  248
  are also too low. It is perhaps a pity that the right hon. Gentleman has seen fit to reduce the industrial injury contribution when he could have used that £7¼ million to better purpose by raising the benefits still higher. In many locations, especially office staffs, people get full pay for weeks or even months of sickness while an industrial worker who is completely knocked out by injury or disease is given under the Bill £4 17s. 6d. plus 35s. for his wife, £6 12s. 6d. in all, which is less than half the average earnings of an adult worker in 1959. That is how we treat our skilled industrial workers, the men who are building the wealth of this country.
  The special hardship allowance, even if improved to 39s. a week, is still too low. There is a good deal of dissatisfaction about this allowance. We should want to attend to that, too. Here it seems to me is surely scope for putting the plight of the men injured at work on a basis worthy of a highly industrialised society which knows the hazards of factory, mine and field. We still impose on the workers of the land a financial penalty for injury on top of suffering and disablement.
  I believe that the Government seriously underestimate the readiness of the people of this country for a bold move forward in social policy—something comparable with the upsurge which there was at the time of the Beveridge Report, that great landmark in our social history.
  The Minister asks, who is going to pay? Quite obviously, we are all going to pay somehow for improved benefits. It is, as the Minister says, a transfer from one section of the community to another in varying degrees, according to income in the case of taxation and according to contribution in the case of contributors. We on these benches believe that the people of Britain are prepared to pay more to get greater peace of mind about the plight of the old, the sick and the disabled in a community which at the present time is leaving them sadly behind. We cannot advance in a progressive spirit while these unfortunate people are denied a full share in the good things of life.
  We are prepared to increase benefits substantially, but we do not agree that the whole of the increased cost should

  249
  be laid upon the contributors. We believe that the Exchequer—the State, taxation—has its part to play as it has had right from the beginning. The improvements in the Bill will cost, approximately, £140 million, only £17 million of which will be in increased Exchequer contribution because, as the Minister has pointed out, the Exchequer contribution is now on a proportionate basis.
  The total income of the National Insurance Fund next year will be £1,174 million and the contribution of the Exchequer will be £187 million—16 per cent. We agree that there is a limit to the level of flat-rate contributions, a limit to contributions of any kind when the proportion of total earnings taken in contributions becomes excessive. There is fundamentally no more reason for financing National Insurance out of contributions than for financing the National Health Service or family allowances. This is largely historical and traditional, and I do not propose to alter the fundamental basis of the scheme.
  I want to draw the attention of the House to the fact that years ago the Exchequer assumed far greater responsibility than it is now being called upon to meet since the 1959 Act. The 1951 Act reduced Exchequer contributions over a period of years amounting to £332 million and under the 1954 Act the actuarial principle of fixing contributions was discarded and new and higher contributions were heavily loaded to take account of increased benefits. Over the years the Government Actuary was drawing attention to the future liabilities which would rest upon the Exchequer owing to the deficits which were then in prospect.
  There is no doubt about the wizardry of the right hon. Gentleman. He has been a magician. The quickness of his hand has deceived the eye. By the 1959 Act he transferred to the shoulders of contributors the burden of hundreds of millions of pounds of the cost of the National Insurance Scheme which otherwise the Chancellor of the Exchequer would have had to meet.
  Paragraph 19 of the Report by the Government Actuary on the financial provisions of the National Insurance Bill, 1954, reads:
  "… Assuming that, from April, 1960, onwards, the Exchequer were to meet the annual deficits due to excess of expenditure
  250
  over income … as well as the amount required for supplements to contributions, the Exchequer payments to the Fund would rise steadily from about £250 million in 1960–61 to nearly £520 million in 1979–80."
  All that has vanished—every penny of It. In place of those admittedly formidable deficits for future years, we now have surpluses provided by the use of graduated contributions to pay flat rate benefits.
  The shift of financial responsibility from the Exchequer to contributors, which I am sure has been the envy of every slick operator in the City, still leaves a moral responsibility on the Exchequer to foot the Bill it was prepared to foot years ago. We could fully justify a substantial increase in the Exchequer contribution to meet a higher level of benefits. We should restore the true partnership between taxation and contributions envisaged by the 1946 Act.
  Finally, the country is ready, as I hope and believe, to respond to the Home Secretary's call to duty. I urge the Minister not to be afraid of the people. They are not as selfish as he thinks
  5.32 p.m.
  Mr. Percy Browne: For several years I have been trying to breed animals with stamina. I am discovering that it needs a considerable amount of stamina to be called in a major debate in the House. This is the first time I have been called, except on small issues, since I made my maiden speech in November of last year. I am grateful for the opportunity I have today.
  I join with all hon. Members in welcoming the increases in the Bill. I have been making speeches on minor matters most of the year, in the House and outside it, saying that it was high time that the Conservative Party fulfilled its election pledge and raised the pension. But the Bill is bad for two reasons. First, in conjunction with the alteration in National Assistance rates, we are getting away from what I believe to be a basic principle, namely, of concentrating help where it is most needed. Secondly—here I agree with the hon. Member for Sowerby (Mr. Houghton)—the proposed increase is too little and too late in present circumstances.

  251
  However, I say to hon. Gentlemen opposite, who may think that I am making a Socialist speech when I am not, that it would be a good thing if there were not too much sentimental boggle from the benches opposite such as we had in the last debate I listened to on pensions. We should get down to the facts. Although comparisons are odious, hon. Gentlemen opposite from their record will realise the difficulty of arranging anything in this field, because the number of old-age pensioners is increasing year by year. There are 5½ million today, but there will be 7 million within ten years.
  The sort of questions we should be asking ourselves are these. First, is the present pattern of Exchequer contribution towards the pension fund of about one-quarter a year inviolate? Secondly, is the principle of equal benefits for equal contributions still tenable in view of the present level of the basic pension as compared with past contribution entitlement? The Minister has said that it would now be 9s. a week.
  I turn now to the main reasons I gave for disliking the Bill as it stands. The first is the question of concentrating help where it is most needed. The gap between the benefits under National Insurance and those under National Assistance will be narrowed. The new retirement pension for a married couple will be 92s. 6d. a week, but the National Assistance scales are increased by only 5s. That is what I mean by narrowing the gap. I believe that this is basically contrary to Conservative thinking. I do not believe that the concepts of the same level of Exchequer contribution or equal benefits for equal contributions are inviolate.
  The argument was advanced by my right hon. Friend and by the hon. Member for Sowerby that those who draw benefits under the pension scheme but have other sources of income will pay back some of that pension in tax. That would be perfectly all right if it went back to the pension fund. The same argument applies to farming subsidies. We talk about a subsidy bill of £250 million a year, of which £90 million are producer subsidies. We do not take into account the tax which farmers pay. If we did, it would come back against that subsidy bill.
  Mr. A. C. Manuel: Everyone pays tax.
  Mr. Browne: That is fair enough. At the moment, the working population is paying contributions to secure an increase for a percentage of the population which does not need this benefit. I can speak only for my own part of the world. The hon. Member for Sowerby said that my hon. Friends and I should talk to old-age pensioners in our constituencies. Of course we do. The hon. Gentleman will probably be very interested to hear that a greater number of old-age pensioners in my constituency voted Conservative at the last General Election than voted Socialist, basing themselves on the record of this Government.
  Mr. Manuel: How does the hon Gentleman know?
  Mr. Browne: I do not. I am hazarding a guess, and I think it is a fairly accurate one.
  The smaller districts, namely, villages and smaller towns, present another problem. This is so in any country district. Everybody knows everybody else's business. Consequently, people do not like going to the post office with their National Assistance booklet to draw the supplementary pension, as it is called. They also have a great deal of pride and do not like the idea of going for what they consider to be charity.
  The people we want to help are, first, those who have no source of income other than their pension. It is not necessarily right to say that they could have saved. They may be, as my right hon. Friend rightly said, people who served in the wars but were unemployed between the wars. They may have had relatives to look after. The second category are those who have probably denied themselves during their working lives to save a certain amount of money but whose income has now diminished in value.
  One of the other difficulties is that the disregards under National Assistance for income purposes are very low, being only 30s. a week. I was talking the night before last to a retirement pensioner in my constituency who said that in desperation she had gone to the National

  253
  Assistance Board and, after much probing and prying, had been offered an extra 2s. 6d. a week.
  For all the people I have mentioned the increases are much too small.
  The hon. Member for Sowerby said that he and his party are against any form of means test. The people I have mentioned dislike it just as much as I believe all of us do. But in present circumstances, unless benefits are raised appreciably, which would mean a considerable increase in contributions, there seems to be no way round this except to adopt a system whereby there is a universal automatic means test.
  I suggest that the alternative way is to increase the income disregards for National Assistance, but we should then once again encounter two problems—first, the taint of charity, and secondly, a discriminatory means test, which is disliked.
  I am afraid that the Minister has heard me talk before about what I call the two-tier pension scheme. I do not want to go into it tonight. My hon. Friend the Member for Lewisham, North (Mr. Chataway) has spoken about it before, but I would suggest that it has two real advantages. First, it increases the basic pension for those who really require an increase and, at the same time, it gives an automatic national means test, like Income Tax, which is not discriminatory. The hon. Member for Sowerby mentioned that he and his party dislike the idea of a means test and, perhaps, the type of system that I have suggested, but I think that he might be interested in my reading a short extract from a speech made by the president of the National Federation of Old-Age Pensions Associations, the Reverend T. E. Nuttall, who is reported as saying in my constituency:
  "They would also present"—
  he is talking about the federation—
  "a new pensions idea based either on income or on age. In this country there were men and women who, because of superannuation or for other reasons, did not need more pension. The Federation were pressing for those whose pension was their sole income to be given a supplement immediately."
  I suggest that he has left out the savings group which is most important. He goes on to say:
  254
  "In the end, … that would mean an inquiry, but don't we all suffer from a means test one way or another?"
  I think that it is of interest that the president of the federation should be thinking along those lines.
  Mr. Manuel: The hon. Member is making a very important point. If I follow him correctly, his two-tier system embodies the principle of inquiry into means. I take it that he would completely agree that any other forms of Government assistance, in, say, subsidies to other sections of the community, should be subject to the two-tier system before distributing public money?
  Mr. Browne: I think I know what the hon. Gentleman is getting at. This was raised before. I am discussing the particular problem which is involved, and I have said that it is quite possible that this proposal is unworkable. All that I am suggesting is that we shall go on spending more money on old-age pensions; we shall have to contribute more; we shall have to spend more and there will be an increase in the number of pensioners. I am suggesting that we might think on these lines. Personally, I think that they are right, but I would never back my judgment to that extent on this issue.
  I said earlier that I thought that the Bill was increasing benefit by too small an amount and was coming too late. I have explained why I thought it is too little. As to it being too late, although the cost of living index has risen by only 1·2 since October last year, we gave the pledge that we did at the election quite voluntarily and not because the hon. Member's party had started an auction beforehand, and it behoves us to see whether we can raise the benefits before Christmas. We know that in spite of the cost of living having risen by such a small amount, many of the basic necessities—the increase in the price of coal for instance—are hidden in the figures for commodities which have not increased in price and which old-age pensioners cannot afford to or do not buy.
  I absolutely agree with the Minister, although he may not think so from what I have said, on the principle that contributions must go up if benefits go up. I think that there is a special case here—although the right hon. Gentleman specifically said why he would not do it—of
  Y
  255
  increasing the benefit at the cost of the Exchequer until 1st April. I think that the reason which he gave, that it was administratively difficult to alter it before 1st April, is a very fair one. If one looks at the Bill, one sees that it will cost a great deal of money to bring this into effect. In any case, it would be a pity to raise the stamp price. But if we do not do something about it pretty soon the accusation can truly be levelled at the Conservative Party that we are beginning to get our priorities a little wrong.
  I should like before sitting down—I have probably done enough damage already—to make one small point. I welcome most sincerely Clause 3, with which the Minister dealt at some considerable length. That is virtually the abolition of the 12-hour rule. I have spoken about it in the House before and I think that it would be a great benefit to many people in my constituency whose wages are not of the average mentioned by the hon. Member for Sowerby but a good deal lower.
  I ask the Minister to realise that there is no personal criticism in what I have said. I have a great regard for his complete knowledge of the subject and for the human approach that he brings to it. Nevertheless, while welcoming the increases, I must repeat that the Bill gives too little too late and the collateral change in National Assistance departs from the principle to which, I believe, we should adhere.
  5.46 p.m.
  Mr. John Cronin: I think that hon. Members on both sides of the House will express our appreciation of the speech of the hon. Member for Torrington (Mr. P. Browne). He said much with which we on this side of the House would agree, particularly about the inadequacy and the tardiness of these improvements. He rode into the very heart of the matter with the same dash with which, no doubt, he behaved in the Grand National some time ago.
  Mr. Manuel: He did not fall into the ditch.
  Mr. Browne: Not this time.
  Mr. Cronin: I think that we must give the Minister some credit. There has been a change of heart——
  Mr. Manuel: He needs it.
  Mr. Cronin: I agree that he needs it. So far he has conducted a stubborn rearguard action to prevent social security from occupying more than a limited proportion of the national income. He has conducted it with great skill. One is only sorry, for his sake, that he has not received any reward by some higher change of office, but he is up against difficulties there. He is neither a peer nor is he related to the Prime Minister.
  I think that one should congratulate him because at last hon. Members opposite have dropped, at least in part, the idea of attaching retirement pensions and other social benefits to the cost of living index. That is a real advance in Conservative thinking, and I am prepared to give them some credit for it. I think that we must also give the Minister some credit for altering the 12-hour rule. This will remedy a substantial grievance.
  We must feel unhappy about some of the people who have been left out of the increased benefits. My hon. Friend the Member for Sowerby (Mr. Houghton), in his really admirable speech this afternoon, referred to the 10s. widow and also the non-contributory pensioner and the modified pensioner. I should like the Joint Parliamentary Secretary to let us know what is the position of the pensioner who gets an increment for postponed retirement. The situation is not quite clear. I should point out that there are others who are not receiving benefits to which they might reasonably be entitled. I have in mind, for example, the workers who receive compensation under the old Workmen's Compensation Acts. They receiver no benefit whatever.
  I should like now to turn to the question of the timing of the increase in these social security benefits. Hon. Members, certainly on this side, would agree that there is genuine public indignation at the delay in bringing these social security increases into action. There is a real feeling of indignation. Perhaps it is manifested in simple if rather crude words by the Daily Mirror, which said on 2nd November:
  "So the old folk must scrape along on their present miserly pension until next spring. And the reason presumably is that some administrative clots find theft paper work too much for

  257
  them. This is outrageous. To Pension Minister John Boyd-Carpenter we say, send round a circular. Send it round at once. And make it read—Higher pensions by Christmas Day."
  Nobody will suggest that the Daily Mirror necessarily adds any useful intellectual contribution to our debates, but it is read by 10 million people and represents to some extent their feelings. In this case, I think that it mirrors the real public indignation which is felt about the delay in giving these increased benefits to social security beneficiaries.
  We remember that in 1958, hon. Members opposite acted with great celerity. We had the Second Reading of the National Insurance Bill in November and the benefits were received in January. One must bear in mind, however, that there was then the possibility of an early election and this stimulated the right hon. Gentleman to a considerable extent. I am quite prepared to believe that that is not the case if he nods his head in negation, but there seems to be some connection between the two points.
  All of us on this side agree with my hon. Friend the Member for Sowerby that the suggestion that a pre-dating of the increased benefits would cause insolvency is absolute nonsense. There are enormous sums which can be drawn from many sources. There is the £286 million authorised by the 1959 Act and the £1,500 million which is available to the National Insurance Fund. There is, therefore, no justification for the suggestion that there are financial difficulties.
  What I wish to emphasise is that there is urgency in getting the social security beneficiaries an increase earlier than April. They have to face the coming winter. We all know that the hardships of the poor are always maximal in the winter time. They must find more coal and warmer clothes and they must have more hot food. They are more prone to illness and the increased expenses caused by illness. In addition, they have more need of public transport. All these factors cause big increases in their expenditure. There is certainly urgency on those grounds alone.
  The Minister has said, however, that in view of the financial and administrative difficulties he could not consider antedating these increases unless there is compelling urgency. I suggest to hon. Members, on both sides, that there is one
  258
  particularly compelling urgency. That is that hundreds of thousands of these people will be dead by April in the ordinary course of mortality. There is nothing more compelling than death to produce urgency. These very people who will die on these lower rates of benefit are people who suffered worst in the inter-war years, the years of pre-Keynesian conservatism. I suggest that the urgency in their case is very great indeed.
  To return to the question of the level of benefits, we have heard reasons why the benefits have been increased. I am glad that we have not had the same tedious repetition from the Minister of the comparative records of the parties on a cost of living basis. The right hon. Gentleman did, however, refer to the fact that the retail price index has increased by only 2 per cent. since the last increase and that wages have increased by about 9 per cent., and there were various similar figures. All this presupposes that wage earners and retirement pensioners, for example, were on the same level of living at the time of the last increase, which, we all know, is absolutely untrue.
  What is the use of basing increases on wage rates when retirement pensioners and other beneficiaries of social insurance were enormously behind wage earners in their standard of living before? These figures are meaningless. As my hon. Friend the Member for Sowerby pointed out, the figures speak for themselves. Who can live on 57s. 6d. a week? What married couple can live on 92s. 6d. a week?
  But we do not need to look at the figures. We can all look around in our awn constituencies and see the condition of the old-age pensioners and those living on social security benefits. We do not have to hear figures about the cost of living. All we need do is to look at the people to see that they are living in miserable poverty. It is shameful that the Government have not taken earlier action.
  I should like to say a few words on the financial burden of these increases. They are almost entirely thrust upon the contributors. The contributors consist of two components, employers and employees. In the vast majority of cases, employers can pass on the increase in

  259
  increased prices, which has an inflationary effect. Again, the vast majority of employers are large companies and the increased contributions have no effect upon the directors' remuneration and have practically no worth-while effect upon the shareholders' remuneration, because the shareholders receive such a comparatively small proportion of the actual profits. The employer's contribution, therefore, will not be a severe embarrassment to the employers.
  The employee's contribution, however, is simply a poll tax, a tax levied on everybody irrespective of his ability to pay. In many oases the ability of these people to pay the contribution is very poor indeed. In many cases it is difficult to get employment simply because the total of contributions is such a large proportion of the actual wages received. It is one of the glories of our fiscal system that we attempt—or we did attempt—to graduate Income Tax so that it falls mast heavily on those who can pay it most easily. This poll tax, however, which the Minister has steadily increased, is a most unjust burden on the lower income groups of the whole country.
  A rather unsatisfactory aspect of this matter is that National Assistance rates will go up only to the extent of 3s. 6d. and 5s. That will mean that a substantial proportion of retirement pensioners—in other words, those who receive National Assistance—will get hardly any benefit at all. It will be much less than the Minister has suggested. Those are the very retirement pensioners who have the most possible need.
  The Minister's scheme has, in the rather slick Conservative way, certain political advantages. It gives the most money to the most people, but not to the people who need it most—the people who are receiving National Assistance. It will have the advantage of reducing the number of people who receive National Assistance, but it will not make any of them better off. So the whole of the Bill is to some extent throwing dust in the eyes of those people who genuinely wish for an increase in the standard of living of retirement pensioners.
  One of the less fortunate aspects of the Bill and of the right hon. Gentleman's speech is that the Government have not shown any real wish to rethink the whole
  260
  question of retirement pensions. It is a long time since we had the Beveridge Report, and it is high time that we had some consideration of all the factors involved.
  There should be a thorough social investigation into the attitude of the British people towards the elderly, the retired, the sick and the disabled, into their standard of living and into what sort of circumstances the vast majority are living in. There should be some new ideas on the kind of proportion of a man's salary that he should retire on, and on what amount of poverty we are to tolerate among those unfortunate people who have retired or who are sick, disabled or widowed.
  These questions need careful study, and there is no indication that the Government intend to afford such a study. We are simply having a hand-to-mouth, year-by-year basis of reassessment of what is becoming a festering sore in our social system. The time has come for urgent new thinking, because the plight of retirement pensioners, of widows, of orphaned children, of the disabled and the sick is a blot on the social conscience of every one of us on both sides of the House.
  6.2 p.m.
  Mr. John Eden: I agree with the last point made by the hon. Member for Loughborough (Mr. Cronin). Indeed it was the only one he made with which I agree at all, and was his only constructive point. It was that we should change our thinking entirely towards the payment of pensions and the needs of pensioners and try to get away from the basis of the Beveridge Report. The burden of my speech will be to try to give my views from that aspect.
  I wish to start, however, by welcoming very warmly the dropping of the 12-hour rule, which has certainly worked at a disadvantage to many of my constituents who find an opportunity of earning in the holiday season only, and have felt the bitter end of this rule operating against their interests. I am sure that they will welcome this change and that it will mean a great deal of difference to a considerable number of retired people in my constituency.
  I also welcome the small increase in the National Assistance rates—the second increase which we have had recently. It

