NATIONAL HEALTH SERVICE CONTRIBUTIONS BILL

HC Deb 16 March 1961 vol 636 cc1774-900

[3RD ALLOTTED DAY]

Order for Third Reading read.—[Queen's Consent on behalf of the Crown, signified.]

4.34 p.m.

The Economic Secretary to the Treasury (Mr. Anthony Barber)

I beg to move, That the Bill be now read the Third time.

In view of the time, I shall not take long in moving the Third Reading of the Bill, but I should like to pay tribute to the hon. Member for Sowerby (Mr. Houghton) and the hon. Member for Kilmarnock (Mr. Ross) who led the Opposition throughout consideration of this important Bill. I am happy to see around me one or two familiar faces of others who played a prominent part. The hon. Member for Sowerby, I am sure the whole House will agree, regaled us with arguments from time to time with his accustomed courtesy. He once again showed his encyclopxdic knowledge of the way in which our system of National Insurance is financed and of the financing of the Health Service.

If the temperature of the Committee was from time to time raised by the Member for Kilmarnock, I can only say that having once spent a night with him in the desert I know that his heart is in the right place. Everyone will agree that on any ground we have had a full series of debates on this Bill. We had a censure Motion which took six hours, we had a debate in Committee of Ways and Means which took three hours—

Notice taken that 40 Members were not present:

House counted, and, 40 Members being present—

Mr. Barber

I was pointing out that the censure Motion took six hours and three hours were spent in debate in Ways and Means. Then we had fourteen hours on Second Reading and twenty-eight hours in Committee. If we assume that half the censure debate was devoted to this Bill and that we shall be dealing with the Bill for more than six hours today, we shall have spent on the Bill all told fifty-four hours, a period which some people would consider a normal working week. I ask the House to remember, in comparison with that fifty-four hours, that twenty-three hours were spent on the 1958 Bill and only fifteen hours on the 1957 Bill.

Our discussions have been both long and full, and as far as I am concerned they have also been interesting and useful. The debates we have had during the last two days of the Committee stage of the Bill were particularly useful and if I may answer the hon. Member for Kilmarnock—for my part very educative, a consequence perhaps not entirely unconnected with the fact that the debates were taken on the basis of a timetable. I do not think anyone could seriously pretend that enough time was not provided for the Committee stage of the Bill because, whatever else hon. Members opposite say, they cannot complain that they have been prevented from dealing fully with the detailed aspects of these proposals. There have been debates on all of what I might call the special groups of contributors. It was particularly valuable for all of us to have the very extensive views of hon. Members opposite on the intricacies of the drafting of Bills.

The general case for these disposals has been stated on a number of occasions from this side of the House. Perhaps I can best sum it up in this way. This Government cannot be accused of having neglected either the Health Service or the social services in general. The cost of the Health Service has more than doubled in the last ten years. That is an undeniable fact. It is true that this is in money terms, but in real terms also expenditure on the Service has gone up by something like a third. Expenditure from the Exchequer on the social services as a whole has nearly doubled in the last ten years.

As hon. Members opposite have said, the argument on this Bill is an argument about the financing of the Service. They say it is an argument of principle; we say it is not. Certainly there is nothing new in the principle that the Health Service should be financed in part from contributions income. The hon. Member for Sowerby came what seemed to me a long way towards agreeing with us that there always has been a sense in which the National Insurance contribution provided a portion allotted in aid of the National Health Service.

We do not say that we should impose a contribution just because the Labour Government did so. We ask that our actions should be judged on their merits and say that the Opposition cannot claim that these proposals are an attack on the principles of the Service. Indeed, the hon. Member for Sowerby was most helpful in his intervention on Second Reading when he quoted to the House a passage from paragraph 430 of the Report of the then Sir William Beveridge which, I must confess, had not gone completely unnoticed by the Government. I will read the passage again, because it is very relevant: There is no obvious reason, apart from a desire to keep the insurance contribution as low as possible, why insured persons should be relieved of the burden wholly, in order that they may bear it as tax-payers. If importance attaches to preserving the contributory principle for cash benefit, it attaches also to contributions for medical treatment. At other times hon. Members opposite seemed to despair of being able to convince us on this side of the House of what they regarded as the simple truth that there was not National Health Service contribution before 1957. I ask the House to consider the facts. The only difference in the arrangements made by the 1957 Act, was that before that Act the health element in the contribution came to the National Health Service by being transmitted through the National Insurance Fund. Since that Act it has been transmitted through the Exchequer, and I will say something about that later.

My hon. Friend the Financial Secretary and I have certainly heard nothing in the lengthy debates we have had to shake our belief in the fact that this is all a question of judgment—in other words, what is the right proportion of the Health Service to be financed by the Exchequer and how much by the contributor, and how much is it reasonable to ask the contributor to pay?

The hon. Member for Kilmarnock was concerned at one point that we had not turned our attention to the question whether it was right to ask the contributor to pay. That is exactly what these debates have been about. We on these benches do believe that it is right for the contributor to pay, and, what is more, the Labour Government also thought that it was right for the contributor to pay.

Mr. Douglas Houghton (Sowerby)

I am allowing some provocative comments to pass uninterrupted, but I warn the Economic Secretary that I shall deal with them in my speech.

Mr. Barber

I shall be very happy to hear what the hon. Member has to say, because the reference I made to him was, in fact, as he realises almost a quotation from his speech.

In the debates we have had on this subject, which have extended over a number of days, hon. Members opposite have questioned our judgment as to whether the total contribution is reasonable. They are entitled to do so, and we are entitled in our turn to say that we believe that the total contribution is reasonable.

I promised a few moments ago to say something about the business of the contribution passing through the Exchequer. During one of our debates in Committee the hon. Member for Fife, West (Mr. W. Hamilton) asked me whether all the money that will be raised under the Clause will be devoted to the National Health Service. He also asked me this question: Will all the money raised in Scotland be devoted to the Scottish Health Service?"—[OFFICIAL REPORT, 9th March, 1961; Vol. 635, c. 707.] The hon. Member for Kilmarnock answered his hon. Friend, but I am afraid that he got it somewhat wrong. He intervened to say this: …one lot"— that is, the insurance contribution— goes into the National Insurance Fund and the other"— that is, the health contribution— gets lost with the rest of the moneys going into the Exchequer. I have looked this up, and that is not the position. I refer the hon. Members for Kilmarnock and Fife, West to Section 1 (4) of the National Health Service Contribution Act, 1957, which states that contributions, having been paid to the Minister of Pensions and National Insurance, shall be taken to be so paid for the benefit of the Minister of Health, towards the cost of the national health service in England and Wales, and of the Secretary of State, towards the cost of the national health service in Scotland… The subsection goes on to state—I hope that these words will not strike too much terror into the hearts of hon. Members opposite who sit for Scottish constituencies— in such shares as the Treasury may determine.

Mr. William Ross (Kilmarnock)

It is as well to get the history straight. I should be very glad if the Economic Secretary would quote the column from HANSARD where I gave this information in reply to my hon. Friend the Member for Fife, West (Mr. W. Hamilton). My recollection is that the hon. Member himself told my hon. Friend that it had nothing to do with Scotland but was a United Kingdom Measure. I corrected him from my sedentary position.

Mr. Barber

I quoted exactly what the hon. Member said. It is column 707 of the OFFICIAL REPORT for 9th March. The hon. Member intervened to say: Does the hon. Member appreciate that this money is collected with and cannot be separated from National Insurance contributions? It goes into what is referred to as a combined contribution. After that "— the next passage is what I quoted— one lot goes into the National Insurance Fund and the other gets lost with the rest of the moneys going into the Exchequer. That is what I was dealing with. As the hon. Members knows, it is true that I dealt with the matter on the basis that it was concerned with the United Kingdom. That is why I am dealing with the Scottish point. The point I was trying to make was that it is not quite true to say, as the hon. Gentleman did say, that one lot goes into the National Insurance Fund and the other gets lost with the rest of the moneys going into the Exchequer."—[OFFICIAL REPORT, 9th March, 1961; Vol. 635, c. 707.] That is not the case. The split made by the Treasury between Scotland and England is made after consultations between my right hon. Friends the Secretary of State for Scotland and the Minister of Health. Since I was asked this question, the hon. Member may like to know that it is settled on the basis of a share of nine-tenths for England and Wales and one-tenth for Scotland, which I think the hon. Member will consider fair.

Mr. E. G. Willis (Edinburgh, East)

No.

Mr. Barber

The hon. Member doubts it, but it is exactly the right distribution according to the number of contributors in the two parts of Great Britain. It is based on the Ministry of Labour regional analysis of employed persons as adjusted by the Government Actuary's estimate of self-employed and non-employed.

Mr. Ellis Smith (Stoke-on-Trent, South)

I want to understand the Economic Secretary's position. When the Bill is enacted, every insured contributor will know the contribution he will have to pay to the National Health Scheme. There will be no doubt about that. In view of what the hon. Member has said, will he tell me what an insured contributor paid out of his wages each week prior to 1950?

Mr. Barber

I cannot without notice, unless I hold up the work of the House, give an answer off the cuff to that question, but I am sure that it is one of the facts that my hon. Friend the Financial Secretary will consider. I have the information here, because it is a matter which we dealt with during the Committee stage, but time is moving on and we started rather late.

I want to turn to some of the more serious criticisms which hon. Members opposite made of these proposals in Committee. The first general criticism, apart from the major criticisms of the Opposition to the increase in the contribution as a whole, was made by the hon. Member for Sowerby in a closely reasoned speech criticising the fact that the relationship of the health contribution to liability to pay the insurance contribution caused a number of anomalies, and he returned to this point on one or two occasions.

In his first intervention the hon. Member mentioned three of them—older men and women over 65 and 60, respectively, who go on working, married women, and of course students. This so-called anomaly arises because the health contribution is tied to the insurance contribution. In other words, anyone who opts to pay, or for special reasons has to pay, the one also has to pay the other. To put it the other way round—it is just as fair to put it this way anyone who chooses not to pay the insurance contribution is excused paying the health contribution. In a sense, this is an anomaly. It has existed ever since 1946.

It is true that there was an opportunity to reconsider the matter and put it right in 1957. As those hon. Members who followed our debates in that year will remember, the Government decided that if the arrangements for collecting National Health contributions were to continue, it was essential that the liabilities for the two contributions should move in parallel, and, indeed, to have made any other decision would have caused very considerable administrative difficulties which the House would not have wanted to face.

Each of the various groups to which the anomaly applies is such that quite separate considerations apply in each. The anomaly, if there is one, with the over 65s is not an anomaly in the same sense as that with those classes who choose to pay or not to pay insurance contributions, for example, married women. The tie-up between insurance and health was criticised as imposing on the married woman who opts to pay an insurance contribution a further liability for the health contribution, but, as I tried to point out during the Committee stage, the anomaly is the other way round, because the Health Service contribution is a flat rate contribution, which is what it has always been. Logically, there is a case for submitting that all married women in work, whether or not they opt out of paying National Insurance contributions, should continue to pay National Health Service contributions and that only that is the real anomaly.

Last week, we had a long debate on the position of those people earning less than £9 a week. Hon. Members opposite will agree that in a way that was the core of the Opposition's criticism of the proposals. My hon. Friend the Financial Secretary dealt with the matter fairly fully on that occasion, and I do not want to do more than to say that in the Government's opinion the new rates of contribution will not be oppressive. I know that hon. Members opposite take a different view, but at least they must give us credit for holding with sincerity the view which was expressed by my hon. Friend on that occasion.

To paraphrase the case which hon. Members opposite were making, they did not like the contribution and they said that if we were to go on levying it it ought to be related to income. Some hon. Members opposite may have in mind—and it was clear from some of their speeches that they did—the idea of a middle course by which the Health Service contribution would be related to ability to pay but would be collected separately from Income Tax. That would be one step in the direction of a social security tax, and I am not at all sure that that is what hon. Members opposite want. In any event, to set up a new graduated tax in this way would be extremely expensive in administration and would certainly need many more officials to administer it.

Hon. Members opposite have suggested—quite fairly—that it is not enough simply to consider the health contribution and they have said that one must consider the total National Insurance and National Health contributions. That is a perfectly fair argument. They pointed out that the total contribution, which they regarded as particularly onerous for the lower paid worker, would rise in July, whereas, it was said, under the 1959 Insurance Act the contribution for the lower paid worker would have fallen. That was a point made by several hon. Members in Committee.

Mr. Willis

It is very true.

Mr. Barber

Of course, something of considerable significance has happened since then, as the hon. Member for Edinburgh, East (Mr. Willis) knows, because the Government have increased the benefit and to pay for the benefit it has been necessary to increase the contribution. I will say more about that in a moment. My point is that but for the new arrangements under the 1959 Act the contribution for the lower paid worker would have been considerably higher. It is perfectly fair to continue to claim, as we do, that the Government are concentrating help on the lower paid worker. We do not agree that we should have raised insurance benefits without raising contributions to pay for them, and I do not believe that in their hearts hon. Members opposite disagree with me.

I can best state the position in these terms and I am sure that the whole House will agree with this—there is a limit to the amount which the taxpayer—including the working-class taxpayer—is prepared to pay in taxes. We are convinced that it would be unwise to take pensions out of National Insurance and make them non-contributory.

Miss Jennie Lee (Cannock)

Will the hon. Gentleman explain something to me which, even after all our hours of debate, I do not understand? How is he able to make a distinction between the taxpayer as one class and the insured worker as another? Does he not know that even the poorest insured worker pays in all kinds of indirect taxes and makes a contribution?

Mr. Barber

I follow the hon. Lady's argument, and I am trying to deal with it now. I say that there is a limit to the amount of tax which the taxpayer, including the working-class taxpayer—and I am not talking just about Income Tax—is prepared to pay, and we are convinced that it would be unwise to take pensions out of National Insurance and make them non-contributory. Although, of course, the State should makes its contribution towards financing them, the main burden must be borne in the future, as in the past, by contributions from the employer and the employee. As hon. Members will recognise, that was a quotation from the Labour Party booklet, "National Superannuation", and I believe that it sets out the position very clearly.

Over the last ten years there has been a great expansion of the Health Service. The cost of the social services as a whole has been growing year by year and, at the same time, wages have increased considerably, in both money and real terms, and the people of this country have never been so prosperous. In those circumstances, we believe that it is right to ask the contributor to pay something more, and we believe that it is reasonable to ask him to pay the level of contributions which are set out in the Bill.

It is nonsense to say that this Measure is an attack on the social services. The truth is that in passing the Bill we are providing a part of the means to enable us to go on improving the social services, and this we mean to do.

4.57 p.m.

Mr. Douglas Houghton (Sowerby)

I wish to thank the Economic Secretary very warmly for his kind references to my hon. Friends and myself. We in turn should express appreciation to the hon. Member and to the Financial Secretary for their unfailing courtesy and admirable patience throughout these long debates. They helped both the House and the Committee very much on many complicated matters which we had to discuss, and we are grateful to them.

Until the Economic Secretary told us, I had not realised that, assuming that we go on to the limit of time allowed us today, our debates will have lasted for fifty-four hours. That is a very long time, and it is very difficult after fifty-four hours, or even fifty hours, to find something new to say. That does not mean that there is nothing more to say, or that we should refrain from saying more about the Bill.

All I will say about the Guillotine is that it was premature and unnecessary and that we would have gone along very well if we had been left alone. Quite naturally, when the Committee is working under a timetable there is a psychological reaction against the conditions under which we have to work. Our debates would have been the better if they had been uninhibited by the fear of curtailment of discussion at particular points in our proceedings.

According to Parliamentary theory, the fate of the Bill is still undecided until the vote is taken at the appropriate time tonight. In Parliamentary theory, we do not know whether our arguments have triumphed over those of the hon. and right hon. Members opposite. But, of course, we know in advance what the result will be. The Government will get their Bill and probably nothing that he or I or any other hon. Member will say in the course of the debate will change opinion within the House. But I hope that it may mould opinion outside the House.

For all I know to the contrary, electors are at this very moment going into the polling booths in a number of by-elections to register their disapproval of this Bill. I hope that when the results are known later we shall see some signs of that disapproval. But whether we do or not, we intend to continue our own opposition to the Bill and in further debates, after it has passed into law, to reveal as best we may the fundamental difference of opinion and of approach between hon. Members opposite and my hon. Friends and myself to these matters relating to our social services.

One thing can be said about the Bill which distinguishes it from its two predecessors. There have been fewer pretences about the Bill than there were about its two predecessors. In 1957 and 1958 they were Departmental Bills in the charge of the Minister of Health. It was repeatedly stressed that the money collected by contributions would pass through the usual financial channels but would be made available directly, explicitly and wholly to the Minister of Health for the purpose of financing his enterprises and for the expansion of the Health Service.

The presence of the Economic Secretary to the Treasury here this afternoon and of his hon. Friend the Financial Secretary clearly shows that this Bill is acknowledged to be a taxing Measure. The National Health Service contribution is a tax levied on National Insurance contributors and on no one else. The Economic Secretary defends that on the ground that to do otherwise would raise serious administrative difficulties, but I have yet to hear that we should judge the principles of our system of taxation mainly or wholly by considerations of administration.

We think that this discriminatory tax is wrong in principle and that administrative convenience cannot justify its operation. Taxes have been called by various names—a plain tax, a levy, a duty and a contribution. There are precedents for them all, but this tax, like all general taxation, is not linked with specific benefits received or available. Tax evasion in this field may lead to certain penalties, but disqualification from the Health Service benefits is not among them.

The insurance contribution is quite different, and that is why we think that it is a mistake to saddle the insurance contribution, which is a contribution, with a National Health Service contribution which is a tax. In the case of the National Insurance contribution, benefits depend upon contributions and avoidance of their payment not only attracts a penalty in law but a disqualification from benefit or a reduction in benefit on account of failure to pay the appropriate contribution.

I believe that this method of taxing people for the National Health Service has been adopted in order to make it more acceptable to those who pay this tax. I believe that though it is made more acceptable, it is done by deception, because this tax has nothing whatever to do with ability to pay or with benefits received. It is a flat-rate tax, duty, levy or contribution.

It is interesting to look at the reasons given at different times in support of this Measure. This Bill is a simple extension of the principle introduced in 1957 and extended in 1958. The Bill, in its operative Clauses—and the amounts of the contributions are set out in a Schedule to it—is almost identical in form to that of previous Bills. In 1957 when this form of contribution was first introduced, the justification for it rested upon the total cost of the Health Service and the proportion which the Exchequer would have to bear of the total cost unless some steps were taken to relieve it.

In 1957 the total cost of the Health Service was £690 million and the proportion which the Exchequer would have borne but for the 1957 Bill would have been 80 per cent.—£555 million. Having regard, first, to the total cost to the Health Service, secondly, to the burden falling upon the Exchequer, and thirdly, to the proportion of one to the other, the Government then said: The Government, therefore, have decided that this heavy and growing burden is more than the taxpayer can reasonably be expected to bear.—[OFFICIAL REPORT, 8th May, 1957; Vol. 569, c. 989.] That was, I think, the fundamental basis of the 1957 Act, and the contributions which were then introduced reduced the burden falling on the Exchequer from £550 million to £531 million.

In 1958 the total cost of the Health Service had risen to £740 million, of which £555 million would have fallen on the Exchequer unless steps had been taken to relieve it. That amount, the Government said, was in excess of the £550 million which in the previous year they had regarded as the limit which the Exchequer should bear of the cost of the Health Service. In the course of the discussions on the Bill, the Government spokesman said: The need for this Bill arises, as the House knows, from the hard fact that the Exchequer is spending as much on health as can be afforded in the national interest, and we need more than that.—[OFFICIAL REPORT. 24th March, 1958; Vol. 585, c. 82.] It seems to me that the ground had shifted somewhat from 1957 to 1958. In 1957 it appeared to be the desire to restore an earlier proportion between the amount which the Exchequer should bear and the total cost of the Health Service. In 1958 it seemed to be that the Exchequer was spending as much as could be afforded in the national interest. I would remark in passing that it seems to me to be a strange doctrine that the Government should announce in advance of the budget statement what the country can or cannot afford in the national interest. That is what has been done on two occasions, notably in the course of the introduction and extension of National Health Service contributions.

Alongside the declaration of 1958, one had to notice that a few weeks later the Government found that in the national interest a substantial tax relief could be afforded on earned incomes. They discovered a year later that relief of taxation amounting to £360 million could be afforded in the national interest, and as that happened to be the election year I refrain from any comment on what other interests might then have been involved.

Now, we come to the grounds given for this Bill in 1961. The total cost of the Health Service is now estimated to be £867 million, of which £663 million will be met by the Exchequer unless steps are taken to relieve it. There is no reference this time to a ceiling of £550 million. There is no literal reference to the limit which the Exchequer can afford in the national interest. We get something different.

When the Minister of Labour made his announcement on 1st February, he said: The Government are determined to continue their policy of developing the Health Service and, in particular, to carry through a long-term programme of modernising our hospitals. These objects will be in danger if the cost of the Service to the Exchequer were allowed to go on increasing at so high a rate. The Government have, therefore, decided that certain steps to reduce the net estimates are necessary."—[OFFICIAL REPORT, 1st February, 1961; Vol. 633, c. 988.] That is a different preamble and a different form of words at the end, but the effect is presumably the same.

Therefore, the total of all measures that are being taken, not only in this Bill but otherwise to reduce the Exchequer burden on the National Health Service, amounts to about £65 million in a full year. That means that the Exchequer burden for a full year will be reduced from £663 million to just under £600 million.

That is the history of the matter. The House will notice that this year there has been no attempt to define either what the country can afford, as in 1958, or what is the limit of the burden the taxpayer can be reasonably expected to bear, as in 1957. In these two respects, little has been said in our debates.

What comes out more prominently this year is, first, how heavily the Government rely on the principles that the Labour Government is supposed to have written into the 1948 scheme—relying for virtue, respectability and justification upon what they say the Labour Government did. Secondly, they have relied more heavily than before on what I would call the cult of the proportion sums.

On both of these, it seems that the Government pronounce a sort of benediction—"As it was in the beginning, so it shall be for ever more, world without end"—

Mr. Charles Loughlin (Gloucestershire, West)

Only more so.

Mr. Houghton

What was done in the beginning? Here I come to something that the hon. Gentleman said in the course of his speech. It is not always that a Conservative Government justify their actions by reference to what a Labour Government did. They say it about National Health Service contributions but not about nationalisation. They distinguish very clearly between those acts of the Labour Government which they think were wise and sound and those upon which they pass a harsh judgment. They rely on the one and denounce the other, but it was the same Labour Government—the same wise men were there, and it was the same minds that evolved Labour Government policy both on social services and on nationalisation—

Mr. Barber

I did say specifically that my reference to the position before 1957 was not used in justification of what the Government were doing. My purpose in mentioning it was that it seemed a fair point to make that so many hon. Members opposite made speeches against the principle of what we were doing which, in my view, despite what the hon. Gentleman said, is much the same kind of principle that the Labour Government applied before 1947, and certainly before 1948 and 1951.

Mr. Houghton

The hon. Gentleman may say that now, but earlier in our debates it has been very difficult for him to keep his seat when an opportunity has occurred to quote from a Labour Government White Paper or from the scheme that the Labour Government introduced and, with a smile on the face of the tiger saying, so to speak, "That is the answer to you." I just say that the Government are very selective in their choice of the acts of the Labour Government upon which they rely in justifying subsequent actions of their own.

At the risk of boring the House on this matter, I still want to say a little more about what happened in 1946. The House will remember that before the new scheme of National Insurance there was a National Health Insurance scheme, which was contributory and covered medical benefits for doctor and medicine as well as providing for sickness benefit in money.

The time came when the insurance for money benefits was to be separated from a scheme of provision of medical benefit; in other words, National Insurance was to be separated from National Health. Up to then, the National Insurance scheme had borne out of the contributions the cost of paying doctors, prescriptions and other treatments provided by the old National Health Insurance scheme. It was natural, therefore, that when the two schemes were separated some provision should be made for part of the cost of the new National Health Service to be borne by a grant-in-aid from the National Health Insurance Fund which had previously borne the whole of the cost.

The National Health Service was to take over from the National Health Insurance scheme all the responsibilities of medical treatment, and a lump sum grant in aid of £40 million a year was paid from the new National Insurance Fund to the Health Service in the nature of a transfer payment—even of a transitional payment. When one found that one was to be relieved of all future liability for doctors and medicine and that the liability was to be taken over by the National Health Service on a non-contributory basis, it was only natural and right that some transitional arrangements should be made for the one fund to help the other.

All I want to stress is that there was no commitment to increase. There was not even a commitment to review it. The truth of the matter is that the Government themselves brought that to an end in 1957. On 8th May, 1957, the Minister said: Hitherto the contributory element towards the cost of the Health Service has had no separate existence from the insurance contribution and the money has been paid over in the form of a lump sum from the National Insurance Fund. Then he used these significant words: This Measure will rid the National Insurance Fund of responsibility towards the Health Service."—[OFFICIAL REPORT, 8th May, 1957 Vol. 569, c. 991.] That ended the transitional arrangements which had started in 1946.