  261
  is timely, particularly if, in this way, an increase is still secured in the income of the pensioner, even though the amount will now come in a lesser degree in the form of a supplementary pension. As the hon. Member for Sowerby (Mr. Houghton) quite rightly said, my own view is that I would like to have seen a much more substantial increase in the supplementary pension. I would have liked to see the emphasis the other way round from that which we are now taking. I would also like to have seen this supplementary pension made much more widely available to pensioners. In that way, we could have best brought the assistance needed by elderly people without jeopardising the future of taxpayers.
  There is a great difference of approach here, and my hon. Friend the Member for Torrington (Mr. P. Browne) has already given one slant upon this view. I want to develop my arguments as best as the patience of the House will allow me to do so, but before I begin I have a duty to declare an interest which I have acquired since I last spoke on this subject. I am now associated with a firm of brokers who can rightly be claimed to be the leading pensions consultants in the country.
  I should emphasise at once, of course, that they have nothing whatsoever to do with my views and I should absolve them from any culpability right away. I am far more likely to be carpeted by my boss tomorrow than given a bouquet. I know that I can justifiably count on the fairness of hon. Members who will recognise that the views I am about to profess are in no way influenced by the position I enjoy outside this House, because I have professed them before and have held them for some considerable time.
  For pensions purposes, the people of the country, broadly speaking, are divided into two main sets. On the one hand, there are existing pensioners and those approaching pension age whose pensions, as we have heard, have in only small part been earned by the contributions they are paying and have been paying. On the other hand, there are the existing wage-earners of today—the younger and middle-aged men and women whose prospect of retirement is, happily, still quite distant. It is the
  262
  latter group which I will, for the sake of convenience, refer to as the present generation
  They have been enjoying, ever since the end of the war, rapidly improving standards of living. Their rising incomes have more than offset any increases in the cost of living which they have had to experience. Many of the younger people have come to regard almost as essentials commodities which their parents regarded as unobtainable luxuries. They are spending today much more on themselves and their families than their parents, the older generation, would ever have imagined possible.
  For the older group, however, the situation is nothing like so happy. As they approach retirement, in any case the prospects of adding to their incomes diminish, and once having reached retirement their incomes inevitably decline. Again, this has taken place over the postwar period, when costs have been rising and when inflation has materially affected the value of savings. In addition, as has been mentioned and as I fully recognise, a considerable number of them were not able, owing to experiences in the inter-war years, to put very much aside, if anything at all.
  By comparison with their declining standards they have had to witness the very substantially increasing standards of the comparatively younger generation. We have, therefore, been witnessing in these post-war years two distinct pressures in pensions. In the first place, there has been that coming from the older people who are demanding that the State raise the level of their standard of living more nearly comparable to that enjoyed by their children. At the same time, we have had pressure coming from the younger generation, aware of their awn prosperity and conscious of the gap which exists between their own standards and that enjoyed by their parents, and again demanding of the State that it make up this gap and make good the difference that exists between them.
  Ever since the end of the war Governments have largely refused to do this. They have refused to recognise changes in the standard of living; they have merely reflected the adverse effects the rise in the cost of living has had on pensioners' incomes. This, as my right hon. Friend said, has meant that in past

  263
  Measures to increase pensions which have come before the House we have largely been considering rescue operations.
  Now, with the introduction of this Bill, as the Minister himself emphasised, for the first time there is an entirely different emphasis. The basic pension under the Bill will have been raised not to make up for any erosion that has taken place, but to enable the pensioners to taste something of those higher standards which the rest of the community have been able to acquire. This, indeed, is my right hon. Friend can justifiably claim, is a redemption of the election pledge of the Conservative Party that the pensioners shall "share in the good things which a steadily expanding economy can bring."
  Mr. Houghton: Will the hon. Gentleman tell us how he will decide what share they should have? It seems to me that he would cut adrift from the link of the cost of living and the other obsolete criteria, but where would he go from there? Where does this standard come from, and how would he fix it?
  Mr. Eden: I agree that it is not an easy matter to decide, that it is largely a matter of what the economy will carry at any particular time, and what those who are called upon to pay for increased benefits for pensioners are prepared to endure. It is also largely a matter of judgment, as, indeed, standards of living always are matters of judgment. There is no set graph or scale as for the cost of living, but I think that the hon. Gentleman will agree that this is probably a more desirable standard by which to judge the needs of the pensioners than that which has been previously adopted. I will agree with that.
  Where I disagree is in the method by which my right hon. Friend is now proposing it should be achieved. I disagree with this for three reasons, because I fear the effect that the Government's proposals could well have on the development in private pension schemes, on the extent of voluntary savings and on the responsibility of the individual citizen. Because these things are so intricately and intimately interwoven, I do not want to take each one point by point, but will give
  264
  a short general survey of my views, illustrating the way in which I feel that these reasons for my objections are justified.
  Ever since the publication of the Beveridge Report in 1942, there has been a steady growth in the number of private occupational schemes. In fact, as each fresh advance has been made in the provision of State pensions, it has, perhaps not altogether unsurprisingly, resulted in a sudden leap forward in private pension schemes. This could well now be the case, and I hope it will be, but there is undoubtedly concern at the higher contribution that will now be required for the State scheme. It appears to me, in any event, that with the introduction of the National Insurance Act, 1959, this curious relationship between the development of State pensions and the resulting stimulus to private pensions has about reached its limit. Certainly, there was a great display of interest in pension schemes as a whole, and a very welcome display this has been, resulting in quite a considerable number of new schemes.
  But it is my contention that this would have happened in any event, and that it is not the result of the introduction of the Act of 1959. It is the result of the changed economic circumstances that we have been experiencing. As the levels of income rise and as the level of employment is continuously maintained at its present peak, the pressure for occupational schemes—for job schemes, as they were somewhat colourfully referred to by my hon. Friend the Member for Uxbridge (Mr. Curran)—has become steadily heavier.
  In fact, we have now come to the point, and a significant point it is, where wage earners as well as salary earners now regard pension schemes as an essential condition of employment when taking up a job, and employers themselves—at any rate, the more enlightened ones amongst them—have come to recognise in pension schemes a satisfactory means of improving relationships between themselves and those who work for them. There has, therefore, been a steady increase in these schemes since the end of the war, and this increase would have continued at an increasing rate even had the 1959 Act not come along Indeed, it is possible that the 1959 Act did a good deal to retard the development of these schemes.

  265
  It has always been a mystery to me how it was hoped that the twin objectives of the 1959 Act could both be achieved: at the same time, to solve the deficiency in the Fund and to encourage the development of private pension schemes.
  Mr. J. T. Price: I hope that the hon Gentleman does not mind my intervening, because it is my recollection that he was a member of the Standing Committee which considered, in its marathon sittings, the 1959 Insurance Bill. I sat with him for several months, and during the whole of that period I never heard him voice the opinions that he is expressing tonight. I think that he was chiefly notable during that period by his silence. If he has been doing his homework since, and has now seen the light, perhaps we have to listen to what be is saying tonight. At the moment, I am not very impressed with his statement, when I compare it with his behaviour and general bearing when we were considering the principal Act which his right hon. Friend pushed through the Committee.
  Mr. Eden: Unlike the hon. Gentleman, I never tire of the possibility that one day I may learn even greater wisdom. Perhaps the day may come—who knows?—when I shall look back on this speech and say that I could have made a better one. As things develop over the years, one changes one's views from those one previously held, and we in this House should exercise the right to give expression to them.
  I was referring to the difficulty which I experienced in understanding how the two declared objectives of the 1959 Act are, in fact, obtainable. Assuming that those two objectives were at any time compatible, and that in itself is doubtful, there can be no doubt that with this latest arrival, the 1960 Bill, bringing further increases in the basic rate, the two are hopelessly uncomplementary. By raising the rates of contribution and the pensions to be paid under the Act, the Minister will be going quite a considerable way to undermining one of the basic rights of individuals. I want him to give serious consideration to this aspect, which may not have been presented to him in quite this way before.
  266
  It is the fundamental right of any citizen to exercise the freedom of choice whether he shall save his money or spend it. In this instance, the Minister has gone a long way to determining for him that he must save. That, in itself, is not so bad, when one considers the already high rate of taxation, which does that in large measure all too efficiently. But the worst aspect of this matter is that the Minister, far from requiring that the savings shall be directed to investment in a properly managed insurance scheme, which I think would have been the right way of doing it and could have been enforced, is demanding that the personal savings of the individual shall be placed it the disposal of the State to finance current pensions in exchange for the promise of a pension for himself in the future, which undoubtedly, in decades to come, will have to be paid for by the succeeding generation.
  It is this aspect which alarms me most. We are now concerned with supplementing the incomes of those who, in effect, are back service pensioners; those who, for one reason or another, could hardly have contributed at all to the cost of their pension. In industry where that takes place it is normal for the management to pay for this and it is not called for from the individual members of the scheme by way of contributions. That, I think, is the line on which we should be working today in our State system in thinking that these back service pensioners, who, admittedly, will increase in number over the next few years, but will, in years to come, ultimately diminish, should be assisted in the supplementation of their incomes by direct Exchequer subsidy.
  My fear is that when compulsory saving reaches the proportions which are now obtaining it can have only one effect on voluntary saving, and that a disastrous one. Like my hon. Friend the Member for Torrington, I have great admiration for the Minister. I particularly admired the way in which he presented the Bill to the House this afternoon. The House has always paid tribute to the sincerity with which he holds his views and to the fact that he has done his best, over these years, to assist those people we have in mind today. But I should have still further respect for my right hon. Friend if he

  267
  could explain to me just exactly what it is he is now trying to do.
  I wish that my right hon. Friend would make up his mind. How can he, at one and the same time, declare himself in favour of the extension of private enterprise and proceed solemnly to build up the enormous fabric of the State system? If my right hon. Friend is really in favour of the development of private pensions, why has he not taken measures to remove the obstacles which stand in the way of development of private pensions rather than add to them, as I believe this Bill will? Already, there is confusion enough among employers and employees and experts as a result of the passing of the 1959 Act, but this further Measure, in the words which Mr. Bickmore used not long ago, throws a "monkey wrench" into the intricate calculations which many have been making in the last twelve months.
  In announcing the introduction of the Bill on 2nd November, and in his speech this afternoon, the Minister said that it would in no way affect the rates of graduated contributions and benefits or the conditions for contracting out of the graduated scheme. That is perfectly true as far as it goes, but it does not go the whole way. There is more to it than that. There is more to it than just a mathematical consideration. The increase in basic rates as proposed under the Bill will certainly cause firms to reconsider the amount of additional pension that they can provide privately. They must ensure that the total amount to be paid in contributions and the total amount to be expected by way of pensions from all schemes, State as well as private, continue to bear close relationship to the wages being earned.
  If the position is uncertain now in the minds of those considering pension schemes in toto, what prospect have we of any greater certainty in future? Precious little, as I see it. Since we have already experienced an increase in the basic rates introduced before the new scheme comes into operation, could we not well expect a further increase to be found necessary as standards continue to rise, a further increase perhaps by 1964? If present thinking continues to rule, is it not possible that there may be an extension in the amount of the graduated
  268
  benefits, or even an extension in the wage range over which the graduated system will operate?
  I hope that when my right hon. Friend replies the opportunity will be taken of removing any thought that there is discrimination against private pension schemes. Already, private pension schemes which participate can provide up to the maximum allowable benefits and add the State benefits on top of that. Where they have contracted out they can provide the maximum allowable benefits, but are not allowed to add a further sum equivalent to the amount of the State benefit on top of that. This is a bias which, I think, is unjustified and which should be removed.
  These consequences are serious enough—and I hope I have exaggerated them rather than under-estimated them—but in my opinion perhaps the most harmful effect of these proposals could be on the individual himself. If the State builds up a system over the coming years under which it is proposed not only to supply basic needs for everyone regardless of individual requirements, but also intends through the lumbering and costly machinery of the State universally to subsidise incomes to an extent dictated by the standards of the day, there is a real danger that the chief responsibility for the welfare of himself and his family will pass from the individual to the State.
  That would be both unnecessary and, in the present circumstances, most undesirable.
  Mr. Ellis Smith: That was one of our war aims
  Mr. Eden: It is unnecessary because, in the economic circumstances of today, men and women have the means to save. They have them today more than they have ever had them and, to a greater extent, they are becoming increasingly more willing to save. I hope that the taxation structure can be altered further to stimulate saving. And I believe that it is by alteration of the taxation structure that we can best bring help to those who need it. It is undesirable because for the State to intervene to the extent of damaging the natural growth of private pensions would be self-defeating. I am convinced that by making the maximum possible number of people members

  269
  of private schemes in this way we shall reduce to the maximum possible extent the numbers dependent on National Assistance. That is what I should like to see happening.
  Not only am I convinced of this, but a large number of employers and trade unionists are also convinced of it. One shop steward said the other day, when contemplating the prospect of the development of private pension schemes as opposed to State schemes, that this was an exciting thing and offers the best hope of "lifting people off the breadline".
  Mr. Ellis Smith: What was his name? Tell us his name.
  Mr. Eden: If hon. Members opposite are not so enlightened as this shop steward they have a great deal to learn.
  Mr. J. T. Price Mr. J. T. Price rose——
  Mr. Eden: The hon. Member for Westhoughton (Mr. J. T. Price) will have benefited considerably from listening to me this afternoon. It is by making more and more people members of private schemes that we can best exchange the uncertainty for old age for security in retirement and ensure that old people have a continuing share in the prosperity of this country.
  Further, only by adding to private schemes rather than State schemes can we hope to relieve the taxpayer of some of his burdens, to reduce the degree of State intervention, and so remove the issue of pensions and the welfare of our old people from the platform of party politics. I am sure that that is in the interests of every Member.
  6.31 p.m.
  Mr. Tom Brown: When a subject is being discussed in which one has a personal interest it is customary in this House to declare that interest, and I shall declare my interest at once. I am an old-age pensioner. That does not prevent me from voicing my opinion on a question of paramount importance to our old people. For at least forty years I have continued to proclaim inadequate and shocking treatment of old folks by the State.
  Whatever points we may disagree upon in connection with the Bill—and there will be many—we shall all agree upon one thing. The Minister will not
  270
  challenge it. Whenever a question of social security for the aged and infirm comes before the House we agree that it is a profound human problem. We cannot challenge the responsibility that rests upon us. Therefore, not only in this debate but in Committee we shall have to keep before us this intense human problem.
  In his opening statement, to which I listened with rapt attention, the Minister expressed several points of view. He said that the increases in pensions suggested in the Bill would go to those pensioners who were not in need.
  Mr. Boyd-Carpenter: I said that some would go to pensioners who were not in need and some to pensioners who were. As the hon. Member knows, within the total of 5½ million there is every level of income.
  Mr. Brown: Can the Minister tell us the number of pensioners who will receive the proposed increase under the Bill who are not in need of that increase?
  Secondly, he said—and I agree with him in this—that people to whom the benefits will apply are those who could not in their working days make provision for their old age. This is the first time I have heard that admission in this Chamber—and I have been here for eighteen years. Hon. Members opposite have always said that working people ought to provide for their own old age. When I started work at the age of twelve my wages were a shilling a day. When I reached adult age they were 30s. a week. Who could save out of 30s. a week, even in those days? I entirely agree that the benefits proposed will apply to people who could not save for their old age.
  I have always believed in the philosophy that it is the duty of every citizen, whatever his trade or vocation—whether he be a street sweeper, a town clerk or a worker in a steel works, a mine or a factory—to do the best he can for his industry and for the State, and that, having done his best, it is the duty of his industry and the State to protect him from poverty, want and starvation. That has been my philosophy through life. Forty years ago I began advocating an improvement in the lot of the old

  271
  people, in the bad old days of the board of guardians, which happily does not now exist.
  The Minister also said that there would be a concession in respect of those who preferred to work on after they had attained pensionable age. He referred in particular to Clause 3, which has also been referred to by the hon. Member for Bournemouth, West (Mr. Eden). I am glad of that, but I would ask the Minister to simplify the regulations under which that concession will be applied. One of the great difficulties facing old people who want to continue with their work because they are physically fit and because their employers desire them to continue is that they are always confused as to how many hours or days a week they can work before their pensions are interfered with. I hope that the Minister will make the regulations as simple and as understandable as possible.
  The Minister then said that he did not want to alter or undermine the principle of pensions being paid as of right. He said he hoped that there would be no quibbling among the younger generation at being called upon to pay their contributions in order to receive benefits when they reached pensionable age. It it true that before the passing of the 1946 Act, which became operative in 1948, there was some resentment among the younger generation at having to pay contributions, but with the passing of the months and years there has been a different approach, and they realise that what they are now paying, when they are full of vim, vigour and vitality and have a full earning capacity, will be reflected in benefits paid to them when they require those benefits. Those young people make no complaint—with the proviso that the State itself, through the medium of its Exchequer grant, should pay a fair contribution to the fund out of which the pension is provided. That is one of the points which occupy the minds of the people who will now be called upon to pay a slightly increased contribution.
  It is all very well to advocate these pension schemes. It is all very well for the State to legislate and to make these schemes compulsory, but the State should see to it that in the provisions and the
  272
  requests that they make for the payment of contributions the national Exchequer pays its share towards the fund. No working man or woman, young or middle-aged, would raise any objection to paying the contribution so long as they knew that the State was paying its share and that the pension which they will receive will be adequate and commensurate with a decent standard of life.
  Vice-Admiral John Hughes Hallett: Is the hon. Gentleman suggesting that the younger generation are so stupid that they would not realise that the Exchequer contribution is coming out of their pockets along with the other contributions?
  Mr. Brown: There is the worker who considers what he is called upon to pay and there is the employer who does likewise, and they are both interested in what the Exchequer is paying. Already in this Bill there is an indication that the Exchequer grant will increase from £170 million to £187 million—an increase of f17 million. If the hon. and gallant Gentleman will look at the Exchequer contributions from 1948 he will find that they went down for a number of years, but in the last four years they have been increasing. The reason that the Exchequer contributions have been going up is that the Government, rightly or wrongly, thought there was some discontent in the minds of the workers at the low contributions paid by the Exchequer. Let us not under-estimate the intelligence of the ordinary working man. He is not a Josiah Stamp, but he can reckon his wage packet and can calculate the increase in the contribution that he has to make.
  When I read the Bill and the White Paper I thought to myself, "Never have so many waited so long for so little." The old-age pensioners have been waiting a long time for some increase in their basic pension, and whatever we may say, whatever figures we may produce, and although an hon. Member tried to prove that the cost of living had increased by only two points since 1958, the important question remains, how much will the pension buy when the old-age pensioner goes to the market?
  My hon. Friend the Member for Sowerby (Mr. Houghton), in an excellent speech, emphasised that point. It is

  273
  indeed a point which needs emphasing. He said that hon. Members opposite were not in contact with their constituents. I am afraid it is true—although it is not my duty to find fault with hon. Members opposite—that some hon. Members are very out of touch with the circumstances of old-age pensioners. Only by reading the social surveys do they get an elementary knowledge of what happens to the old-age pensioners and what conditions they are living under.
  The old-age pensioners are asking, "How can the Government of the day expect us to live on 47s. 6d.?"—the pension for a single pensioner. Neither they nor I can reconcile ourselves to the suggestion that sincere consideration has been given to the figures which now appear in the White Paper. If we add the 7s. 6d. for a single man to the 12s. 6d. for a married couple, we get 20s. Let us divide that between three persons; it comes to 6s. 8d.—less than 1s. a day as the increase in pension for three persons. How can we expect old men and women to live on the sort of pension that is recommended in this Bill?
  Let us consider the increase in the price of coal. Two bags of coal per week are required for the most economical fireplace to warm some of the old houses in which the old people live. As I go about and visit these places, I see the economy and care which are exercised. With the best will in the world these old people cannot eke out an existence on the miserable pension that is now paid to them.
  I am glad to see the hon. Member for Bournemouth, West in his place. He and I disagree in our approach to what should be done about National Assistance. I think it is true that we have got to accept the National Assistance proposals—not the amounts but the policy and the administration of National Assistance—as the order of the day until we can find something else to put in its place, but I should like to see it removed, just as I wanted to see the old Poor Law system removed.
  Mr. Ellis Smith: There was a big improvement on that.
  Mr. Brown: There was indeed a big improvement. I spoke as a member of a board of guardians and I was delighted when the country decided to sweep that
  274
  system away. I shall be equally delighted when the days comes—it will not be just yet—for something better to take the place of National Assistance. However, that day will not come next year, nor the year after.
  As I have said in the House before, the criterion by which a pension is assessed, whether for married or single persons, is often determined by the number of people that the pension prevents applying for National Assistance. People would not apply for it were it not for the fact that they are forced by sheer economic circumstances to do so. Let us examine the figures briefly. In 1954 there were 4,435,000 old-age pensioners in receipt of pensions. In March, 1959, there were 893,795 in receipt of National Assistance; on 15th December, 1959, there were 976,045. In the first quarter of this year there were 1,012,313, and on 28th June, in the second quarter, the number had increased t3 1,029,446. At 27th September, 1960, for the third quarter of this year—the latest figures I have been able to obtain—the number was 1,048,187. This was the highest number of people in receipt of National Assistance since 1954. In my judgment, it reflects discredit upon the pension scheme when so many people must seek financial help from the National Assistance Board because they are unable to live on their basic pension.
  Far be it from me to complain about the attitude of the officers of the National Assistance Board. Since the Board became a statutory body, its officers have performed very useful and humane work, and I admire them for it. Nevertheless, the Minister and the Department should know that men of wide experience, men who have an intensely human feeling towards the old people who appear before them, have often said to me, "We would to God that we could do more far them, if the regulations would permit it." It is true that discretionary powers have been conceded. Those powers are exercised, I think, to the full everywhere, with the exception of one or two districts where the chief area officer is officious. I say that with all respect. One does not find any officious attitude in the industrial areas. My experience has taught me that officiousness on the part of some

  275
  National Assistance officers is to be found in the seaside towns.
  Mr. Eden Mr. Eden indicated dissent.
  Mr. Brown: The hon. Member may shake his head, but I speak from experience. One part of my constituency comes under one of the ports, and from people in my constituency I receive reports about the attitude of National Assistance Board officers. I give credit where credit is due. I have paid my tribute before, and I pay it again. The National Assistance officers, in the main, are doing a very useful job, and I express my appreciation to them for so doing.
  In a few days we shall have before us some of the regulations which will have to be accepted. A great deal has been said about sharing the increase in the national cake. I am not a mathematician or a statistician, but when I look at the level of the national income, just over £20,000 million, I can safely say that the old people and the infirm are not receiving their fair share of the national cake. It will take more than the Department to prove to me that they are.
  Another factor which disturbs me very much is this. Years ago we used to pride ourselves as a nation on being in the very forefront in providing social security for our people. I have heard it said from time to time in this House that we were in the van leading the other nations of the Continent and the Commonwealth in the direction we desired them to follow. We are not there today. To use a football term, we are not at the top of the league now. We are scarcely above the bottom rung.
  I have examined some of the figures published by the International Labour Office. France, which is supposed to be a very poor country economically, is spending 16 per cent. of its national income on social security. The Federal Republic of Germany is spending 19 per cent. The United Kingdom is spending 10 per cent. A glance down the list reveals that, while we were in the forefront in making provision for social security, we are now down at the bottom of the league. This ought not to happen in a Christian country. I hope that we shall be able during the Committee stage to get from the Minister some of the concessions which we think ought to be made for the benefit of the old folk.
  276
  I come now to the distressing subject of industrial injuries. I am disturbed that it is proposed by this National Insurance Bill to amend the Industrial Injuries Act. I wish that the Minister had allowed the contributions to remain as they were, at least for another year or two. I know that the surplus is considerable, but we must remember that there are very many totally disabled men to whom we wish to bring some joy and happiness in their lives. I have said before in this House, with great feeling, that I wish we would provide improved amenities particularly for the paraplegic men of industry.
  The Minister tells us that he is reducing the contributions, but he is reducing them at a time when the purpose of the fund has not been fully met. I put this question to him. Perhaps the right hon. Lady will give me an answer. Will there be any danger of the surplus now in the Industrial Injuries Fund being used for any purpose apart from that for which it was created? That is a straight question. I hope the Minister will give a straight ansyer. I recall that, many years ago, there was poaching on one of the funds which was very wealthy at that time, and I do not want something similar to take place now. I want the fund which has been raised for the purpose of helping unfortunate men, broken and bruised on the wheel of industry, to enjoy at least as full a life as it is possible for this nation to give them.
  On Saturday night I had the opportunity, a rare one for me now, of witnessing the Festival of Remembrance—a most impressive sight. Again on Sunday morning a similar ceremony took place. We have said, "We will remember them." We cannot do anything for the dead, but we can do something for the living. Remembering those men, let us not forget their grandfathers and grandmothers, their fathers and mothers, who brought them into the world, who nursed and educated them, so that they were possessed of a patriotic spirit which led them to lay down their lives for this nation. Are we asking too much? I think not. I hope that we shall remember them in tangible form and give them an adequate pension commensurate with a decent standard of life, which is what they are entitled to, and what they richly deserve.
  7.0 p.m.
  Sir Spencer Summers: Many of us have had the pleasure of hearing the hon. Member for Ince (Mr. T. Brown) speaking on this subject on a number of occasions. He is very well informed and speaks with the greatest possible sincerity, but I hope that he will not mind my pointing out one thing to him I think that his enthusiasm is rather apt to run away with him if judged in terms of logic.
  The hon. Member was comparing the performance of this country with that of others in the field of social services, and was deploring the fact, as he said, that we now occupy "bottom place in the league". He said that this was a disgraceful position for a Christian country to be in. I merely point out to him that the countries which he was comparing with this country are also Christian countries, and that it makes it difficult to fulfil his precept in terms of all of them.
  There have been criticisms of the Bill from both sides of the House, yet I imagine that in the event of a Division we should vote unanimously in favour of the Bill. However, I want to comment in a different way from that expressed so far. I do not think that anyone would dispute that since the war we have been trying to catch up with events and, through inflation, have continually had to increase benefits in practically all the social services. It is rather like what the Red Queen said, namely, that we have to run as fast as we can to remain in the same place.
  For some time we have had relative stability and it seems to me that this is an opportunity of looking at the whole pattern of our social services, not only in this sphere but in others, to see whether the emphasis is right and whether the pattern is right. One of my regrets is that in the Bill there does not appear to be any major departure from the recipe as before.
  May I allude to something which has been accepted ever since the scheme started which, I suggest, in the light of experience over the last twelve years and in view of the widespread rising standard of living, at least calls for challenge, if not for alteration. There has always been a uniform rate in benefits for retirement pensions, unemployment
  278
  and sickness. I believe that we should apply yet another criterion to those which have been mentioned in our social service policy, and that is to tend more to leave what I call the running repairs to the patient and to protect him more significantly against the major hazards of life.
  If that be a tenable approach, it follows that the hazards which are of the longest term deserve more generous treatment than those of short-term. I suppose that the longest hazard which we must all look forward to is old age. I believe that we must seriously think of departing from the principle of uniformity which has hitherto prevailed and that we must pay a larger amount to the retirement pensioner than we are paying to the unemployed and sick, at any rate for a limited period. For how long is a matter of relative detail.
  I would remind the Minister that one of the things which he said justified the Bill was the pledge which was given at the time of the General Election, a pledge which he rightly says is now being honoured, to old people. There was, however, no pledge, so far as I know, to the unemployed or to the sick. To me, it would have been perfectly in keeping with that pledge, perhaps even more so, had it been possible to introduce rates more attractive to the retirement pensioner than those which are being introduced for the sick and unemployed.
  In many of the debates on what we should be doing in the sphere of national insurance the topic of finance arises. One of my quarrels with the speech of the hon. Member for Sowerby (Mr. Houghton) was that he seemed all along to say, "Let us decide what people ought to get and then give it to them irrespective of the consequences of the financing of the operation". [HON. MEMBERS: "No."] That was the whole tenor of the hon. Gentleman's speech and of the speeches of other hon. Members. We on this side of the House believe that consideration must be given to what it is reasonable to deploy in this sphere and then see whether those resources are being deployed in the most sensible way. I challenge—I have done this before and I make no apology for doing it again—whether the money which we are spending on family allowances is being spent in the right way.

  279
  I will not dwell on this point at any great length, because it is not directly germane to the Bill, but I think that it is worthy of second thoughts that we spend £70 million a year in assisting every second child eligible for family allowances. We could save a great deal of money and it could be deployed in the sphere we are discussing with much greater advantage if the payment in respect of the second child were eliminated.
  Mr. Leslie Spriggs: Does the hon. Gentleman oppose family allowances?
  Sir S. Summers: I must not dwell on this point, because I shall soon be in difficulties with you, Mr. Speaker. I am referring to the second child only. I would spend part of the saving from not providing a family allowance for the second child on better family allowances for the third, fourth and fifth children. I hope that that summarises my general attitude to family allowances.
  With one exception, when hon. Members opposite were sitting on this side, it has always been the practice to pay the same pension to a person at the age of 65 for the rest of that person's life. I am not sure that it is right that the same rate of pension should be paid throughout the last days of a man's life. I am not sure that there is not a very strong case for increasing the amount of pension payable to an individual when he reaches 70 years of age. I know that those who are 70 are treated differently from the point of view of the earnings rule, and it would be a complete illusion to imagine that everyone can remain at work until 70 years of age if he so chose, but I think that if we want to spend the money which is available for social services most effectively we should consider whether a higher pension for the considerably older person would not be a wise move.
  Reference has been made more than once in the debate to the difference between the improvement paid to what I call the statutory retirement beneficiary and the amount paid to those on National Assistance. I, for one, would very much have preferred the increase to be the same in both cases. I do not go all the way with my hon. Friend the Member for Bournemouth, West (Mr. Eden) in
  280
  wanting to confine the improvement to those on National Assistance. But I am sorry that we have gone so far as to give an increase of 3s. 6d. to those on National Assistance drawing supplementary benefits and 7s. 6d. to the statutory beneficiary. It is argued by some that this operation must not be taken in isolation and that those on National Assistance had an increase a year or so ago which did not apply to those drawing statutory benefit. If that was then deemed to be a helpful move to concentrate assistance to those who need it most—and it was largely justified for that reason—to make a difference of 4s. now is undoing much of the good that was done at that time.
  If we compare the position in 1951 with what it will be in 1961, it will be found that the single statutory pensioner has gone up by 27s. 6d. and those on supplementary benefit have risen by 23s. 6d. The married statutory pensioner has gone up by 42s. 6d. and the married National Assistance beneficiary by 40s. I am only too ready to concede that that is not finality in comparison and that there must be brought into account, first, the supplementary benefits which are paid to two-thirds of those who draw National Assistance. I believe that I am right in saying that the average is about 7s. a week.
  It might, therefore, be said that if that figure was thrown into the scales with the figures I have just mentioned, it would tip them slightly in favour of those on National Assistance. In these figures which I have quoted, however, no regard has been paid to the increments which retired pensioners have earned. Whenever a pensions discussion arises, the basic rate of pension is always quoted without any mention of the substantial increases in pension which are paid to those who have deferred their retirement.
  I do not have with me a note of the average figure by which the basic rate has increased, but I think that something like one-half of the men and one-third of the women who have retired are enjoying substantial increments. Again, therefore, that throws the comparison back in favour of the statutory beneficiary to the disfavour of the person on National Assistance.

  281
  Then, it is argued that in this comparison we must take note of the fact that those on National Assistance receive a rent allowance and that the amount paid under this heading has gone up substantially in recent years. That does not alter the spending power of those in this category. If the rent of the house in which they live goes up, they can claim an increased payment, but their own position vis-à-vis that of other people and other standards is not altered in the slightest. For all these reasons, I am sorry that when the pledge was honoured, we did not see to it that those on National Assistance were at least as well off as those enjoying increased statutory benefits. As is well known, we have substantially altered that.
  Reference was made by the hon. Member for Ince to the fact that, taking the last series of dates when the figures of those on National Assistance were published, the numbers were going up. We have heard more than once that that is a situation which requires a remedy because, it is argued, too many people on National Assistance is an unhealthy state of affairs One of the remedies which the Government have advanced for just that is to give a greater increase to the statutory beneficiary and a smaller increase to those on National Assistance, for the effect must surely be to reduce the number of those on National Assistance. It seems to me rather hard to provide a remedy for a situation which is criticised at the expense of the very people whom we should think of helping the most. That is another reason why we need to have fresh thoughts about that aspect of the situation.
  I, like other other hon. Members, welcome very much the change in the rule governing hours as it affects the earnings rule. There is still room for improvement, however, in the amount which a person can earn without affecting his pension, without in any way departing from the principle of retirement. We all know that the earnings rule is no more and no less than a test of retirement. When we consider that the average earnings now reach £14 a week, I consider that, despite the views of the T.U.C. or anybody else, there is scope for allowing a somewhat higher figure of earnings
  282
  per week in retirement without vitiating the principle of retirement as such.
  I welcome also the increased pro rata help to the widowed mother which is to be found in the terms of the Bill. I hope however, that before this topic comes round again for major change, the Government will have examined some of the assumptions on which the existing scheme rests and some of the applications of principles that have been built in the scheme to see whether they are in need of revision. I have alluded to a number tonight and I have no doubt that other hon. Members can think of many changes which certainly might be studied and which might, perhaps, with advantage be accepted. I hope, therefore, that one outcome of this debate will be to turn a searchlight on to some of the fundamental parts of our social service system which to my mind, stand in need of revision.
  7.17 p.m.
  Mr. William Stones: It is with rather mixed feelings that I rise to speak in this debate. Like my hon. Friend the Member of Sowerby (Mr. Houghton), who opened the debate from this side of the House, I am pleased with the proposals contained in the Bill to increase the benefits payable to old-age pensioners, the sick and injured and others. Although I welcome the Bill, however, I have certain reservations. I hope that the hon. Member for Aylesbury (Sir S. Summers) will forgive me if I do not follow specifically the arguments which he adduced, although I may possibly refer to them generally during my speech.
  In a Command Paper presented to Parliament in October 1958, the Government recognised that to make proper provision for our old people was of the greatest importance and that to do so was becoming increasingly difficult, because we have a high proportion of aged people and it is likely to become higher still. This cannot be denied. The Government have taken certain steps which, they claim, will alleviate some of the financial difficulties and hardships experienced by the old-age pensioners.
  It was also made clear in that White Paper that public policy on this subject must be such as not to undermine the personal responsibility of each of us to make whatever provision we can for our

  283
  old age. Whatever can be said of the Government's actions in providing for the old-age pensioner, at least it cannot be said that such actions are likely to undermine the personal responsibility of millions of our people to do whatever they can to provide for themselves in their old age.
  At this stage, however, I do not wish to argue the merits or demerits of the Government's actions to make provision for the old people of the future. It is of the old folk of today that I wish to speak. In this country, as in every other country, we have certain rights and also, of course, certain obligations. They must be abided by. This also applies to Governments.
  I believe that all persons having worked a stipulated number of years in any trade, profession or occupation, contributing either by physical or mental efforts to the general welfare of the community, should be legally entitled to a monetary income sufficient in itself to ensure a reasonable standard of living in retirement. The Minister referred to this and mentioned the actuarial and contributory bases for the provision of such a right. I would suggest to the right hon. Gentleman that persons who have worked for forty or fifty or more years have contributed in no small measure, irrespective of the financial contribution they have made to a pensions fund.
  I believe that those of us still at work come under an obligation, and that is to see that the old-age pensioner does have his rights properly abided by, and in my humble opinion we of this generation are not meeting our obligation in this respect in the way that we ought. I know that there is no comparison between the provisions now made by the State and the provisions made by the State in the days of my boyhood. Most of us are conversant with the facts and it is not necessary and I have no inclination to illustrate the point. Despite certain arguments which have been put forward by hon. Members opposite, I myself do not intend to argue which Government have done most in the past for the old people. What I do intend to argue is that we are not doing sufficient for the old people of today.
  There is no point in anyone telling me or any old pensioner existing on the pen-
  284
  sion alone that the present purchasing power of the pension today is greater than or even as great as the purchasing power of the pension before, because, whether this be true or not true, it does not really affect my argument. I still say we are not meeting our obligation: we are not doing enough for the aged people.
  I suppose that almost every right hon. and hon. Member opposite would agree that the old people should be guaranteed a standard of life in retirement somewhat comparable with the standard of living enjoyed by them prior to retirement and would vote for any Measure calculated to bring this about, but they would make this proviso—only if we could afford to do so. I believe that we not only can afford to do this but that we must afford to do it.
  During the election campaign last year, the Prime Minister boasted that he did not remember any time in his life when the economy of this country was as sound and the prosperity of our people at home was as widely spread as now, and a pledge was given, too, that the pensioners would continue to share in the good things which a steadily expanding economy would bring. Despite the fact that certain hon. Members have said that they believe that the Government have honoured that pledge, I myself do not think that the Government have.
  In the first instance, they have been too long in bringing these proposals forward. Incidentally, the hon. Member for Aylesbury, when he made mention of the pledge given at that time, said he did not remember any pledge being given to increase the payments to the sick and the injured. At that time, if my memory serves me aright, the question of cost arose, and the point was made, quite legitimately, that along with any increase in the old-age pensions, higher payments to other people, the sick and injured must automatically occur. To begin with, I think the present proposals to increase the pension should have come earlier, if the Government had intended to honour their pledge.
  Secondly, I think that even with the proposed increase the pension will still be inadequate. I think the Government have made such delay in bringing these proposals that they should put them into effect long before April next year. Many old people, to my knowledge, have been