When those arrangements were ended, the Government had a choice: should the cost of the National Health Service be borne by the Exchequer, which, in my view, is what was originally intended, or should they impose a separate charge specifically for the National Health Service? They chose the second alternative, and that was the birth of the National Health Service contribution. We now have something new, something different, a separate National Health Service contribution which can be in- creased, and which is being increased, quite apart from any considerations of National Insurance. The principle is entirely different. I wish that the Economic Secretary could see the point of my argument in this connection.

Mr. Willis

He does not want to see it.

Mr. Houghton

This is not something which comes out of the National Insurance Fund any more. It is not something which comes out of the National Insurance contribution any more. It is something levied on top of the National Insurance contribution and it is quite separate now from the National Insurance Fund. It is no longer an element in the National Insurance contribution. It is a separate tax. Those are my last words on the controversy about 1946 and what happened then.

I come now to the cult of the proportion sums. In 1946, the proportion of the total cost of the Health Service borne by the Exchequer was estimated to be 72 per cent. In the first full year, that is to say, 1949–50, it was 76.3 per cent. By 1950–51 it had risen to nearly 81 per cent. By the time the 1957 Act was introduced, it had fallen slightly to 80.2 per cent. The contributions imposed by the 1957 Act and the 1958 Act pulled the proportion down from 80 per cent. to 75 per cent. In 1960–61 it was an estimated 75.4 per cent. This Bill and other Measures connected with it will reduce the Exchequer proportion of the total cost to 70.7 per cent., which is the lowest Exchequer proportion yet in the whole history of the National Health Service.

The hon. Gentleman and his hon. Friends hark back to 1946 to the percentage that never was. It never was 72 per cent. They hark back to that percentage that never was, they make it a form of worship, and they then write it down by 2 per cent. That gives them the answer in the Bill and other Measures connected with it. That is the first part of the cult of the proportion sums.

The next part is the proportion which the total combined contribution bears to average earnings. In 1946, we are told, the proportion which the total combined contribution bore to average earnings was 4.3 per cent. Now, for a contracted-out employee, the combined contribution will be just over 4 per cent. That, say the Government, equals justice. Q.E.D. They do not dwell on the comparison between the proportion which the Health Service contribution now bears to the total contribution because it does not help them. That element in 1946, in proportion to the total combined contribution was, I estimate, 14½ per cent. Today, it is 20½ per cent. or it will be when these Measures are completed. Nor do they dwell upon the proportion higher than 4 per cent, which the National Health Service contribution and the combined contribution will bear to below average earnings. It would be much higher than 4 per cent. in many cases.

What sanctity have these proportions? Are they gospel or are they guff? Are they excuses—I was going to say the straws which are clutched by men of straw, except, of course, the Financial Secretary—to justify the extension of this form of taxation? The Financial Secretary, with his customary honesty, says that there is no principle here. He probably attaches no particular importance to these or any other proportions. They are for him merely supporting evidence, something to which he can refer if external justification is necessary to support a matter of judgment.

Of course, when we are dealing with a Government who have no principles, who regard matters of principle for us as matters of judgment for them, it is extremely difficult to come to grips with them. They are so slippery in these matters. They grease themselves with false precedent and proportion sums of questionable validity to avoid being pinned down to anything resembling a principle.

Will these proportions which are relied on in justification for the present increases govern future Government policy? Will the limit of the Exchequer burden on account of the National Health Service always be limited to 70 per cent.? Will the contributions be kept in line with the 1946 and 1961 percentages of average earnings? Are these the criteria which the Government will take in arriving at future decisions on these matters? Clear answers to those questions are called for.

I come now to the question: If we do not have this Bill, what do we have? I wish to refer to one point which was notable for its omission from all the Government speeches on this Bill but which was very prominent in the debates on the Bills in 1957 and 1958. On 8th May, 1957, the then Parliamentary Secretary said that: The alternative to placing on the general taxpayer the burden of higher expenditure is either to ask for greater contributions in the way of further charges, which we must reject, or that people should be asked to contribute when well towards the cost of the burden which would otherwise fall upon them when they are sick."—[OFFICIAL REPORT, 8th May. 1957; Vol. 587, c. 1097.] Charges on prescriptions were rejected. Increased contributions were recommended to the House then as being preferable to imposing charges on people when they were sick.

On the 1958 Bill, the Minister said: …we have preferred an increase in contributions to an increase in charges, because of the principle"— we heard something then about a principle— because of the principle that it is better, if take we must, to take from those who are earning and well rather than from those who are anxious and sick."—[OFFICIAL REPORT, 24th March, 1958; Vol. 585, c. 145–6.] We have heard nothing this time about the principle of not taking from those who are anxious and sick. We have heard nothing of that sanctimonious argument in discussing this Bill because, as the House knows, the Government are proposing charges on the sick as well as increased contributions from those who are well.

What, in 1961, did the Minister of Health say in this context, if there is one? On 1st February, he said: …I should have been betraying my trust if I had agreed to an increase in the budgetary cost of this Service, for it would inevitably have resulted in the development of the Service itself having to be curtailed or limited if these steps had not been taken."—[OFFICIAL REPORT, 1st February, 1961; Vol. 633, c. 990.] We had never really been told whether the Minister of Health resisted proposals from the Chancellor of the Exchequer to meet the whole cost or more than the cost of the Health Service by Exchequer payments. What I suppose the Minister meant, although it is an extremely ambiguous statement, was that had he insisted on a higher proportion of the cost of the Health Service being borne by the Exchequer he would not have got as much as he requires; but presumably he would have got something more. I am still puzzled by the actual relationship between the Minister and the Chancellor of the Exchequer on this matter when the Minister said, "Had I agreed to an increase".

It looks almost as if the Minister had insisted that the Chancellor of the Exchequer should not make more budgetary provision for the National Health Service, and, knowing the Minister of Health, I think that a not unlikely explanation. He was determined not to have more from the Exchequer towards the cost of the Health Service. That is not surprising, because we know that of all the Ministers of the Crown the Minister of Health is the one who prefers to live his Ministerial life in sack cloth and ashes.

Having dealt first with the reliance on what the Labour Government is supposed to have done and, secondly, with the cult of the proportion sums, I want to deal with a further matter not so prominently referred to in our debates this year but which, nevertheless, I am sure is at the back of some of the speeches made from the other side of the House, although not very many speeches have been made. I refer to the question whether there shall be an unlimited charge on the Exchequer.

In the debates on earlier Bills, the Government spokesman challenged my hon. and right hon. Friends to answer the question "Are you in favour of an unlimited charge on the Exchequer for the Health Service? Answer yes or no." I do not understand the significance of the words "unlimited charge". The same question could be asked about defence, at twice the cost of the Health Service, or education, or roads, or anything we like. What is the limit of budgetary provision for anything? It is largely a matter of priority; one item can be cut to make room for another. The Labour Government had to make some cuts to make room for expenditure then believed to have a higher priority years ago. Surely the limit of any expenditure is the Government judgment of what the limit is.

In bringing forward this Bill, the Government are not saying that they have reached the limit of the total cost of the whole Service. They are saying that the taxpayer cannot afford to pay the lot so the contributor must pay an extra share. It is not a matter of limited resources but of the distribution of costs. The Government are transferring part of the additional cost from me to me and from you, Mr. Deputy-Speaker, to you. It is not easy to distinguish the taxpayer from the contributor, but we know that what falls on the taxpayer is much more likely to be fair than what falls on the contributor, and we object to it being done in this way. It is not a fair way. We do not accept the doctrine of what the taxpayer cannot afford the contributor can.

This Bill is the Government's National Health Service hat trick. They may have caught out the mass of the people by underhand bowling, but we think that the by-election results, which we shall see in due course, will show that the spectators are now beginning to see through the hat: they will observe that the tendency in this Bill, to which we so strongly object and which we may see extended in the future in this and other fields, is to transfer from the fair basis of taxation to the unfair basis of contributions.

5.37 p.m.

Mr. A. E. Cooper (Ilford, South)

At the commencement of his remarks, the hon. Member for Sowerby (Mr. Houghton) referred to the Guillotine. He suggested that it was premature and that had we not had it we should have got along very much better. I should like to point out to him and to his hon. Friends that, notwithstanding that we had the Guillotine in the last two days of the debate, when the Guillotine was enforced the hon. Gentleman forced no fewer than nineteen Divisions in two days, with the result that out of the time allotted for debate no fewer than four hours were spent in trudging in and out of the Division Lobbies.

Mr. Houghton

When we had no time to debate the Amendment separately, is the hon. Member suggesting that we should have allowed them to go by default? We decided to register our opposition to the Bill without debate rather than to see it passed without debate or without opposition.

Mr. Cooper

I am not suggesting that the hon. Gentleman and his hon. Friends should not have divided the House on a number of occasions. I am simply suggesting that to have taken out of two days about 25 per cent. of the debating time by going in and out of the Lobbies shows the sense of great irresponsibility which has activated the Labour Party throughout the debates on these Measures since they were first introduced in the House. [Interruption.] Every time I get on my feet in these debates I have to suffer a running commentary from hon. Members opposite. It is a great pity that hon. Gentlemen cannot take what they are so ready to give out. To them the National Health Service is a sort of sacred cow, something to be equated with unilateral nuclear disarmament and Clause 4. The prospect emerges of the hon. Lady the Member for Cannock (Miss Lee) leading a deputation of Labour Members of Parliament from Westminster to the by-elections as a kind of latter-day Excelsior, holding aloft a banner showing a medicine bottle rampant on a bed of aspirins, edged with cotton wool.

Really and truly, the National Health Service is not sacrosanct. The economic life of this country is not static; it moves on from day to day. Throughout the political life of this country, long after the Government have gone and other Governments have taken their place, there will be modifications in the National Health Service.

Miss Lee

Hear, hear.

Mr. Cooper

During the debate the hon. Member for Sowerby and his hon. Friends have made great play with the words that these new proposals represent a poll tax, and one hon. Member after another used the expression until, in the end, it really became a sort of dirty word. The fact is that throughout our taxation system we have a whole collection of poll taxes. There are, for example, the Road Fund licence, the petrol tax, the radio and television licences, the tax on cigarettes and tobacco and on liquor, the charges on gas and electricity, coal and water. All these are poll taxes in so far as they are a flat charge which everybody has to meet if they consume that particular article, irrespective of their incomes.

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

Would the hon. Member not admit, however, that there is some freedom of choice? We are not compelled to have a television set or a motor car, but this type of poll tax is in a different category. We have to pay it whether we like it or not.

Mr. Cooper

The hon. Member must have gas, electricity and certainly water.

Dr. Stross

One can use paraffin.

Mr. Cooper

Even paraffin has its price. A wide variety of goods purchased in the shops all bear certain prices. Do not let us try to create the idea that a flat charge is something which is utterly immoral. It is not. On the general question of a flat rate, the Labour Party itself, in spite of what the hon. Member for Sowerby has said, accepted the principle of a flat-rate contribution for this Service. What we are now arguing and what is really the nub of this problem is whether an individual contribution should be levied and, if so, whether the present figure is too high.

There is obviously room for differences of opinion between the two sides of the House. The hon. Member for Sowerby dealt with the question of an unlimited contribution by the Exchequer to the Health Service and he asked what we meant by that. Let us put the matter in another way. A Labour Chancellor of the Exchequer himself said quite clearly that there had to be at that particular time a ceiling on the National Health Service as far as the Exchequer was concerned, and in order that it might be developed beyond that figure certain charges were introduced.

We do not need to go into the history of all these charges, but the fact remains—and I took the trouble last night to look up the debates—that at the time these were introduced by the Labour Government only one Division took place. Therefore, hon. and right hon. Members opposite must accept the fact that their own party in the past has accepted that where the Exchequer is concerned there must be a ceiling on the Service and that if it is to go beyond that point funds have to be found in other directions.

Some hon. Members opposite, and indeed, I think, the majority who have spoken, have suggested that the whole cost of the Health Service should be financed out of taxation, whether direct or indirect. I put it to them that if this is to happen, with the present cost of the Health Service, there will be thrown on to the taxpayer, if the contributions are withdrawn, a figure of about £160 million in a full year. The Chancellor, of course, has his traditional ways of raising that money. I suggest to hon. Members opposite that if £160 million, or whatever the sum may be, is raised by taxation, old-age pensioners, for whom they express so much regard will be forced to make some contribution out of taxation which they do not have to pay at present by reason of the current rate of contributions.

It seems to me, therefore, that the idea of transferring all this to taxation must inevitably affect adversely those people who are least able to bear it. It is fair to point out that when the charges were introduced in 1957 the words used were precisely the words as used by Sir Stafford Cripps when he announced the ceiling as Chancellor of the Exchequer. There was no difference on this subject between a Labour Chancellor and a Conservative Government. It happens that at present the Labour Party is in opposition and this is a very good political stick with which to beat us. I am sorry to disappoint the hon. Member for Sowerby about the by-elections. I am sure that he will have cold comfort tomorrow when he reads the results.

I now come to a question which we must all look at objectively in the years ahead. The sum of about £800 million which the Health Service is to cost is only about half what it will cost in fifty years' time. Future generations will have to give their serious consideration to how this massive Service, which we all want to see developed, will be developed.

It is my firm belief that the average man in the street expects to make some contribution directly towards the Health Service, but the real question is whether the figure which we are now asking him to contribute is too much. We can have honest differences of opinion about that. It is my view that, having regard to the present wage structure, the figures are all right for the generality of earning people. Reference has been made at length in these debates to one or two sections of the population, but only slight reference has been made to two other sections which I have in mind and which should be mentioned again tonight.

We have heard a great deal about the £9-a-week man. I would say to my hon. Friend the Financial Secretary that there is a great deal of worry in all parts of the House about the proportion of income which people in that income group have to pay to meet these costs.

Mrs. Harriet Slater (Stoke-on-Trent, North)

The hon. Member did not vote for our Amendment.

Mr. Cooper

The reason my hon. Friends did not vote for that Amendment was simply that it was shown in argument to be quite impracticable of operation, and we had to find other means. I do not profess to say exactly what are the means of dealing with this problem. It may well be that an entirely new system of financing the Health Service will have to be devised to take care of these categories.

Nobody has said very much about the self-employed. When they are mentioned, the view is sometimes taken that the people we are talking about are the professional man or somebody who has a big shop or a practice of some sort and who is earning a substantial income and is able to look after himself, but there are in the self-employed category large numbers of people who have a real job to make ends meet. To mention just two sections, there are news-vendors and jobbing gardeners, and they make up a large part of the people in the country. Something must be done in due course to take account of these lower earnings.

On balance, and within the context of our present economic situation, I feel that the Bill is about right. I would again draw the attention of the Government to the fact that there is considerable perturbation in the House about the lower income groups, and I sincerely hope that something can be done about them before it is necessary to introduce any other Measure of this sort to the House.

5.50 p.m.

Miss Jennie Lee (Cannock)

The hon. Member for Ilford, South (Mr. Cooper) deserves credit for being a good tryer. Not many hon. Members opposite are prepared to put themselves on record quite so recklessly. He has said, "I really appreciate the point that you make about the low paid worker and the old-age pensioner, but it is beyond the intellectual resources of my party to think of ways of meeting this point of view, and it is beyond my modest resources to be able to advise my party how it could even up these grosser forms of injustice."

In case the hon. Member is worrying too much about all this, I should like to answer his point about the old-age pensioner. The hon. Member told the House that if we were not prepared to raise about a quarter of the funds for the Health Service by the proposed special impositions and if the entire charge was met by the Exchequer, one of the first persons to suffer would be the old-age pensioner. The hon. Member is not as daft as all that. He must see through that fallacy.

Mr. Cooper

I recall that not many years ago the television licence was raised from £3 to £4 a year. The first cry that we had from the Opposition was that the first people to suffer from this imposition would be the old-age pensioners. The fact that they had spent £80 on a television set had gone over the heads of hon. Members opposite.

Miss Lee

I fail to see the precise relevance of that point, but if the hon. Gentleman says that we might look very carefully into the way we finance television, particularly commercial television, I should like to follow up the point at some other time.

To get back to the "aching heart" about the old-age pensioners, which the hon. Member has been exposing to the House, what the hon. Member is really telling us is that if the full cost of the Service is to be borne by the Exchequer, the Chancellor dare not think in terms of raising direct Income Tax, Surtax, death duties or capital levies, dare not think in terms of the more buoyant economy, dare not think of bringing under public ownership and control some of the more lucrative monopolies so that he could be raising revenues from those sources, and dare not think in terms of raising extra money by taxing luxury goods.

What the hon. Member was saying was that the only person to whom the Chancellor could possibly turn was the old-age pensioner, and he would say, "I am sorry, old fellow; you are already paying for the boots on your feet, the chair in which you are sitting and practically every little comfort that you possess, but we shall have to add 1d. or 6d. more." I had a sneaking regard for the hon. Member, but I just cannot believe that he does not see through the shoddiness of that argument.

I can help the hon. Member in respect of the low paid worker and the imposition of what my hon. Friend the Member for Sowerby (Mr. Houghton) called the poll tax. I was much impressed by my hon. Friend's speech, because he explained with his usual brilliant clarity that in the early stages there was a transfer from the old workmen's benefit arrangements to the new Health Service. However, I was delighted when he said that it should be remembered that this was a transitional Measure and that in all likelihood it was a temporary one.

I look forward to future debates in the House, preferably when some of us are speaking from the opposite side. I feel that the present debate and what has gone before will have served an extremely useful purpose and contributed to the transfer of power inside the House, provided that we have all learnt the lesson that we dare not make compromises with principle, even to the most limited extent, when we are dealing with the Conservative Party. The Conservative Party of Great Britain is an old party.

Mr. W. A. Wilkins (Bristol, South)

And an artful one.

Miss Lee

Yes, an artful one, and it knows precisely when to praise a Labour Party when it falters in its Socialist principles. I am not professing to be by any means a perfect Socialist, and I do not claim that for my party. However, the debate has more and more brought out in the open the fundamental differences between the two sides of the House.

The more steadfastly we base our case on Socialist ethics and economics, the clearer it will be for the great mass of the people to understand the argument which is going on between the two sides of the House. The argument is not just one which raises our compassion because it is concerned with men, women and children in times of illness. The argument is also a challenge to us because it is asking in what way the wealth of the country is to be distributed? The original Act was, and always was, understood to be a redistributive Act as well as a compassionate one. It was based not only on the ethics of the good Samaritan but on the economics of the sound Socialist planner with right priorities.

But hon. Members opposite come to the House and say, in effect—they have been more open during the discussions on this Bill than ever before—"The more buoyant the economy of Great Britain, the less necessary is it for us to have a Health Service paid for by the Exchequer." They have changed their views several times. As has already been brought out in earlier stages, they have advanced rather more cautiously. They have been feeling public opinion very carefully. But—maybe it is our fault—they have become a little arrogant. A great deal of complacency has crept into their attitude towards the House, and they have now reached the stage when they think they can say quite openly to us, "We believe that the individual citizen should pay directly for the health benefit at the moment when he is in need of medical and hospital attention."

Part of the Opposition's anxiety is because we know that we have not reached the final solution. We believe that a permanent tug of war goes on. This is power politics. There is the struggle of the time, in which we on this side of the House inevitably obey the tugs that have propelled us into public life. We try to serve the particular interests which have led to our being here at all. Hon. Members opposite are doing the same.

I cannot separate for a moment the attitude of the Government towards the Health Service, towards education, towards housing and towards public ownership. Indeed, during the hours in which we have been discussing whether it is right and proper to raise about £20 million by harassing people with additional prescription charges and increased welfare charges, which seem so petty to those with large incomes, the full armoury of the money market has been rallied in seeking to persuade private investors to buy steel shares that were public property and were bringing profit to the nation as a whole—profit that could, among other things, have been used to ease taxation

The Government have been offering bargains to the investors. They have been throwing away tens of millions of pounds of public money for the ideological reason that they do not believe in the public ownership of our great basic resources. Members opposite are skilful at changing their ground. There was a time when they said that their objection to public ownership was that it was inefficient and that we should leave these things to private business. That is not how they are talking now. In the same way, there was a time when, in their attitude towards health charges, they were a little more careful. Now they come out openly and say, in effect, that they want the maximum burden to be placed on the shoulders of people when they are sick.

More than that—and this is something I utterly fail to understand—if one is a lady or gentleman of leisure one may be living on a pound or two a week, or one may be a millionaire, but one need not pay any contribution to the National Health Service, though one gets the full service. Yet if one is an insured worker or an employer, one has to be singled out and put into a special category in the community in order to pay special taxes. That is my answer to the hon. Member for Ilford, South, who was worried about the low-paid workers. A worker is a worker, and whether he is paid £9 or £90 a week he should not be paying this contribution at all.

I hope that one day we shall have a debate in the House when the Conservatives will stand their ground on the full weight of their own philosophy and when we will stand on our philosophy. I am certain that it will come, and that we on this side of the House will rally public opinion for a National Health Service financed 100 per cent. by the Chancellor of the Exchequer. It will then be the responsibility of the Chancellor to decide whether Income Tax, Surtax, Purchase Tax, or certain other taxes—on wine or cars or anything else—should bear the burden. Priorities have to be arranged as between tax and tax.

I have not heard one argument in the debate which has in any way modified my point of view that there is far too much blunting of this issue. Not one single penny should be raised by special impositions on the industrial workers. Not one single person should be charged when hospital service is needed.

Hon. Members opposite also say—and this goes to the root of the differences between us and hon. Members opposite—that the more buoyant the economy the less we need the Health Service. We say that the more buoyant the economy the more easy it is for us to afford the Health Service. We go further and say that if a National Health Service, paid for by the Exchequer, is essential during a period of buoyant economy, it is doubly essential during a period of trade recession. In all humility, I ask my colleagues to consider the argument I am putting, for we argue inside our own party. Hon. Members opposite are beginning to follow our good example, and I congratulate them. There is everything to be said for argument within parties, as there is for argument between them.

We on this side of the House are going to rally the public on these issues, and I ask my colleagues to consider that if it is right to place the burdens of this great Service on the shoulders best able to bear them in a time of expanding economy, then, if ever again we are faced by difficult and stormy weather—and we have to look forward to the fact that it is when times are difficult that the public is most likely to turn to the Labour movement; Members opposite usually get the better end of the stick—and if we are faced by a depression for reasons beyond our control, or by a period of special difficulties, that is an additional reason for saying that no part of the charges on the National Health Service shall fall on the wounded.

Let the able-bodied soldiers in the front line of battle stand their ground, and let them apply to these great issues of peace what every brave and honourable man and woman applies in time of war, when one is not only willing to carry the wounded but is proud to carry them, and would be ashamed if one tried to pass part of one's burden on to their shoulders.

6.7 p.m.

Mr. Percy Browne (Torrington)

I spoke on the Second Reading of the Bill and I had not intended speaking again, but I should like briefly to say one or two things.

I think that the hon. Lady the Member for Cannock (Miss Lee), who spoke with her usual sincerity and passion, was really pin-pointing what this debate has been about. I think that at times she was speaking more to her own benches in saying that they should get down to basic Socialist principles. When one is the party responsible for administering a service such as the National Health Service, it behoves one to be responsible about if. The hon. Lady said, at the end of her speech, that it was necessary for those who were able-bodied to bear the wounded. I agree with that. Through this Bill we are asking that those who are working and able-bodied should pay towards the National Health Service.

The hon. Lady also said that it was essential, should there be a recession, that the Health Service should be safeguarded. Again, I would have thought that it would be safeguarded much better if we took the responsibility for its being made safe. As my right hon. Friend the Minister of Health said on Second Reading, one cannot necessarily depend upon getting a sufficient sum from the Exchequer to allow the National Health Service to go on expanding. In this case, what we have done is to go on doing what was done before. But I do not hold, as I have said before, that it is a good thing to say that, because somebody else did something, we should go on doing it.

I make no apology for having voted entirely with the Government on this issue. I have had various reservations about the Bill, but no part of the country can opt out of inflation. I appreciate the argument that this is a national Measure. In my part of the country the average wage is low. The level of contributions we are imposing this time is the level that we must stick at. We must not go any higher. These debates will have been useful if they mean that many of us who might not otherwise have thought deeply about this problem will have thought more deeply about it.

It is no good going on with variations on the same theme—that is to say, putting up contributions by a little bit one year and prescription charges at another time; in other words, using the same measures and saying all the time, "This is the proportion that we kept before. Therefore, we must go on keeping the same proportion." I believe that the time has come when we must rethink not just our National Health Service policy, but the programme for roads, schools and everything else, and allocate specific priorities.

As a very new politician, one of the disadvantages seems to me to be that at election time the parties promise a great deal, if productivity can rise and we can fulfil all that we promise all the time and take the money out of general taxation, well and good. To my mind, the argument in favour of contributions and other measures as they are with the proviso that I have made is that they make people realise that it is impossible to have something for nothing.

Having said that, however, it is time that we rethought the way that we will pay for the National Health Service. As the hon. Member for Ilford, South (Mr. Cooper) said—

Dr. Stross

Before the hon. Member leaves the point, will he deal with this fact? He is speaking of the rise in proportion of the contributions as the years have gone by. Does he not agree that if we go back to 1951 the rise in the cost of the Service as a whole can be accounted for to the extent of 70 per cent. by inflation, and that only the remainder can be allocated to other reasons? The contribution, however, has gone up times four since then. Speaking, as he does, so sympathetically, does not the hon. Member agree that his Government have grossly overdone it?

Mr. Browne

I entirely follow the hon. Member's argument. Since he tripped me up, quite rightly, last time when I spoke without having looked at the figures, I took the trouble to get out some figures. I admit that I was surprised at the various proportions, in that in 1946 the proportion paid by way of contributions—I have taken these details from the speech of my right hon. Friend in HANSARD—was about 21 per cent. It dropped for reasons of inflation, because the contribution was not put up, to a percentage of 8.9 of the cost of the Health Service in 1950–51. and it has risen gradually since then.

These arguments, going back over history, seem rather pointless, because we are still at 16.7 per cent. today for the contribution which is still less than the 21 per cent. in 1946. I do not think that that proves anything. That is why I say that, having listened to much of the argument about this matter, it leaves me cold, to use a colloquial expression.

Dr. Stross

Of course, the 1946 figure was guesswork. The only figure that we can take that is reasonable is the figure for the first year of working the Service. Then the hon. Member will find that the question which I put to him rhetorically is correct.

Mr. Browne

I agree. That is one way of putting it. In, say, 1949–50, the actual percentage of total contributions towards the cost of the scheme was 11.8 per cent. It has now risen to 16.7 per cent. The hon. Member has proved his point. He has also helped my point of view that while it is right that people should pay a certain amount towards the Health Service individually so that they realise that they cannot get anything for nothing, the time has come when I have a fear that this spiral will continue and the cost of the Health Service must go on increasing. It may get up to, possibly, £100 million a year.

Whichever Minister, of whatever party, is in power, he must come back to the House of Commons and say that more money is wanted for the Health Service contributions. I suggest that we must think about how we are to get it. There are various possible measures. We can go back to the suggestion of the hon. Lady the Member for Cannock that it should all come out of the national Exchequer. One could adopt the suggestion, put forward by the Liberals, that there should be a social service tax, as I believe there is in France, which is kept entirely separate and is graded according to means. There is a great deal of sense in that sort of suggestion. I am not producing a ready-made solution, because there is not such a thing.

All that I wanted to do tonight was to ask my right hon. Friend, much as I dislike inquiries, whether the time has not come when we should consider setting up an inquiry to look into the financing of the Health Service, whether it be done on priorities from general taxes, whether we are to leave the present level of contributions irrespective of the level of wages in the future, or whatever else is to be done. I feel certain that something will have to be done, and I am sure that unless there is a great increase in the national wealth in the next two or three years we shall find ourselves in difficulties by about 1965.

6.15 p.m.

Dr. Horace King (Southampton, Itchen)

The kindly introduction of the Economic Secretary to this debate was most disarming as he paid compliments to my hon. Friends on the Front Bench. I ought to begin by paying tribute to what I might call the twin Secretaries of State, who are able and kindly hon. Gentlemen, and say that nobody could have more pleasantly failed to answer the arguments that have been put throughout our long debates on the Bill. Nobody could have defended so mean a Measure so sweetly and with such an air of outraged innocence. We thank the two hon. Gentlemen for their courtesy and, as persons, we say nothing of them but good. Politically, however, we have no kind words for either of them or for their Government.

I once more congratulate my hon. Friend the Member for Sowerby (Mr. Houghton) and my hon. Friend the Member for Kilmarnock (Mr. Ross) on excellent Front Bench leadership. We on the back benches are proud of them. We are pleased with the teamwork that we have been able to put in under their leadership. Indeed, but for the Guillotine, back benchers would have played a much more elaborate part in subjecting the Bill to scrutiny in Amendment after Amendment which the Guillotine prevented us from debating. Even had we succeeded, however, it would not have made any difference. The Government had made up their minds to raid the pockets of some of the poorer people to get most of the £50 million that is needed.

Hardly anybody has spoken on the Government benches throughout these long debates. Indeed, we shall not have too many speeches from the Government side today. One would except the hon. Member for Ilford, South (Mr. Cooper), the hon. Member for Devon, North (Mr. Thorpe), who always makes a reasonable contribution, and the noble Lord the Member for Hertford (Lord Balniel), who has just joined the debate and who is so keen on the subject of the Health Service that he even did his best to prevent the Opposition from stating their case on a recent Prayer tabled by the Opposition on one aspect of the matter.

The Bill to which a Third Reading is being given today has been guillotined through the House. I believe that the reason for the Guillotine is that the Government preferred a day's academic debate on the Guillotine to a day more in which to hear unpleasant truths about the Bill. They would sooner vote down our undebated Amendments and tramp through the Lobbies, as we were compelled to do, on the Amendments than hear arguments for the Amendments. Under a timetable in which the Government had the supreme decision of allocating stages, they generously allocated us a day for Third Reading, because they know that nothing that we say today can in any way alter the fate of the Bill.

I understand that Oxford and Cambridge scholars are engaged in translating the Bible. If I may interject the only remark which may be out of order in my speech, I am sure that we are all delighted to know that the new New Testament is a best seller. I suggest that the Government could help the scholars in translating the Old Testament. I have turned it up and in Exodus, 30, I read a Law of Moses: The rich shall not give more, and the poor shall not give less than half a shekel…to make an atonement for your souls. That might indeed be called the Moses Spiritual Health (Contributions) Bill. Moses and Aaron were good Tories. They invented the poll tax. All that the Bill is doing is translating what I have quoted from Exodus into modern language.

The Bill continues the cold war against the National Health Service which the Government have waged ever since they voted against it on Third Reading in 1946. We refuse to believe that the leopard has changed its spots. Those who will vote for the Third Reading of the Bill will include all those who are still in the House who spoke against the Third Reading of the Bill which set up the National Health Service. The hon. Member for Putney (Sir H. Linstead), who is not here now, will be here tonight to vote for the Bill, because he opened the debate against the Third Reading of the other Bill. The hon. Member for Horncastle (Sir J. Maitland), the present Minister of Education, Lord Amory, Lord Conesford, and the then Member for my University, who, like a good university man, did what University Members have always done, voted against every progressive course, all voted to prevent the Health Service from coming into existence and spoke against it.

Included in those who voted against the Third Reading of the Bill which set up the Health Service are the present Leader of the House, the Minister of Pensions and National Insurance, the Minister of Aviation, the ex-Minister of Health, the Attorney-General, and, of course, the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke). They all voted against the Third Reading of the Bill.

Miss Lee

I hope that my hon. Friend will not forget the Chancellor of the Duchy of Lancaster, who has been so conspicuous by his absence.

Dr. King

I am sorry that I omitted the Chancellor of the Duchy of Lancaster, who played such an active part in fulminating against it. The two Ministers taking part in this debate and the other Ministers of the Government Front Bench did not vote against the Third Reading of the National Health Service Bill simply because they were not here.

The Government have never liked the Health Service. They believe that money ought to be able to buy everything. They believe that it ought to be able to buy health and medical care, just as it can buy superior education. The Government do not like graduated taxation. If they were powerful enough, they would set the patient free. They would set up a two-tier system of national health, just as we have a two-tier caste system of public and State schools.

The Government, however, depend on the votes of millions of ordinary people, and to the millions of ordinary Tory voters socialised medicine has become very precious and popular. Thousands of devoted members of the Tory Party voluntarily serve in this great National Health Service. Even their supporters in the House, like the hon. Member for Putney, now believe in a Health Service, so they dare not embark on the destruction of the Welfare State or the abolition of the Health Service. They must just nibble at both, and the Bill is one of the nibbles.

I would be out of order if I described their other parallel attacks by the group of Measures which are before the House at the moment, the prescription charges, and so on, although the Bill can be appreciated to the full only if we join it to its predecessor of 1958, which raised charges two years ago, and the various charges which the Government are imposing by other Measures. The effect of these nibbles is cumulative, and it is meant to be, but I suggest that £50 million is quite a big nibble against the principle of the Health Service.

I regard the Bill and its predecessor as part of a grand Tory strategy. Everybody complains about the burden of taxation under a system of graduated taxation. Those who pay most, naturally, complain the most. We were told yesterday about a gentleman who is to receive £24,000 a year. It was pointed out that he would pay £17,000 a year in tax. The Tories argue, and this is the principle behind the argument in support of the Bill, why should such a man not have more of his own money to spend on himself? This is what a lady said on the radio the other night in a Tory political broadcast with the President of the Board of Trade.

Is it not better, ask the Government, that we should all pay a "bob a nob"—or at least 8d. to 10d. a "nob"—to relieve the very rich taxpayer of £1,000 or so of this terrible burden which he carries? That is what the fight is about. That is what we have fought during the fifty-four hours' debate to which the Economic Secretary referred. Just how far is it right to impose further flat-rate burdens on everybody, and how far is it right, on the other hand, to impose any new financial burdens which the Health Service demands according to one's capacity to pay?

There is no argument about one simple fact. The Bill shifts some of the burden of graduated taxation into a poll tax burden. It will make things easier for the £24,000 a year man. It will make things harder for the 10s. widow. The Government believe that that is both right and necessary, and that they cannot build the hospitals we need unless they relieve the taxation burden of the £24,000 a year man and make a flat-rate charge on the 10s. widow and the old gentleman of 65 who goes out to work to increase his pension when he retires at 70.

We on this side of the House think that the flat-rate element in taxation is already large enough. I believe that it is too large. We also believe that the £50 million which the Bill provides ought to come out of general taxation. The burden of flat-rate taxation is already very heavy. Let those who moan about the burdens of direct graduated taxation remember—as, indeed, was pointed out by the hon. Member for Ilford, South during the short time that he was present in the Chamber, but I see that he has since departed—that a tremendous amount is levied on the citizens of this country by way of flat-rate taxation.

In the indirect taxes, a flat-rate tax on tobacco and beer, and Purchase Tax, are borne equally by the millionaire and by the poorest workman, except that the poorest workman does not consume as much as the millionaire. From the Chancellor's point of view they all have one advantage. They are concealed flat-rate taxes, but these indirect taxes, all of them flat-rate, together with the now enormous portion of his weekly wage that has to go in a stamp, are, I believe, greater than they should be for the poorest wage earners of the country.

The case is a moral one. The man worth £24,000 a year, even if he has to pay £17,000 a year in taxation, will have £7,000 a year, or about £150 a week, to live on. I believe that he will be able to get by fairly comfortably on that sum. On the other hand, the man with £8 a week, after paying his National insurance contribution, and after paying the new levies which the Government are imposing, will have less than £7 10s. a week to live on. I have always believed that this disparity between the richest people and the poorest is too great, and that the Bill is bad because it widens the gap instead of narrowing it.

Mr. P. Browne

This is a dialectic argument. Does the hon. Gentleman think that he would get people to accept the responsibility in the higher managerial levels if they were penalised by more taxation?

Dr. King

The hon. Gentleman begs the question by using the word "penalised". He refers to people in the higher wage groups of taxation as being penalised because they pay more tax.

Mr. Browne

I asked the hon. Gentleman a direct question. Will he give me a direct answer?

Dr. King

The difference between the hon. Gentleman and myself is that I believe that the burdens imposed on the lower income group have reached such a level today that further taxation is penal.

Mr. Browne

I am not disagreeing with the hon. Gentleman. I asked him a question.

Dr. King

If we had to choose between imposing further direct flat-rate burdens on the lowest-paid income group in this country, and stiffening graduated taxation. we should not hesitate at all.

Mr. Browne

I appreciate the hon. Gentleman's point of view, but I asked him whether he thought that he would get these people to take on these responsible jobs if the taxation were increased.

Dr. King

I am sorry that I misunderstood the hon. Member's first question. It is much easier to answer now that he has repeated it. Every Royal Commission report on taxation that has been published has shown that there has been no such disincentive. Nobody will refuse a £24,000-a-year job, even if it carries a tax of £17,000, if such a job is available. If such a post were advertised today there would be a rush of people willing to accept the responsibility of paying £17,000 a year in Income Tax when they have £7,000 left, and the hon. Gentlemen himself might be one of them. I am sorry to have been so long over the interruption.

The Government have put forward during our debates, when we have shown them that group after group of unfortunate people are caused hardship by the Bill, only two arguments: One is that average wages are up to £15 a week, so everybody ought to be able to pay this extra poll tax. Even if that were true, there are better ways of securing the extra £50 million than by a poll tax, even considering the motive of the Government. Wages are not the only things that have risen in the last few years. Profits, dividends and unearned incomes have risen much more dramatically than wages, and if it is morally right that people should pay more to the Health Service because they have more money to pay with—which is one limb of the Government's argument—why not allow Income Tax to take care of that? Income Tax will do so. The yield of Income Tax today is higher than it has ever been, although the rates of Income Tax have been lowered steadily by the Government, because people are receiving bigger incomes.

That is why my right hon. Friend the Leader of the Opposition said, in the last General Election campaign, that it might be possible to meet all the demands of the expanding social services without raising the level of taxation. What we may be deciding in this debate is not whether a new graduated tax should be imposed, but whether the Government can get £50 million with which to reduce graduated taxation.

Moreover, the biggest increases in income have not gone to those who work by hand or brain. I am much more sympathetic to the Minister of Transport's action in paying the market price for the administrative brain than I am to the wealth that has recently gone to those who have done nothing beyond owning property and scrip, who receive increases of unearned income vastly out of proportion to any conception of social justice.

We have shown, during our curtailed debates on the Bill, that there are millions of people who get nothing like an average of £15 a week. As I wander round among my trade union friends at the weekend in Southampton I even find it difficult to find anyone who is earning that average, and I am certain that that goes for other industrial towns. If we meet someone who is earning more than £15 a week we can be sure that that figure is not his basic rate, but that he is getting it by working excessive overtime.

There are thousands of disabled people—excluding ex-Service disabled—thousands of widows, thousands living on small fixed incomes; millions in industries which are not prosperous enough, or whose workers are not adequately organised in their trade unions; thousands faced with short time through the shrinkage of an industry, and all the young students in universities, technical colleges and training colleges that we need to encourage the creation of the intellectual, technical and scientific cadres that we need to match the problems of the next fifty years; there are millions of women doing drudgery work. Most of the drudgery work is done by the women of England—London's splendid army of charwomen among them.

All these people will pay the new increased flat-rate charges under the Bill, merely to save those of us who are much better off a few miserable pounds a year. Many of us think that when the Finance Bill comes before us in April it will be found that the purpose of obtaining this £50 million is to relieve the Surtax payers of some of what hon. Members opposite call penal taxation.

The other argument addressed to us has been, "Well, you did it when you were in power." It is true that the Labour movement has advocated and also legislated for a flat-rate element in National Insurance and in the Health Service. It is worth pointing out the historical reason for that. We had to fight for our existence. The trade union movement had to fight to build up a standard of living, and when we fought to establish insurance some things weighed in our minds—one the fear, often expressed, that a reactionary Government might take away the benefits provided under any State system unless the worker had made a contribution towards them. In National Insurance, the worker has all the benefits as of right although he does not pay the actual cost of all of them. He pays a portion, but the portion he pays in a flat-rate contribution secures him his State benefit as of right, and no Government can take it away from him.

We still hold that view on insurance, in general, but I am glad that we are moving away from it in relation to the Health Service. I hope that the Labour Party will adopt ultimately the position put so eloquently by my hon. Friend the Member for Cannock, that all Health Service charges should be borne by the Treasury, and that we should receive from the citizen, according to his capacity to pay, the finance we need for the Health Service. But if we do not go as far as that, even if we concede the principle of the flat-rate, there is a limit beyond which, I believe, we should not go.

The hon. Member for Ilford, South thinks that the limit has now been reached. I think that the limit should be judged not by any sweeping reference to average income, but by what is a fair charge on the poorest person in the country. It must be remembered that this Government have quadrupled the flat-rate charge on the poorest person. I am certain, from my knowledge of the poorest people in my constituency, that that limit has long been reached, and that this new burden should not be imposed on the poorest people in Britain.

These people, faced with the high cost of their weekly stamp, will have to deprive themselves of some of the things they ought to have in order to meet it. I believe that poor people are poor not because of something sinful in their nature, or because they are necessarily incompetent, but because society rewards its citizens inequitably, and flat-rate taxation of this kind emphasises the injustices instead of moderating them. When we remember that this Bill has to do with national health it therefore becomes even more objectionable. The health of the citizen is not only a personal possession of his own; it is part of our national wealth. The fact that we have the healthiest generation of children that Britain has ever known is a matter of pride and of real wealth, not only to parents with children but to people who have no children, to the nation as a whole.

The fact that old people live longer, that the poorest people, when they get old, live more happily and more healthily than they have ever lived before, is again a matter of real wealth to Britain. The fact that the devoted labours of general practitioners, consultants, surgeons, nurses and all the voluntary and professional workers in the great National Health Service—the fact that this army is winning year after year great victories against disease—the destruction of rickets, the almost complete victory against tuberculosis, the conquest of pneumonia and of diabetes—all this is a matter of national wealth, national well-being and national pride.

I believe that it is the negation of all decent thought and feeling to add, as this Government have done, new financial burdens on the sick. It is the negation of all good progressive financing to spread the £50 million of this Bill over rich and poor exactly alike. National health contributes to national prosperity, and those who get the most out of national prosperity ought to be glad to pay most for it.

We have opposed this Bill with determination and with unity, but it will be carried. I would say to my hon. Friends on this side that I believe that if we can show the same unity about other questions affecting our great Labour movement, and tackle them in the spirit which we have shown in these debates, it will not be very long before we move over to the other side of the House and restore the National Health Service to what it should be. I believe that the appropriate quotation for this Bill comes not from the major classics, but from a minor one—from Gilbert and Sullivan's "The Gondoliers"; The Earl, the Marquis and the Dook The Groom, the Butler and the Cook The Aristocrat who banks with Coutts The Aristocrat who cleans the Boots The noble Lord who rules the State The noble Lord who scrubs the Grate They all shall equal be. This Bill makes them all pay the same flat-rate of contribution. I believe that that is egalitarianism gone mad.

6.42 p.m.

Lord Balniel (Hertford)

It is always a pleasure to follow the hon. Member for Southampton, Itchen (Dr. King). Although he has just been engaged in a piece of party political warfare, we all appreciate his sincerity and the knowledge of the National Health Service which he shows in our debates. In following him, I apologise to the House for the fact that I have not been present during the course of the debate owing to an engagement outside the Chamber, a difficulty in which, I might say, other hon. Members found themselves at the same moment. I should, however, like to refer directly to the hon. Gentleman's speech. It seems to me that his speech, in common with other speeches made by hon. Members in opposing this Bill, contained two absolutely basic fallacies.

The first fallacy is that there is between the two sides of the House a great difference of principle on this Bill. The hon. Member indeed nods his head to that. I venture to express doubt that there is any great difference of principle between us, and I would like to argue that in rather more detail. The other basic fallacy exemplified very clearly in the speech of the hon. Member for Itchen is that it is desirable, as advanced by him, that the contributory element of the Health Service should, in fact, gradually dwindle away. I think I understood him rightly to say that, ultimately, he wished to see the Opposition adopt as its policy the elimination of the contributory element altogether. That seems to me also to be a basic fallacy, and certainly a disadvantage to the Health Service. I should like to deal with that argument also.

Before I do so, I should like also to say that what rather surprises me is that during the course of the debate, hon. Members opposite seemed to have been blinded to the trap which has been laid for them by what may be described colloquially as the Left wing of the party. The hon. Member for Ebbw Vale (Mr. M. Foot) has already torn his party asunder on the question of defence, and has also torn his party asunder on the question of nationalisation. Now, behind this great façade of unity, which was the word used by the hon. Member for Itchen, this façade of total opposition to the Bill, the hon. Member for Ebbw Vale with his associates is reopening the great question which tore the party opposite asunder in the early 1950s. I am surprised that hon. Members opposite have been blinded to the trap which has been put before them.

There is one hon. Member of the party opposite who has not been blinded, and it is the right hon. Gentleman the Leader of the Opposition. He has not been blinded; I think he has been hypnotised. He sat there like a petrified rabbit, not taking any part—and I understand the historical reasons for that—waiting for the knife to be plunged into his back by the hon. Member for Ebbw Vale and his associates.

Dr. King

The noble Lord comments adversely on the fact that my right hon. Friend the Leader of the Opposition, for what he regards as a mysterious reason, did not take part in the debate. Will he tell us for what political reason the Prime Minister is not taking part?

Lord Balniel

The Leader of the Opposition began this series of debates by referring to this Bill. I think I am quoting his words correctly, although "off the cuff", by saying that he stated that this was the beginning of the dismantling of the Welfare State. In these circumstances, it is slightly surprising that we have not had the benefit of a speech from the Leader of the Opposition. However, I do not want to get too involved in party dispute on this matter.

What I should like to do is to revert to the argument that there is a great difference of principle between us. I do not want to spend too much time on the slightly arid argument that what we are doing is basically unchanged from what the party opposite did when it was in office. Normally, this is a view which does not commend itself to me in the slightest, and I agree with my hon. Friend the Member for Torrington (Mr. P. Browne). This kind of argument is the kind which leaves me absolutely cold, but hon. Gentlemen opposite must appreciate that the furious indignation which we have witnessed during the past few weeks would be slightly more impressive, both to the country as a whole and to hon. Members on these benches, if, in fact, we were not in this Bill putting forward proposals which are entirely consistent with the proposals which they put forward when they were in office.

Mr. Wilkins

The noble Lord was not here for the opening speech.

Lord Balniel

I have already apologised for not hearing the opening of the debate.

This Bill increases the contributions for insured persons by 10d., and it increases the contributions of the employers by 2d. The total amount to be paid by the insured person is 2s. 8½d. a week, or a total of about £7 a year. To whatever test we submit this contribution, it is almost identical with the contributions of the past.

I think the normal reaction of people outside the House—people not steeped in partisanship and party politics—is going to be, "Well now, what does this contribution take out of our overall earnings?" I believe that most people do not distinguish between the National Insurance element and the National Health Service element, although on the stamp it is made quite clear that a certain element goes to the Health Service and a certain element towards insurance benefits. I think most people lump these two together, and that is the common sense thing to do.

That is their weekly payment, and if we do as they do and lump these two elements together, we see that the stamp in 1949 involved a weekly payment of 4s. 11d. at a time when average earnings were £7 2s. 8d. In those days, the stamp took 3.45 per cent. of average earnings. Today, under the proposals of my right hon. Friend, the stamp is to take 3.65 per cent. of average earnings in the country. That seems to me to be a difference which is so slight that there can be no difference of principle between us. Hon. Members opposite can, of course—I quite appreciate the argument of the hon. Gentleman—say that the contribution formed too great an element in 1949 and therefore it forms too great an element today. But my belief is that the people in the country, having studied these figures, would say that if it was a fair contribution in 1949, when, after all, we could hardly spend anything on luxuries, it is probably, in a rough and ready way a fair contribution today.

I wish to look at this contribution in a slightly different way. Earlier in the debates on the Health Service I heard what I frankly admit was a moving speech by the hon. Lady the Member for Cannock (Miss Lee). She was quoting the words of the late Aneurin Bevan who said that the language of priorities is the religion of Socialism. Those are rather fine and moving words. The language of priorities is not only the religion of Socialism; it is, of course, the daily life of everyone involved in politics or in the government of the country. I also recollect hearing a speech by the hon. Member for Coventry, East (Mr. Cross-man) on a totally different subject. He said that one of the weaknesses of a capitalist society was the way in which we diffuse our energy over a great variety of priorities, compared with Communist States where there was an intense concentration of effort on a few priorities of great importance to the State. It is quite true that in Communist countries there is this intense concentration on a few priorities; there is something rather stern, aesthetic, rather fine and, indeed, rather strong about this concentration of priorities—although we know at what terrible cost such concentration is achieved.

If priorities are so very important, as surely we all agree they are, are we quite happy that we have the priorities absolutely right at the present time? If hon. Members examine the figures of expenditure in an average household, they will find that the order of priorities is enlightening. I agree with the hon. Member for Itchen, that there are many people whose earnings fall well below the average and whose expenditure, therefore, is not comparable with average expenditure. Of course I appreciate that, but, none the less, the average is surely significant.

In this Bill we are asking that families should pay 2s. 8½d. as a weekly contribution towards the Health Service. We are asking that they pay that sum at a time when in the average household 10s. 6d. a week is spent on sweets and ices, £1 4s. on beer and other drinks, 5s. on television, 14s. on pools and betting and £1 8s. on cigarettes. Is there something wrong in our priorities when we ask the average family, in fact all families, to pay 2s. 8½d. a week for the Health Service?

Mr. Ron Ledger (Romford)

Yes.

Lord Balniel

Hon. Gentlemen opposite are entitled to their opinion. If the language of priorities is the religion of Socialism, it seems to me we are not asking too much of an ordinary family that it should pay this amount towards the cost of its health.

As I said, I accept that there are people who are unable to afford expenditure at the average level, and throughout the whole of these discussions on the Health Service my right hon. Friend has spoken of the means we shall employ to try to avoid hardship. Here I wish to echo the words of my hon. Friend the Member for Torrington. I do not generally engage in the arid argument of saying that what was done in 1949 is right today. The time has come when we must look at the whole question of financing the Health Service and at the balance between charges and contributions.