  285
  looking forward with great interest and expectancy to these increases, and, though it may be a morbid thought, I must agree with the remark made by one of my hon. Friends that some of these aged pensioners looking forward so keenly to this new pension will not be much longer with us to share in that good thing. I suggest that it is really shameful to delay the benefits so long.
  The question has been put about the additional cost. Much of this will be met by the additional contributions and a relatively small amount by the Exchequer supplements. I agree that our obligations which would be much better met if we had drawn upon some of the vast capital gains which were made last year. I understand that they amounted to about £6,000 million and that dividend interest rose in the same year by £100 million.
  While it has been suggested by the right hon. Gentleman that it was quite wrong to put the burden upon the taxpayer, it is a fact that by the Exchequer supplements it is already to some extent on the taxpayer, and if we increase the Exchequer supplements we shall be putting a higher burden on the taxpayer, but even then the people who would be paying most would get most. If the same benevolence were shown to the old-age pensioners by the Government as was shown by them to private shareholders in private industry by way of dividends and to those on the receiving end of golden handshakes, I should be more inclined to believe they were sincere in their charitable statements about the old folk.
  In spite of what was said by my hon. Friend the Member for Ince (Mr. T. Brown), I still believe our country to be in the forefront in social services. The more I see of other countries the better able am I to appreciate my own, but, like my hon. Friend the Member for Ince, I believe we are seriously lagging behind less prosperous countries than our own in the way we treat our old people, sick and injured, and, with my hon. Friend the Member for Sowerby, I sincerely believe that the vast majority of our people would agree to increasing the old-age pension still further even if it meant some personal sacrifice to themselves, but they would be better pleased if further increases were financed by the
  286
  methods I have indicated. At the moment, I think the least the Government can do is to reconsider their decision not to pay up till April and to advance the date of payment of the increase as early as administrative requirements will allow.
  It has been said that a nation can be judged by the manner in which it treats its aged, its sick and its injured. If this is true, the present Government, and succeeding Governments, too, should make every effort greatly to improve the lot of the persons we are considering in this debate. Otherwise, in my opinion, in comparison with the rest of the world, this country will be judged as found wanting.
  7.30 p.m.
  Mr. Arthur Tiley: It is a real pleasure for me to follow the hon. Member for Consett (Mr. Stones) and to say that I agree with him completely when he says that the problem is to deal with the people who are retired and old now. I assure him that we accept the challenge in this country of doing just that. It is a responsibility that we all share. I hope to show in my speech how we share it.
  First, I should like, as is the tradition, to declare to the House my interest in insurance, though if I had forgotten to declare it this time and if I forget henceforth I feel that I ought to be forgiven because I have declared it so often in the past. But, having declared my interest, I should like to say something to my hon. Friend the Member for Bournemouth, West (Mr. Eden), who is not now present and whom I was sorry to see move far to the right not only in his speech but in his position in the House.
  My hon. Friend criticised my right hon. Friend the Minister of Pensions and National Insurance from the private insurance angle. I should like to say, coming as I do from the insurance world, that I believe that my right hon. Friend, next year with his National Insurance Act, and with his pensions legislation, is tackling the problem in the way that it should be tackled and that the graduated scheme which comes into force next April was necessary because we in the House and in the Government are tackling the problem of those who are not in any pension schemes at all

  287
  There are thousands and thousands of top-hat schemes, and there are thousands and thousands of bowler-hat schemes, but there have not been so many cloth-cap schemes. It was necessary that we should take some measure to deal with those who are outside the private schemes. Another problem which the Government tackle and which private schemes never tackle is the problem of the people who are old now. They are always forced to be left outside the scope of private insurance schemes. I believe that my right hon. Friend has set the limit of the new graduated scheme at a moderate level so as not to hinder the development of private schemes. I visualise that in future this problem can be dealt with only by State schemes, private schemes and private savings all uniting in an effort to solve one of the major economic problems of our time, and I would say to my hon. Friend the Member for Bournemouth, West that if he cannot sell his schemes in London he should come up North where we will teach him something about salesmanship.
  I apologise to the House, especially to the hon. Member for Sowerby (Mr. Houghton), that I have missed part of the debate. I was particularly sorry to miss the speech of the hon. Member for Sowerby, but I shall read it tomorrow with great interest. The trouble is that we are all so busy in the House and I had to absent myself from the debate to take part officially at a meeting in another part of this Palace.
  I want to begin my speech proper by quoting the hon. Member for Sowerby, who on 2nd November, when my right hon. Friend announced this new Measure, said:
  "The share which the Government propose to give the poorest people in the community of the rising standard of living of the nation is not high enough.…"—[OFFICIAL REPORT, 2nd November, 1960; Vol. 629, c. 172.]
  That is the nub of our problem. How high shall the State pension be? But it is not the only question that we should ask. At the same time, having accepted that, we should say, "How much can we afford from current earnings to set aside for this purpose?" I am sure that the hon. Member for Sowerby will not mind if I say "allocate" and not "give" for this purpose, because the Govern-
  288
  ment have virtually nothing to give. We can only pay out as a Government what we collect, and those who work, toil and think—the producers—produce all that the Government can collect and all that the Government can pay out.
  We should look at the burden that we are placing on the shoulders of those who work. Three-fifths of our people are shouldering the entire burden of running the country. Let hon. Members think of the National Health Service. Only today, £42 million of additional money is required. Let us think of the new hospitals that are needed, of the new roads and bridges. We are told in the Press today that we need more policemen with higher pay. We can think of the extra cost of education, of the cost of new schools and universities, and we should think of the prodigious effort that is being made in the field of pensions by those who work.
  I can only quote again—because it is an important figure—the fact that the present yearly cost, in 1959–60, of National Insurance benefit is running at £960 million of which pensions account for £650 million. According to the Report by the Government Actuary, dealing with this Bill, in 1961–62 the total outgoings of the National Insurance Fund will be £1,134 million.
  I do not wish to go into the past and to consider which party has done the most for our pensioners and those who need help in their sufferings from either industrial injury or illness. I am sure that hon. and right hon. Members on both sides of the House wish to see the maximum effort in this respect, but we should consider at the same time the full impact on our economy of this acceptance of the challenge. I am sure that the hon. Member for Consett will agree with me in that.
  Fortunately, we have had price stability for two years and we have had full employment without inflation. These are two priceless gems in our industrial economy. We must keep them if we are to survive, and we must keep them all the more in future months because of the highly competitive life that we are leading in the world of exports.
  We are prepared to accept these burdens in taxation and contributions. As the hon. Member for Consett said, we want to see the benefits increased. I want

  289
  to see them increased. I am prepared to pay, but this is not simply a question of whether the hon. Member or I or this House or even the country is prepared to pay. The choice of how much we can accept depends upon the foreigner and how much extra he will pay for our goods, by which we survive, towards our Welfare State. The answer is that he is prepared to pay nothing because he is already buying at less than our prices in other markets. If hon. Members do not accept that, they need only look at last month's export figures.
  Mr. Richard Marsh: What the hon. Member says would be perfectly true if he were suggesting that we can increase old-age pensions or insurance benefits only by increasing prices. What is suggested by my hon. and right hon. Friends is that a civilised Christian community could not justifiably boast about its increased personal consumption and not be prepared to make some contribution from that personal consumption for the benefit of the old.
  Mr. Tiley: I accept that. The hon. Member is really adding weight to my argument. In any Christian community, as a personal responsibility, we accept it, but in the wider sphere of world competition for markets it is not ourselves personally as Christians or even as exporters who decide. The prices of our goods depend on the Government's extension of our welfare services and all the other things which go to make pricings and costings. If the price goes too high, the choice moves from us to the foreigner who refuses to buy our goods. The American who looks in shop windows in New York at lengths of cloth does not say when he sees Japanese textiles at several shillings a yard cheaper, "I must buy the Bradford cloth because I want the Bradford pensioners to have a bigger pension." He is not doing that, and he has not done so for a long lime. He is buying the cheaper cloth, and that is the whole issue when one looks at our economy and the problems of this country.
  That is the problem. If hon. Members do not believe it, let them look at the export figures. Let them look at the effect in the motor car trade, where our models, at our prices, cost too much and markets abroad are being lost. So
  290
  it might have happened with cloth. The difficulties in selling textiles are far more serious than the selling difficulties in our major engineering industries. If it had not been for private enterprise selling in the face of competition all over the world we should have been out of work in Bradford and the West Riding many months ago.
  Our old people are beginning to appreciate the problems, and the majority of them are not angry with the Government's policy. The majority have more sense and know what the Government are doing. The Government are taking on an enormous job. Our people were unable to make adequate provision in the past. We have only to look at the history of our industrial communities to realise that it has been impossible for people to save for old age, what with slumps, booms, unemployment and world wars. These things have prevented the ordinary people from saving up for their old age, and now we have to recover all those spent years and at the same time to keep ourselves in jobs so that we survive.
  I am certain that our old people are under no illusion about the situation. It was right for my right hon. Friend to give figures to show the magnitude of our task and the great distance which we have travelled in seeking to accomplish what we want. We have been told about the man who, with his employer, had contributed £300 and, if he had been a member of the scheme from the beginning, the total pension which would accrue to him and his family for those contributions throughout all those years would have been 9s. per week. Instead of that, the country, on both sides—industry and taxpayers—is now happily in the position of being able to increase the pension for a married couple to the new figure. The majority of the people know that we are doing our best, and the majority are in support of the Government.
  To give a little proof of this, we had in May—at the instigation of the hon. Member for St. Helens (Mr. Spriggs)—our last debate on pensions. It seems a long time ago now since we talked about pensions, but that is only because the Summer Recess has intervened. We really never go more than a few weeks without dealing with this problem.

  291
  Following that debate, there appeared in one of the Sunday newspapers, from a celebrity-turned-journalist writing in his weekly column, these words:
  "In the Parliamentary debate on old-age pensions, Mr. Tiley said he did not agree that there should be a substantial increase in the present payments. … Why shouldn't the old-age pensioners of Bradford invest threepence in writing personally to Mr. Tiley …? I hope they do. I hope that Mr. Tiley is weighed dawn with sacks of letters and I hope they teach him wisdom and humility."
  This celebrity is well known because he can cure flatulence.
  The old-age pensioners in my city could have written to me without spending 3d. I live among them, and thousands of them pass two or three letterboxes in which they could drop communications to me. One does not need to be taught humility if one was born in a back-to-back house. In any case, I did not say what the celebrity attributed to me. What I said is in HANSARD:
  "… it would be a monstrous policy to provide substantial increases to those who do not need pensions at all. That would bring great harm to our economy."—[OFFICIAL REPORT, 20th May, 1960; Vol. 623, c. 1706.]
  Mr. Mendelson: Get on with the debate.
  Mr. Tiley: The hon. Member is singing the wrong tune, and for someone with his name that is very bad form.
  There was a poor response to that incitement to the old people to attack me. I had about forty letters from the country as a whole—not a sackful. Some of them were very rude. One began, "You lousy b. . …", a word of six letters, not four; perhaps it is cultured to use it now. At least, it is not true; I am not lousy, and I know I am not the other. The interesting thing is that from my city of 300,000 people, with more than 30,000 pensioners, I received only four letters. Two were signed and two were anonymous. To those who signed their names I sent a copy of my speech, and one old gentleman apologised. I am sure that pensioners generally know what is being done and that they understand our difficulties. The pensioners in my city appreciated the position at that time and now appreciate my right hon. Friend's action in their interests.
  292
  I want to say a few words about the delay till 1st April. When this was mentioned earlier an hon. Member opposite pointed out that that date is just before the local elections. If the Government have done this for that purpose, they have chosen a singularly inopportune moment to put up the weekly contributions—just before the people go to the polls. However, we have never shrunk from the task of taking from those who are earning a greater measure to hand to our older people. When they were in power, hon. Members opposite were unable to do that—whether through lack of courage or not, I do not know.
  It is a pity—I am sure we all agree on this—that the new increases cannot be brought in until April. I should have liked to see—I am sure all hon. Members would have liked to see—them come into operation for Christmas, but I can understand the reasons for the delay. The Department—I would emphasise this from my personal experience in the private field—must be almost submerged by the work arising from the ramifications of the new Act which is coming into force in the New Year. I do not see how anyone could quickly have brought into operation a Measure to increase contributions and then made alterations again in April. It is a great pity that this cannot be speeded up, but I think we ought to accept the reasons why it cannot be done.
  There is another reason We are imposing on industry two additional burdens of no small consequence—the new graduated contributions and the new contributions which will be made by industry of 1s. 5d. a week for every worker. At least, we are giving industry a chance to organise its costings to take in the additional contribution which has to be made so that our exports do not suffer I wish that all this could have been done sooner, but I agree with my right hon. Friend that it could not.
  Two years ago, because of my personal experience, I used to think that I knew a good deal about pensions. But we are doing so much complicated legislation that I think that my right hon. Friend is perhaps the only person in the House now who completely understands these matters. I think we ought in some measure to simplify the whole of our proceedings. I have found it impossible

  293
  to understand a large part of the Bill, and yet I am supposed to understand these matters. To those who have not studied pensions, it must be an enormous job. When I read at the weekend the Bill and the papers which accompanied it, I felt that I wanted to go away for a week on orange juice and spend the whole time trying to understand the Bill.
  I also think that some measure of simplicity must be brought into this to help the public. The contributions are now so varied that there is a great need for simplification. There was in our local paper—it is not really the local paper; it is a famous Yorkshire organ, the Telegraph and Argus—on 1st November—all sorts of good things come from Bradford—this leading article:
  "Everyone knows that pensions have to be paid for and that the money must come from the taxpayer one way or another. It would seem only sensible to bring all financing of pensions under one heading, to get all the money from the Treasury in the first place and to make it clear year by year what proportion of general taxation was being devoted to pensions."
  Perhaps the new method of collecting the graduated pension contributions which begins next April, whereby it is done through the Treasury and on P.A.Y.E., may in itself provide a way by which all this could be simplified. We might get rid of weekly stamps and save industry this huge task. It should be possible, with percentages of income, of taxation and of expenditure, to allocate these funds contributed centrally into their respective quotas.
  When we receive a rate demand it tells us penny for penny how the money is to be spent, but we pay one rate to our city treasurer. We owe it to those in local government, industry, the Ministry and the private sector of insurance who are struggling manfully to deal with the graduated measure some simplification of their tasks. I think it is possible to do it by making the one allocation and henceforth doing without the stamps.
  Mr. Spriggs: When the hon. Gentleman mentioned that I moved a Private Members Motion about pensions on 20th May, he said in the same phrase that he wished the Minister could have brought in the increased pensions in time for Christmas. If he deploys that argument,
  294
  the logical conclusion is that the Minister should have brought in his Bill earlier—about the time when I put down my Motion. Does not the hon. Gentleman agree?
  Mr. Tiley: I am quite happy to respond to that point. I said before last year's Budget that I would not find it possible to support the Government if they reduced taxation and gave all these things which were pressed for from these benches if they were given before the pensioners were dealt with. I was very glad that Viscount Amory, in introducing his Budget, set as the first thing to be accomplished this year the fight against inflation, because if we had done these things then we might again have had inflation and unemployment and there would have been no increase for the pensioners next April.
  I am sorry that it was not possible to have these increases by Christmas. But I would rather see us with full employment and making a fight for world markets in 1961 and paying for this penny for penny with money that is worth something, as we shall be doing in April. I support the Bill.
  7.54 p.m.
  Mr. George Lawson: The hon. Member for Bradford, West (Mr. Tiley) and I have followed one another on many occasions. He has so often raised this scare about inflation. Indeed, he seems to have taken upon his Government the credit for having produced a fairly considerable period of price stability. I was under the impression that in West Germany, France, Italy, the United States, Canada and in most other countries of the world there was also price stability. I do not think that our Government was as influential as all that. But if the hon. Gentleman feels that this is the case, then I will happily—
  Mr. Tiley: This is a very good point, but there is an adequate answer. At the same time that the hon. Gentleman is putting forward this view, will he also give the House the unemployment figures in those countries? They are 7, 8, 9 and 10 per cent. Ours have never exceeded 3 per cent.
  Mr. Lawson: I am aware that this is extraneous to the argument for a country like West Germany——
  Mr. Tiley: I should like to develop it.
  Mr. Lawson: It is fundamental, of course, but I understood that West Germany was desperately short of workers and was importing large numbers of foreign workers. Unemployment is very low in these countries, so neither on the basis of inflation nor of employment policies can we say that we are distinctive. We are not. In many cases, as was shown by my hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) the other day, we are falling behind.
  Mr. Tiley Mr. Tiley rose——
  Mr. Lawson: I am sorry that I cannot give way again because I must get on. The hon. Member tells us that he is an insurance man, and we are happy to hear him speak from that point of view. But like other insurance men he is far too inclined to measure everything in terms of £.s.d. The Minister in opening the debate, told us that at the maximum a contributor could, with his employer, have contributed only £300 for his pension, in actuarial terms, to receive £3,000. The hon. Gentleman was applying this same £.s.d. measure——
  Mr. Tiley: Does the hon. Member agree with the slogan that pounds, shillings and pence are meaningless symbols?
  Mr. Lawson: They are symbols and one must not go beyond those symbols. The hon. Member also spoke of three-fifths of the people doing the work of this country. He was on sounder ground there. It is true that the bread we consume today or tomorrow is produced by bakers working day by day. That applies to all other forms of wealth, some more perishable than others. We live on the day-to-day activities of the working people.
  When the hon. Gentleman speaks of three-fifths doing the work of this country I am ready to accept that. But those three-fifths are not working unaided. They have been enormously assisted by the generations which went before them—not just one generation, their own fathers, but by their grandfathers and their great-grandfathers and others. We are standing on the shoulders of past generations. We are well
  296
  equipped educationally, technically and in the knowledge of working, and the tools are there to our hands.
  We cannot estimate the amount of work derived from the past which we are enabled to utilise in this present generation. Merely to try to measure all this in terms of some person having at maximum contributed £300 for a pension is nonsense.
  We are able to enjoy our standard of living because of the work that went on in the past. We should be hopeless, living at less than the caveman's level of existence, if it were not for these past efforts. That is the basis of our argument on this side of the House. We say that we of this generation owe a duty to the last generation; and I agree with my hon. Friend the Member for Sowerby (Mr. Houghton) that we do not think that the debt is being paid by a pension of 50s. being raised to 57s. 6d., quite apart from whether the pension is higher than in the past or not.
  We are merging into another conception of our obligations towards our fellows. This is one of the changes taking place in our generation, one of the features of the changes for which we stand—which is for increasingly accepting collective responsibility. We believe that we have collective responsibility for the elderly, for the sick and the youngsters. This is, if one likes to call it so, a new attitude, a new morality. We are not fulfilling that obligation when we pay a pension of 57s. 6d. to a single person and £4 12s. 6d. to a married couple.
  My hon. Friend the Member for Sowerby was very modest when he said that at the very least we should relate the basic pension rate to the basic earnings rate. He did not say the average male earnings rate but the average earnings rate, and he said that on the basis of 30 per cent.—I thought that he was going to argue for one-third—that would give a single person a pension of £3 10s. a week. Who among us will say that 70s. a week is too much for a single man or woman to live on?
  Who says that the nation cannot afford to ensure that no adult person is expected to live on less than £3 10s. a week? I do not think that enough, but I am prepared to accept that figure and I filly support my hon. Friend when he says that at this stage we should be seeking

  297
  to link pensions to earnings, so that we have some measure by which we can regularly adjust pensions as standards increase. As standards rise—not the cost of living—so should people no longer able to work be able to enjoy the benefits which the society which they helped to create enjoys. I hope to see the argument of my hon. Friend taken up increasingly in the months ahead so that that arrangement is accepted as the basis on which we establish pension rates in our society.
  If on top of that some people are fortunate enough to ensure higher pensions for themselves, perhaps by their own efforts, that is all right. But let us recognise that in many ways it is a matter of fortune. In most cases it is not a question of extra effort on the part of the people concerned. For example, the private pension schemes, of which the hon. Member for Bradford, West is so enamoured, are increasingly part of the terms of employment and in many ways are recompense, payment, or deferred earnings and are often non-contributory.
  If someone is fortunate enough to be a member of such a scheme, it is not that he himself saves for his retirement but that he happens to be in the type of job with the type of employer where such a scheme is provided. The scheme is paid for out of the general currency of production in that society and not by any special sacrifice by the employer or employee. The money for the scheme comes out of the common pool of production and when such men enjoy their extra benefits they do so out of the common pool of future production.
  That is also true of the so-called top hat schemes. I know that the hon. Member for Bradford, West wanted to give the impression that he was talking about cloth-hat schemes, but top-hat schemes provide their members with as much as two-thirds and sometimes nearly 100 per cent. of their maximum earnings. Such pensions come out of the nation's production as much as the smallest pensions are paid for out of the nation's production.
  Mr. Tiley: The hon. Member could not be more wrong.
  Mr. Lawson: That is the only way in which present pension contributors can be said to be paying for future genera-
  298
  tions. It is curious that the people who save most are also the people who consume most. It is usually the wealthier people who do the saving. The universal form of saving with poorer working people has been through the insurance man who appeared as soon as a person was born and who provided an insurance so that the person eventually had a respectable burial. The universal form of saving among the working class has been saving to get buried, and the saving was done in coppers.
  The person who can really save for his retirement is the person who is already earning, or obtaining, a very high standard. The hon. Member for Bournemouth, West (Mr. Eden) spoke about the present generation being able to save. Men employed in the motor car industry may be earning anything from £15 to £25 a week and, presumably, they are able to save, but how many of them have the threat of insecurity now hanging over them? Those in the lower levels of income cannot make adequate savings.
  I know that it is said that a shilling of one's own is one's best friend, and that kind of saving is almost universal among the majority of working people, but saving shillings can make practically no contribution when one gets to the stage of no longer being able to work, for one then soon uses up those odd shillings. For savings to be sufficient to give a man comfort when he retires, there must also be security of employment, and even in the great motor car industry there is not sufficient security now, and what is true of that industry is true of many others.
  We therefore have to have collective saving, and once again we return to collective action. Those who are fortunately placed—fortunately placed rather than with peculiar qualities of excellence in themselves—are able to save, but the common run of us are not. I am far better placed than most people, but I am not making adequate provision for my own old age, and there are many much worse off than I am.
  We have to provide for the generation now retired and a new generation will take over when we retire. We are equipping the new generation and we can expect it to look after the generation which retires in its time as we now look