I wish now to turn to the basic argument of the hon. Member for Itchen. He would like to see the financing of the Health Service borne increasingly by direct taxation through the Income Tax and for the contribution element gradually to dwindle away. The hon. Member is supported in this view by some hon. Members on the back benches opposite. although I think I am right in saying that it does not command the support of the Opposition Front Bench. Perhaps I may quote the hon. Member for Cannock, who said: Let us join issue as the battle develops, and say quite clearly that the whole of the cost of the Health Service must be paid for by the Chancellor of the Exchequer."—[OFFICIAL REPORT, 8th February, 1961; Vol. 634, c. 474.] If I may be permitted one further quotation, I should like to refer to the words of 191-ie hon. Member for Ebbw Vale, who said: I hope that in this debate, it will be made clear from the Front Bench on this side that when we get a Labour Government again their deliberate purpose, aim and commitment will be to remove all the insurance contribution element in sustaining the Service."—[OFFICIAL REPORT, 15th February, 1961 Vol. 634, c. 1536.]

Dr. King

Will the hon. Gentleman read on? My hon. Friend also said: I do not say that it can all be done in one Budget…

Lord Balniel

I accept that, the hon. Gentleman did go on to say that it could not be done in one Budget. But the hon. Member for Itchen wishes this to be an objective of the Labour Government.

If we followed the advice of the hon. Members for Ebbw Vale for Cannock and for Itchen, we should see the contribution element gradually dwindling away. It would be a diminishing pro- portion of the average earnings and play a dwindling part in the financing of the National Health Service. What would happen would be that individuals on the lower income scales who do not pay taxes would not contribute towards the cost of the Service. To them it would become a system of charity. In the words of the Sunday Times article on the subject, it would become a system of universal pauperisation. Individuals on the higher income scales would contribute towards the Service indirectly by means of taxes which go to a general pool of revenue available for distribution at the discretion of my right hon. and learned Friend the Chancellor of the Exchequer.

Is this really what hon. Gentlemen opposite wish to see? Indeed, is it a good thing for the Health Service?

Mr. Ledger

Yes.

Lord Balniel

The hon. Member says "Yes", but it would be totally contrary to the principles of the Beveridge Report. The hon. Gentleman nods his head. I do not know whether he would extend the argument into the sphere of pensions. Today the individual gets his pension as of right because he has contributed to it.

Such a course of action would be totally contrary to the principles of the Beveridge Report because it runs like a golden thread through the Beveridge Report that the contribution should be an integral part. It was this sense of financial participation by the individual be it for pensions or the Health Service, this golden thread, combined with a wonderful depth of understanding and compassion for the problems of the people on the lower income scales which, I believe, was so inspiring a feature of the Beveridge Report and which evoked such a response among many persons who grew up in the post-war generation. It was indeed not only applied by the Beveridge Report to pensions; it was specifically applied to the National Health Service. If hon. Members look at page 159 of the Beveridge Report they will see that it reads as follows: If importance attaches to preserving the contributory principle for cash benefit, it attaches also to contribution for medical treatment. In this Bill my right hon. Friend is raising the contribution to form 16.7 per cent. of the cost of the Service. That proportion is slightly different from that recommended by the Beveridge Committee because since then a prescription charge has been written into the Health Service. It is worth recollecting, when hon. Members opposite recommend that the contribution should be abolished altogether, that the Beveridge Committee recommended not only that there should be a contribution to the Health Service but that it should not be 16 per cent. which we have in the Bill but 19 per cent.

Mr. Ross

Before the noble Lord leaves that point, will he read paragraph 287 of the Beveridge Report?

Lord Balniel

Yes, I shall read that paragraph. The Report says that these proposals are put forward as a fair basis of discussion.

Mr. Ross

Discussion, yes.

Lord Baniel

The Beveridge Report was not laying down the principles on which a Health Service should be established but the lines on which the National Insurance principle for pension should be established. The hon. Member invites me to read paragraph 287 of the Report and I shall do so. It reads as follows: If the total contribution by insured persons of all classes is compared with the total Security Budget, it represents about 22 per cent. If their contribution for cash insurance benefits is compared with the total of these benefits it amounts to 29 per cent. If their contribution for medical treatment and rehabilitation is compared with the estimated total cost of these services it amounts to about 19 per cent. The hon. Member has proved my point. This was recommended, or taken as a fair basis of discussion by the Beveridge Committee for the financing of a Health Service. I have quoted it at the invitation of the hon. Member. The Beveridge Committee took 19 per cent. and we are taking 16.7 per cent. I have no hesitation in defending this Bill and the principles of the Beveridge Report against the savage onslaughts of hon. Members opposite.

7.4 p.m.

Mr. W. A. Wilkins (Bristol, South)

Mr. Speaker, you and your predecessor have been rather kind to us this afternoon in the range of this debate because, apart from the two Front Bench speeches, I have not particularly noticed anything essentially concerned with the contents of the Bill.

I was interested in the speech of the noble Lord the Member for Hertford (Lord Balniel). I always think it a mistake to make a speech in this House when one is in complete ignorance of the speeches which have been made.

Lord Balniel

I did apologise.

Mr. Wilkins

At least in the early part of his speech the noble Lord had certainly not made himself knowledgeable of the very critical examination and explanations made by my hon. Friend the Member for Sowerby (Mr. Houghton), who answered every point the noble Lord sought to make this afternoon. I am sure, Mr. Speaker, you will agree—having gone as I have, when a young man, on the hustings in the open air—that part of his speech could be called a "stump speech". It was retrieved a little by reading from the Beveridge Report, which put a little meat into it.

I have one regret this afternoon. I should very much like to have had the opportunity of following in this debate my hon. Friend the Member for Cannock (Miss Lee). I could not, of course, hope to make such a splendid contribution. I might have been able to introduce emotion, but I could not introduce the logic and reasoned argument she introduced. She said something which appealed to me very sensitively when she made reference to the Parable of the Good Samaritan. I am one of those who believe that no one should suggest that by the Christian views they hold people have a right to claim a monopoly of Christian virtues. I have never believed that. I try to give credit to everyone for the views they hold, particularly their religious views.

I must make this observation because the noble Lord claimed that there is no difference of principle between us. It may be a difference of interpretation, but I would certainly offer a very different interpretation of what I am required to do by my religious beliefs than what is offered to us through the medium of this Bill as a practical contribution to the Health Services of the country.

Some of my hon. Friends may remember that in the 1945–50 Parliament when we were bringing in this legislation we formed ourselves into an association which we chose at that time to call the Socialist Christian Movement. We formed it with a very definite objective. There were eighty of us who were members of that movement, which is a substantial number in this House. We tried our best to influence this class of legislation which our party was then bringing into operation. I still say that what I address myself to this afternoon—I am coming to the contents of the Bill now—and the observations I want to make about it are conditioned by what I regard as being my responsibility—I am not answering for anyone else towards my neighbour. What am I required to do to help my neighbour? The proposals which we have in this Bill are, in common terms, that we should fight for ourselves and accept the survival of the fittest.

The hon. Member for Torrington (Mr. P. Browne) made an interesting speech. He is not at present in the Chamber. I make no complaint about that, because I know that a series of meetings is taking place at the moment. I wrote down what he said. He said it was no use thinking that we can get something for nothing. I think we accept that. I have never agreed that we have the services provided for us in the National Health Service for nothing. It has to be paid for. In the main it has been paid for, at least until 1952, out of taxation. I am making the comparison at the moment between the proposals to raise more revenue through the medium of contributions and the method we previously adopted where quite a substantial part of the cost of the Health Service was defrayed out of taxation.

I favour defraying the whole cost of the Health Service out of taxation. That is why I oppose the Bill. I believe that taxation is the fairest possible way to do it. Indeed, if I could have my way—I know that I cannot—and could one day be Chancellor of the Exchequer I might embark upon the mighty exercise of eradicating indirect taxation from our fiscal system and substituting therefor direct taxation, which is the only fair form of taxation.

The Bill will increase the contributions of men, women, boys and girls, and employers—in the case of men by 10d., in the case of women by 8d., in the case of boys and girls by 6d., and in the case of employers by 2d. I do not know to what extent other hon. Members, either on this side or on the opposite side of the House, have been consulting their constituents or friends. I discovered during last weekend, following the debates we have had in the House, that certain employers in my constituency are not in the least concerned about the extra 2d. If it is mentioned to them, they laugh. They say, "You do not think that we will pay the 2d. We do not pay the insurance contribution anyway. The Government can make the employer's portion of the insurance contribution whatever they like. We do not pay it. We put it as an on-cost on the product we produce."

This was not said to me directly by an employer. I was told this by one of my own family who was talking to an employer of labour on Saturday last and learned this from him. The employer said, "It does not matter at all. The worker will pay this increase either directly or indirectly". In other words, he will pay the 10d. directly and the 2d. which is put on the employer indirectly.

The noble Lord has said once again how easy it will be for workers to meet this contribution if they will only stop their kiddy having an ice cream or a lollipop, or forgo their weekly visit to the cinema, or give up one packet of cigarettes or one ounce of tobacco a week. The noble Lord said that if workers do that the extra contribution will not be a burden upon them.

This is a threadbare argument. The workers have their pleasures in all sorts of different ways, and it is a shocking mentality which argues that they are not entitled to enjoy themselves as long as they have to meet other commitments. That is a shocking argument to advance in defence of something which I can well believe the noble Lord is ashamed of.

On Monday, 6th March, I asked the Economic Secretary a question relating to the Bill. I knew that he might not be able to answer it off the cuff. I do not know whether he took much notice of my question. If he did, he may well be able to give me the answer now, because it is very relevant to what we are discussing if taken in conjunction with the arguments advanced by hon. Members opposite that the worker should sacrifice his ounce of tobacco or packet of cigarettes to meet this increase.

Only yesterday I was advised by people in the tobacco industry in my constituency, which has pretty well the largest factories of this type in the country, that over 3s. of the 4s. ld. cost of a packet of cigarettes is tax. The treasury hopes to get £49 million out of the increased contributions. I asked the Economic Secretary if he could tell us what the loss to the Revenue would be if everyone—men and women, because many women smoke—accepted the advice of hon. Members opposite and sacrificed one packet of cigarettes per week.

I believe that these figures can be obtained. If he wished to, the Economic Secretary could ascertain before the end of this evening what the loss to the Exchequer in taxation would be if workers followed the advice of the Conservative Party and sacrificed one packet of cigarettes or one ounce of tobacco per week. I should be surprised if it does not exceed £49 million.

My hon. Friend the Member for Sowerby said this afternoon that the Government have no principles. I disagree with him on this. I did not disagree with much of what he said this afternoon, but I disagree with him on this matter. I think that the Government have principles. We have all the evidence possible that the principle which the Government are adopting here and which they have already adopted in a number of similar cases is that when something is being given away the worker's pay packet must be robbed.

Within three or four weeks old-age pensioners will get a rise. The very same week the workers will pay an increased contribution for graduated pensions, out of which I understand the Government will take about £97 million to pay the old-age pensioners their increase. The Government have a principle, namely, that if it is proclaimed loud enough the public will believe that it is the Government who give these things and fail to recognise the source from which they get their money.

We have been told almost specifically that the increases which the Bill proposes are being levied to provide more hospitals. The Government want to boast that they are providing more hospitals. They have told us bluntly and blandly that out of this £49 million which they will get from the increased contributions they will provide about £5 million a year for hospitals. In due course they will proclaim to the public that they are building new hospitals, but the Government will not be buliding new hospitals. The workers will be building new hospitals, because they will be providing the money to do it.

The reason why the Economic Secretary is on the Government Front Bench at the moment and the reason why the Financial Secretary has been there is that the Government have clearly acknowledged that this is a tax Measure. That is obvious from the fact that the Bill has been in the hands of Treasury Ministers. We believe that the Government are following this principle because they are very anxious in the Budget, which is due in four or five weeks, to be able to afford Surtax relief to the new £24,000 a year chief transport boss and people like him who are in receipt of massive salaries. To do that and make good the resulting losses to the Exchequer the Government are increasing the contributions which the workers have to pay for their Health Service. I am beginning to wonder just to what level a Government can sink in these matters.

The hon. Member for Ilford, South (Mr. Cooper), who departed some time ago after making his speech and has not returned, said that the Labour Party regarded the National Health Service as a sacred cow. He went on to say that it was sacrosanct. Up to a point the hon. Member is right. To me and to many of my hon. Friends the Health Service was sacrosanct. To me it still is. I hope that it is still so sacrosanct in the hearts of hon. Members on the Opposition side when the opportunity arises to pass legislation through the House of Commons as soon as we can to redeem the promises we make to the people. We will restore this Service as a free Service so that the people shall have what we have come to regard as probably the first right to which the people are entitled—that is, the right to a doctor when they are ill and to the medicine which is necessary to cure them.

I apologise if I have become a little emotional. It is not nearly as emotional as I can become and, when I get on the public platform, will become. My hon. Friend the Member for Sowerby commented that whatever we say, however we argue and with all the persuasion that we have tried to bring to bear, the Government will get their Bill. I wish to add a postscript. The Government are bound to get their Bill, but when the opportunity arrives they will get their deserts. When the public are enabled to pronounce about this Measure and the other Measures that go with it, the Government will get their deserts and will wonder what has hit them. They will deserve the condemnation of the people in the ballot box.

7.23 p.m.

Dr. Reginald Bennett (Gosport and Fareham)

Much as I respect the capacity for emotion of the hon. Member for Bristol, South (Mr. Wilkins), I do not think that this is a topic which is best discussed in a heart-throbbing fashion. It is a matter of seriously trying to find the ways and means on which to build and improve, and cause to grow, a Health Service of which we are all singularly proud. The problem is one which, I am sure, is familiar to everybody. One does not need to harp upon it. The difficulties, however, can be met only by a realistic consideration of why we are trying to raise the money for such a Service.

As hon. Members will know, I have spent many years working under the Health Service. I certainly regard it as something of which we should all be highly proud. One thing which I certainly know is that there is no improvement that anybody could mention which we do not at once want to try to incorporate in the Service, from the level of qualification or standard of service to the provision of accommodation which people need. That being so, we commit ourselves automatically to a Service which must grow continuously. Every improvement costs money. Every additional public servant helping in the Health Service costs money for pay and, possibly, for accommodation and office space. Every new modification of an instrument costs money in an enormous way.

When we think of some of the plant, even today, that is used fairly commonly in diagnosis and other such things and compare it with what it was even ten years ago, it is as true of the Health Service as of all walks of private life that the extraordinary innovation of yesterday becomes the commonplace of today. If we allow this to take place—I defy anybody to refuse the right for it to do so—we must provide the money for it. This House has the invidious duty of providing the money.

Then, we get back in the provision of money to the age-old controversy of whether it is to be done by a contribution or by an extraction of money from the pool of general taxation. The flat rate of contribution has been accepted in principle by both parties. It was introduced by the Labour Party in the original legislation. As the extent of money required has increased, so we have to contemplate whether we shall put a check on the total money drawn out of the general "kitty" of the general tax fund.

Mr. Stan Awbery (Bristol, Central)

That is not the argument that was put to us when hundreds of millions of pounds were voted during the last day or two for the Armed Forces. We were not told anything about a contribution then. It all came out of the Exchequer. Nobody on the benches opposite said anything about making a contribution. Why not follow the same method with the Health Service?

Dr. Bennett

That might be relevant if every member of the population was entitled to have a go at driving a V-bomber, or something of the sort. I am talking about a social, and not a military, service, and there is little relevance in the hon. Member's intervention.

If we are serious, and not jesting, in trying to find money for a Health Service which everybody is entitled to use, shall we try to raise it from general taxation or from a special contribution towards that Service? The principle of a contribution has not been refused by either party. If, as the cost of the Service goes on rising continuously, there conies a time, as the late Sir Stafford Cripps discovered, when the general fund of taxation can no longer be saddled with a continuously rising bill, do hon. Members opposite wish to curtail the growth of the Health Service, or would they give a blank cheque for unlimited taxation from the general fund, as, I understand, the hon. Member far Bristol, Central (Mr. Awbery) proposes?

Mr. Awbery

Why not?

Dr. Bennett

All I can say is that a Chancellor of the Exchequer of the hon. Member's party did not find it possible. I do not think that we should find it any more easy than did Sir Stafford Cripps.

Another point which fits the case is highly relevant. Let us face it without lapsing into crocodile tears and the like. The spread of incomes from the highest to the lowest is a good deal less as time goes by, and has decreased. The upper incomes, even of those in the Transport Commission, are not so astronomically high in relation to the spread of incomes before the war. The lowest incomes, although I think that the dockyard workers in my constituency are, possibly, among the lowest, are still going up, even if not fast enough.

The average working man's income, however, is not now a disgraceful one. It is a good deal better, relatively, than it was even at the time of the introduction of the Health Service. Therefore, it seems to me that the argument is clear that it is not an intolerable imposition to have a flat-rate contribution from all hands, so to speak, such as was originally agreed in general in the Beveridge Report and by all three political parties. It is not unfair to have the flat rate, and as the distance between the highest and the lowest incomes narrows it is not unfair that the flat rate should be increased in some proportion to the kind of incomes that are being drawn.

I share, of course, the horror which has been expressed at the thought that what we lightly say from time to time should be taken literally; that it is the price of five cigarettes a week that is in question in all this "hoo-hah". Five cigarettes a week has been mentioned often, but it would be disastrous if everyone thought of giving up the same thing; others will no doubt have to give up something else. For instance, I do not smoke, so it is quite certain that I shall not deprive the Treasury of that amount of tobacco tax. I shall have to deprive myself of something else.

We cannot regard as seriously based this somewhat excessive alarm and concern about the average wage earner, who is really doing quite well and, we hope, will continue to do even better. For the reasons I have given, I am absolutely certain that there is nothing inequitable in the increase in these contributions that the Bill proposes. As I say, I have worked in the Health Service for many years, and I do not think that we shall be doing harm to the Service, to the nation, or to the people by the imposition of this modest increase.

7.31 p.m.

Mr. Ron Ledger (Romford)

During the last three and a half hours of this debate I have watched as well as listened. It has been interesting to watch the way in which hon. Members opposite have earned their right to speak. They have arrived just in time to take their turn, have waited the due length of time after they have spoken, and have then disappeared, but I am sure that those people who are interested enough to read their speeches tomorrow or later will gather that they have not paid a great deal of attention to the 54 hours of debate which we have had on this Bill.

The speech of the hon. Member for Gosport and Fareham (Dr. Bennett) was completely irrelevant to this debate, and that goes for the majority of speeches coming from the benches opposite. I would exclude from those ranks the Financial Secretary and the Economic Secretary. Their answers have not satisfied us, of course, but, within limits, they have advanced arguments—with which we have disagreed and have attempted to answer our questions. During all these hours of debate they have put up quite a performance. We have hardly seen any senior Ministers at all during all this time, and the two hon. Gentlemen have borne the full brunt of our onslaught.

As I say, the speech of the hon. Member for Gosport and Fareham was completely irrelevant so I shall not refer to it, but the noble Lord the Member for Hertford (Lord Balniel) introduced that wonderful red herring about the amount of money spent by families on such things as sweets, lollipops, television and tobacco. To make his point he gave average figures of consumption of those commodities and in order to destroy his argument completely I propose to deal with just one of those articles.

He said that the average family spent 10s. 6d. a week on sweets and ice-cream and argued that if they could spend 10s. 6d. a week in that way they should be able to afford the modest 2s. or 2s. 8d. contribution to the National Health Service. There are a number of ways of reaching an average of 10s. 6d. We can take two families, one spending 20s. a week on sweets and ice-cream and the other spending only a Is. a week. The average is then 10s. 6d. per week per family.

Our argument is that although the difference may be that between £1 and 1s., both families will have to pay the same amount to the National Health scheme. No matter how much a family can afford to spend on luxuries it will still pay the same National Health poll tax. One presumes that the family spending 20s. a week on sweets and ice-cream is in a higher salary range than the family spending only a Is. a week, but they will both pay the same amount of poll tax.

In an earlier debate the Financial Secretary referred in very nice terms to my contribution to the debate on that occasion, but then referred to hon. Members on this side as part of the stage army for this debate. We do not grumble at that, but I would assure him that the only orders we are receiving in this army are those dictated by our conscience and a sense of social justice. We could not apply the same term to his hon. Friends. It would, perhaps, be more accurate to call them the ghost army, the phantom army. There have been no soldiers, and the general has been absent. We have had a couple of lieutenants who have done the best possible, but it has been a ghost army it has lost the chance of learning something of the economic facts of life.

We feel very keenly and sincerely about these matters. It is not just a question of Labour Party policy but of individual feelings. Basically, we believe that the nation should provide these public services, and it is fundamental to us that those service should be provided from direct taxation. Much has been said about the increasing cost of the National Health Service. It has been pointed out repeatedly that the cost has gone up by £100 million, or £200 million or £300 million since the inception of the Service, that we have to meet that increased cost, and that these extra charges are justified because the workers are earning far more money now than they did when the Service was introduced. That argument is quite irrelevant. The only important figure to consider is the relation of the cost of the Health Service to the total national income.

Taking the Government's own figures, we find that whereas in 1950 that cost represented 4.5 per cent. of the national income the most recent figure given by the Government is 4.2 per cent. It would therefore appear that, on that basis, we are spending not more but less on the Service. It means that the National Health Service is less of a burden today on the economy than it was in 1950. Moreover, whatever burden there is, a considerable amount of it arises from the Government's own policies which have brought inflation upon the country.

I do not believe that this is basically, even on the benches opposite, a question of how the costs are to be met. There is a difference of principle beween us and the Government. This is a matter of principle, no matter what they say and no matter how they try to argue round it. It is a matter of principle and priority. The Government and the Tory Party have as their priorities profits, dividends and rents. They legislate in favour of all those things, and they have done so ever since they have been in power.

The Financial Secretary to the Treasury (Sir Edward Boyle)

Oh.

Mr. Ledger

Yes, of course they do.

Sir E. Boyle

The hon. Member has forgotten that we put up Profits Tax in the last Budget. That is why I said "Oh".

Mr. Speaker

I do not want to interrupt either hon. Member, but, although great licence has been allowed in this debate, I think that the discussion now is passing beyond the limit.

Mr. Ledger

I do not want to go out of order, Mr. Speaker, and had I been allowed to finish my comment you would, I think, have realised how much in order I was. It was the Financial Secretary who went out of order by referring simply to the Profits Tax. He ignored all the other things and other benefits which were given at the same time. I was saying that the Government's order of priorities was profits, rents and dividends first and that welfare came next. The attitude of the Government has been that, if there were anything left over in the kitty when they had dealt with the other things, then they would not mind doing something about pensions, about the Health Service and about other public services. We on this side, on the other hand, hold very dearly to the principle that the first priority must be the welfare services and the public services. We must provide them first and then work out ways of meeting the cost.

Quite another problem is raised by the Bill. The hon. Member for Ilford, South (Mr. Cooper) painted a colourful picture of the flag which my hon. Friend the Member for Cannock (Miss Lee) would be carrying into the battle of the by-elections. I suggest that the flag which Government supporters would carry into by-elections at this time in support of the Bill would be a simple and very well-known one, the skull and crossbones, because the Government are embarking upon another campaign of pillage and plunder. The only excuse we have heard from them so far for imposing these charges is that they propose to spend another £5 million a year on building hospitals, but, in order to spend that £5 million, they will extract from the people of this country £50 million. The other £45 million is the plunder that they will extract.

If the Government had really wanted to do so, and if they had really believed in the principle of the Health Service, they could have used the Service itself to reduce costs. I have recently been reading a report issued by the Ministry of Labour on 19th December, 1960. headed "Health at Work". One of the point made in that report is that during each year more than 300 million working days are lost in Great Britain because of sickness or injury. A similar survey made in 1955 by another organisation produced a similar figure, and it was said at that time that the value of the lost production was about £1,000 million. It costs this country £1,000 million in absenteeism from work just for sickness and injury. Yet by this Bill the Government will increase the amount of absenteeism because they will effectively increase the amount of illness and disability.

There is a fallacy in the way Government supporters argue that 10d. on the stamp will not affect the wage earner. I can understand the argument. Hon. Members argue that a man with his wage packet in his hand on Friday will not miss another 10d. Indeed, it would be difficult to argue that a man receiving £8, £9 or £10 would at that point of time miss a further 10d. out of his wages. But it is nonsense to look at it from that point of view. A man does not retain his wages for the whole week. He will notice very much any further deductions on the following Wednesday and Thursday when all the money has been spent. When the wife has bought the food and other necessities, when all her allowance has gone and on Thursday she says to the family that this and that is finished, that there are no more eggs, there is no more jam and no more bacon, then, at that point, the 10d. becomes a lot of money. It is at that stage, when the family has no money at all, that we begin to hear murmurings in the home and discussions at work which lead to talk about the need for increased wages in order to meet the higher cost of living.

The Financial Secretary must realise that this increase of 10d. cannot be taken on its own. It comes at a time when there are many other increases, when, for instance, many families will have to pay 5s. or 6s. more per week on prescriptions, and when families with small children will have to pay more shillings a week for welfare foods.

This morning I gave a neighbour a lift in my car. She was going to the dentist. She is pregnant. On the way we chatted about the National Health Service and I told her about this debate, explaining that we should discuss the Bill which is to increase the stamp contribution. I am not sure which way this lady votes, but I am quite sure that the Financial Secretary would not have been very reassured by her reaction, because immediately I mentioned the contribution on the stamp she went into a tirade about all the other increases which are being imposed. It is nonsense for Conservative Members to argue as though the 10d. itself was the only increase that the workers will have to face. In doing so, they merely exhibit their lack of realism.

If I were a member of the Government I should not feel very complacent about the public reaction. Only last week I met in this building a deputation which came from my own constituency and from the neighbouring constituency of Hornchurch, which is, or which was, a fairly safe Conservative seat. Those people came to this building with a petition, part of which I have here. The bundle I have beside me on the bench is quite a small part of what was collected. It is a petition against the new charges and increases in contributions under this Bill and other Measures. Nearly 20,000 signatures were collected in two weeks. I am told by those who dealt with the petition that it was almost impossible in the shopping centres to keep up with the demand of people who wanted to sign it. In areas in my own constituency, not notably strong for the Labour Party, there was a continuing demand from residents to sign this petition. I do not think, therefore, that the Government can feel a considerable amount of confidence in their assertion that these new charges will be accepted by the people of this country.

I should like to give one further proof of this. The hon. Member for Horn-church (Mr. Lagden) is not in the Chamber at the moment, but I am quite sure that if he were he would not be quoting from this paper. It is one of the local papers that he and I share. It is commenting upon the annual meeting of the Hornchurch constituency Conservative Party. After the hon. Member for Horn-church had been discussing the National Health Service, it reports that during the meeting there was general agreement that the Health Service charges should be related to income through Income Tax coding.

This is quite a departure from the attitude of the Government, because it is precisely what we have been arguing, that the payment of these charges should be related to ability to pay. Here is a constituency Conservative Party annual conference which says precisely this. One wonders, therefore, to what extent the Conservative parties throughout the country are wedded to this idea, and to what extent within the Conservative Party there is likely to he another split to confound the present Government.

We have had a reasonably long innings on this Bill.

Mr. Willis

Really? We did not even discuss all the Amendments.

Mr. Ledger

My hon. Friend, I hope, will get a chance to make my point more forcibly, but first I want to make my point, that though we have had a reasonably long innings on this Bill it would have suited us better to have had twice as long an innings so that we could have said the things that we wanted to say.

The hon. Member for Ilford, South decried the fact that during two sittings we had nineteen Divisions, which took approximately four hours of debating time. It would have suited us very well, if we had been told that the Guillotine was to drop not at 11.30 but perhaps at 3.30 in the morning. Then we should have had another four hours for discussion, and although the hon. Member for Ilford, South and other Conservative Members would certainly not have made any use of that time, we on this side would have done.

We served notice on the Government during the debates that have taken place on this Bill that this is not the end of it. This Bill will be dealt with this evening and become part of the legislation, but it is not the end of the fight. I do not think that we shall find in the constituencies, when we argue this case, that there has been the apathy there which has been so apparent on the Government benches. I feel certain that the spirit which has run through the ranks on this side of the House will, as it were, burgeon into action on other matters as well.

The Financial Secretary would be well advised at this late stage to acknowledge many of the arguments which we have made and which he has dismissed during Committee and other stages of the Bill. If he does not, it is my prediction that this may be the beginning of the end for the Conservative Government and that, very likely, we shall be in a position on the benches opposite to reverse the legislation which is being imposed at the present time.

7.55 p.m.

Mr. Arthur Holt (Bolton, West)

The hon. Member for Gosport and Fareham (Dr. Bennett) seemed to be strongly attached to the contribution system and to think that it was today a principle in all aspects. There is one aspect of it which he did not consider, and which, as a medical man, I am sure that he will appreciate. I will come to that later.

So much of our taxation system is completely chaotic today that it is rather surprising to find anyone seriously defending it. If one looks at the system as a whole, it appears a little odd that the Conservative Government should, as it were, put a premium on puritan virtues. If one does not smoke, does not drink, and is rather healthy he avoids a lot of tax, whereas if one drinks like a fish and smokes like a chimney—

Mr. Deputy-Speaker (Major Sir William Anstruther-Gray)

Order. I am reluctant to interrupt the hon. Member so early in his speech, but I hope that he will remember that we are not discussing the taxation system as a whole, but the Third Reading of this Bill.

Mr. Holt

Naturally, I pay great attention to your Ruling, Mr. Deputy-Speaker, but I was developing this argument because I thought that the taxation system, which, of course, acts so indiscriminately in a community, was something which was relevant to all matters impinging on the Health Service. If people are happy and busy in their work, they will not have to call upon this Service. I think that one should look at one or two aspects of this system in passing, but I am not proposing to dwell upon it.

To return to the point about the poll tax, and the increases which are being put on the contributions by this Bill, the real objection to it—and it was, indeed, supported by one or two of the hon. Member's hon. Friends when it was given an airing in an earlier debate—was that now that the total contributions, including National Insurance and the employer's part of the contribution are getting near to £1, it is becoming a substantial part of the total cost of employing a person who has only a very small skill to offer to an employer. It is becoming an obstacle against the employment of marginal workers.

This is a most serious aspect. The hon. Member for Ilford, South (Mr. Cooper), in a previous debate, did, in fact, say that he thought that the contributions had now reached the limit. Some of us believe that they have already gone beyond the limit.

I should like to come to a point which may have been touched on by the Financial Secretary when he opened the debate, but, if so, I can only say in apology that I was not able to be here then because I was serving on a Select Committee upstairs. A very important statement was made yesterday which has a serious bearing on all these proposals for increasing revenue of which this Bill is one. These proposals, of course, are for increasing contributions and the subscription charges and other charges. Can the Financial Secretary to the Treasury give us some figures bearing on this point? Yesterday, the Minister of Health made a statement about some recommendations from the Cohen Committee on the Classification of Proprietary Preparations. The fact that the Committee had reported, and the nature of its report, was not known to the House until yesterday. When the Government were drawing up their proposals for the Health Service, which they felt they had to make for their own reasons to raise about £70 million which otherwise they would have to find from other sources, did they take into account the kind of savings that might be made in a full year if the advice given by this Committee were accepted by the doctors and carried out in practice?

I should like to know whether any estimate has been made by the Treasury of what the saving in total cost to the Treasury of prescriptions in a year might be if doctors now prescribed their drugs under the British National Formulary and from the other listed preparations? This is relevant to the Bill. If the point was that the Bill had to make a new contribution to the Exchequer of about £49 million, and if a saving can be made by the doctors by prescribing not very expensive proprietary brands, which are often as much as 50 per cent. more costly than the equivalent drug which is just as good and is listed in these official publications, it might well be that, entirely due to what most hon. Members would agree would be a sensible prescribing by the doctors, there might be a saving of £20 million. If that were the case there would be no need for the House to pass this Bill to raise a sum of £49 million. It would be far better for the Government to withdraw the Bill and prepare a fresh Bill, reducing the figure required to perhaps £20 million.

I should like to know from the Financial Secretary whether the Treasury has made any estimate of the savings that might result from the doctors carrying out his advice and, if so, what action the Government propose to take. Do they consider this to be extra "bunce" and, if so, are the hospital building programmes to move faster? Alternatively, will this mean that the Government will cut down expenditure?

Mr. Anthony Kershaw (Stroud)

Before the hon. Member sits down, may I ask him a question? The hon. Member mentioned £20 million and referred to it as a sum which might possibly be saved by doctors adopting a different rule for prescribing. Has the hon. Member any method of calculation whereby he arrives at a figure representing this possible saving? This is a very complicated question and it is very doubtful how doctors will be affected by this advice. If the hon. Member could say how the saving of £20 million is to be achieved I am sure that it would be of real interest to all of us.

Mr. Holt

I should like to do so. The point is that the Cohen Committee is extremely firm in what it says on this subject. It says that while there should continue to be no absolute prohibition on the prescribing of any drug the indication is very strong that doctors, with few exceptions, can get all they need from the official publications. This is what the Minister said yesterday and he said that the Report went on to advise that a doctor who prescribed other preparations should be liable to be called upon to justify his action.

In an earlier debate I gave the example of the ordinary aspirin and compared it with a proprietary brand. Whereas the proprietary tablets cost 12s. 1d. for a certain number, the same number of aspirins prescribed according to the British National Formulary cost 8s. Therefore, there was an increase of about 50 per cent. in the cost of the proprietary brand. I do not know whether that 50 per cent. represents the extra cost of a doctor prescribing the proprietary brand.

Sir E. Boyle

On a point of order. I do not want to be tiresome, but the hon. Member asked me a question and I had a feeling that I should not be in order if I responded to his desire that I should answer it. The exchanges of the last few minutes have made me feel that it is more and more necessary for me to do so.

Mr. Deputy-Speaker

I appreciate the hon. Gentleman's point of order. The source of the trouble is my allowing the hon. Member for Stroud (Mr. Kershaw) to ask a question which prompted the hon. Member for Bolton, West (Mr. Holt) to go further than he otherwise would have done. As the hon. Member's speech was finished when he was invited to reply to a question, it would be better if we left that and we got on with the debate.

Mr. Holt

Would it not be in order, Mr. Deputy-Speaker, for the Financial Secretary to reply to me?

I put it as a point of my argument what the Government told the House that it was necessary for them to make a certain total saving on the Health Service. The whole point of what I have been saying is that yesterday the Minister of Health made a very important announcement which hitherto had not been taken into consideration by the House and which, I suggest, will result in an additional total saving of a considerable amount. I was endeavouring to discover from the Financial Secretary whether the Exchequer had made any estimate of what this total saving might be, because the House should know whether that means that we do not have to pass this legislation to achieve the saving because part of it would be made by another method.

Mr. Deputy-Speaker

The debate must be restricted to the Third Reading of the Bill which we are now discussing.

8.9 p.m.

Mr. John Hall (Wycombe)

I intervene in the debate for only a short time, and I apologise that my other duties made it difficult for me to attend the debate earlier. I think nevertheless that I shall be able to make the point which I have in mind without finding that to be too great a disadvantage.

If I may follow up the point made by the hon. Member for Bolton, West (Mr. Holt) without getting out of order, I doubt very much whether the savings which he envisages are likely to reach a double figure. In considering this matter one has to draw a distinction between proprietary drugs and ethical drugs, and the fact is that a far greater proportion of the cost of prescribing goes on new and expensive ethical drugs than on proprietary drugs.

The doctors have been allowed, as I understood the Minister's statement yesterday, full freedom in continuing to prescribe such drugs of which there is no parallel in any other form. So I doubt very much whether the savings would be sufficient to make a worthwhile contribution of the kind which the hon. Member has in mind. There will, no doubt, be the £1 saving. If there is, I should have thought that it would have been better applied to the further improvement and development of the Health Service rather than towards the costs involved in the Bill.

While the insurance principle remains with us, one can understand the logic behind the Bill, and for that reason I support it. But I am driven to ask myself whether we can go on financing the Health Service, or, indeed, the social services as a whole, in this way. I ask myself whether the total cost which has to be met can be met by a worthwhile contribution from every individual throughout the country irrespective—

Mr. Willis

The hon. Member says that this is based on the insurance principle and has talked about contributions made by every individual in the country. It is nothing of the kind. It is a contribution made solely by the person with an insurance card.

Mr. Hall

If the hon. Member wishes to make that distinction, he is entitled to do so. The great majority of the people in the country pay a weekly insurance stamp. Those are the people with whom I am primarily concerned at present. There is little doubt that the total cost of all the social services which are covered by the weekly insurance contribution, of which the Health Service charge is £1, is getting to a point where it is becoming a very considerable burden on certain sections of those now liable to pay the contributions. While, as I said at the beginning, we still maintain the principle on which the original scheme was based, one can understand the logic of that, but the time has come when we cannot go through all this exercise again. We should consider the whole of the social services, including the method of financing the National Health Service, in a totally different way.

I suggest, briefly, that when we look at the National Health Service over the years to come, there is no doubt that, whatever economies we might make in various directions, and however efficient we might make various parts of the Service, the cost is bound to rise inevitably year by year. I cannot see any halt to that. When considering the effect of this on the national finances of the future and when we come to a point where we realise that we have to adjust our method of financing it, I suggest that we ought to consider a form of social service tax which has some relation to the ability to pay and which does not place such a burden on the very low income earners.

We talk a great deal—both sides of the House tend to fall into this error—about average wages and average earnings. but to have any average one has to have a large number of people below it as well as a large number above it. I can think of a number of examples from my experience, of people employed in the textile industry and male and female personnel employed in shops in the distributive trades at £5–£10 per week. To them the increased cost of the weekly insurance stamp represents a very considerable proportion of their weekly pay, and in some cases it represents a hardship.

I have supported the Bill because it follows the principles which have so far governed the development of the National Health Service and the National Insurance scheme as a whole, but I should not like to have to go on supporting additional contributions of this kind if we had a similar Bill before us in two years' time. We must consider how we are to temper the increasing cost of these schemes to those with the minimum income.

That is the point that I wanted to make at this stage. It is, in a sense, a note of warning to whatever party is in power at the time and may be responsible for continuing the financing and development of the National Health Service and other social service schemes. It is a warning to them that if they cannot go on doing it in this way we must find another method.

8.15 p.m.

Mr. James Dempsey (Coatbridge and Airdrie)

I understand that we were debating tonight not the National Insurance contribution, nor a National Insurance Bill. The Measure is called the National Health Service Contributions Bill. The Explanatory and Financial Memorandum indicates that it is expected to raise a certain amount of money as a result of these increases. I notice that it is estimated that £16.1 million of the actual amount will probably be the responsibility of Scotland.

It seems to me that we are dealing with a subject which is quite apart from National Insurance contributions and that we have apparently reached a stage under the Tory Government where we now fix contributions to be paid by persons who are gainfully employed without any regard to the principle of ability to pay. We have decided, according to the Bill, that employees and employers, self-employed and non-employed persons, of both sexes and all ages, will be asked to foot a bill in order to try to retain the present National Health Service.

The further we study the Bill the more we realise that successive Tory Governments have time after time increased contributions for this very purpose. I know that we have very often heard from the Government benches great criticism about what happened between 1945 and 1951. But it is interesting to note that even during that period the element which was regarded as sufficient to meet the cost of the Health Service from the point of view of the gainfully employed person was 8½d. However, by July this year, under the Bill, that contribution will have increased to 2s. 8½d. Here we have an extraordinary increase in the contribution of gainfully employed persons towards the provision of a Service which is essential if the human frame is to be maintained in reasonably satisfactory order.

When we look at the development of the Exchequer contribution we find that it has not increased correspondingly to the increase in respect of the gainfully employed person. If we hark back to those days, as the Goverment usually do, we find that the Exchequer met £106.8 million of the cost of the Service. This year, the cost will be £187 million, or an increase of 70–75 per cent. If we relate that to the increased percentage cost payable by gainfully employed persons, it indicates a very wide difference between the responsibilities being fulfilled by the Exchequer on the one hand and gainfully employed persons on the other.

Mr. John Hall

Would not the hon. Gentleman agree that the contributions from the Exchequer will come very largely out of the pockets of the gainfully employed persons in any case?

Mr. Dempsey

At present, as I see it, as long as there is a tax on a section of society, they must pay a specified rate of contribution irrespective of their ability to pay. It means that the higher income level classes, the Surtax payers, are making the identical contribution and getting exactly the same service as others. Under such a system it is the lower income groups who are paying a disproportionate part of their income for the maintenance of the services which are being enjoyed by the better off classes of society who are paying an infinitesimal part of their income for them.

That is the economic logic of the intervention of the hon. Member for Wycombe (Mr. John Hall). Whereas the Exchequer contribution has gone up only by 70 to 75 per cent., the employed person's contribution has risen by 260 per cent. That is a tremendous increase for a person in the lower income group with a wife and family to maintain. The Government are asking for a disproportionate part of such an incime.

I was pleased to hear the hon. Member for Wycombe pouring scorn on the figures which indicate average earnings. Time and again, since we started to discuss this matter, we have heard right hon. Gentleman referring repeatedly to average earnings. During the period over which the employed person has been asked to pay an increase of 260 per cent. in his contribution, the average wage rate has increased by 74 per cent. In those figures we can again see the validity of the statement that the working man is paying a disproportionate part of his earnings towards the Health Service.

We recognise that the cost of the Health Service has risen over the last ten years, and that that is why the Exchequer contribution has had to be increased. But it should surely have been increased in a way that would have ensured fair shares of the cost of the Service being borne by the Exchequer and the other contributors. But the converse has happened. The emphasis has been placed on the gainfully employed person, not on the Exchequer, and that is our great criticism of the whole system.

This concerns not a choice between mental attitudes to the Bill, but a choice between two principles. We believe that the Health Service should be an inheritance of man without regard to his ability to pay. It is for that reason that we have tabled several Amendments to the Government's proposals during the last few weeks.

It is interesting to note that during that period we have heard very little reference from Members opposite to the question of ability to pay. This is surprising because, when we discuss subjects relating to other social services, we are reminded by the Government that a subsidy should not be passed on to a worker because a subsidy should be based on need. That argument has been adduced time and again from the benches opposite on an issue of this nature, but it has been shelved for this Bill.

It was a great surprise to me to hear the Economic Secretary adducing, on the one hand, the reasons for this Bill and, on the other, traducing the Opposition as having misrepresented the Bill's purpose. He gave us three reasons. The first was that the burden on the Health Service was growing too great. The second was that, unless this burden was checked, the hospital building programme would be jeopardised. Thirdly, he thought that prescription charges would check waste.

For those reasons he moved the Third Reading, and the more we analyse them the more we realise that they are not reasons, but excuses, for introducing a Bill, the purport of which is to ensure that in many cases those least able to bear the cost will have to pay up to absolve the Government of the need to tax those who can afford to pay.

My hon. Friend the Member for Rom-ford (Mr. Ledger) said that if we harked back to the "bad old days" of 1945 to 1951 we would discover that the Labour Government were spending 4.5 per cent. of the national income on the National Health Service. The present Government are spending only 4.2 per cent. of the national income on the Service. In view of that, the Government's argument that the burden is growing so great is a fraudulent attempt not merely to mislead us, but also to mislead the people. It is important that we should remember that argument when discussing the Bill.

The Government also say that the burden was growing so large that there was a danger of the Service in general being prejudiced. It is well known that of all our social services the Health Service is third in its share of Government expenditure. The Government have relegated it to third place, whereas under the Labour Government it received a larger share. If the facts I am quoting are wrong, I hope that the Financial Secretary will give us the information.

It seems that in real terms we are spending only a fifth more in pounds, shillings and pence than we spent ten years ago, in spite of the substantial increases in the cost of the services, in doctors' and dentists' salaries and in the pharmaceutical services. Our achievement over the past ten years is a 2 per cent. expansion per annum in real terms. Frankly, it seems to me that there is little reason for the Minister to suggest that the Service is in jeopardy.

If we look across the English Channel and analyse how other Western European countries approach the provision of a Health Service we find that Britain is spending less on the Health Service than are the majority of the Western European nations. Apart from our relegation at home, we are facing relegation abroad.

The second argument, that the hospital programme was endangered unless those gainfully employed paid increased contributions per week, was about the weakest of all. If the Minister had had any knowledge of the situation in Scotland he would have chosen wiser words, because in Scotland we have been paying increased contributions for ten years and in the whole of Scotland we have one new, little hospital at the Vale of Leven, with 120 beds. That is the achievement of ten years' hospital provision by a Tory Government.

I retain membership of a hospital board, and on it I heard one of Scotland's most competent medical authorities state that the hospitals in Scotland are fifty years out of date and are well behind the hospital provisions of many European countries. That statement came from a competent medical source. When we are discussing increased contributions and listening to the arguments which were used to bolster up the hospital programme, it is regrettable that none of the Scottish Ministers is here to take part in the discussion or at least to give an ear to the representations being made on behalf of those who live north of the Border.

I then examined the Minister's third argument, in which he made some startling statements. He said that unless prescription charges were increased, the present system would lead to considerable waste. With a view to checking wastage we are asking people, whether they can afford it or not, to pay 2s. per prescription item instead of ls. In my opinion, this is a fallacious argument. When the ls. per prescription charge was imposed in 1956, many doctors, to mitigate some of the effects on the patients, prescribed very large quantities of drugs on each form, and the average cost per prescription rose sharply from 4s. 11½d. in 1956 to 5s. 10½. in 1957.

Doctors were compelled to do this because they had the utmost sympathy with many patients whom they knew were so poor as to be unable to pay the full cost of these prescriptions. If that happened after the prescription charge of Is. had been introduced, what will happen when the charge is doubled? We see that the average cost per prescription rose from 4s. 1l½. to 5s. 10½d. and that the charge of 1s. did not check waste. It resulted in an increased cost to the Health Service for prescriptions throughout the country.

It seems to me, therefore, that when we examine these arguments about the hospital programme and the prescription charges, they hold no water, and it appears that in his effort to camouflage the true intention of the Bill the Minister has failed miserably not only to convince the Opposition, but also to convince the country. Most hon. Members have been flooded with resolutions from very strange quarters protesting, for example, about the increased health charges and the increased contributions.

These have come not only from sources belonging to the Labour movement, but from non-political bodies, from active medical bodies, from independent organisations, and even from associations with Conservative advisers, all protesting, and rightly so, about this appalling imposition on the shoulders of millions of citizens who cannot possibly afford them.

We should realise that tonight is our last chance to reverse this regrettable policy of this regrettable Government. It is incongruous of the Minister, and, indeed, of Government supporters to ask us for support for the Bill. It is most audacious of the Government to put legislation of this nature through the House to increase contributions to provide these services, because at the last election—and I have here the manifesto and the statement purporting to come from the Central Office—the Tory Party promised to reduce the cost of contributions from 9s. 11d. to 8s. 4d. It promised to reduce the charge to those gainfully employed. It promised to give them more and charge them less, but here we have the reverse of that policy.

The Government are now charging more and giving less. It is for that reason that the Opposition are endeavouring to try to prevent the Third Reading of the Bill in the hope that this legislation will be reversed by the Government. I am convinced that if, prior to the last election, the Conservative Party had told the people of the country that this is what it intended to do there would have been a different result. The Tories have been dishonest. They had this iniquitous legislation in mind prior to the election, but they made sure that it would be introduced in the post-election period.

The fact that this legislation is being submitted now is a manifestation of the philosophy of the Conservative Party. It is a most convincing factor to prove to the citizens of this country that Tory promises, on the one hand, and Tory performances, on the other, are poles apart. When we require money to maintain an essential and integral part of the life of our society there are other ways of finding that money than by taxing those who are least able to afford it.

We have heard the cry: where can the money come from? If anyone cares to study the Budgets over the past few years, they will find not that £49 million had to be found, but that millions of pounds have been given away in Surtax and other reliefs. In the last Budget, reliefs were given to wine manufacturers and cardsharpers. Everybody seems to share in this great beneficial feat except those who matter most, the working people.

It shows a weak mental attitude to say that this charge—this has been said by several hon. Members opposite—represents only the price of a packet of cigarettes. I have heard that said in relation to the increased contributions, in relation to the housing subsidies when they were reduced, and in relation to the rates when they were increased. I wonder when the Government and their supporters will draw the line and realise that they are sacrificing so many packets of cigarettes, so many plates of ice cream, and so many bottles of beer that the working man will soon have little left unless a halt is called and the Government stop making inroads into his meagre weekly or monthly income.

Those hon. Members who talk of this being a mere 10d., and who say that we can all afford to pay it, should remember that working people also have to pay other contributions, such as extortionate hire-purchase charges and interest rates. The working man who fortuitously owns his own home has many other commitments which involve deductions from his very limited earnings. When the Government ask where the money is to come from if it is not to be collected in this way they should remember the answer given to a Question asked only a few weeks ago in connection with the National Insurance Fund, to the effect that the Fund has been denuded by £338 million because of investments in gilt-edged securities.

If any hon. Member opposite asks me where the money is coming from, I reply by asking another question of him. Where did the £338 million of the Fund go to? That is the sort of question that we should ask the Government. That sum seems to have disappeared overnight. We have spent days in discussions on dozens of Amendments dealing with the object of trying to find £49 million, but how can that sum be compared with the overnight loss of £338 million, due to the very weak and wrong investment policy of those who are handling these contributions?

When we arrive at a decision in this matter, which is of vital importance to our people, we should remember that there are other rates besides Health Service and Exchequer rates. We should remember that the main rate in such a matter as this is not the Exchequer rate, but the death rate. The Bill will merely achieve a higher death rate, and not a better Exchequer contribution rate. If we were guided by our sincere convictions, as representatives of the people, we could so reorganise our finances as to maintain our excellent Health Service, which is one of the most successful pioneering ventures in the social history of the world.

We can do this if we make sure that those who are able to pay bear the greatest burden. Although the Minister of Health and the Secretary of State for Scotland are dealing with the Bill, I can see the hand of the Chancellor of the Exchequer in it from beginning to end. It is obviously a financial operation, designed to ensure that those who pay taxes will be partly relieved of their burden this year, while those in the lower income groups—people in the distributive trades, local authority employees and the millions of women who earn very small wages—bear most of the burden.

It is because the burden will be borne by those who can least afford it that we oppose the Bill. We shall continue to oppose it in the country and rouse the people to a realisation of their responsibilities. If the Government do not reverse this legislation, at the next election the people will reverse the Government, and restore the National Health Service to its former greatness, as pioneered by a Labour Government.

8.45 p.m.