  299
  after the generation now retired. Collective saving, the only way in which the nation can save domestically, is done by building up the nation's productive capacity and making it more and more efficient so that it produces greater and greater wealth with less and less physical effort.
  My complaint is that the right hon. Gentleman so often riles me with his hypocritical air of generously handing out to the people and always saying that the State is carrying its share of the burden. With each insurance Bill giving increased benefits there has been a substantial addition to contributions, and, proportionately, the amount added to the contributions has been greater than that given to benefits.
  The argument has always been—it was advanced in 1954 and 1957—that one has to have regard to the future obligations which the State incurs. For example, the present Minister of Housing and Local Government, then the Financial Secretary to the Treasury, on the Second Reading of the National Insurance Bill, 1954, said:
  "In five or six years' time the contributors will be bearing only two-thirds of the cost of National Insurance and the taxpayer one-third. I have heard hon. and right hon. Gentlemen urging that the Exchequer should pay one-fifth. What I am pointing out is that in five years' time it will be paying one-third."—[OFFICIAL REPORT, 8th December, 1954; Vol. 535, c. 1072–3.]
  However, in 1959, which was five years later, the Exchequer was paying only 18 per cent. and not 33⅓ per cent.
  That was what happened on each occasion. It happened in 1957, in the Measure raising the pension in 1958. On this occasion the Minister made the point. In November, 1957, he said:
  "… owing to the steady increase in the number of recipients of National Insurance benefits, the expenditure will go on rising, and, by the year 1964–65, the total Exchequer liability to the National Insurance Fund on the present basis will be £357 million …."—[OFFICIAL REPORT, 13th November, 1957; Vol 577, c. 976.]
  The estimates in the White Paper accompanying this Bill show that it will work out at about 16 per cent., which is far below what was calculated by the right hon. Gentleman.
  There was an acceptance of Exchequer liability. How are we sure about this? We know, as was pointed out by hon.
  300
  Members opposite, that Exchequer liability is taxpayers' liability. We are all taxpayers, but we do not all pay the same amount of taxes. Some people do not enjoy incomes at a level which makes them liable to taxation. The great feature of taxation, or having the Exchequer make a special contribution here, is that this is a graduated contribution. One is assessed on the liability to pay which is not like the flat-rate contribution charge which operates at present. One of the principal objections to that method of financing is that it bears most heavily on the people least able to pay.
  This brings me to what has been described as the wizardry of the Minister. I should have found a different name with which to describe it. The wizardry of the right hon. Gentleman has resulted in the liquidation of the emerging deficit about which we have heard so much year after year. Every time legislation was brought forward or any pressure was exerted on the Government to increase pension benefits, we were told about the emerging deficit and the huge burden which future taxpayers would have to carry. The wizardry of the Minister has taken the form of a graduated pensions scheme. By means of a contribution far in excess of the actuarial value of the benefit the emerging deficit ceases to emerge. It is transferred to the contributor.
  In 1961–62, when the 1959 legislation comes into operation—it is tied up with the Bill we are now discussing—the amount of money paid in graduated contributions is estimated at £186 million. The amount paid in graduated benefits is estimated at nothing. So there is a clear excess of payments, income over expenditure, of £186 million. One might say that of course this is just the beginning of the scheme and after ten years, twenty years, thirty years, or even forty years, the amount of the benefits would probably exceed the amount of the contribution because that is how these things usually work. But not on your life, not in the graduated pension scheme of this Government.
  To save time, I will not refer to a period of ten years, but I will go to the year 2001 when, according to the actuarial assessments of the Government, the amount of the contributions paid into

  301
  the graduated scheme in excess of the amount of the benefits paid out will be £330 million. That figure is for one year, forty years after the scheme has come into being. This is the wizardry of which my hon. Friend the Member for Sowerby spoke, but I call it sheer robbery. I consider it a blatant swindle. I do not apologise for using those words. The reason why this swindle has not caused the country to be up in arms is that the Bill is so complicated. I agree with the hon. Member for Bradford, West, that the Measure is very complicated and that people do not understand what is happening. During consideration of other Government Measures members of the Press, who are supposed to look after the interests of the public, attended discussions in the Standing Committees and scarcely wrote a word about these things. Perhaps the subject was too difficult for the learned gentlemen of the Press to understand. But here is a fraud being perpetrated on the public and the spokesman of the Government tells us that there is to be an additional contribution.
  Mr. Tiley: The reason why it is not considered to be a swindle is that people read National Superannuation, the scheme of the Socialist Party, which they considered to be the biggest swindle ever put on paper.
  Mr. Lawson: The hon. Gentleman will recall that my hon. Friends and I pressed the Government to turn this graduated scheme over to private insurance. I especially pleaded with the hon. Gentleman to use his influence with the Government to get this scheme handed over to private insurance. I will say that under private insurance the benefits would be greater than they are now. But the hon. Gentleman, who believes so much in private insurance, was not prepared to do that. I think I have said enough to show that we are not accepting the obligations which we ought to accept, and instead of calling this scheme—which is the elimination of the deficit—an example of wizardry, I would call it an example of swindling.
  8.17 p.m.
  Mr. Philip Holland: In any conflict between those two very desirable ends, brevity, and the maintenance of a strong thread of continuity through
  302
  the debate, my prejudice is normally in favour of brevity. Conscious as I am of the number of hon. Members who wish to contribute to the debate, and the limitation on time, I will surrender to my prejudice wholly tonight; and I hope, therefore, that the hon. Member for Motherwell (Mr. Lawson) will not think me discourteous if I do not begin with a preamble analysing the points which he has made, but, instead, plunge straight into the matters which I wish to bring to the notice of the House.
  Death found my father unprepared. It struck swiftly when he was still quite a young man, trying to build up a legal practice during the difficult circumstances of the First World War. He had no life insurance; he was not insured in any way. I was born several weeks after his death. My brother and sister were both under the age of seven. I cannot understand how my mother managed to house, feed, clothe and educate the three of us. I only know that throughout the whole of my childhood I watched her struggle to do so. I hope that the House will forgive this personal reminiscence, but I felt that I should establish ant I have not merely an academic interest in the difficulties of the Less fortunate members of our community.
  This Bill provides for the widow with three young children to receive in the first year of widowhood £317 10s. 6d., if my memory serves me correctly, and in each subsequent year £302 18s. until the children are of an age to provide for their own support. Perhaps understandably, therefore, I welcome a Measure that sets out to improve the lot of people who, for one reason or another, are unable to provide adequately for themselves—it may be through lack of good health, or strength, or through lack of employment or for some other reason.
  I am glad that the Bill will increase National Insurance benefits more than seven-and-a-half times as much as the increase that has taken place in the cost of living since the last increase in benefits in 1958. In looking at the amount of the increase. I agree that we have to accept that this is a general Measure which applies to the whole population irrespective of need. We have to recognise that the problem of the otherwise

  303
  destitute people with no other means of support or source of income is a separate problem from that problem which it is sought to deal with in this Bill. It is one that is really outside the scope of the Bill and this discussion because its solution involves, as our administrative arrangements stand at the moment, the payment of supplementary benefits by the National Assistance Board. I am speaking of things as they are, not necessarily as I would like them to be.
  The Bill is about as comprehensive as such a Bill can be. It does not attempt to benefit only one section of the community to the detriment, or at the expense, of other sections. It recognises that hardship results not only from retirement, but from unemployment, sickness, and industrial injury, and, forgive me if I say most important of all, from widowhood and widowed motherhood.
  It is not just a pensions Bill, although the accent seems to have been on pensions as regards the amount of money to be spent on each benefit. I am not quibbling about whether it does enough for the less fortunate members of the community so far as this can be done through the medium of National Assurance, but the Bill does seek to improve the lot of those people.
  I must stress that, because the Bill does not deal with the sort of help which a grateful Government ought to give to people who have served the community faithfully throughout their working lives and who have now reached the twilight of their lives. The Bill deals only with such benefits as are the right of everyone in the National Insurance Scheme. I have said this to explain the limitations as I see them, because the limitations of the Bill have obviously coloured the conclusions which I have reached about the Bill as it stands.
  There are divided opinions about what the amount of the increase should be. The principal alternative suggestion, so far as I can gather on a party basis, is that the increase should be a flat rate of 10s. on both the single and double rates of benefit. As we know, the Bill offers 7s. 6d. on the single rate, and 12s. 6d. on the double rate. The hon. Member for Ince (Mr. T. Brown) added the single and double rates together, divided by three, and made it 6s. 8d.
  304
  If one adds the two 10s. flat rates together, one gets the same result, which indicates to me, on the basis of what I know so far, that both sides are basically agreed on what the average should be in that sense.
  It seems that of those two suggestions the provision in the Bill is more equitable, because it recognises that whilst rent and the cost of heating may be the same for one as for two people living together, food and clothing obviously cost more for married couples than for single people. Although the double rate is not double the single rate, it is an increase on the single rate which will take care of that.
  On the question of timing, I would like to explain what has led me to my conclusions about this. Had this been a rescue operation, as my right hon. Friend said when he opened the debate, had these figures been necessary to restore the value of the pension to the 1958 level, or could these increases have been justified on the ground that they were necessary to match the increase in national wealth, or earnings, or wages, whatever one will, since 1951, I should have felt compelled to speak against the timing of it, as some of my hon. Friends have done. Indeed, I would have supported an amendment at a subsequent stage to bring them in in time to have the increases paid during the winter months.
  So far as I can see, the Bill does not represent a rescue operation as such in the sense of meeting an appreciable increase in the cost of living. It cannot be justified on this ground, nor can it be justified on the ground of keeping pace with the rising standard of living in the country generally, if we take, say, the increase in total national wealth since 1951, or the increase in industrial earnings since 1951.
  According to the latest figures which I have, since 1951 National Insurance benefits have risen by 67 per cent. Total national wealth has risen by 63 per cent. Industrial earnings have risen by 70 per cent. They are all round about the same figure, one up and one down on the benefits. According to this, one-tenth of the increase proposed would suffice to restore both the purchasing power of the pension to the 1958 level, and to

  305
  bring it into line with the increase in industrial earnings since 1951.
  Since emotion always has a stronger appeal than logic, although I have argued this case I accept the facts put forward only with reluctance. In logic, I am compelled to go further and say that if we are to maintain the insurance concept—and I think that, basically, the House is agreed on this as far as it goes—we have to accept, at least in principle, that an increase in benefit must be accompanied by an increase—not necessarily equal or matching—in contribution. I think that the two are tied together to a certain extent, and that there must be some alteration in contribution when there is an alteration in benefit to maintain this feeling and to continue to impress on the country that this is an insurance scheme.
  On that basis I am sure that if we accept this we will also have to recognise the administrative difficulties in having two alterations in contributions, not only for the Government Departments—and perhaps we do not care too much about the difficulty we cause them—but for every employer in the country.
  This does not alter my view that if a way could have been found to introduce the increases in benefit at an earlier date during the winter I should have welcomed the Bill more than I do now, but I do not at the moment see how a practical way could be found of doing it. As it is, I think that it could only be done if we could bring forward the graduated pension scheme to about January or February; but as that is outside the scope of the Bill, and as Mr. Deputy-Speaker is looking at me, I will not pursue that now.
  I conclude by saying that I welcome the Bill so far as it goes, and that I accept, albeit reluctantly, its very necessary limitations.
  8.28 p.m.
  Mr. J. J. Mendelson: I think that every hon. Member very greatly respected the opening remarks of the hon. Member for Acton (Mr. Holland). Speaking for myself, I particularly respect any argument produced by anyone who has a real knowledge of the facts of life in these matters.
  306
  In moving on to some of the points the hon. Member made, I shall confine myself, as he did for the rest of his speech, to the logic of the argument and to the course of policy that he put before the House. He took up—and I think that this was something the Minister made a great deal of in his speech this afternoon—the point about certain increases as proposed in the new Bill not being a rescue operation. That has been a completely misleading argument by the right hon. Gentleman, because it has been admitted by the Government over the last three years, time and time again, that there was an urgent need for an improvement in the position of old-age pensioners. That has never been denied. That has never been in disagreement between the two sides of the House.
  The main argument the Minister has always put forward on recent occasions when he refused to raise the pension, when he has refused to agree to a flat-rate increase, has been that the time is not ripe because the country cannot afford it, or that the economy is not at the moment in a state in which we ought to do this for very sound economic reasons. He has never argued that there was not a need for an increase. Indeed, in previous debates hon. Members opposite have said that there was a need—this was two years ago—to do this job, but alas, we could not do it. What is being proposed now, although in too limited a form, is a rescue operation. Therefore, there is all the more reason for doing it as quickly as possible.
  I want to link that with another point made by the hon. Member for Acton. He said that this delay might have something to do with the date for the introduction of the other scheme. I regret that the hon. Member for Bradford, West (Mr. Tiley) is not now in his place, for I want to refer to a point that he made. I do not complain about him not being in his place, for an hon. Member cannot stay here all the time, but I regret that he is not present now because he said that I was playing the wrong tune, and I am rather touchy about my music. The substantial point the hon. Member for Bradford, West made was that we ought to be very careful, in approaching this problem, not to suggest that we are doing something which might put up our export prices.

  307
  That is a farfetched argument if ever there was one. If there is a point to be made about our export prices, that is far removed from the sort of amounts we are discussing today. Anyone who has done any economics, and I do not require people to hold a B.Sc. degree or to have any knowledge of economics beyond an elementary one, will know that the kind of transfer we are discussing is not a transfer which directly shows itself in export prices. I do not want to weary the House by going into a lot of argument as to what produces the collective figure for export prices in the end, but I do not think such an argument should be adduced on this occasion.
  The hon. Member said at great length that he had not received many letters concerning his views on pensions and then proceeded to justify the delay the Government are imposing on the implementation of the Bill. I wonder whether that sort of tune will be accepted when it reaches Bradford. I received a letter from my constituency this morning, and my constituency is not so very far away from Bradford, West. The letter was from the secretary to the area council, including Dodworth and Barnsley, of the National Federation of Old-Age Pensions Associations, from which I want to quote a couple of sentences on the problem of delay. This is what he wrote:
  "… we do feel very strongly on the long period of five months before it is put into operation. I think you will agree with me that the winter months is the worst period that pensioners have to contend with.…"
  That, I think, is a representative view of many old-age pensioners at present.
  The Minister made an interesting point on this subject of delay. He said that, although he was advancing administrative reasons, he had to mention various other points. I thought that a reasonable approach. One has to advance arguments which one does not regard as compelling because one has to put them on record, and he was doing that. However, when he reached the crucial point in his argument, he said, in effect, "But all this would not be sufficient to impose the delay if there were some compelling reason for not having the delay." He can look it up in HANSARD tomorrow. I assert that there are compelling reasons
  308
  and those compelling reasons are to be found in a number of things which have not been mentioned this afternoon.
  First, some hon. Members opposite have said that all reached the same level because of the percentage increase in the last five years, but they must not forget that they did not start from the same level five years ago. In this case, we are dealing with many people who have been going through periods of hardship as pensioners for many years. Certain things which have not been mentioned in the debate are very important. They are such things as clothing and furniture. A considerable number of pensioners move from a large to a smaller dwelling as a result of a sensible policy followed by local authorities and encouraged by the Government, but that often means that they have to buy replacements. Pensioners living below a reasonable standard during the last five or eight years have found it very difficult to make those replacements. I say that not only from my own knowledge, but I also assume that hon. Members opposite know about these things, for I do not presume to think that we have a monopoly of knowing how old-age pensioners have to live.
  It must be common ground—however much reasonable people disagree about conclusions, they ought to be able to agree on the fact—that old-age pensioners do not start from the same level and, therefore, there is no virtue in quoting these figures about the percentages having been roughly the same. What is needed for the old-age pensioners is to bring them up to a reasonable starting point, and then we can start talking about percentages.
  There are two other points that I want to mention. In the Minister's speech there was one sentence which disturbed me a great deal. He said that there had been outside criticism of the Bill. Some of this outside criticism was later voiced in the Chamber in a very interesting speech by the hon. Member for Bournemouth, West (Mr. Eden). That criticism of the Bill I will leave to the Government. I do not want to interfere in arguments between those on the other side of the House who have derived their economics from 1900 to 1905 and those who have derived them from a more recent period.

  309
  The Minister, referring to criticism made outside the Chamber, said that he would not like to assure the House that in future he would necessarily think of further increases in pensions in the way in which the Bill has provided for such increases. Pressure has been exercised on the Government not only from this side of the House, but to my certain knowledge, and, every honour to them, by several hon. Members on the other side of the House, in the last three years. I wish that they had stated it a little more publicly. Sometimes there is virtue in voicing an opinion that is not an exact imitation of what one's leader has already said. I wish that they had been a little more forthcoming in making their voices heard, but, none the less, they have privately added to some of the pressure that we on this side of the House have been able to put on the Government. I and other hon. Members feel that this is a useful departure, after so many years of resistance, that many of the arguments advanced again and again by the Minister in recent years, when he refused to put up pensions and only increased National Assistance, were dropped overboard this afternoon.
  I was beginning to think that we are getting somewhere. But the Minister deliberately added his caution that he would not like us to think that he would proceed in the same way in the future. He did not want us to think that "Tommy's" improvement was to be a lasting improvement. That disturbed me a great deal. There is no reason to think that by this very limited and far too narrow increase the problem will be solved, even temporarily.
  My last point concerns the principle to which we have to relate pensions. I think that it is common ground to everybody in the House that there is no point in merely talking about figures, either here or in debates outside. We have to relate pensions and the level of pensions to a more general principle. One is reinforced in this view when talking to social workers. It is essential to realise that if we relate the level of pensions to a principle it has to be a principle that concerns the rest of the community. Representing a highly industrial constituency, where the majority of people are active trade unionists, nothing has encouraged me more as I go about the
  310
  area and in clubs, meeting people socially as well as politically, than the attitude of many people who have said to me, "We are now prepared to take part, if necessary, in doing something to see that our old folk get a better standard of living." It is underestimating the moral fibre of our people not to believe that that is so.
  I therefore say that if, in future, we link the level of pensions to the standards of living of the rest of the community, the Minister's announcement today is quite unnecessary. If he intends to pursue his old policy of pushing more and more people into asking for and receiving National Assistance; if he is thinking in some general way that in the future there will be no further flat-rate increases, there will be a need for more and more people to go through the machinery of the National Assistance Board. Here I would add my tribute to the individual officers of the Board. I have appeared on behalf of pensioners before boards of this kind and I have no criticism whatsoever of the people who do the job. It is important to say so when making speeches on this subject. But we are not talking about the individual members administering the work of the Board; we are talking about the Government's policy and the philosophy behind it.
  There is no sense in thinking of a future in which the fact that a great number of people have to ask for National Assistance is regarded as praise for the efficiency of the Board. It is far more important to realise that this means that the pension is far too low, and that we are not doing our job in looking after our old people. It is because the Minister made the remark he did about the future that I thought it essential to make the position clear once again.
  I hope, as must all those who are concerned with the matter, that the increases will be paid as soon as possible, and that the Minister will have second thoughts in this matter. If he does not consider as very important what Members here might say, I hope that he will remember the two sentences that I have quoted from the representative of the old-age pensioners in my constituency and will act accordingly, by changing the timetable and introducing a new one