Mr. Anthony Kershaw (Stroud)

I am not sure that I entirely followed the reference by the hon. Member for Coat-bridge and Airdrie (Mr. Dempsey) to the death rate. I assume that his argument was that the death rate is likely to increase as a consequence of the provisions of this Bill. I think that his fears are rather misplaced, and I am fortified in thinking so by a computation which I recently undertook of the rising expectation of life which we have in these islands today, and it is very different from what it used to be when the hon. Member and I myself were born. In fact, the longer the hon. Member and I remain Members of this House, the longer we may expect to remain Members, provided also that the electorates agree with that proposition in our respective constituencies, because it appears that hon. Members of this House, like everyone else, are living longer and longer today.

One cannot divorce this fact from the consideration of the circumstances in which the inhabitants of this country are growing up, the food they are able to have, the medicines at their disposal and so on. These things have made a remarkable difference, in the lifetime of the hon. Member and myself, to the expectation of life of the people of this country.

I freely grant that women in this country live longer than men, but I have never quite been able to understand why this is so. The average expectation of life for women is eight years longer than that for men. Whether it is that they do not work so hard, or take fewer medicines or do not pay so much in National Health Service contributions, I have not been able to discover, but that is the arithmetical fact. They live to draw their pensions and drink their medicines eight years longer on the average than will the hon. Member for Coatbridge and Airdrie.

The hon. Member made a number of perfectly valid and telling points in his speech, and I should like to refer to one or two of them. He mentioned ability to pay and said that although he freely admitted that, perhaps, 10d., 8d. or 6d. a week respectively, as the case may be, was not a very large sum arithmetically, yet, progressively, combined with other additions it might well be the last straw to break the camel's back. However, that is his argument, and it is one to which we must pay attention. Obviously, the time must come when the contributions of various sorts, if not an unreasonable burden, may appear at least to be an unreasonable burden and more than people feel that it is right and just for them to pay.

At the present time, I think it is difficult to maintain that this particular increase, combined with other increases which have recently fallen upon the budgets of ordinary people in this country, is in fact that last straw which may break the camel's back. We have to admit, and the hon. Member did most fairly say, that average wages during the course of the last few years have risen quite remarkably. In fact, it will be present in the mind of the hon. Member that during the last three years average wages have risen by about 10 per cent., whereas the cost of living has risen by only 2 per cent.

I know that these figures of percentages are somewhat disheartening when considered in that cold way, and there are many people in this country who consider that their particular expenses, caused by their station in life, their state of health, the climate in which they happen to live and so on, are not exactly the same as the standards by which the Ministry judges what their need may be. Nevertheless, I think we must admit that there is some validity in these figures, and admit that the rise in average wages during the last three years has very considerably outstripped the average rise in cost to the average person. While freely admitting, as did my hon. Friend the Member for Wycombe (Mr. John Hall) that the average person is in the middle, that there are some people whose income is higher than average and that equally there are some whose incomes are lower, the hon. Member for Coatbridge and Airdrie also said, by way of criticism, that during the time of the Labour Government—

Mr. Ross

Would the hon. Gentleman give us some figures in relation to what he has been saying and relate it particularly to rises in the flat-rate contribution? Will he tell us why he has changed his mind, because on 11th November, 1958, he said: I do feel…that at the moment our flat-rate contribution is about as much as they are willing to pay.'—[OFFICIAL REPORT, 11th November, 1958; Vol. 595, c. 291.]

Mr. Kershaw

Certainly. Later I will develop the point that there is a limit, as I have already indicated, which is perhaps not beyond their pocket but beyond the willingness of people to pay for any particular item. Whether they pay money to the State by way of tax, contribution or charge, there is a stage beyond which they are not willing to go, and I think that there is a psychological barrier which we must consider seriously.

Two years ago I thought that the increases then made were about the limit of what the country would be willing to accept at that time, but we have had an increase since, and in a few moments I shall develop the proposition that we ought to take a look at the matter to decide how in the future we are to meet these increases, as increases they will be. I do not think anyone would suggest that we shall ever see a reduction in the bill for education or for the Health Service or any of the social services. Therefore, as a House of Commons, we have the future task of debating how we are to allocate those extras.

Returning to the specific point about the National Health Service at one time having been the largest Service in the way of cost and now being the third largest service, that is a valid point to make. In answer to the hon. Member for Coatbridge and Airdrie, I say that when the Service first came into being there was a great backlog of medical attention which had to be undertaken. This was after the war and after the period of dislocation following the unemployment of the 1930s. It was only natural, therefore, that many things had to be done which had not been done previously. In those days we should have expected the large increase in expenditure on the Service which took place. The position now surely is that the Service is running well and is a source of pride to the people of this country and commands the admiration of most of the world; despite the criticisms of it which are naturally and properly voiced, especially by hon. Members opposite.

The education service has now to deal with a very much larger number of children and it is mathematically obvious that if there is a certain expenditure per child per year, that expenditure will rise by sheer reason of numbers each year in which it goes on. We know now that there are more children at school than ever before and it is not surprising that the education service should be taking a large share of the money.

Similarly, turning to the question of retirement pensions, it is not surprising that as the proportion of elderly people in the population increases and there are more people of retiring age—one knows that there are 5,500,000 of retiring age in the country—expenditure on pensions will go on rising. It does not mean that relatively the Health Service is any worse than it was because, by reason of rising numbers of pensioners and children, education and pensions cost more. The hon. Gentleman would never suggest that any of these other services should be retarded in order to preserve pride of place for the National Health Service.

Mr. Ledger

I am trying to follow the hon. Member's argument, but surely he is missing a most important point that, as a percentage of the national income, less is being spent today on the National Health Service—I think the figure is 4.2 per cent.—than was spent in 1950 or 1951, when the figure was 4.5 per cent. Therefore, there could be an increase in the amount of money spent on other services without there having to be a proportionate increase in the amount of tax needed to pay for the increase. The hon. Member has not yet mentioned any figures, but I am sure that is a point he would not wish to miss.

Mr. Kershaw

That is a valid point. I have already given the answer, namely, that the Health Service could be expected to cost a great deal more when it first came into existence because of the backlog of medical attention which it would be necessary to make up at that time. Now it is running more smoothly and there is not the need for the various appliances which it was necessary to provide at the beginning. I think it natural that we should be able to provide a good Health Service standard, which is not below that provided in 1946 to 1948, for a proportionately less amount of the national income. In theory, of course, although we have never reached this happy event, in time the more excellent it is the less the Health Service should be used. I imagine that we have all during the course of our lives to go to the doctor however well we may be fed and however good our working conditions may be. I do not think it extraordinary that the National Health Service, while providing a better service, should nevertheless take a greater proportion of the national income.

I should say to the hon. Member for Coatbridge and Airdrie about the comparison with health services in Europe that I am sure—in fact I know—he is at fault in thinking that the contributions by way of taxes are higher there than they are here. I do not know whether he has ever had the misfortune to fall ill in France or Germany. I have done one but not the other. I may achieve the other in due course. He will find, unless he has taken proper precautions with consuls and insurance, that the incidence of charges in those countries is very much higher than it is here. One should hesitate before drawing a comparison like that.

Mr. Dempsey

I was very careful about what I quoted. I said that, compared with the majority of other countries in the West, we spend less as a proportion of our national income. That was a quotation from statistics published by the health organisations and the facts are absolutely accurate. I was not dealing with the system of taxation but talking in terms of the proportion of national income spent by this country in comparison with the proportion spent by the majority of nations in the west of Europe.

Mr. Kershaw

I take the point made by the hon. Member and freely admit that I misunderstood. I am obliged to him for his correction.

As to hospitals—although I do not know particularly about hospitals in Scotland—it is a pity, and we have to admit it, that the hospitals of our country generally are not up to the standard we should like to see. We know there is a very large hospital building programme which it is necessary to put in hand. That is one of the reasons for this Bill. To save the day-to-day running costs of the Health Service and to invest that money in permanent capital improvements which the Health Service requires was one of the reasons put forward by the Minister for introducing this Measure. I am sure that none of us would disagree that if we had the permanent capital installations, principally in the form of hospitals, which we need, the Service would not only be better but would also run at a cheaper overall rate than it does at the moment.

Mr. Dempsey

I am sorry to interrupt the hon. Member again, and I am grateful to him for allowing me to make another intervention. I tried to point out that the general increase proposed in the Bill will raise a revenue of £65 million in the next fiscal year, whereas the Minister is proposing to spend only £5 million in addition to present expenditure on hospitals. He is not using the increased revenue for the purpose of improving hospitals in general as he is to spend only a proportion of it, £5 million, on hospitals.

Mr. Kershaw

I mentioned the hon. Member's name, so of course I am very willing to give way to him. There are two points there. First, the expenditure next year will be £5 million, but after that it will rise fairly rapidly. The hon. Gentleman knows that the programme for the next four years is a £65 million programme on hospitals alone.

Mr. Dempsey

An increase of £5 million per year.

Mr. Kershaw

Secondly, the operation is also designed to try to hold the current costs of the Service fairly steady and not merely to invest all the money in hospitals. The combined objective—hospital building and the desire to hold currents costs steady—is a legitimate one. It is surely legitimate to limit current costs in favour of future capital expenditure.

The hon. Member said finally that the last effort at putting prescription charges on certainly did not have the effect which the Government now say they desire of checking wastage. He said that the costs actually rose after the imposition of the prescription charge. I do not think that the hon. Gentleman's reasoning is correct. The fact that the cost of medicines rose in spite of the prescription charge does not by any means preclude the proposition that they would have risen more if it had not been for the prescription charge.

The main item of expenditure in relation to drugs is not so much the amount but the value of each individual prescription. That cannot be very easily controlled. The measures which have recently been taken—for instance, yesterday's announcement by my right hon. Friend the Minister of Health—are an attempt to control—"control" is possibly the wrong word, but as a back bencher I can use it more loosely than a Minister can; the better word perhaps would be "influence"—the prescribing of doctors and to bring home to them the costs of various medicines.

Doctors are not always able to fall in with the Minister's wishes in that way. I can bear witness to that fact, because six or seven years ago I had to have very large amounts of a drug which I believe is now extremely cheap but which was then extremely expensive. The drug is called cortisone. Whilst it is easily prescribed today, I understand that it cost the nation a great amount seven years ago to keep me full of cortisone for about three months.

That is the practical reason why it is difficult to show that, because the cost of drugs rise, the incidence of the prescription charge has had no effect. I believe that the prescription charge will not have the effect—I certainly hope that it will not—of keeping an individual needing medicine away from his medicine. One effect it will have will be to bring home to prescribers the consequences of prescribing such and such a drug in such and such an amount. Whilst one does not say that doctors should not prescribe exactly what they feel should be prescribed, one is entitled as a public representative to ask that they should at least have in mind—

Mr. Ledger

On a point of order. I hesitate to interrupt such a courteous Member as the hon. Member for Stroud (Mr. Kershaw), but has the debate on Third Reading of the Bill, which is listed on the Order Paper, now been concluded? When I left the Chamber for the first time half an hour ago we were still on Third Reading. I have been listening to the hon. Member for Stroud very carefully but have not heard any reference in his speech to the Bill. You, Mr. Deputy-Speaker, have been lenient with myself and other hon. Members, but we did refer to the Bill at some time during our speeches. We are very interested to hear what hon. Members opposite have to say about the Bill.

Mr. Deputy-Speaker

I think that the hon. Member is quite justified in his point of order. No doubt the hon. Member who has the Floor will take due note of it. The Chair is paying attention to the course of the debate.

Mr. Kershaw

I am obliged to you, Mr. Deputy-Speaker. I was attempting to follow the most interesting speech of the hon. Member for Coatbridge and Airdrie. I have not yet come on to the remarks I intended to make when I entered the Chamber. I owe you, Mr. Deputy-Speaker, and the House an apology for not having been here in the earlier part of the evening to hear all the speeches which have been made.

It will be within the recollection of hon. Members that important arrangements have been going on upstairs which took a great many Members away from the debate. It is surprising how few hon. Members have been able to tear themselves away from those important duties upstairs to hear the debate. To some extent, however, the principles which I have, al perhaps inordinate length, been discussing have been dealt with at such great length during the past fortnight that they are very much present in the minds of many hon. Members whether they are attending this debate or not. There is, therefore, no indication of lack of interest by hon. Members on either side in the fact that larger numbers are not present to discuss this important Bill.

The hon. Member for Kilmarnock (Mr. Ross) raised the point that the incidence of contributions must in time reach an unreasonable limit which must bear hardly on those, or, at least, some of those, who have to pay for them. In considering the matter of contributions, we must bear in mind that the other ways of paying for the Health Service are taxation and charges. Contributions came from those who work, charges are paid by those who use the Service and the taxes are provided by the general population.

It is a justified argument which has been made that we come down to the House of Commons and different Ministers attend. Tonight it is my hon. Friend the Economic Secretary to the Treasury. Last week it was my right hon. Friend the Minister of Health and anon it will be my right hon. Friend the Minister of Housing and Local Government, or some other Minister. He comes to explain the necessity for this or that method to be adopted concerning, for example, the contributions, as in tonight's Bill, or in other ways to raise the money that is necessary to pay for our social services.

I regret that this evening we are discussing so itemised a matter. I must not stray too far from the Bill, but I regret that we do not have the opportunity more often to have something in the nature of, if I might use the analogy, a defence debate with the Defence Minister in charge and then the Service debates afterwards dealing with each item.

Mr. Deputy-Speaker

The hon. Member is getting far too wide of the Third Reading of this National Health Service Contributions Bill.

Mr. Kershaw

I apologise, Mr. Deputy-Speaker. I do not wish to take the debate outside the lines which it should pursue, but the contributions for which we are asked to vote tonight are merely one aspect of the method of raising finance for the social services, which I should like to see dealt with by a more general command over the whole social service structure., Then we should be able to relate this debate, only with contributions, to other debates relating to charges and to the amount that the taxpayer can be expected to pay. This debate about contributions covers only one of three ways in which my hon. and right hon. Friends could have come to the House and asked us to provide the money for this social service. Whilst it is an essential one, it is difficult to discuss it as fully as we should like to do without having the others in mind and their relation to the amount to which we are being asked to agree tonight.

Mr. Ledger

It is amazing that the hon. Member should talk about broadening the scope of the debate and having further opportunities for discussing other aspects. Is he aware that we have debated the Bill for nearly fifty-four hours. during which time there have been periods of eight hours of debate in which no Government supporter has bothered to attend? [HON. MEMBERS: "No."] That is true.

Mr. William Shepherd (Cheadle)

It is drivel.

Mr. Ledger

I am stating facts. I have sat throughout the Bill and there have been times when—

Mr. Deputy-Speaker

Order. I do not think that the hon. Member should make a second speech. Mr. Kershaw.

Mr. Kershaw

I hesitate to refer to that intervention as it was out of order, but, of course, we on this side had the pleasure—and, occasionally, were moved to admiration—of hearing the number and the length of the points of order on this Bill that were raised from the other side, and were sometimes left wondering what was their relevance to the Measure. However, I leave the matter there.

I think that the contributions asked for are not unreasonable when we bear in mind that the average wage has risen since last we discussed this question. If I may say so, I still think that we should have an opportunity not very far ahead to have a slightly different structure of debate so as to bring all aspects of the scheme into its ambit. If we have spent fifty-four hours in discussing this Bill that has resulted from the unfortunate necessity to remain in order by discussing contributions only. I still think it unfortunate that we could not have spent much of that time discussing the charges and the taxation necessary—

Dr. King

On a point of order, Mr. Deputy-Speaker. Is it in order for the hon. Member constantly to flout your very reasonable suggestion that in a Third Reading debate he might at least talk about the Bill we are discussing?

Mr. Deputy-Speaker

I am afraid that there can be no doubt that the hon. Member for Stroud (Mr. Kershaw) has been getting very wide of the Bill, and I think that we should get on with the debate. Mr. Ifor Davies.

Mr. Kershaw

I apologise, Mr. Deputy-Speaker. It is my interest in the matter that led me astray, and I would not wish to stop other hon. Members speaking.

9.12 p.m.

Mr. liar Davies (Gower)

The hon. Member for Stroud (Mr. Kershaw) has made a gallant attempt to try to justify this Bill, but we all realise that he has failed miserably. I can understand his predicament. The last two speeches from hon. Members opposite have been remarkable for one thing. Whatever speeches are being uttered elsewhere—the hon. Gentleman has referred to other meetings—the last two speeches from the benches opposite have been full of apologies. Apologies for the Bill have been the theme running throughout those speeches.

The hon. Member for Stroud even praised the Health Service, but I would remind him of who opposed it when it was first introduced. I regret that the hon. Member for Wycombe (Mr. John Hall) is not now in the Chamber, because his speech prompted me to intervene. He, too, was apologetic, but he made one remarkable statement. He said deliberately that he would support the Bill now. That was a very telling phrase—he would support the Bill now but would give no assurance of his support if this went on. Where does the hon. Member draw the line? We have drawn the line. In addition, I thought I noticed a note of hesitance in the voice of the hon. Member for Stroud also as to whether he would go on supporting Measures of this kind.

This is the real point of the debate. I can well understand my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) speaking with such sincerity and passion. My hon. Friend comes from across the Border, and perhaps the House will understand that as a representative of a Welsh constituency I can speak with equal passion. I hope that I shall not be carried away, but I hope also that the House will understand it if I am, because the man who introduced this Service was a Welshman.

I would add very sincerely that it is with some regret that I must point out to the House that the two Ministers who are now principally responsible for undermining this Service also claim to be Welshmen. I refer to the Chancellor of the Exchequer and to the Minister of Health. The depth of feeling that exists in the Principality as a result of this attempt to undermine the Service should not be misunderstood.

I come at once to the Bill, Mr. Deputy-Speaker, before I am ruled out of order. Incidentally, while I am on the subject of order, since the hon. Member for Stroud stretched the limits of the debate to some extent and referred to prescriptions, I should like to say, that, although the Minister said that the cost of each item had risen from 5s. 1½d. to 7s. 4d., that is no justification for doubling the prescription charge from 1s. to 2s. That is the answer to any justification about prescriptions.

The hon. Member for Wycombe made one remarkable comment. Speaking again about average earnings—we have heard that word "average" throughout the debate—the hon. Member, while saying that average earnings were £14 or £15 a week, was honest enough to recognise that there are many people below that average. Included within the average are as many persons earning less than £14 or £15 as there are persons earning more. Indeed, it is the fact that about half the earning population of Britain receives less than that figure, and I assert that these increased contributions constitute for them a very great hardship.

It is a fact that about one-fifth of the population, about 11 million people, are members of families having about six guineas a week to live on, and out of that, of course, they have to pay for rent, food, clothing, and all the rest. There is not much left for medicines, spectacles and everything else. Therefore, any increase in contributions will result in a very serious burden upon very many people. It is no use dismissing it by saying that everybody should make a fair contribution. The charges and the increased contributions will be a very great hardship indeed.

There have been many different quotations during these debates. Even Shakespeare has been quoted, and I have heard quotations from American Presidents. I shall quote the words of another American President, Abraham Lincoln, who said, "You can fool some of the people all the time. You can fool all the people some of the time. But you will not fool all the people all of the time." It is my belief that there are many people today who are beginning to see the truth of that statement.

We have been told that the basis of contributions is similar today to what it was when first introduced by the Labour Government. But the economic conditions of the country in those days was different from what it is today. Today, of course, we have the affluent society. We have "never had it so good". We have heard that phrase much bandied about, and with it as a slogan some hon. Members opposite have reached their positions on those benches. Today we do not hear so much about it.

I emphasise the difference between us on this great issue because it is extremely important that we should have clear in our minds that, whereas we on this side really do believe in the National Health Service, hon. and right hon. Members opposite do not. There are three main principles all of which hon. Members opposite deny. The first is that the resources of the community should be mobilised by the community to help the sick; the second is that everyone should have the same treatment; the third, a medical principle, is that prevention is better than cure.

We are told that these increased contributions are imposed in order that we may save £49 million. The hon. Member for Bolton, West (Mr. Holt) answered that when he said that he felt confident that there were other ways of achieving this saving, giving as an example the drug trade. I believe he estimated that £20 million would be achieved in savings by this means. We say that there is no justification whatsoever for interference with the whole principle of the Health Service by increasing contributions in this manner. That is why we shall oppose the Bill and continue to do so as long as we possibly can.

9.21 p.m.

Mr. William Shepherd (Cheadle)

I do not think that the hon. Member for Gower (Mr. I. Davies) could seriously support his contention that the increase in contributions which are levied under the Bill will impose any real hardship. He did not produce any evidence that was convincing, and I do not think that such evidence can be produced. Nevertheless, I shall not vote on the Third Reading with any enthusiasm. I shall not vote against the Bill as I did against the prescription charges, but I shall certainly not support it with any degree of warmth, because I consider that the whole approach to this problem is lacking in penetration, is non-progressive, and ought to have been tackled in an entirely different way.

I have been trying now for four or five years to direct the attention of the House to the need to look at this problem in a different light. Even my hon. Friend the Economic Secretary to the Treasury, one of the most intelligent men in the House, said in defence of the Bill that it was the same order of things that obtained in 1946. I do not want to see the same order of things that obtained in 1946. There is no reason why, after a passage of twelve or more years, we should not conceive some different ideas about the way in which we should raise the money for the National Health Service. I am disappointed that we have not made any progress in this matter.

The Bill raises the employer's contribution only to 7½d. I have never been able to understand why, during the past five or six years, a larger employer's contribution was not obtained. There is to my mind no single reason why a larger amount for the National Health Service should not be obtained from employers. I admit very readily that even an increase in the employer's contribution would not solve the problem in its entirety. I have previously referred to the health service overseas, and I have burdened the House on many occasions with figures to show how it is financed in such obscure countries as Mexico and Bolivia, which sent hon. Members opposite rushing to the Library to find out whether such services existed and they found that they did. I do not want to repeat what I said then because it would be out of order if I attempted to do so. But I say that in looking afresh at this issue we must direct our minds very keenly to the question of whether some percentage on earnings will have to be charged in the future to finance this service rather than by way of a flat rate contribution.

I hope this is the last time that we shall have a footling Bill of this nature and that between now and the next occasion on which there is a review of the methods by which this money is raised there will be a careful inquiry into sound and sensible ways by which the National Health Service shall be financed, because I am satisfied that this is not an intelligent way. Even when we make these additional charges we shall have next year about £700 million taken out of the taxpayer's pocket to finance this Service. That is a great deal of money, and I see no reason why this burden of direct taxation should prevail.

There is another important reason why I think that the Government must do something different from what we are now doing in the Bill. It is that all other European countries make their national health service a direct charge upon production. We are the only country in Europe which does not do that. If we are to become associated with the Common Market in any way, those countries will want us to harmonise our social policies. If we are to secure this link with the Common Market and if we are making changes in the way that we finance the National Health Service, would it not be intelligent to start to move in the direction in which we shall be forced to move if we are ever to link ourselves with Europe in the Common Market?

We shall have to do this in time, and we shall have to harmonise our economic arrangements with others. It seems to me axiomatic that when one makes a change one should not proceed on the basis of what was done in 1946 but one should face the realities of 1961, and, in particular, realise the need to lower the impact of direct taxation in this country and to harmonise our arrangements with the people whom we shortly hope will be our partners in Europe.

I hope that this footling Bill is the last of its kind and that on the next occasion we shall see an attempt made financially to fashion the Service in the light of the volume of money demanded, which will be getting on for £1,000 million, and that we shall look to the future and look to the need to harmonise our relations with Europe and find some means to finance the Service which would enable it to expand and at the same time to be less of a drag on the taxpayer.

9.27 p.m.

Mr. E. G. Willis (Edinburgh, East)

The hon. Member for Cheadle (Mr. Shepherd) has made a speech in which he has repeated the ideas that he has put forward on many previous occasions, but what I cannot understand about the hon. Gentleman is that, in spite of his great dissatisfaction with this method of raising money, of the criticisms that he has made of it, and of his feeling that the Government should be urged to think afresh, he will vote for the Bill.

I should have thought that the best way to make the Government think about these things would be to defeat the Bill, because they would then be compelled to think about the sum of nearly £50 million which is to be raised on the Bill and they would not be able to put the matter off for an indefinite time. What is more, if the hon. Member pursued that action, bearing in mind that a number of his hon. Friends have also expressed doubts today, we should be really getting somewhere.

I have heard most of this debate. An interesting thing about it is the manner in which hon. Members opposite have said that this 10d. increase is not very much, but that we must realise that to pursue this course too far would mean to impose a great hardship upon the lower-paid worker. All hon. Members opposite thought that this was about the limit and that next time a Bill was introduced it should be on a different basis altogether. I was not sure whether hon. Members opposite were genuine about this, or whether they were creating an alibi for themselves to present to the electors from whom they must have heard during these proceedings.

Make no mistake about it; there has been a considerable amount of criticism of the Government's proposals from all sorts of people and organisations. Therefore, I am still left wondering about the speeches of hon. Members opposite and wonder whether they really desire to change this method of taxation or whether they are trying to keep themselves right with their electors; and I am inclined to suspect that it is the latter because none of them is prepared to do anything about it in the House.