  311
  allowing our old people to receive the benefit of the new increases before or immediately after Christmas.
  8.42 p.m.
  Mr. A. E. Cooper: We have had two interesting dissertations on economics—one from the hon. Member for Motherwell (Mr. Lawson) and the other from the hon. Member for Penistone (Mr. Mendelson)—but I very much doubt whether, upon deeper reflection, their arguments would stand up. My hon. Friend the Member for Bradford, West (Mr. Tiley), when saying that this increase in contribution would put up prices, did not mean that that would be so simply because it would put 1s. 5d. on the employers' side. He did not mean that that fact in itself would put up prices. To the extent that this increase of approximately £150 million is a transfer from one pocket to another, it is not inflationary and, therefore, can be borne with some degree of equanimity.
  But we must face the facts of life and be honest with ourselves. We know that when these extra contributions are taken from the workers' pay packets the inevitable consequence, in the long run, will be a demand for higher wages. It is in that demand that the inflationary spiral starts and we start to price ourselves out of our export markets. There is no gainsaying that as an economic fact.
  Mr. Mendelson: I must voice my dissent at the hon. Member's proposition that an increase in wages automatically produces an increase in export prices. That is the view of the old school of economists, but since Keynes we know that it is not so.
  Mr. Cooper: If I went into a long argument of rebuttal I might be called to order. I will merely say that the hon. Member's argument will not stand up to any sort of analysis. Wages are part of the cost of production, and the cost of production, however built up, must be met by prices. If the prices do not cover this cost, ultimately the business goes out of existence. There is no argument against that.
  No matter which party is in power, whenever a pensions increase is suggested it is always criticised as being too little
  312
  and too late. That always will be so. Governments are always accused of bringing in pensions increases at the wrong time of the year. I do not know how many pensions Measures I have sat through in this House; there must have been six or seyen, and they have either been introduced too late to catch the Christmas shoppers or too late to catch those people who wanted to go away for their summer holidays. Whatever time of the year the Government introduce a Pensions Bill, it is always too late and too little.
  Governments have to act responsibly; they have to face the realities of the situation. However much we might like to double the pension increase, inevitably there will be a considerable increase in purchasing power, which will not be saved by the general argument that the pensioner is living more or less on the margin. Any increase in pension is going to be spent. It is not going to be saved as it would be if that same amount of money were left in the wage earner's pay packet, when there might be some saving element which would have a non-inflationary effect. Governments have to face this reality. Whatever their good intentions, they must all the time bear in mind the inflationary situation which would inevitably result if too much were done, which would not be kindness or generosity, because in a short time the pension would be whittled away.
  I was interested to hear my right hon. Friend say that we must no regard what has been done in the Bill as setting a precedent for the future. I was surprised to hear the criticism of those words by the hon. Member for Penistone. I feel that we are not tackling the question of the State pension in the right way. I am not at all convinced that a flat rate of increase right across the board is the best way to deal with the problem, for reasons which I will try to explain.
  Broadly speaking, pensioners fall into three categories. There are what I call the rich pensioners—for easy reference, the type who is the object of cartoonists, the Field Marshal Montgomery type of pensioner, whose pension is in four figures, who still gets the State pension and who, when the Bill becomes law, will get the benefit of the 7s. 6d.
  Mr. Charles Loughlin Mr. Charles Loughlin (Gloucestershire, West) rose—
  Mr. Cooper: I have not much time. I cannot give way now. He will get the 7s. 6d. as a gross sum and he will then be taxed and, presumably, Surtaxed on it. The point is that contributions have been increased right across the board to make available this higher rate of pension which will accrue to many people who do not need it.
  We come to the second class of pensioner, the person who has moderate savings and who is able to get by on his State pension plus any interest on investments or Post Office savings and the like and has no need of National Assistance. Such people get the full benefit of this increase.
  Then we have the third category of pensioner, the person who has no outside investment whatever, who lives purely and simply on the State pension, which is, in most cases inadequate, and has to apply for National Assistance to make up the difference.
  Because of the variation in National Assistance Regulations, when this Bill becomes law the people on the lowest scale will not receive the maximum benefit which the people in the middle stratum receive. It has always been my basic political thinking that public money should be given to those in greatest need. I believe that, with the flat increase of pension right across the board, we have got ourselves into a situation which really does not bear any ethical or moral analysis. For that reason, I consider that in future we must concentrate the expenditure of public money, through taxation or in some other way, on those with the lowest incomes and ignore the four-figure income pensioner who really does not need that sort of assistance today.
  I wish now to raise a special point with regard to the provisions in the Bill dealing with disablement and ex-Service men's pensions. Quite frankly, I think that my right hon. Friend must make some changes before he can satisfy many of us on this side of the House and many of our supporters in the country.
  Mr. Boyd-Carpenter: I did explain that the Bill does not deal with war disability pensions. I do not know whether my hon. Friend was in the House when I moved the Second Read-
  314
  ing. I pointed out then that they are dealt with quite separately under the Royal Warrant. I think that what has, perhaps, misled my hon. Friend is the reference to industrial injury disablement.
  Mr. Cooper: I was misled by the First Schedule, page 7, which deals with weekly rates of disablement pension for disability.
  Mr. Boyd-Carpenter: That is in respect of industrial injury.
  Mr. Cooper: Yes, but the extraordinary thing is that the new amounts when compared with the old amounts are precisely the amounts which are to be paid for war disability as well.
  Mr. Boyd-Carpenter: That is on the basic rate, but it is not so in respect of a great many of the other provisions. However, I think I should be out of order it I attempted to expound, as I should like to do on some other occasion, the war pensioner provisions.
  Mr. Cooper: Is it then your Ruling, Mr. Deputy-Speaker, that I am not permitted to raise the subject of war disablement pensions?
  Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): I have not given a Ruling at all.
  Mr. Cooper: I am seeking your guidance, Mr. Deputy-Speaker.
  Mr. Deputy-Speaker: If the hon. Member will proceed with his speech, the Chair will interrupt him if he goes out of order.
  Mr. Cooper: It has always been my desire not to fall foul of the Chair, and I endeavour to insure myself beforehand.
  At present, the war disabled, particularly legless men, receive what is known as an age allowance at the age of 65. Statistically, very few people in this category live beyond 65, so to all intents and purposes the age allowance is of very little value. I should have thought that the minimum requirement which has been put forward for a long time, that the age allowance should be brought in at the age of 60, was something which we really ought to try to meet. I understand that the total cost would be no

  315
  more than about £450,000 in the first year, decreasing thereafter.
  I do not altogether like the way you are, as it were, sitting forward in the Chair, Mr. Deputy-Speaker, ready to pounce.
  Mr. Deputy-Speaker: I think the hon. Member is going beyond the scope of the Bill. There are only a few minutes left. It would be better if he devoted himself entirely to the Bill.
  Mr. Cooper: Thank you, Mr. Deputy-Speaker. At least, I was able to make that point.
  We hear a great deal from both sides of the House about the earnings rule. I can understand why the trade unions are not particularly anxious that we should abolish it altogether. However, I believe that, notwithstanding the local difficulties which we have and which are purely temporary in the motor car industry, there is now and there will be for a long time a great demand for the maximum productive effort which this country can make, and there are very many men in this country who, because of the earnings rule, are inhibited from putting forward that maximum effort which would, indeed, earn them more money. It seems to me that we have an opportunity in this Parliament to do something about the earnings rule, and I hope that my right hon. Friend will find it possible to increase the earnings figure in the not too distant future.
  8.55 p.m.
  Mr. Leslie Spriggs: I listened with great interest to the hon. Member for Bournemouth, West (Mr. Eden) who declared his interest in insurance and pensions. He pressed the case for private pensions in no uncertain manner. We on this side of the House—and I was pleased to hear that some hon. Members opposite are of this opinion—think that there is a case for increased pensions before next spring. Some hon. Members opposite said that they were in favour of an increase in pensions by Christmas at the latest. Knowing something of the procedure in this House and of the party machines on both sides, may I say that surely hon. Members opposite have had an opportunity of making known to their right hon. Friends what
  316
  they thought about the position of the pensioners and the people concerned in this Bill. Apparently, they have done nothing about it until today.
  I am sure that the Minister did not intend to do anything about it nor did his right hon. Friends. When the right hon. Gentleman had a simple case to answer on 20th May last, when I had the honour of moving a Private Member's Motion calling on the Government to increase the old-age pensions immediately, I think that the main argument of the Minister was that people in need could apply for National Assistance. That was the gist of the right hon. Gentleman's reply.
  In the minute or two at my disposal, I should like to reply to those who speak in favour of private pension schemes. There are some very bad schemes and, apparently, there are some good ones. I have in mind schemes run by industry which are based upon the earnings of the workers. So much is deducted weekly for each pound earned. There are people who do not pay anything towards their pension. There are noncontributory pension schemes. As it is possible, and has been possible for many years, to bring into being some first-class pension schemes and non-contributory schemes, why in the world has it not been possible for people in the know who have the job of legislating to do something for the old people before now?
  The Bill asks the House to agree to an increase of 7s. 6d. in the pension of a single person, making a total of 57s. 6d. for an adult person to live on. My hon. Friends and, I am sure, some hon. Members opposite know that it is just impossible for people to live on 57s. 6d. a week. In anticipating the Minister's reply to the effect that people can go to the National Assistance Board for supplementation of their retirement pension, I would say that the subsistence level of National Assistance set by right hon. Gentlemen opposite is far too low. The time has come for both sides of the House to decide to take the politics out of old-age pensions altogether. Let us set up an all-party committee of people who profess to be interested in the welfare of our retired people and others who have to live on very low fixed incomes. I am sure that it can be done.

  317
  If the will exists, there is no doubt about it.
  There is, however, one overriding factor. These people whom we are discussing today have a meagre existence. As one of my hon. Friends put it earlier this afternoon, in a so-called civilised, Christian society this Parliament should not stand for what we are forcing upon our retired people and others who are drawing benefits from the National Insurance Scheme.
  My experience has been that any suggestion that the working of the National Assistance Regulations has been detrimental to the National Assistance Board is not correct. Whenever I have approached the Board or sent any of my constituents to see the Board's officers, they have given every consideration which it was within their power to give.
  9.2 p.m.
  Mr. William Ross: It must be the dream of every Minister of National Insurance to come along to the House with a Bill for increased benefits that will be received by plaudits on both sides of the House. If the Minister imagined that that would be the circumstances of today's debate, he certainly has been disillusioned. Even from his own side of the House, a fairly critical welcome has been given to the Bill. It speaks well for the frankness and bluntness of the House of Commons that we had that kind of expression, not from one side of the House alone, but from all sides. This reflects more or less the mood of the nation. We tend now to look upon the whole problem of social security much more deeply.
  It may well be that we are groping towards a revaluation of our whole social responsibilities, and the Bill gives us a chance to move in that direction. The Bill concerns not merely pensions but unemployment benefit, sickness benefit and widows' benefit as well. As the Minister rightly pointed out in his comprehensive speech, it covers the contributions of about 24 million people in industry With the changes that it makes, the Bill will raise over £1,000 million to be paid out in social benefits.
  I do not envy the Minister his task when we consider that a Measure of this
  318
  kind is an annual event. In 1957 we had two National Insurance Bills, in 1958 new National Assistance Regulations, in 1959 a new major National Insurance Bill, and here we are again with yet another National Insurance Bill. This shows how the Government have been tinkering with the problem instead of getting down to a comprehensive solution of it.
  Let us appreciate this. I took the figures the Minister gave us for last year, that National Insurance benefits amounted in all to—I think it was—£952 million; but of that £952 million I think about £650 million went for retirement pensions. So we have over two-thirds of the National Insurance benefits going to one aspect of social security only. I think it is something we have to look at to see whether we have got things right within the National Insurance Scheme; and to see whether, without destroying the insurance concept, it is right to overload the National Insurance Fund, as presently constituted, with the justified increases for the existing retirement pensioners.
  We are dealing here not only with the pensioners but with the unemployed as well. I was very glad that the point was made by the hon. Member for Aylesbury (Sir S. Summers). We are coming more and more, especially at this moment, to realise that there are unemployment scales. We have known it in Scotland for a long time. When a man is drawing full wages and then goes on to unemployment benefit he suddenly realises for the first time what unemployment benefit means and how totally inadequate it has been.
  One hon. Member spoke very feelingly of the position of the widows, particularly of the widowed mothers. When we examine the scales, even as they are put forward now, in the cold light of the reality of living, that is when the point of inadequacy becomes absolutely clear. As it becomes clear, we as the Parliament must accept the responsibility for doing something about it and not tinker about with it as we do. We are raising generally all these scales by 7s. 6d. for a single person and 12s. 6d. for a couple. Retirement pension, unemployment benefit, sickness benefit, and the widow's benefit, though the widowed mother's

  319
  allowance is treated a little more generously, by 12s. 6d., with increased allowances for the children—we have to translate them into the realities of living if we want to judge of their adequacy.
  While we appreciate and welcome the fact that improvements are being made, the first criticism made by my hon. Friends has been, why so long? There has not been a single argument produced by the Minister today in justification of what he is doing that could not have been produced last year, and, indeed, eighteen months ago. We have been pressing him from this side of the House, sometimes with help from the other side, to face the realities. But he has been the leader, or the occasional leader, of the resistance movement to reality.
  I can remember the resistance movement getting a new leader on one occasion. We had the Chancellor of the Duchy of Lancaster, the national literature secretary. He has always been in the van of the resistance movement when it came to progress in the social field. We remember he was the man who, in that debate just before the election, presented us with the bogey of the field marshal's pension and said that we could not increase pensions because we should be increasing them for people so much better off. If that argument was true then it is true today, and the rearguard of the people who were then supporting the right hon. Gentleman from the back benches are evidently still unconvinced that what the Minister is doing is right.
  The Minister says that the reason why the change is made is that the Government made a definite election pledge. That was a wonderful pledge—reluctantly dragged out of them; there is no doubt about that. We had the pledge. We had it from the Chancellor of the Exchequer, from the Leader of the House, and from the Minister of Pensions and National Insurance himself, and I will quote him because his words were more or less echoed word for word by the Joint Parliamentary Secretary later. They were:
  "We pledge ourselves to ensure that pensioners continue to share in the good things that our steadily expanding economy will bring."
  Why not a year ago? I gather that round about election time the Conservatives
  320
  thought that Britain never had been stronger and that we had never had it so good.
  Sir Henry Studholme: Is not the hon. Member the first man who, if we had done that just before the election, would have said that we were currying favour with the electorate and trying to bribe them to give us votes?
  Mr. Ross: I seem to have said something which has got under some people's skin. I am talking about a year ago. The election was over a year ago. The Government had a chance to introduce this Measure. They had said they were concerned about pensions. They certainly were. I wonder whether the House remembers the first Bill that was introduced by the Government after the election? It was a Bill to increase pensions, but they were the pensions of the judges, and included was the pension of a member of the Cabinet, the Lord Chancellor, who had been going round the country, no doubt, telling people why the Government could not increase the old-age pension. The Government certainly increased pensions, but they had their priorities wrong.
  Are they telling us that the country was not as strong then as it is now? Many people argue that the strength of the economy was greater then than it is now, and certainly some cracks are beginning to appear. The Minister is condemned first of all for this delay. I wonder why there was a delay. I think that there has been an argument going on in the party opposite between those people who really believe that we should not have this kind of Bill at all, raising basic pensions, and those who believe that with the graduated scheme now being introduced any hardship should be dealt with by the National Assistance Board. It was to be the chosen instrument.
  I have more than a feeling that the Minister himself is glad that the Government have broken away from that, but I think that we have not broken away very far from it. I do not think that the election pledge has been carried out. It was:
  "We pledge ourselves to ensure that pensioners continue to share in the good things that our steadily expanding economy will bring."
  Mr. Boyd-Carpenter: Hear, hear.
  Mr. Ross: The Minister says, "Hear, hear." The message has gone out to the motor car industry that if it can only wait until the first week in April it will have the old-age pensioners queueing up for the goods which our expanding economy is producing—for the motor cars, the refrigerators and all the other things produced in the consumer boom, and all for a 7s. 6d. increase in the old-age pension. It is nonsense. [An HON. MEMBER: "The price of a dog licence."] And as one of my hon. Friends has rightly said, it is only 3s. 6d. for those who, by all the arguments we have heard in the past two or three years, are the worst off of all.
  This is fantastic nonsense. When we look at the question of adequacy in relation to old-age pensions, there is only one real test, and that is the test of the standard of living. The hardship for the retirement pensioner is just like that of the man who becomes unemployed, who one week is drawing full wages and the next is down to the stipulated benefits, but in the case of the pensioner he has to make the adjustment for the rest of his life. I am glad, indeed, that we have not been taken along the stale statistical labyrinth of what happened in 1946, 1951 and all the rest of it——
  Mr. Boyd-Carpenter: I bet you are.
  Mr. Ross: —for a very simple reason, that it is sterile. The youngest pensioner of 1946 is now 80, and most of the pensioners to whom that referred are dead. We now have a new generation of old-age pensioners. I am very pleased to have the new dictum of the Minister that the dead do not forget. I wish the living would remember. We now have a new generation of pensioners with new standards. The man retiring in the middle of April, of whom the Minister spoke, has spent the last fifteen years of his working life with a post-war standard of living; how can he maintain that standard in any way now, when a married couple will receive £4 12s. 6d. a week and a single man £2 17s. 6d.? It just cannot be done.
  Lord Balniel: Surely the hon. Gentleman will recollect that the Labour Party recommended for a married couple a pension of only £4 10s. a week?
  Mr. Ross: The hon. Member is about as far out of touch with the policies of the Labour Party as he is with the feelings of the old-age pensioners. We pressed upon the Government modest requests for increases, but even those were turned down, and now the Government expect us to go into raptures over the proposed increases.
  It is worth while recalling what the Guardian said about this:
  "… it will remain a smaller rise comparatively than that enjoyed by the more prosperous four fifths of the community which lives off earnings on the 1960 scale. To have held the pension in the same relation to earnings as it had in 1957, the standard benefit of a single person would have to be raised by £1 and for a married couple by 30s. We need not preen ourselves too much on our generosity".
  My hon. Friend the Member for Sowerby (Mr. Houghton) suggested that the relationship of pensions to earnings was well worthy of consideration by the Minister even at this late stage. To my mind, each new generation creates its new and higher standard, and unless our pensions are related to those higher standards, they are falling behind reality.
  We were asked by the Minister—and this is what was put to us during the General Election—"Where is the money to come from?" Well, where is the money to come from? The right hon. Gentleman resisted any possibility of a change in his proposals to raise the money through contributions, declaring that a departure would destroy the insurance principle. Where is the insurance principle in this distortion of all the National Insurance benefits by reason of two-thirds of it going to one section? The Minister said today that a man retiring after 1st April, having paid only about £300, would get a pension of a capital value of £3,000. If that is true, I should not have thought that it enshrined an insurance principle.
  The way we are dealing with this vitiates every insurance principle. We pass the burden of giving the increases for presently retired pensioners on to present contributors. Obviously that is not insurance. The man who is to retire after having paid one week of his additional 1s. 5d. contribution will be entitled to an additional 7s. 6d. for life. I wish somebody would introduce me to an insurance company which would enable me to do that.