The Bill raises one very simple issue. The Minister of Health has told us that he needs money to proceed with his hospital programme. It has taken the Tories a long time to realise this. I remember when the Tory Party was busy producing prospectuses before 1955 and telling us about the great hospital programme which it would undertake during the life of the last Parliament. Now it has done it again. The Minister of Health now tells us that he will proceed with a great hospital programme, and for this purpose has to make certain changes, one being that he has to raise £50 million through increases in contributions.

Consequently, the issue is, very simply, this. The Minister of Health wants £50 million For hospitals, and the Treasury has decided to raise it by imposing a flat-rate poll tax on everyone with an insurance card. What we are really deciding today is whether this is the best way to raise £50 million for building hospitals. When I put it to myself in that fashion I am struck by some very curious comparisons. Yesterday, we discussed a gentleman who is to get £24,000 a year. He will pay 10d. per week towards these hospitals.

Mr. Shepherd

But how much will he pay in tax?

Mr. Willis

The widow who is out at work cleaning a school in order to supplement her income will pay an extra 8d. per week. That does not seem to be a very ideal method of financing the programme. A disabled man in a Remploy factory would pay 10d. a week, the same as the man with £24,000 a year. The Clores and the Cottons will pay exactly the same as the widows. Surely that cannot be a sensible and fair way to finance the building of hospitals. Are the Government so bankrupt of ideas that they can think of nothing better than this?

Mr. Shepherd

Does not the hon. Member realise that this is a system which was put into operation by the Labour Party? Does he not realise that the man who is to earn £24,000 a year will pay a very large part of that in taxation? Does he not realise that the taxpayers will be contributing about £700 million as against the £200 million raised in contributions?

Mr. Willis

Does not the man earning £24,000 a year pay tax in accordance with his ability to pay? Of course he does. So does the widow, the unemployed man and everybody else; we all pay our taxes in accordance with our ability to pay. All I am suggesting is that the Government seem to be so completely bankrupt of ideas that they can only tell the House that to build their hospitals they must charge everyone with an insurance card—it is not even everyone; plenty of wealthy people will pay nothing at all—this flat-rate increase. That is a poor solution to a problem for the Government to present to the House of Commons.

The hon. Member for Cheadle made another point, which I have forgotten.

Mr. Shepherd

I said that this idea upon which the hon. Gentleman was pouring such scorn was the child of his own party.

Mr. Willis

The hon. Member was not here when that statement was rebutted fully, and at length, by my hon. Friend the Member for Sowerby (Mr. Houghton) today. That principle was not accepted by the Labour Government. It was not the principle upon which the National Health Service was based. I agree with the hon. Member when he asks why we must do it now as we did it in 1946. To talk about what we did in 1946, or 1948, or 1952 is rubbish. I have always held the view, as I have said before, that the Health Service was a magnificent scheme, but I do not suppose that anyone in the House, when it was introduced in 1946, thought that it was the last word.

Every time we have to deal with it in the House we consider whether it is good enough and how it can be improved. It is the duty of the House to ask questions about such matters, and not to say that because we did something in 1946 we should do it again in 1961. We would never get anywhere if we followed that policy. We should never make progress. We would not have sanitation or anything else, simply because we did not have them 150 years ago. The argument is pure nonsense.

For what it is worth, it was trotted out by the Economic Secretary most pathetically and almost apologetically today, and was fully rebutted by my hon. Friend the Member for Sowerby, who exposed it in all its nakedness for what it is worth—and it is not worth much.

To increase these contributions cannot be a good way of financing our hospitals. We are to make a flat charge on everyone. We do not do that with all sorts of other things. Today, the agricultural subsidies for the forthcoming year were announced. They will not be collected by means of a poll tax, yet they run into hundreds of millions of pounds and are higher this year than last year. The Chancellor of the Exchequer does not present a Bill like this to provide for those subsidies, so why do it for the hospital service?

Is this country so bankrupt under a Tory Government that it is unable to raise £50 million other than by telling the poorest people—the aged, the widows, the youths and the sick—that they must pay so much more through contributions and prescriptionn charges? Have the Government no confidence in their policy to expand production and the wealth of the country? I suppose that the Financial Secretary and the Economic Secretary, having read the latest report about the economic progress of the country, probably have some doubts about that policy.

Mr. F. A. Burden (Gillingham)

Members opposite constantly talk about expanding production. I wish that many of the people who talk about it would realise the difficulties of selling in the export markets, as many of us who are engaged in that job realise them.

Mr. Speaker

Order. I must protect the hon. Member for Edinburgh, East (Mr. Willis) from being tempted to stray out of order.

Mr. Willis

I am grateful to you, Mr. Speaker. I do not think that I should have wandered further than to remind the hon. Member of the great steel order which was lost this week, at Leipzig.

We have the ability to raise our productive capacity to take care of the expansion which is necessary. Our total national income is about £20,000 million. If we increase that by 1 per cent. a year, it means an increase of £200 million a year. Cannot the Government follow policies which would achieve this expansion and enable the money to be collected almost automatically through increased revenue?

The Government have no confidence in their own policy. The Bill is the product of a Government which is not only bankrupt in ideas, but which has no faith in the future of Britain and no faith in themselves. When we consider the categories of people whom we have discussed during the proceedings of the Bill, and who will be affected by the Bill, we realise that this is a Bill which could have been brought before the House only by very mean-minded men. There is no magnanimity of character in a Government which can produce a bill which taxes widows, old-age pensioners and the sick in order to build hospitals.

I gather that the hon. Member for Gillingham (Mr. Burden) is muttering something about what my right hon. Friend the Leader of the Opposition did several years ago, but he should remember that eighteen months ago he and his Government boasted about the affluent society in which we live. They spoke about increasing abundance and never having had it so good, but apparently they forgot to provide an abundance of hospitals. Apparently, that did not come into their calculations. They were so busy that they did not notice that the essential services were not being built up. As my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) said, we have had only one new hospital in Scotland since the end of the war, and that was a small hospital.

I am disgusted with the Government's performance over the Bill and I am certain that when they appreciate what is happening, the people of the country will be disgusted, too. It is easy to say, "It is only 10d., it is only ld. on gas and 2d. on electricity and Id. on meat and id. on butter", but at the end of the week it makes a considerable difference to a working-class family. I do not think that hon. Members opposite have any idea how a working-class family live.

Mr. Victor Goodhew (St. Albans)

They live very well.

Mr. Willis

If the hon. Member knows how they live, then he knows that what I have said is true about the accumulation of 10d. and 8d. and 6d. in the family budget. These are payments which they cannot dodge, nor can they run into debt over them or decide to do without the services. They must meet this obligation. Every time we add expenditure to a household budget of an ordinary family which cannot be dodged, we are creating a hardship and making things difficult. Hon. Members opposite may not appreciate that but it is true.

The woman whose household budget is carefully planned each week to cover the rent, the food and many other things, including saving for the summer holiday, is in difficulty if her husband has to meet an extra charge. That leads to hardship. I know that many hon. Members opposite do not know what hardship means. They should think of people living on £9 a week. I do not think that many hon. Members opposite would like to live on £9 a week. It might be a good thing if they did, because they would then appreciate the difficulties of a person trying to live on that sum. It is not only this increased charge which has to be borne by these people. They have to pay increased prescription charges and increased charges for glasses for schoolchildren.

I am sure that we could find a better way to provide this money to build hospitals than by increasing this poll tax. With an expanding economy, the increase in revenue would almost meet the sum required, and the Financial Secretary knows that. If the country's economy were increased by 3 per cent., 4 per cent., or 5 per cent. year by year, the increased revenue would almost cover the sum required.

Sir E. Boyle

If the hon. Gentleman refers to the interesting speech made by the Leader of his party in July, 1957, he will see that the right hon. Gentleman said that when production is rising and revenue is increasing through an increase in production inflationary difficulties are not necessarily lessened. I commend that speech to the hon. Gentleman.

Mr. Willis

Of course they are not lessened. I appreciate that, but the fact that inflationary difficulties might arise does not destroy the argument that with increased productivity and automatic increases in revenue would almost meet the cost of this, and the hon. Gentleman knows that to be true.

I do not know what the increases have been over the past few years, but some of them have been fairly substantial. The Government's policy displays a complete bankruptcy of ideas. I hope that hon. Gentlemen opposite who have said that this should be the last time we increase the charges are in earnest, because I have no doubt that my hon. Friend the Member for Sowerby is correct when he says that they will be increased again—probably two or three times during the next few years. I hope that hon. Gentlemen opposite are in earnest about this, and that they will refrain from voting against us, or vote with us.

9.47 p.m.

Major Sir Frank Markham (Buckingham)

We have listened with great interest to the eloquence of the hon. Member for Edinburgh, East (Mr. Willis), but we are disappointed that there was not a single constructive suggestion in his speech. The nearest he could get to a constructive suggestion was that the Economic Secretary to the Treasury, or the Cabinet, or somebody, he did not say who, should increase national production.

It is obvious that the hon. Gentleman has never turned his hand to that species of hard work, or he would not come out with such cheap, glib, and free and easy phrases. If he had taken part in the struggle for export markets, he would know that it is the hardest work which anybody in the country takes on at present.

The biggest struggle facing the country is that of maintaining what we have in terms of exports against increasing tensions and struggles all over the world, and to increase it if we can. We cannot increase and develop production by slinging a few phrases across the Floor of the House of Commons. The hon. Gentleman was bankrupt of ideas. He was certainly eloquent, but eloquent with the noise of tinkling brass.

Mr. Willis

If the country wants to raise £50 million, it can be done by raising the prescription charge. I do not want that. It can be done by raising the contributions. I do not want that. It can be done by being paid for by taxation. That is the best way to do it.

Sir F. Markham

I am very glad to get a second suggestion from the hon. Member—

Mr. Willis

It is not a second suggestion.

Sir F. Markham

—which has a little more substance than the first. He has now changed his ground. He says that the extra £49 million should be raised from direct taxation.

I now come to the point which has been made on several occasions by my hon. Friends during the debate, namely, that the talk of hon. Members opposite is now the complete opposite of the talk of the Labour Party when in power. When the party opposite was in power it had the responsibility of finding this money in the best way it could for the nation. Now that it is in opposition it is irresponsible, and it does not have the same approach to the matter as it showed in 1946–51.

I want to refer to the views of the Labour Party at that time, because they have not been challenged by them, either in the House or at Labour Party conferences. Hon. Members opposite are now contradicting their former views, because they are in opposition. On the question of raising money for National Health schemes, including those covered by the Bill, the Labour Government, both in theory and practice, agreed to a division into four separate categories the whole time they were in office. The categories were, first, the State; secondly, the employers; thirdly, the workmen; and, fourthly, the users. The Bill contains provisions for raising the contributions of the workmen to exactly the same proportion or percentage as existed when the Labour Government were in office.

At that time they decided that this was a fair division of the burden—and it still is. But certain hon. Members opposite have changed their views, because it suits them at the moment. But the party opposite never sought officially to change the proportions, either at its conferences or in the House.

It is estimated that the increases in the National Health Service contributions will produce an extra £49 million a year. I agree that the main purpose of that £49 million is to build new hospitals. The hon. Member for Edinburgh, East said that the Government had built only one new hospital in Scotland. How unjust! How unfair! How disgraceful! He knows as well as anybody that more extensions and improvements have taken place to hospitals in Scotland since the Conservative Party came to power than occured in the whole period of the Labour Government. He has not the decency to admit that. If this is a case of party politics, it is disgraceful. It is so cheap and easy to say that the Government have built only one new hospital in Scotland, and to shut one's eyes and not admit that there have been more extensions and improvements than occured when the Labour Party was in power.

While we all approve of the development of the National Health Services, many hon. Members on both sides want to see worth-while economies achieved. Many of us are alarmed at the increasing bill for drugs, and some of us are also alarmed at the occasional unnecessary use of the medical services. Only this week a case came to my notice of a man who went gardening, pulled up nettles, got very badly stung, went straight to the doctors and had the most appropriate and expensive drug prescribed to deal with nettle stings. If he had been country born and bred he would have used the ordinary dock leaf, which is always to be found growing next door to the nettle.

I think that the Ministry ought to produce what might be called a "Highway Code" of the National Health Service, a simple book dealing with first-aid, perhaps, for burns, sprains, and this, that and the other, and also containing suggestions on how to treat elementary things like constipation and headache.

Mr. Speaker

We have practically picked all the nettles during this evening, but I think that the hon. Member is now really beyond the scope of a Third Reading debate.

Sir F. Markham

I am sorry, Mr. Speaker, if I have offended, but I thought that by saving money on prescriptions and drugs, and so on, one would be helping to meet the cost of the Health Service, but I bow to your Ruling.

May I say, in conclusion, that I support the Bill and the principle of having the four separate kinds of contributor for the National Health Service; that is to say, the State, the employer, the working man, and the user. I have no objection to two of these categories sometimes being folded one within the other. It is the fair thing to do, and it was the way in which the Labour Party dealt with it when it had the responsibility of office.

If ever the Labour Party finds itself back on these benches, which I do not think will be in our generation, it will go back to the principle which it adopted from 1946 to 1951, and which it has now temporarily deserted while in opposition.

9.56 p.m.

Mr. William Hamilton (Fife, West)

The hon. and gallant Member for Buckingham (Sir F. Markham) should get his facts right about the Labour Government. In fact, the Health Service contribution was incorporated in the National Insurance contribution and remained the same throughout the life of the Labour Government. The simple fact is that the Tories have introduced three increases—the first Bill and two separate increases—as compared with the record of the Labour Party.

I thought my hon. Friend the Member for Edinburgh, East (Mr. Willis) was right to indicate the nub of the problem, which, quite simply, is this. How do we finance the extension of our National Health Service? Do we do it by progressive taxation levied by the Chancellor of the Exchequer, by Income Tax and Surtax and so on, or do we finance it by regressive taxation such as the poll tax which we are now discussing? To an extent, of course, the whole thing is financed by taxation, and still is one hundred per cent., but there is a proportion of it which is progressive taxation and a proportion which is regressive taxation. The regressive element we are discussing tonight. The proportion that we finance out of progressive taxation ought, in our view, to be increased, rather than the proportion financed out of regressive taxation.

That is the nub of the problem, and, of course, The Guardian was right when the proposals were first introduced and it stated in its leader of the 2nd February: This Bill represents a significant victory for the Tory Right Wing. It is not a matter of necessity, but a matter of principle, with the Tory Party that the burden shall be passed increasingly to the recipients, irrespective of their means, and progressively away from those who pay their taxes according to their means. My hon. Friend quoted the case mentioned in the House yesterday of a man who is to receive £24,000 a year. He will pay 10d. a week, and a man in my constituency—a railway worker in the same industry—on £8 per week will also pay 10d. Where on earth is the morality or the justice of that kind of principle?

I have not the time to go into all the points that I wanted to make, but I should like to say that all the speeches which I have heard from the Government side—I am sorry I have not heard them all—have had very many qualifications about the welcome which they gave to this Bill. The hon. Member for Torrington (Mr. P. Browne), the hon. Member for Ilford, South (Mr. Cooper), and the hon. Member for Cheadle (Mr. Shepherd) have all expressed great concern about the lower paid worker.

Recently we had my hon. Friend the Member for Cannock (Miss Lee) referring to the Parable of the Good Samaritan in the Gospel according to St. Luke in the Revised Version of the New Testament. It was in The Times of yesterday: The Lawyer has asked 'And who is my neighbour?' It is St. Luke, Chapter 10, verses 30 to 37. But it is already out of date with this legislation and I propose to give my own version—I hope it is not blasphemous.

Mr. Burden

It will be.

Mr. Hamilton

I do not think it will. Jesus said: A lower-paid worker was on his way from Wolverhampton when he fell in with Tories who stripped him, beat him and went off leaving him half dead. It so happened that one, Enoch, was going down by the same road. But when he saw him he went past on the other side. So, too, a Selwyn came to the place, and when he saw him went past on the other side on his way to Suez. But a Socialist who was making the journey came upon him and when he saw him he was—[HON. MEMBERS: "Shame."]—moved to pity. He went up to him and bandaged his wounds, bathing them with oil and wine. Nor did he ask him whether he could pay for the bandages or the oil, or the wine, at two bob a time. Nor did he even ask him if he could pay the 10d. weekly contribution. Rather he lifted him on to his own beast and cared for him without thought of contributions or charges. Which of these three do you think was neighbour to the man who fell into the hands of the Tories? He answered: Not Enoch the Greek; not the Selwyn of Suez, but the Socialist who showed him kindness without thought of contributions or charges. Jesus said: Go and do as he did.

I say that because we on this side of the House feel very strongly about the action which the Government have taken. The hon. Member for Ilford, South talked about us regarding the Health Service as a sacred cow. We do not, but we are conscious of the fact that every hon. Member opposite when the Bill to set up the Service was introduced voted against it. Every one of them on Third Reading voted against it, and they have always been disposed, not openly to attack it, because they know it is too popular in the country, but to undermine it. At an earlier stage I described them as political woodworms, and that just about sums up their attitude. When the hon. Member said that the flat-rate contribution had not gone too far, if he was referring to the £8 a week, the £9 a week or the £10 a week man, he does not know what he is talking about.

Many of his hon. Friends have said the same thing. The hon. Lady the Member for Tynemouth (Dame Irene Ward) said it during the Second Reading debate. She asked how were the lower paid workers to pay this money. The hon. Member for Torrington and the hon. Member for Cheadle said the same. Almost every hon. Member opposite has said it. Let them not imagine that this Measure is popular. Let them not imagine that we shall let it rest even assuming that it gets a Third Reading.

10.4 p.m.

Mr. William Ross (Kilmarnock)

Slowly, but inexorably, the tumbrils are rolling towards the Guillotine. What has been very interesting about this journey is that there have been few bystanders or witnesses, particularly on the other side of the street. [HON. MEMBERS: "Oh"] I am talking about the journey from the moment when we started the Committee stage. Although there have been few witnesses on the other side of the House, there have been fewer who had any comment to make. No doubt as we get nearer and nearer to the hour of execution we shall have some more hon. Members who are curious coming into the Chamber. Even the higher functionaries who are responsible for it may put in an appearance.

It may well be that the Patronage Secretary will reappear, not smiled upon by the Financial Secretary to the Treasury because he has been a much buffeted man. It was he who was gagged by the Patronage Secretary and he who, on Monday night, was guillotined in the middle of an explanation. It may well be that the Leader of the House will appear. There is no doubt that, certainly since he arranged his timetable, he has been able to have a very much easier time in respect of the Bill. I wonder whether the Guillotine was introduced because back benchers opposite had shown no enthusiasm for the Bill and the Leader of the House wanted to curtail their agony. There has not been a whole-hearted speech in favour of the Bill from start to finish.

I can well remember a speech by the hon. Member for Uxbridge (Mr. Curran) who expressed the strangest and most sadistic sympathy I have ever heard when we were discussing widows. He said there was hardship, so he offered them sympathy and then proceeded to go into the Lobby to ensure that the hardship would be redoubled. That is the kind of thing that we have had all through the stages of the Bill. One thing is very much clearer now that we are reaching the end of this process. All the pretences have been dropped. The Treasury has taken full responsibility for the Measure and has recognised that it has nothing to do with the Health Service; the tenuous connection is only one of accountancy. If he knew the original Bill well enough, the Economic Secretary would appreciate that.

This is a Bill relating to taxation and to nothing else, for by this Measure and the Schedule—which was not fully discussed —in the coming year the Government will raise £161 million. The increases which are within that amount to £49 million. That is what the Bill is really about. I should like to know where are the fighters for freedom in taxation matters. Not only is this taxation, but direct taxation. Where is the noble Lord the hon. Member for Dorset, South (Viscount Hinching-brooke)? Where are all the others, the freedom first men, who have been proclaiming their antagonism to increases of taxation? Not only have they not raised their voices, but they have not even shown their faces in our discussions on the Bill.

This is Treasury trickery. It is taxation by stealth. I wonder whether hon. Members opposite who conducted a campaign in the country against taxation during the election appreciate what the Bill means. It has been pointed out more than once that the Schedule has no separate existence. The National Health Service contribution is only part of a tripartite National Insurance contribution. By the beginning of April, as the result of what has already been passed by the House, we are to raise additionally an extra £134 million by fiat-rate National Insurance contributions.

By a new graduated contribution, which is equally direct taxation to those who pay it, the Government are raising another £202 million in the coming year. By the Bill they will raise yet another £49 mill ion, making an additional total of direct taxation levied in this way of over £400 million. From pay packet and pocket the Treasury will extract in this way during this year an extra £400 million, and this is being done by the party which, at the General Election, did not breathe one word about this.

I do not ask hon. Members to take my word for it, or accept my decision that this is direct taxation, I have in my hand a book by an objective organisation, namely, the Aims of Industry, which draws attention to the fact that National Insurance contributions are direct taxation. It says it in language which I should not use. It says it equally with diagram, because it lists as direct taxes Income Tax and National Insurance contributions. The first point is that we are dealing with direct taxation to the tune of £161 million.

Mr. Ellis Smith

What is Aims of Industry?

Mr. Ross

I do not know, and I shall not go into that now.

The Government having gained that amount of money in this way, it eases the burden of the Chancellor of the Exchequer in relation to his other taxation problems. The Financial Secretary suggested that we should not con- sider this as taxation. He said that the only things which counted as taxation were the matters dealt with by the Chancellor of the Exchequer in his Budget. However, this is taxation. To the extent that it is concentrated where it is, it is a redistribution of the tax burden.

The stings of taxation are not in the amount. The two stings of taxation are the waste that it may well support and the injustice of its incidence. I do not know why I should limit myself after what we have heard all day, but I should be out of order if I referred to the question of waste. But the incidence of taxation certainly arises on the Bill.

The Government levy £161 million for a pretended purpose according to the categories listed in the Schedule. People who hold a National Insurance card and pay full insurance are the people who alone have this additional tax visited upon them.

Who are they and what does the Schedule say? The Schedule lists three main categories—employed, self-employed and non-employed. The categories are then sub-divided into three—men, women and juveniles. There is the additional category of employer. That follows closely the National Insurance pattern.

I have looked at the Schedule without being able to find what has been referred to by practically every hon. Member opposite who even attempted a justification—and this included the Economic Secretary—that is, any reference to average earnings. The first description is: Employed men between the ages of 18 and 70, not including men over the age of 65. There is nothing there about average earnings. What it means is that every man between the ages of 18 and 70, if he has not retired from gainful employment, will pay 2s. 8½d. irrespective of whether he is earning £7 or £70. The man who pays, pays it out not from an average wage packet, but from his own wage packet.

The light has not yet struck hon. Members opposite that there are many lower-paid workers. There are 7¾ million people who earn less than £9. It is true that most of them are women. They are still included in the Bill irrespective of their wage. Women between the ages of 18 and 65 will pay 2s. 0½d. irrespective of earnings.

I spent last Sunday at a trade union meeting, sitting, listening. It was an N.U.R. meeting.

Mr. J. M. L. Prior (Lowestoft)

A waste of a Sunday.

Mr. Ross

It was not a waste of a Sunday. Had the hon. Member been there, he might have learned something of how a man had been injured and the claim was being made and the case fought in respect of his future. He could not carry on his usual job and he was being offered a job as a porter at £8 a week. That man, at £8 a week, will pay exactly the same as Dr. Beeching, with his £24,000. This is what hon. Members must face. Is it just or is it unjust that we should raise the necessary money in respect of the pretended purpose that was put forward by the Minister of Health in this way? I suggest that not one hon. Member on the Government side could defend it with enthusiasm.

When we consider the question of women—I am determined that we should examine the Bill—they can be, and are, divided for National Insurance purposes according to their numbers. There are 7½ million women employed in industry. They do not all pay insurance. There are 3⅓ million single women, of whom ¼million do not pay. There are 3½ million married women in industry and employment and only 1¼ million of them pay. This is where we have to balance justice. This is where the poll tax falls heavily.

There are 400,000 widows in employment, but only 190,000 of them pay. The hon. Member for Uxbridge said that when discussing this we have to remember that there are poor widows and wealthy widows. Wealthy widows do not go out to work, and because they do not have to go out to work they do not have a National Insurance card. The widows who go out to work are generally those who have to go out to work. Of the 190,000 widows who pay this tax, over 100,000 are 10s. widows.

Is it right that we should have a system of paying for hospitals which results in the wealthy widow paying nothing but the widow who is so poor that she has to go out to work being compelled—because the 10s. widow cannot opt out of insurance, but is compelled, in order to retain benefit and the right to a pension at the age of 60, to pay this 2s. 0½d. and this additional 8d.?

Mr. Godfrey Lagden (Hornchurch)

Since the hon. Member has quoted my hon. Friend the Member for Uxbridge (Mr. Curran), would he not agree, in all fairness, that my hon. Friend was extremely anxious that something better should be done for the lot of widows in general? Would it not be fairer just to mention that, instead of quoting my hon. Friend completely out of context?

Mr. Ross

I have already referred to the hon. Member for Uxbridge and I am sorry that he was not in the Chamber. The hon. Member for Uxbridge said that he was fully in sympathy with our case, but that there were wealthy widows and poor widows, and that what we really required was a social revolution and a complete reorganisation of the whole soheme for women. He then announced that he would be delighted to vote against our Amendment, which would help the widows. That was his speech, and that is a fair summing up of it.