  323
  Take the case of a man earning £12 a week who comes under the new graduated insurance scheme which also starts next April. How long will he have to pay his graduated contribution—I think it is 2s. 6d. a week—in order to obtain an increased pension of 7s. 6d.? If my figures are correct, the period will be about seventeen years. The right hon. Gentleman calls that the insurance principle. Either one system is right and the other is wrong. It may well be that both are wrong, but one of them is not the insurance principle and the other, as one of my hon. Friends said, is a bit of a swindle.
  We must face this. If we pass on burdens to the contributors which should really be borne by the Exchequer, then we are overloading the contributory aspect. That is why my hon. Friend was right in saying that this is a national responsibility of the general taxpayer.
  When the right hon. Gentleman was at the Treasury he introduced a Pensions (Increase) Bill. He did not visit the cost of that upon the people who were employed in the Departments where the beneficiaries had formerly been employed. It was taken over by the general body of the Exchequer. The same principle is equally applicable here.
  If he wants to make this purely insurance he should accept for the general body of the taxpayers, through the Exchequer, the responsibility for the increases in pensions of those who are already retired. It is as simple as that. It does not vitiate the insurance principle but consolidates it and makes it more real. What is being done is that the individual contributor has to pay very much more than an equitable insurance system would call upon him to pay.
  There is also injustice as between individuals. The right hon. Gentleman says that we have this responsibility for increasing the standard of living of the pensioners, that we must pay for it by this means, and that the sacrifice entailed will meet the responsibility. Who is making the sacrifice under the contributory system sanctified in this Bill?
  No matter how we conceal it by introducing at the same time the new graduated insurance scheme, it means that the lowest paid porter on Kilmarnock railway station will pay 1s. 5d. extra, while
  324
  Mr. Clore, who, I gather, has increased his personal fortune by many millions of pounds over the past few years, will also pay 1s. 5d. extra if he is an employed person and, I believe, 1s. 2d. if he is self-employed. Is there justice in that? Is this the fair way to share the burden of the responsibilities of the nation? There is inequity in this which should be put right.
  The National Insurance benefits which we are now introducing will cost £141 million. The contributors will pay £136 million and the Exchequer £17 million. If anyone says that there is no room for a change of balance as between contributor and Exchequer, he is not facing the facts as they are in this scheme. Let us consider the industrial injuries scheme, which is by far the most satisfactory but which still leaves much to be desired. The right hon. Gentleman decided to increase benefits and reduce contributions. We suggest that he should have left the contributions as they were and still further increased the benefits. He did not do that because that is insurance. The rates there condemn the inadequacy of the other social benefits. If he had taken the advice of my hon. Friend the Member for Sowerby and still further increased the benefits, as they should have been increased, he would have still further condemned the inadequacy of sickness benefit, unemployment benefit and the retirement pension.
  With regard to the timing of the increases, we do not need to press the Minister in Committee to change the appointed day. He has full freedom to appoint an earlier day than he has already given. The first week in April is stipulated for contributions, but there is nothing in the Bill about the date for the introduction of benefits. The decision is left to the Minister. It is for us to see that the needs of retirement pensioners, the unemployed and so on are met before the winter and long before April.
  I was disappointed with the hon. Member for Bradford, West (Mr. Tiley). I expected him to make his stand for an earlier payment. He will remember what he said when we discussed National Assistance scales last year, when he remarked:
  "On the occasion of the debate a few weeks ago my right hon. Friend was implored to make certain changes before the winter. It is

  325
  in that period that extra heat, clothing and food are required …"—[OFFICIAL REPORT, 24th June, 1959; Vol. 607, c. 1245.]
  Does he still think that? I am sure that if he had been speaking more from the heart today he would have put in an extra plea for the appointed day to be brought forward. The more the Minister gave reasons why he should not do so, the weaker grew his case.
  I remember what the right hon. Gentleman said about dangling carrots when we discussed the National Insurance Act, 1959, in Committee. He said:
  "… when we have come to a decision, to announce that decision and go right ahead immediately afterwards with the new measure"—[OFFICIAL REPORT, Standing Committee A, 10th March, 1959; c. 366.]
  He did not then speak about a five months' delay. The pledge he gave to that Committee was that if, having reviewed the position, he saw that there was a need for an increase in pensions, he would go ahead immediately.
  I am disappointed that he has gone back in this way and has given the one reason of convenience of administration. He has not mentioned the trick of concealing the increase within an already anticipated and proclaimed decrease. That is the reason. It is not a lack of money, for there is more than £1,000 million in the Natonal Insurance Reserve Fund which could be used to tide over that period.
  I sincerely hope that in Committee hon. Members opposite will join with us in pressing on the Government the urgent necessity of making considerable changes for the better in the rates and the timing.
  In the past two years the Government, I think, have missed an opportunity. They have raced into the field with a new graduated scheme which is a pretty misguided conception. It has fogged the issue and will fog the issue for many years ahead. This was a time for boldness, a moment for another adventurous advance to bring Britain once again into the vanguard of social security provision. The Government are a long way behind the mood of the people. These proposals are a long way behind the expectations of the people. It is too little, too late and still far too long to wait for that appointed day.
  9.30 p.m.
  The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Patricia Hornsby-Smith): Listening to many of the speeches which we have heard today from hon. Members opposite, one would think that the Government were introducing a reduction in pensions rather than an increase. The hon. Member for Sowerby (Mr. Houghton) suggested that our policy has been inspired by theirs. He even suggested that the Socialist pension offer during the General Election had preceded ours.
  I must remind the hon. Gentleman, first, that our election manifesto containing the pledge was published long before the manifesto of the party opposite and that the pledge was subsequently repeated by my right hon. Friend the Prime Minister fourteen days or so before their—as it was described by my hon. Friend the Member for Torrington (Mr. P. Browne)—auctioning in pensions started.
  Secondly, if to be inspired by the Socialist record is to follow a record that saw pensions reduced more and more below the standard of living, then I do not think that anyone can suggest that the rates now proposed or, indeed, those in operation at the moment, which are far and away ahead of what was demanded by the change in the cost of living, owe any inspiration to hon. Members opposite.
  Although we have heard various guesses about what hon. Members opposite would now propose as a pension rate, only four weeks ago, speaking at the Granville Hotel, Ramsgate, at a Labour Party meeting, the hon. Member for Coventry, Fast (Mr. Crossman) reiterated as the objective of his party a minimum pension of £3 for a single person and £4 10s. for a married couple. The hon. Member for Kilmarnock (Mr. Ross) rejoiced that my right hon. Friend did not hark back to the 1945–50 period. I am not at all surprised that he found that a cause for rejoicing. But when the hon. Gentleman puts on a show of synthetic-fury at our record I wonder what he was doing when, in the words of the hon. Member for Coventry, East, prices, profits and wages soared under the Labour Government and the standard of living of our old people went down. They were cheated over the modest slice of

  327
  the national cake which was provided for them.
  It ill befits hon. Members opposite to condemn the efforts which we have made, which are far in excess of anything that they achieved during their term of office. Many hon. Members opposite referred, rightly, to a new look, and I agree that there is a new look on pensions. It is a new look which has resulted from the sound financial policies pursued by the Government and which has made it possible for my right hon. Friend—who, I thought, was most unfairly attacked by the hon. Member for Kilmarnock—twice to raise the basic rate of pension above that which the rise in the cost of living might have demanded. Indeed, hitherto price movements have offset pension increases in varying proportions.
  In this instance the increase in the cost of living would account for a rise of only 1s. 1d. in the single rate, and only 1s. 9d. in the rate for a married couple. Therefore, with increases of 7s. 6d. and 12s. 6d. respectively, this is a real advance in the standards for retirement pensioners and other beneficiaries.
  They are in marked contrast to anything that hon. Members opposite achieved. Indeed, the vociferous protestations of virtue by hon. Members opposite out of office are in lamentable contrast to their pitiful performances in office. These new rates increase the standards of benefits by more than anything which has been done before, and the difference between the method of hon. Members opposite and ours is that they started with high and sincere hopes but they ran the business of Government so badly that they were careering towards insolvency in 1951.
  Mr. Loughlin: Absolute nonsense.
  Miss Hornsby-Smith: Then why did hon. Members opposite go out of office?
  Despite the fact that pensions dropped in value from 26s. to 20s.—and this has been admitted by hon. Members opposite who obviously know more about pensions than the right hon. Gentleman—even in a desperate rescue situation like that they took between 20 and 24 weeks to carry out that partial rescue operation, and it was only partial. It did not even make up the loss due to the cost of
  328
  living. Also, it covered rather less than 4½ million people compared with the 7 million people with whom we are dealing. While hon. Members opposite were carrying out their increase they knew that the cost of living had risen by 7 per cent.
  On the other hand, we are providing, in an expanding economy, for over 7 million people on National Insurance and a further I million on war pensions, a rise in standards in real terms of over 6s. on the basic single rate, and over 10s. on the married rate, taking into account any increase in the cost of living. At the same time, we are ensuring that the Insurance Fund becomes, and remains, solvent for the lasting benefit of present and future beneficiaries.
  Mr. Spriggs: The pensioners will believe that!
  Miss Hornsby-Smith: My right hon. Friend explained very fully the reasons for not making the increase until next April. It is on the grounds of solvency and practical administration, and so as to coincide with the introduction of the graduated pension scheme. As it is, the Treasury will be making an additional payment of £47 million this year towards the current deficit, in addition to the £123 million already provided under the formula of the Act.
  Some hon. Members opposite have suggested that the whole of the increase should be met by taxation, which would make the Exchequer contribution over £320 million initially, and rising annually. To say that it should come from the Exchequer means in fact, and in plainer terms, that one increases Income Tax to meet it.
  Some hon. Members opposite have suggested that the increase should be made earlier, and, again, that the cost should fall on the Exchequer until April. This would add £12 million a month to the already heavy contribution this year of £170 million. Alternatively, it has been suggested that we should run down the Insurance Fund.
  As the Leader of the Opposition so lucidly explained in his Budget speech in 1951, the economic effect of running down the Fund would be the same as if the cost were met directly from the Exchequer. I think that in their hearts hon. Members opposite appreciate the

  329
  value of an insurance fund from which payment is made as of right for contributions made, and where that fund is divorced and independent from the general economy of the country. If, on the other hand, as some hon. Gentlemen have suggested, the major portion were to be paid for by the State, inevitably that fund would be affected by the restraints and restrictions which would arise if the national economy suffered adverse winds at any time.
  The hon. Member for Sowerby argued that the Exchequer supplement should be retained at the level of the 1946 Act. In fact, the proportion formula applied by the 1959 Act is better and more generous. It is a quarter of the flat-rate employer-employee contributions. It is true that the 1946 Act made provision for expected deficiencies, but, as those payments were not required, they were stopped by the Labour Government in the 1951 Act and, at the same time, they reduced the Exchequer supplement to one-sixth. We brought it back to one-quarter, so I do not think that the hon. Member can complain about our reducing the Exchequer formula.
  Mr. Houghton: I am very much obliged to the right hon. Gentleman for—[HON. MEMBERS: "The right hon. Lady] The right hon. Lady wields the dishcloth so effectively that it would become a man to do it so vigorously. I am very much obliged to her for giving way at this point. What I said was that we should meet the obligations which were anticipated under the 1946 Act, not necessarily only the Exchequer contribution.
  Miss Hornsby-Smith: The obligations under the Act were for a 26s. pension. In fairness to the hon. Member, I should say that we have honoured and extended the amount which is taken in proportion with the employer-employee contributions and it was his Government that, finding the deficiency payments were unnecessary, wiped them out.
  Hon. Members opposite have described this increase as one of emergency. They have pressed very firmly for a speedier payment of the new rates. If this is an emergency, the English language has no expression capable of describing the Socialist operation of
  330
  1951 and the fact that they took 24 weeks to do it.
  We have had various requests for higher rates. On record as official Labour policy is the 10s. increase for a single person's pension and 10s. for a married couple. The hon. Member for Sowerby mentioned a rate of £3 13s. single and £5 9s. 6d. double pension. That would call for increased income of £270 million. Under the present formula, £60 million would fall on the Exchequer and it would call for a 4s. 3d. increase on the joint stamp. To make corresponding increases in war pensions, would mean another £25 million to be found by the Exchequer.
  It is very easy for hon. Members opposite to say, "Put it on the Exchequer". I have no doubt they would be delighted if we put up Income Tax and thus encouraged more wage claims and dealt a terrible blow to industry, but we do not believe that this Fund—which, basically, is one of insurance, where a man gets his pension as of right for contributions paid—should be substantially, or to a very large extent, as has been recommended today, financed by the Exchequer.
  The hon. Member for Ince (Mr. T. Brown) asked me a question about industrial injuries. I can give him the assurance that the Industrial Injuries Fund remains entirely separate and exclusively for industrial injuries benefits, but the Government Actuary decided that the Fund was building up a surplus in excess of the estimates which had been made of the demands upon it. Therefore, we have reduced contributions and increased benefits.
  Mr. T. Brown: The answer to the question I put is not in keeping with what I desired. [Laughter.] This is quite true. I put a straight question and wanted a straight answer What I want to know is this. At the moment, there is a surplus in the Industrial Injuries Fund. Will the Minister or the Department, at some subsequent date, raid that Fund to compensate the National Insurance Fund?
  Miss Hornsby-Smith: I have just told the hon. Member that the Industrial Injuries Fund is exclusively for industrial injuries benefit. I have given him an assurance in the terms for which he

  331
  asked. The hon. Member mentioned, also, the case of the 100 per cent. paraplegic whose rates, with constant attendance allowance and sickness benefit, would be increased from £8 10s. to £9 15s. For the exceptionally seriously injured case, which he mentioned, the total rate would be raised from £10 5s. to £11 15s. under the new rates.
  The hon. Member for Ince said that we were at the bottom of the league table, and the hon. Member for Mother-well (Mr. Lawson) suggested that we had fallen behind. One hon. Member opposite made comparisons with a document produced several years ago by the International Labour Office. In reviewing these comparisons between gross expenditure per head of the population, we have to be careful not to get a wholly misleading indicator of the extent of social welfare, and I do not accept that we are down at the bottom of the league table, or that we have fallen behind.
  That table ignores completely the benefit to the old and sick of a free National Health Service, which is of very real value in this country. It ignores the support prices for agriculture, which keep the price of food in this country amongst the lowest in Europe. It ignores the high contributions paid by employees in Germany, where, for pensions alone, a £9 a week worker would pay 12s. 7d., and a £15 a week worker 21s. 5d. without his employer's contribution.
  If we include unemployment and other benefits, the contribution for a £9 a week man is 21s. 6d. and for a £15 a week man 36s., on top of which come the employer's contribution. The same table ignores the means test imposed in Australia and New Zealand on pensions—ours is without a means test—and the fact that a person does not draw his pension in Canada or in Norway until he is 70, instead of 65 as in this country. I repudiate entirely that we have gone to the bottom of the league table. Hon. Members opposite who denigrate our system would be loath to wait for a pension until they were 70, or to carry the burdens placed on employees abroad to meet some of the benefits which they get.
  On the question of widows, generally speaking, the 1946 Act introduced by the Labour Party replaced the unconditional
  332
  10s. benefit to all widows by a selected system of higher pensions for those who, on widowhood, could not reasonably be expected to maintain themselves by working because they were over 50 or had a young family. This provision, enshrined in the 1946 Act, which followed the recommendations of the Beveridge Report, has remained an insurance principle ever since. It follows, therefore, that if such a widow does work she shows to an appreciable extent that this general assumption, which was used in awarding widows' pensions, does not apply in her case, and her widow's pension or widowed mother's personal allowance is thus subject to the basic rule.
  Basically, the scheme is geared to pay higher benefits to those who cannot support themselves, rather than lower benefits to all, whether they require them or not. In its Report on earnings regulations, the National Insurance Advisory Committee, when considering the increased limit of £5 which was passed by Regulation in this House a few months ago for the widowed mother, said:
  "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 a 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."
  That is precisely what we have done. Under the party opposite the widowed mother with three children was drawing £2 15s. a week in 1951. Under the new rates outlined in the Bill a widowed mother with three children will draw £6 14s. 6d.—an increase in real terms of £3 2s. 1d., which I do not think even the hon. Member for Kilmarnock (Mr. Ross) can call tinkering with the problem.
  Earlier this year we deliberately raised the earnings allowance in favour of widowed mothers. In fact, there have been three changes in the earnings limit in the past four years. The limits have been raised more rapidly than earnings have increased, so that a person can now work to a greater extent than previously without his pension being affected. Under current rates a widowed mother can earn £5 without losing any pension

  333
  and up to £8 before it is eliminated. That is not very different from the average industrial earnings for women, which at present are £7 5s. For widows, the earnings limit is £3 10s., and the pension will not be extinguished until they earn £6 10s. It is estimated that rather less than one-fifth of widowed beneficiaries are having their pensions allowances adjusted on account of the earnings rule.
  If, on the other hand, a widow is in more highly paid employment, above that level, she does not qualify under the terms of the Bill as being unable to support herself, and the earnings rule operates accordingly, although she continues to draw her children's allowance, which will never be affected by earnings. Assuming that a widow is in full employment and is earning over £6 10s. a week, can we really justify paying her a full pension even though she is over 50 if she is fit and able to support herself, while making her spinster sister, solely because she never had a husband, work until she is 60 before being eligible for any pension? As it is, a pension is payable to those who are 50 and widowed in recognition of the real difficulty of women of that age starting in fresh employment.
  The hon. Member for Sowerby raised the question of excepted employees. The excepted group are those with modified rates of pension which were awarded up to 1953 under the transitional arrangements of the Socialist Government, taking into account their limited periods of contribution. Since 1953, these awards have been at the full rate. At this stage, it is not possible to rewrite the transitional arrangements, but those pensioners receive an increase which is proportionate to the increases in the standard rates.
  The question of non-contributory pensions was also raised. These pensions have always been based on a test of need. They are outside the proposals now before the House, and as the years go on they are rapidly becoming obsolescent. As there has always been a test of need they are most appropriately dealt with by the National Assistance Board, which, at the same time as it considers the non-contributory pension, is in a position to exercise, and does exercise, its power to provide additional grants on National Assistance Board standards.
  334
  My hon. Friend the Member for Bournemouth, West (Mr. Eden) asked my right hon. Friend if there was any bias against private schemes. I can assure him that there is no such bias, as is borne out by the provisions that we have already made for contracting out.
  I was also asked about the old workmen's compensation cases. These do not properly come under the Bill, but they are being kept under review and many of their members will benefit from the increases in sickness benefit and retirement pension rates which are operative under the Bill.
  My right hon. Friend dealt with the comparisons between the existing rates, and, indeed, the comparisons which from time to time are thrown up to us by hon. Members. The scene changes as we do better. It used to be the cost of living. Then we go to another scene as Her Majesty's present Government do better in insurance schemes.
  Mr. Houghton: The wind of change.
  Miss Hornsby-Smith: It has been a warm wind for the pensioners.
  Whether we take it on retail prices on average earnings or on personal disposable income, these new rates stand up to the test. The retail price index has risen from 108·1 to 110·5 whilst the food index, which is of special concern to old people, has only risen from 105–4 to 106·1. So that an increase of 1s. 1d. single or 1s. 9d. married would have met the claim that pensions should be tied to the cost-of-living index.
  If we compare pensions with industrial earnings, there has been an 11½ per cent. increase in industrial earnings since the last pension award, which would have meant an equivalent rise in pension of 6s. single and 9s. double against the 7s. 6d. and 12s. 6d. that we are providing. Taking the whole period since the Government took office, average earnings have risen 70 per cent. against which the proposed rates represent an increase of 92 per cent. single and 85 per cent. married over the 1951 rates.
  An hon. Member wanted to take personal disposable income as an index. That has increased 9½ per cent. and would have provided an additional pension of 4s. 6d and 7s. 6d. instead of 7s. 6d. and 12s. 6d. If, on the other hand, we compare it with the record of hon. Members opposite, the most favourable rate in real terms which they ever

  335
  provided, namely, the original rate of 26s. in 1946, would today be equivalent to 44s. 1d. single and 71s. 2d. married. Therefore, the real comparison is between what their pension was worth and what ours is worth at the present time.
  Mr. E. G. Willis: The real test is how they live.
  Miss Hornsby-Smith: Several of my hon. Friends have referred to the two-tier system. We cannot go with them on the question of a two-tier system. Our pledge was to all pensioners, and we believe that a pension should be as of right without test of need. By this Bill we are honouring the pledge we gave to the old people at the time of the General Election. We are providing a standard rate of pension and other benefits higher in real terms than ever before; and, equally important, we are safeguarding the solvency of the National Insurance Fund and the contributory principle inherent in a scheme which provides the benefits as of right regardless of need.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Chichester-Clark.]
  Committee Tomorrow.

  NATIONAL INSURANCE [MONEY]
  [Queen's Recommendation signified.]
  Considered in Committee under Standing Order No. 84 (Money Committees).
  [Major Sir WILLIAM ANSTRUTHER-GRAY in the Chair]
  Resolved,
  That, for the purposes of any Act of the present Session to amend the rates or amounts of contributions and benefits under the National Insurance (Industrial Injuries) Acts, 1946 to 1959, and the National Insurance Acts 1946 to 1959, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act of the present Session in the sums payable out of moneys so provided under—

  (a) subsection (1) of section sixty of the National Insurance (Industrial Injuries) Act, 1946 (as extended by section seventeen of the National Insurance Act, 1959); or

  (b) subsection (1) of section thirty-eight of the National Insurance Act, 1946 (as extended as aforesaid); or

  (c) subsection (3) of section one of the National Insurance Act, 1959.—[Miss Hornsby-Smith.]

  Resolution to be reported.
  Report to be received Tomorrow.

  EAST GERMAN BUSINESSMEN (VISITS TO BRITAIN)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]
  10.1 p.m.
  Mr. G. B. Drayson: The subject I wish to raise tonight is that of the restrictions now being placed on East German businessmen and technicians wishing to visit this country. However, the first thing I wish to do is congratulate my hon. Friend the Joint Under-Secretary of State on his new appointment. I believe that this will be his first speech at the Dispatch Box in his new office. I feel sure that, coming as he does from the Ministry of Agriculture, he will bring a breath of fresh air and sound common sense to his new office. Secondly, I must declare my own personal interest in this matter, because I am associated with businesses which are actively engaged in the import and export business with many countries throughout the world, including East Germany.
  I always thought that it was our policy to remove travel restrictions wherever possible, but I now find that, since September, and even before then, travel between this country and East Germany has been restricted for businessmen who wish to come to this country. East Germany, of course—otherwise known to many as the Soviet Zone of Germany—after the arrangements made at Yalta and Potsdam, has been known by some during the last ten years as the German Democratic Republic. It is a State under Soviet protection and patronage, not recognised by the Western Allies, although it is recognised by some countries of the world.
  The East German territory has a population of 17 million people, larger than the populations of Holland, Belgium, Denmark, Norway or Sweden. In fact, it is the fifth industrial Power in Europe. It is a country with a planned economy and, this being so, business is difficult though by no means impossible. I am told that East Germany's total exports amount to £800 million a year, of which the United Kingdom share is only £7 million. I should say that it is £7 million each way, making a total of £14 million. To my mind, that is far too

  337
  little and it should be increased. Great efforts are being made by many people to increase trade with East Germany, but their efforts do not meet very much encouragement.
  There is now a new factor adding to the difficulties, namely, the inability of East German businessmen and technicians to come to this country. I understand that this arises because the East Germans are placing certain restrictions on West Germans going into East Berlin. The trouble arose, of course, out of meetings of various organisations which took place in September in West Berlin. The House may remember that at that time there were rallies of ex-prisoners of war associations Which caused a certain amount of concern in this country. In a leading article at the time, the Daily Mail said:
  "To hold the gatherings now is perhaps a little provocative."
  It also stated:
  "So was the demand made by Professor Erhard, a few days ago, for the return of Upper Silesia".
  The Daily Telegraph, in a leader, referred to the
  "unnecessarily frank speeches about frontiers by Western German politicians".
  It thought that this might be
  "testing the air for next year's elections".
  The Daily Express said that
  "Britain must have misgiving about these rallies",
  which were certainly not intended to lower tension in the city.
  The Potsdam Agreement—not that anyone pays much heed to that document now, although some of us think that the sentiments which it expressed were the things for which we had been fighting—clearly lays down what was to be the situation after the war:
  "All German land, naval and air forces, the S.S. and Gestapo with all their organisations, staffs and institutions, including the General Staff, Officers Corps, Reserve Corps, Military Schools, War Veterans organisations together with all clubs and associations which serve to keep alive the military tradition of Germany shall be completely and finally abolished in such a manner as permanently to prevent the revival or reorganisation of German militarism".
  I have a suspicion that it may well have been some of these clubs or associations holding these rallies in September this
  338
  year which gave rise to our present difficulties.
  What we find is this. Although restrictions are placed on East German businessmen and technicians coming to this country, they are perfectly free to travel at will in and out of West Berlin, as are the West Berliners, and into West Germany itself to place their orders. All that I am asking tonight is that British business firms should be placed in precisely the same position as West German firms. As East Germans can travel freely to West Germany to discuss their business problems, and vice versa, they should be equally free to travel to Great Britain to place their orders with our companies if they so wish.
  We must always remember that West Germany is our biggest trade rival. According to reports from Washington, she has just pushed us out of third place of exporters to the United States. I am told that great pressure was brought by Dr. Adenauer or the Bonn Government on the British Government to impose these restrictions. I would ask: since when have we been subject to pressure from Bonn as to how we are to conduct our business affairs? Meanwhile, we are losing business which is going to Western Germany.
  In June this year I visited an agricultural fair in Leipzig. A great deal of interest was shown in two Aberdeen Angus cattle, a bull and a heifer, which were being exhibited there. Following this an invitation was received from the Royal Agricultural Society to visit the Royal Agricultural Show at Cambridge, and I was told that the West Germans intended to spend at least £250,000 on British livestock, seeds and agricultural equipment. But no visas were forthcoming.
  Mr. Jack Jones Mr. Jack Jones (Rotherham) rose——
  Mr. Drayson: I have very little time.
  Mr. Jones: I am trying to help the hon. Gentleman. Will he tell us how he managed about the currency and exchange rates?
  Mr. Drayson: I will deal with that in a few moments.
  This amount of money, £250,000, was to be spent on British livestock. A number of eminent agriculturalists in East

  339
  Germany proposed to make a visit, but no visas were forthcoming. While no East German agriculturalists are permitted to come to the Royal Agricultural Show in Cambridge, all the time the West German Government are carrying on negotiations. I have a Reuter's report of 1st September which states:
  "A new trade agreement has now been concluded between West Germany and East Germany for the year 1961 in which at least £4 million of livestock and animal products are to be purchased by the East Germans in Western Germany."
  All the time they were preventing the East Germans from coming here to place their orders with British agriculturalists they were signing an agreement behind our backs to export those very items to the East Germans themselves. When it is said that this trade agreement which was concluded on 1st September has now been suspended, few people attach any importance to that. What we have heard is that the old agreement, on which there is quite a lot of leeway to be made up, has been extended to the end of March next year and, in some instances, to the end of the year.
  Again, in the Sunday Times, we read from that journal's Bonn correspondent that
  "For the first time, Dr. Adenauer also has optimistic things to say about the chances of negotiating a new trade treaty with East Germany … Dr. Adenauer said he has given the West German officials concerned in talks for a new treaty instructions to 'negotiate elastically'."
  Thus, while we are put in a straitjacket, West German officials are given instructions by Dr. Adenauer to negotiate elastically with the East Germans for a new trade agreement. The report goes on to say that
  "Unexpectedly friendly words for Mr. Khrushchev have come from the Federal German Chancellor."
  Having cooked the British goose, the West German Chancellor goes cooing like a dove to Moscow. If his officials are to negotiate elastically with the East Germans for a new trade agreement, I should like to know whether our officials at the Board of Trade have been given any similar instructions.
  As the Germans did not come to the Royal Agricultural Show, I hoped that they might come to the Dairy Show. Again, no visas were available. I have
  340
  asked my right hon. Friend the Lord Privy Seal whether visas will be available for the Smithfield Fatstock Show in December, but he tells me that he can give no assurance that they will be available. Why should the British farmers and livestock industry be penalised in this way while the West Germans do not have these same disadvantages?
  It was reported the other day that Czechoslovakia was buying 2,600 head of cattle—heifers, bulls and cows—from Denmark as a result of cattle that were sent for trial in 1957. No doubt, that was precisely the purpose of the Aberdeen Angus at Leipzig this year. It is now on trial in East Germany, and I hope that as a result substantial orders will be placed. The farmers and their representatives must, however, be allowed to come to this country and see the cattle for themselves; and they must be treated well, because that has a lot to do with whether they form a favourable view of what they come to see.
  The same thing applies to steel, and in this I know that the hon. Member for Rotherham (Mr. Jack Jones) will be interested. I understand that over the past year our machine tool exports to East Germany have trebled from £600,000 to £1,800,000. That is attributed entirely to the fact that a large number of East German technicians and professors have been able to visit our machine tool industry and see for themselves the quality of British machine tools. They have bought our machines whereas previously they bought from West Germany. I was told, however, that they needed a lot of convincing. People in the Communist countries are somewhat conservative. They took a great deal of trouble to discover whether our machines would do the job. Finally, they increased their orders threefold compared with the previous year.
  The other day, I happened to be in East Berlin. I did not notice any restrictions on the movement of people going in and out. I met the head of the East German steel organisation, Deutsche Stahl, and Mr. Samisch. He is well known in England and has been over here during the past year and has met all our steel people. There is hardly a major steel company which he has not visited. Now, he cannot get a visa. He

  341
  told me that he was therefore going to Japan and would place his order for steel there if he could not come to the United Kingdom. What is more, he was going via Paris, where he thought that he would have no difficulty in having business consultations while he was there in transit.
  Hon. Members may have noticed that on Saturday the Economist referred to this as "embargo by passport" and said that it stops trade visits and that it may well stop orders being placed. It does not, however, stop the East Germans from getting the goods, because they will give the orders to our rivals. As a result, we lose the business. I understand that there was a visit some time ago from Eastern Germany by the Minister for Chemical Industry, Professor Dr. Winkler, who came over with six top technicians. As a result of that visit he placed an order for £4 million worth of chemical plant in this country. We were then in competition with Lurgi of West Germany. Of course, Lurgi of West Germany does not want East German technicians coming to this country to place orders of that nature here. No wonder they wish the restrictions to be continued.
  I find that this ban is not confined only to trade but extends to sport as well. That, I think, is most distasteful to any Englishman. Recently, in the European Amateur Football Union Cup the East German team, Wismut, were to play Glenavon in Belfast, but no visas were available. The Football Association intervened. I understand, but without success. The Glenavon team considered themselves victims of politics and sent a telegram saying that against their own wishes they had to retire from the event, so that the match went to the East Germans by default.
  In September, I understand, East German Olympic athletes were prevented from appearing art the White City because there were no visas available for them to this land of sportsmen. Only last week there was a figure skating competition at Richmond Ice Rink, and the East German skaters were not allowed to come because there were no visas. There was a film festival at the National Film Theatre, where an East German film, "The Confusion of Love", which has no
  342
  politics in it, was shown, but the producer and the leading lady, and an East German film executive, who wanted to come here to buy British films, were refused visas. Again, this week at the Motor Cycle Show at Earls Court the East Germans are exhibiting their machines which, I am told, are attracting a certain amount of interest, but the champion riders of East Germany are not allowed to be present to meet riders of this country or to explain their machines to them.
  I was attracted by a reference in the Yorkshire Post the other day to some remarks of Mr. Mustill, Chairman of Leeds Productivity Committee, who has returned from Scandinavia, and who said that he was
  "convinced that British industry must go out and sell to challenge growing German domination of European markets."
  If the Germans are to dominate markets by this means, it is far from satisfactory. He went on to say:
  "But there is no substitute for personal visits."
  He was told quite frankly that
  "the Germans are gaining ground because their top level management is more prepared to travel."
  Catalogues are no substitute for personal visits, and buyers must be able to see what is available and go into these matters as thoroughly as possible.
  I could say a great deal more about this subject, but there is not time. All I am asking tonight is that British business firms should be placed on the same basis in relation to East Germany as firms in Western Germany or any other country. I am told that these matters do not unduly worry the East Germans, even if the trade agreements are not continued, because they are now having discussions as to how they can continue to do the trade through third countries, but I want to demand equality with Western Germany for British firms, and fair play for British business firms, firms who are responding to the Prime Minister's exhortations to increase our exports overseas.
  10.19 p.m.
  The Joint Under-Secretary of State for Foreign Affairs (Mr. J. B. Godber): I am grateful to my hon. Friend the Member for Skipton (Mr. Drayson), first, for his kind words to me, which I very

  343
  much appreciate, and also for raising this matter tonight, because I know the particular interest and concern which he has in this matter. Of course, I also recognise the interest which the hon. Member for West Ham, North (Mr. A. Lewis) has in the matter, and I am sorry that I could not give him time to speak in this debate. I am sure that he will appreciate my difficulty. This is a matter, I know, of concern to various Members of the House.
  It is important, however, to remember that any steps which we with our allies have taken have followed from the action of the East German authorities in restricting the freedom of movement of German civilians within Berlin. My right hon. Friend the Lord Privy Seal referred to these matters in his speech in the House on 4th November and I do not think that I need to repeat what he then said, other than to remind the House that the Western alliance is not prepared simply to acquiesce in illegal actions, whether taken by the Soviet or the East German authorities. Important principles have been infringed, principles which are the responsibility in the first place of the three Powers, who, consequently, could not simply leave it to the Federal German Government to take counter-measures. In the view of Her Majesty's Government it was essential to make clear at this stage the seriousness of the situation that would arise if the Soviet or East German authorities were to make further attempts to alter the situation in Berlin unilaterally to their own advantage.
  My hon. Friend made the point about the meetings in Berlin which had led to this particular ban. I should remind him, in the first place, that these meetings constituted no kind of threat to order in the city, nor could they be regarded as a provocation.
  Mr. Arthur Lewis: Is it not the fact that they demanded back their Eastern territories? Surely that is provocation.
  Mr. Godber: If the hon. Member will wait, I am trying to develop this point.
  Of the two meetings which the East Germans used as an excuse, one, the "Day of the Homeland", had been held in Berlin for the last eleven years, and the other, a Congress of the "Associa-
  344
  tion of Returnees, Prisoners of War and Relatives of Missing Persons", which was perfectly innocuous, was simply held in Berlin in accordance with the association's practice of holding its annual meetings at different places in Germany. Both meetings were conducted with marked moderation. The truth is that the East German régime finds every kind of democratic meeting in West Berlin objectionable, just as it finds the very existence of a free way of life in West Berlin objectionable; and to isolate West Berlin and sever its natural links with the Federal Republic, the East Germans attack particularly meetings in West Berlin which are attended by persons from the Federal Republic. I should like to develop that further, but I must go on to deal with other points and I ask hon. Members to view this matter from an objective point of view.
  The Allied Travel Office in West Berlin, which is administered jointly by Her Majesty's Government and the United States and French Governments, has taken steps to withhold from East Germans the "temporary travel documents in lieu of passports" which they require to be able to visit Western countries whose Governments do not recognise the passports issued by the East German régime. This action has been taken by the three Powers since the Allied Travel Office is a tripartite office, but the other N.A.T.O. countries are supporting the practical application of these restrictions so as to prevent evasion of them.
  In joining in imposing these restrictions, Her Majesty's Government recognised that they were bound to have an effect upon trade and other contacts, such as sport, which my hon. Friend has mentioned, between this country and East Germany. At the same time, they considered that this form of restriction was the best means to hand, both as a counter-measure and as a demonstration that the Western Allies would not acquiesce in further Soviet or East German illegal actions. I cannot give any undertaking as to the ending or alteration of these restrictions, although, clearly, it would be different if the illegal restrictions imposed by the East German authorities were annulled.
  It would appear that my hon. Friend is not so much disposed to disagree with

  345
  the action that we have taken as to voice fears that it will result in discrimination against British trade as compared with the trade of other N.A.T.O. countries, and, in particular, the Federal German Republic. I assure my hon. Friend that this is not the result that I would expect at all from the measures that have been taken. As for other N.A.T.O. countries, they are supporting the application of the restriction on the issue of temporary travel documents in the same way as we are doing in this country.
  In the Federal Republic the situation, of course, is different since, in accordance with the principle of freedom of movement in Germany, to which we attach so much importance, East Germans must be able to visit the Federal Republic. That must be so. However, the effect of the actions taken by the Federal Government in the field of inter-zonal trade is such that British trade certainly should not suffer unfairly; indeed, if anything, the resultant situation is more likely to be of detriment to West German trade with East Germany. Whereas no restrictions have been placed upon British trade with East Germany as such, the Federal Government have given notice to terminate the inter-zonal trade agreement at the end of this year. As a result, unless and until new arrangements are made, inter-zonal trade is limited to a continuance of deliveries contracted for and licensed under the 1960 list of goods so far as the quotas have not already been filled.
  Mr. A. Lewis: What about trade in agricultural products?
  Mr. Godber: I shall come to agriculture in a moment.
  I would especially draw the attention of the House to my use of the word "quotas". In fact, as these quotas under the existing trade agreement are completed, no further deliveries in the category of goods concerned will be possible unless and until fresh agreements are entered into. I emphasise that as a very important restriction indeed. The fact is that this agreement has been cancelled as from the end of this year.
  The hon. Member for West Ham, North asked me about the agricultural position. I think it is important to get this matter in its proper perspective. My hon. Friend and the hon. Member
  346
  for West Ham, North appear to believe that we have lost an opportunity for the export of British livestock to East Germany. I take it that the reference is to difficulties which arose over the visit of a German party to the Royal Agricultural Society's show at Cambridge last July. This was, of course—this is of importance—before the present restrictions were imposed. These difficulties arose for an entirely different reason.
  The difficulties arose because the East German authorities proposed to send to the show an official delegation headed by their Minister of Agriculture or State Secretary, for which my right hon. Friend the Home Secretary decided that visas should not be granted. This decision was taken—this is important, and I emphasise it to the House—having regard to Government policy in relation to visits to this country by people prominently concerned with the East German régime. As I think the hon. Gentleman knows, this particular difficulty over the issue of visas could have been avoided if the East Germans had put forward at the time, instead of an official delegation, the names of agricultural experts.
  Mr. A. Lewis: But they were sending their Minister.
  Mr. Godber: I cannot give way to the hon. Gentleman; I want to develop what I have to say further. The hon. Gentleman is now suggesting that the right thing to do is to send a Minister. I suggest that if one wants to make a visit from an agricultural point of view—I speak with some experience of agricultural matters—one sends experienced people to look at livestock. One does not normally send Ministers.
  Mr. A. Lewis Mr. A. Lewis rose—
  Mr. Godber: I cannot give way The point is that had the East Germans wanted to send experts, the position would have been entirely different. However, I say that this point is not relevant to this particular problem.
  No restriction, I would remind the House, has been placed on British trade with East Germany as such. There is no obstacle in the way of travel by British business men to East Germany. The Government, in fact, would like to see this trade developing normally.

  347
  British exports to East Germany have increased from £2¼ million in 1958 to £5½ million in the first nine months of this year. British imports from East Germany have risen from £3,407,000 in 1958 to £4,689,000 in the first nine months of this year. This is the kind of normal development of trade which we should like to see. But it must be faced that there might well be repercussions on trade if the East German régime were to pursue further its present policies with regard to Berlin. Trade can be developed only if the right atmosphere exists; and it is the East German régime which is to blame for creating artificially the present uncertain political situation. I emphasise that most strongly.
  I wish I had longer to deal with this matter, but perhaps I may conclude by saying that the present restrictions on the issue of travel documents to East Germans have been brought upon the East German régime by its own illegal actions. It was necessary for the Western allies to demonstrate their firmness in the face of actions of this kind, and the travel restrictions were imposed as the best means of doing this. The Government will continue to keep these restrictions under review and to see that no
  348
  unfair detriment is done to British trade. At the same time, we must be ready to fulfil our commitments to the people of Berlin, and I ask the House to remember that. The cost in inconvenience of the present restrictions would surely be infinitely less than the price that might later have to be paid for weakness now.
  That is the issue that I put to the House, and I ask hon. Members, whatever their interests in this matter are, to look at this objectively and to recognise that there is a problem here. We want this trade, and we want to encourage it in any way we can, but we cannot overlook the restrictions which have been imposed. It would be wrong to our allies, and it would be wrong to those in Western Germany.
  I would suggest that we have adopted as fair a compromise as we can, and we are always willing to look at any special case which may be brought to our notice. So, while I sympathise with the difficulties of my hon. Friend and the hon. Member opposite, I regret that these are special circumstances, and I must ask the House to take note of them.
  Question put and agreed to.
  Adjourned accordingly at half-past Ten o'clock.