The more we examine the Bill the more we find it absolutely riddled with such anomalies. The same thing is true of juveniles. I wonder whether the Financial Secretary will tell me what will be the cost of the increase for juveniles? Juveniles will pay 6d. more. That means that apprentices will pay 6d. more, but they will also pay more in National Insurance in April. I think that their total increase will be about 1s. 4d.

What does that mean? We had an announcement in November last from the National Insurance Commissioner pointing out that apprentices aged 15, 16 and 17 were being given new limits of earnings: 84s. 6d. at 15, 87s. 6d. at 16, and 89s. 6d. at 17. As a result, the parents of 30,000 apprentices were able to claim family allowances—30,000 apprentices. What was the reason? The reason was that their net weekly earnings were below this. The Commissioner said that unless they got these earnings they were not provided wholly or substantially with a livelihood.

I hope that the hon. Member will appreciate that it is wrong to talk about teenage tycoons, as he did the other night. This generalised affluence that appears in the speeches of hon. Gentlemen opposite flies in the fact of the facts, and also in the face of the Bill. But for many of these apprentices we are now to reduce that take-home wage, and as a result we will have to pay family allowances for even more of them. So it may well be that, even in respect of apprentices, the Government will find that it will cost them more to have turned down our Amendment than to have accepted it. When one examines these things in relation to all these categories, weighing one against the other, including some and excluding others, one cannot vote on this Bill as a matter of equity at all.

Hon. Members opposite avoid another point. We are not really talking about 2s. 8½d. for men, or 2s. 0½d. for women. There is no such thing, and there is no such stamp. What this means is that in July a man between 18 and 70 who is within the scheme will pay 10s. 7d. The employer will pay, on his behalf, 8s. 7d. The combined contribution will be 19s. 2d. If he is in the scheme he will pay 19s. 2d. only if he is earning £9 and under. If he has reached the much-heralded average wage, that man's contribution that week will be 15s. 8d. That is a long way from the extra 10d. we have spoken about. A man outside the scheme will pay 12s. 2d. His employer will pay 9s. 10d. The total will be 22s.

We are not talking about trifles. The same applies to women. Women in the scheme will pay anything between 8s. 8d. and 13s. 9d., and the combined contribution with the employer will be anything between 16s. and 26s. 2d. These are fairly substantial sums. A woman outside the scheme will pay 9s. 6d., the employer will pay 7s. 9d., and the combined contribution will be 17s. 3d.

What effect will all this have? Will it be worth hon. Members swallowing the Treasury trickery and placing such burdens as those upon individuals and upon industry and, in the end place the country in a very much worse position than perhaps it is now?

I am not satisfied that the Government have really faced this issue. They have dragged in the Health Service today in a way which they never mentioned at all since Second Reading. They have again tried to respectabilise something of which they are really ashamed.

It will be exactly fifty years ago, on 4th May, 1911, that the right hon. Member for Woodford (Sir W. Churchill) sat proudly and defiantly as a Liberal Home Secretary on that Bench while the Chancellor of the Exchequer, David Lloyd George, asked leave to introduce a Bill to provide for health and unemployment insurance. That was, within weeks, exactly fifty years ago, and this is how we celebrate. This is the way we mark the occasion, by undermining the other great advance made in those fifty years, the establishment of a free, comprehensive, National Health Service.

Of course, what we are doing now is only one of a questionable quartet effecting drugs, prescriptions and charges. In no way do the Bill or the other actions of the Government in health matters match the moment or the challenge of social progress. Fifty years ago contributions were related to wages—4d. and 3d. on wages of 2s. 6d. and under; 2d. for 2s. a day and under; and ld. for 1s. 6d. a day; and the balance of the unevenness was made up by higher contributions for the employers. Fifty years the working men of this country get their medicine and medical attention free. Today, we have got a higher contribution than ever we had, and we have a higher charge of 2s. per item.

Hon. Gentlemen opposite have legislated not to underpin, but to demolish, the Health Service. Some hon. Gentlemen have been working on the Floor of the House on contributions and the rest of the demolition squad have been working in a Committee Room upstairs. It is because they have legislated with prejudice, because they have legislated for privilege, that they are to be condemned by this House tonight; and, certainly, they will be condemned by the country.

10.31 p.m.

The Financial Secretary to the Treasury (Sir Edward Boyle)

If the late Lloyd George could have been present during the censure debate some weeks ago, and heard the figures which my right hon. Gentleman the Minister of Health gave of improvements in the National Health Service in the last few years, he would, no doubt, have felt that the fiftieth anniversary of his work was being celebrated in a worthy manner. It is well worth remembering just how greatly, as my right hon. Friend showed, the Service in all its essential parts has improved in the last ten years.

The hon. Member for Kilmarnock (Mr. Ross), if it is not impertinent for me to say so, during our debates on the Bill has added considerably to his laurels in this House as a debater, and I am sure many of my hon. Friends would join with me in the tribute I have just paid to him, remembering in particular the speech he made late at night on Second Reading. But he has made tonight one inaccuracy which I think I should correct at the outset, because if it were quoted outside it would give a misleading impression.

Talking about the increase in contributions, he said the increase would be £134 million in April, and there would be an increase of £200 million through the introduction of the graduated scheme, and an increase of £50 million through the increase in the National Health Service contributions; but, of course, the hon. Gentleman did not mention that the 1959 Act reduced the flat rate contribution by about £100 million, so the total increase this year is not £400 million but approximately £300 million. [HON. MEMBERS: "Oh."] I think it is important to get these figures right, and it is highly relevant to this debate to remember that £200 million of the £300 million is related to incomes, that is to say, will be raised by a form of contribution in which there is going to be an element of graduation.

Mr. Ross

I agree. The hon. Gentleman is quite right. I had this in mind, but I was talking at that time about the campaign which was conducted by hon. Gentlemen opposite during the election when, in relation to rates prevailing then and which they boasted about then, they boasted they would bring them down from 9s. 11d. to 8s. 4d. In that connection my figures are perfectly accurate.

Sir E. Boyle

Since the hon. Gentleman has raised this point, if I remember rightly, what we promised at the election—I am not trying to play with words in any way on this—was that we would aim to concentrate help where it was most needed, and, accordingly, we concentrated the help to the lower-paid workers in assessing the contributions they would make under the National Insurance Scheme. But we have at no time said that if National Insurance benefits were to go up contributions would not have to go up as well.

I want to come back to the speech of the hon. Member for Sowerby (Mr. Houghton). I must say that I thought he had a point when he said at the start of our proceedings today that there was not very much new to say on this subject now, but that he was sure hon. Members would have plenty more to say about it. I think that a fair comment, possibly, on the debate that we have had today.

But I cannot agree with the hon. Member or with any other hon. Member who feels that our debate today or our debates at any earlier time in these proceedings have revealed a fundamental conflict of principle between the two sides of the House. I will go on to the speech of the hon. Lady the Member for Cannock (Miss Lee) in a few minutes; she went a good deal further than some of her hon. Friends and stated a conflict of principle not just with the present Government but really with the Labour Government after the war.

After all, it is not really in dispute between the two sides of the House that the weekly payments made by insured persons under the National Insurance Scheme should make some contribution to the cost of the Service. Ever since the Service began in 1948 some part of the gross cost has been met in this way. Equally, it is not in dispute between us that by far the major part of the cost of the Service has always been met, and will go on being met, from the proceeds of general taxation.

It is perfectly true, as the hon. Gentleman has pointed out, that something happened in 1957—that in terms of legality the Health Service contribution has had a separate existence only since the 1957 Act. But throughout the whole period between 1948 and 1957—nothing that the hon. Gentleman said this afternoon contradicted this; in fact, he really confirmed it—an element of the weekly insurance contribution was notionally set aside, and the yield from it was actually paid over towards the cost of the Health Service.

I want again to make the point that just what the balance should be between the proportion of Health Service expenditure financed out of the proceeds of general taxation and the proportion financed by contributions cannot be regarded, I believe, as a major question of political principle. I simply commend the Bill to the House with the reflection that we do not believe that there is anything unreasonable about the balance that we are going to achieve this next year.

The net yield of the proposed flat-rate contribution for the coming financial year, if the House approves the Third Reading of the Measure, will be £148 million, but even after taking into account the increased charges and contributions, the cost to the Exchequer of the Health Service in 1961–62 will still be £600 million. I just do not see how one could reasonably claim that the Government's proposals are relieving taxpayers in general of paying their fair share of Health Service expenditure. I would just relate this to the total of estimated civil expenditure, because I think that when all is said and done £600 million is a fairly sizeable fraction of a total estimated civil expenditure of £3,530 million.

There was another point that the hon. Member for Sowerby made this afternoon. He frankly admitted that if one ascertained the fraction of average earnings represented by the combined contribution there was not very much difference between 1946 and today. He pointed out that the percentage was 4.3 in 1946 and 4 today. But he then asked what sanctity these proportions had. There is, of course, nothing sacred about these proportions at all. All I am saying is that when any Government have to make an act of judgment in deciding a question such as this—what should be the amount of the Health Service financed out of the flat-rate contribution and the amount financed out of taxation—it is surely not unreasonable to pay attention to this sort of statistic and see just exactly what is in the Government's view a fair proportion of average earnings for the combined insurance contribution to represent.

I do not make any apology at all for the fact that over the years we have tended to keep this figure fairly constant. I think that is a perfectly reasonable thing to have done and the sort of way any Government is bound to behave when it has to exercise an act of judgment of this kind.

I come next to the speeches of my hon. Friends the Members for Ilford, South (Mr. Cooper), Torrington (Mr. P. Browne) and Cheadle (Mr. Shepherd), who expressed some doubt about the level of flat-rate contribution and asked themselves whether the present rate was not too high. My hon. Friend the Member for Cheadle went further and said that we should do a good deal more thinking about the whole financing of the social services for the future.

I do not quarrel with any of my hon. Friends who raised these points. I said earlier on the Bill, and I say it again tonight, that, of course, there is a level of flat-rate contribution that would be manifestly unjust. Certainly, every time we propose to raise the flat-rate contribution it is absolutely right that we should consider carefully what will be its effect on workers of all income levels, and not only of workers but of the self-employed, juveniles and the non-employed.

Mr. Houghton

The hon. Gentleman is saying that there will be another time.

Sir E. Boyle

What I am saying is that whenever we are taking a forward look at Health Service expenditure, and are considering the question of finance, obviously it is right that we should consider the social justice of what we are proposing to do. All I claim is that I do not believe that this Measure is in itself an unreasonable one.

In answer to my hon. Friend the Member for Cheadle, I would say that we have certainly not closed our minds on this question. I would be the last to say that we should be complacent about our present system of financing the Service. It is one of the biggest problems which face Western Governments at the present time. It is very much easier to suggest large-scale reforms in general than to work them out in particular, and this is, in fact, one of the most difficult problems which would face a Government today.

Mr. Ross

The hon. Gentleman said he did not think that this Measure in itself was unjust. But we cannot consider it "in itself" because no one pays this itself. It is part of the combined contribution. Does the hon. Gentleman think that the combined contribution of 10s. 7d. will at all times be just?

Sir E. Boyle

When I said this Measure itself, what I had in mind was—I am sure hon. Members have all kinds of ideas as to how the services could best be financed—that we are considering one single Measure, and I do not think that this Measure is an intrinsically unreasonable one.

Mr. Ross

Will the hon. Gentleman answer my question? We cannot consider this matter in a vacuum. This does not exist by itself. It is part of a flat-rate contribution of what will be 10s. 7d. Does the hon. Gentleman think that that sum is fair to the lower-paid worker?

Sir E. Boyle

Certainly. I think that the 10d. which we are considering, and also the flat-rate contribution paid, are things Which I am right to defend either inside or outside the House.

I now come to the hon. Lady the Member for Cannock. She delivered a thoughtful and very sincere speech, and I should like to answer two of the several points which she made. She was arguing very strongly that the cost for the whole of the Health Service should be financed oust of the proceeds of general taxation. I am not sure that there was quite such agreement between the hon. Lady and the hon. Member for Sowerby as she suggested. I think that on some occasion in the House we ought to hear quite clearly whether the hon. Lady did or did not represent the view of the Opposition Front Bench. However, I should like to lake up one point, in particular.

The hon. Lady said that social services not only have a social effect, but also a redistributive effect. What evidence has she that Government social policy as a whole in the 1950s redistributed welfare in favour of the better off?—because I do not believe that to be true. When we look at the increased share in recent years of all social services, and when we consider the point which my hon. Friend the Economic Secretary made that social services expenditure in general has nearly doubled in the last ten years, I do not believe that Government social policies as a whole have redistributed welfare in the country adversely. I think that the ordinary workers are enjoying a higher level of social benefits than ever before.

Miss Lee

My answer, quite simply, is expense accounts. There are two sets of people in the community. There are the schoolmaster, the scientist, the civil servant and all kinds of extremely valuable members of our community who are living on a moderate standard and paying full Income Tax. What has gone wrong with our society, and what is making nonsense of our taxation system, is the fact that there is also another section of the community which is getting away with a great deal of untaxed expenditure.

Sir E. Boyle

I hope that I will not be out of order if I answer the hon. Lady on this point. I am staggered by her suggestion. Of course, we can discuss at an appropriate time any moral and social issues arising out of expense accounts, but if she will tot up the increases in social service expenditure on health and education and National Assistance—and the fact is that we are spending £168 million a year on National Assistance, as compared with £100 million a few years ago—I do not believe that even the right hon. Member for Huyton (Mr. H. Wilson) would claim that the total amount of money involved in expense accounts, legitimate and illegitimate, is anything more than a small fraction of the extra social service expenditure.

Miss Lee

I do not think that the Minister would deny that expenditure on the Health Service is less than 1s. in the £ of national income now, and that that figure has remained relatively stationary. On the other hand, there has been an increase in wages, and such a marked redistribution of income that one would expect some increase in production—especially when the Western world in general has increased its production—but this still means that the whole situation is completely lopsided, and that many sections of our people, including the sick and the pensioners, are comparatively worse off.

Sir E. Boyle

The hon. Lady shows quite clearly that she belongs to that section of her party which thinks that the whole of our British society today is rotten. That is not a view I share; nor, I am glad to say, is it a view which is held by anything like all hon. Members opposite. My point is that not only has Health Service expenditure risen in the last few years, as a proportion of the national product; education expenditure, productive capital spending and social capital spending have also risen.

I believe that the ordinary wage-earning families enjoy a higher living standard and a higher standard of social benefits than before, and I commend to the hon. Lady the wise words of a former Tory Leader—Arthur Balfour—who used to say that this was a singularly ill-contrived world, but not quite so ill-contrived as that.

The hon. Member for Southampton, Itchen (Dr. King) made a very interesting point. I am sorry I was not able to hear his speech, but I had to leave the House. He said that even if we accepted the principle of a flat-rate contribution there remained the level of the contribution to consider, and that we should calculate this not by reference to the average wage of the worker but by reference to the poorest. I go a long way with him on this. If we were considering just the £15-a-week worker I have no doubt we would think ourselves fully justified in putting up the flat-rate contribution by more than 10d. The point is that in deciding on this figure we took into account the lower paid worker—such as, for instance, the agricultural worker with three or four children—and not just the better-paid worker. I agree that we have to take into account all sections of workers.

My noble Friend the Member for Hertford (Lord Balniel), whose speech I also missed, made an admirable contribution to the debate, as I am informed by some of those who were lucky enough to listen to it. He is quite right when he says that the normal reaction of people not steeped in party politics will be that there is no great difference in principle between the two sides, and that if the level of contribution was fair in 1949, having in mind what has happened since the new contribution is also fair.

The hon. Member for Bristol, South (Mr. Wilkins), who spoke immediately after my noble Friend, made one rather startling remark. He said that if he were Chancellor he would abolish all indirect taxation and substitute more direct taxation, and that that was the only fair method to adopt. I know the strength of his moral convictions, and those of many of his hon. Friends, but if we want to see a community with rising standards of living and better social benefits it cannot make sense, at the same time, to kill all enterprise and initiative in this country. Ultimately—this is not just a party point—the level of social benefits we enjoy must depend on our ability to earn our living in the markets of the world. Other countries will not pay our social benefits for us.

Mr. J. T. Price (Westhoughton)

It is interesting that the hon. Gentleman takes my hon. Friend the Member for Bristol, South (Mr. Wilkins) to task on this, because surely he is forgetting that the most notable advocate of the single tax who ever spoke in this House—at least since I have been here and that time coincides with that of the Financial Secretary—was Sir William Darling, a former Conservative Member for Edinburgh, Central, who often made impassioned speeches from the benches opposite for the abolition of indirect taxation.

Sir E. Boyle

When the hon. Member referred to advocates of a single tax, I thought that he was going to refer to the late Mr Richard Stokes. While I used to enjoy hearing him, and also Sir William Darling, I should not have gone to either of them for economic advice.

The hon. Member for Romford (Mr. Ledger), made two points which I should like to consider. I say to him frankly that the rises in spending by the average family to which he referred are a sign that flat-rate taxes can rise by a moderate amount without creating tremendous injustice. He said the reason why the Health Service cost had increased was inflation. There are two answers to that. The first is, as the Economic Secretary said this afternoon, that the expenditure has gone up by a third in real terms during the last ten years; also during the last few years in Britain increments in salaries have tended to advance at a rather greater rate than increases in wages and that is not a bad thing for the social services. That has helped to bring about a better Health Service than we had years ago.

The hon. Member for Edinburgh, East (Mr. Willis), who spoke at the end of the debate, thought this was a thoroughly unjust contribution because the Clores and Cottons, and he added one or two more recent characters, would all be paying 10d. Let us be fair about this because I think it is a point which hon. Members opposite often fail to take. Admittedly, the lower-paid worker will also be paying 10d., but it is worth recalling when we are considering advantages and disadvantages of the flat-rate contribution that there is no increase for a man according to the number of his dependants. [HON. MEMBERS: "Oh."] It is a good point. Also, the flat rate contribution does not fall on the retired person, the sick or the unemployed, or, of course, on any of those receiving National Assistance.

While certainly on balance this is a regressive form of getting money, and we have never disputed the point, it is not, in fact, so completely nondiscriminatory as hon. Members opposite often suggest.

My last point is this. It was suggested, I think by the right hon. Member for Battersea, North (Mr. Jay) in the middle of the night in Committee, that we are financing in general an unfair proportion of our social services through contributions. Let me give the House, very briefly, the figures as accurately as I can for 1961–62. In the forthcoming financial year we shall be getting approximately £1,000 million out of National

Insurance contribution, excluding National Health contribution. We shall be getting approximately £150 million out of National Health Service contributions. Yet net current expenditure on the social services by the central Government for 1961–62 out of ordinary revenue will total approximately £2,125 million. I do not believe that that is an unreasonable proportion. What the central Government will spend on the social services out of ordinary revenue will be very nearly twice the total gained from contributions. In addition, we must think of the very considerable sums spent on social services by local authorities, which will also be between £400 and £500 million.

There is absolutely no truth in the theory that the Government has put welfare at the bottom of the queue. On the contrary, there has never been a time when ordinary families have gained more from our major social services—the Health Service and our education system —and when those in greatest need have gone more to the National Assistance Board to have their problems dealt with.

We on this side are as proud of the social services as any hon. Members opposite. It is precisely because we recognise the need to underpin these services with a sound financial structure that I have no hesitation in asking the House to give the Bill a Third Reading.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 276, Noes 204.

Division No. 114]	AYES	[10.56 p.m.
Agnew, Sir Peter	Boyd-Carpenter, Rt. Hon. John	Cleaver, Leonard
Aitken, W. T.	Boyle, Sir Edward	Cole, Norman
Allan, Robert (Paddington, S.)	Brawls, John	Cooper, A. E.
Allason, James	Bromley-Davenport,Lt.-Col. SirWalter	Cordeaux, Lt.-Col. J. K.
Amery, Rt. Hon. Julian (Preston, N.)	Brooke, Rt. Hon. Henry	Corfield, F. V.
Arbuthnot, John	Brooman-White, R.	Costain, A. P.
Atkins, Humphrey	Browne Percy (Torrington)	Coulson, J. M.
Balniel, Lord	Bryan, Paul	Courtney, Cdr. Anthony
Barber, Anthony	Bullard, Denys	Craddock, Sir Beresford
Barlow, Sir John	Bullus, Wing Commander Eric	Critchley, Julian
Barter, John	Burden, F. A.	Crowder, F. P.
Batsford, Brian	Butcher, Sir Herbert	Cunningham, Knox
Beamish, Col. Sir Tufton	Butler, Rt. Hn.R.A.(Saftron Walden)	Curran, Charles
Bennett, F. M. (Torquay)	Campbell, Sir David (Belfast, S.)	Currie, G. B. H.
Bennett, Dr. Reginald (Goa & Fhm)	Campbell, Gordon (Moray & Nairn)	Dalkeith, Earl of
Berkeley, Humphry	Carr, Compton (Barons Court)	Dance, James
Bevies, Rt. Hon. Reginald (Toxteth)	Carr, Robert (Mitcham)	d'Avigdor-Gotdsmid, Sir Henry
Bidgood, John C.	Cary, Sir Robert	Deetles, W. F.
Bingham, R. M.	Chanson, H. P. C.	Digby, Simon Wingfield
Bishop, F. P.	Chichester-Clark, R.	Donaldson, Cmdr. C. E. M.
Black, Sir Cyril	Clark, Henry (Antrim, N.)	Doughty, Charles
Bosom, Clive	Clark, William (Nottingham, S.)	Drayson, G. B.
Bourne-Arton, A.	Clarke, Brig. Terence (Portsmth, W.)	du Cann, Edward
Duthie, Sir William	Lagden, Godfrey	Prior, J. M. L.
Eden, John	Langford-Holt, J.	Prior-Palmer, Brig. Sir Othe
Elliot, Capt. Walter (Carshalton)	Leather, E. H. C.	Profumo, Rt. Hon. John
Elliott,R.W.(Nwcstle-upon-Tyne,N.)	Leavey, J. A.	Proudfoot, Wilfred
Emmet, Hon. Mrs. Evelyn	Leburn, Gilmour	Quennell, Miss J. M.
Farey-Jones, F. W.	Legge-Bourke, Sir Harry	Rameden, James
Farr, John	Lewis, Kenneth (Rutland)	Rawlinson, Peter
Finlay, Graeme	Lindsay, Martin	Redmayne, Rt. Hon. Martin
Fisher, Nigel	Litchfield, Capt. John	Renton, David
Foster, John	Lloyd, Rt. Hon. Selwyn (Wirral)	Ridley, Hon. Nicholas
Fraser, Hn. Hugh (Stafford & Stone)	Longbottom, Charles	Roots, William
Fraser, Ian (Plymouth, Sutton)	Longden, Gilbert	Royle, Anthony (Richmond, Surrey)
Freeth, Denzil	Loveys, Walter H.	Russell, Ronald
Galbraith, Hon. T. G. D.	Low, Rt. Hon. Sir Toby	Scott-Hopkins, James
Gammans, Lady	Lucas, Sir Jocelyn	Seymour, Leslie
Gibson-Watt, David	Lucas-Tooth, Sir Hugh	Sharples, Richard
Glover, Sir Douglas	McAdden, Stephen	Shaw, M.
Glyn, Sir Richard (Dorset, N.)	MacArthur, Ian	Shepherd, William
Goodhart, Philip	McLaren, Martin	Skeet, T. H. H.
Goodhew, Victor	McLaughlin, Mrs. Patricia	Smith, Dudley (Br'ntf'rd & Chlewick)
Gower, Raymond	Maclay, Rt. Hon. John	Smyth, Brig. Sir John (Norwood)
Grant, Rt. Hon. William	Maclean, SirFitzroy(Bute&N.Ayrs.)	Soames, Rt. Hon. Christopher
Grant-Ferris, Wg Cdr. R.	McLean, Neil (Inverness)	Spearman, Sir Alexander
Green, Alan	MacLeod, John (Ross & Cromarty)	Speir, Rupert
Gresham Cooke, R.	McMaster, Stanley R.	Stanley, Hon. Richard
Grimston, Sir Robert	Macmillan, Rt. Hn.Harold(Bromley)	Steward, Harold (Stockport, S.)
Grosvenor, Lt.-Col. R. G.		Stodart, J. A.
Gurden, Harold	Macmillan, Maurice (Halifax)
Hall, John (Wycombe)	Maddan, Martin	Stoddart-Scott, Col. Sir Malcolm
Hamilton, Michael (Wellingborough)	Maginnie, John E.	Storey, Sir Samuel
Harris, Frederic (Croydon, N.W.)	Maitland, Sir John	Studholme, Sir Henry
Harrison, Brian (Maldon)	Manningham-Buller, Rt. Hn. Sir R.	Summers, Sir Spencer (Aylesbury)
Harvey, John (Walthamstow, E.)	Markham, Major Sir Frank	Taylor, sir Charles (Eastbourne)
Harvie Anderson, Miss	Marlowe, Anthony	Taylor, Edwin (Bolton, E.)
Hastings, Stephen	Marples, Rt. Hon. Ernest	Taylor, W. J. (Bradford, N.)
Heald, Rt. Hon. Sir Lionel	Marten, Neil	Teeling, William
Henderson-Stewart, Sir James	Mathew, Robert (Honiton)	Temple, John M.
Hendry, Forbes	Matthews, Gordon (Meriden)	Thatcher, Mrs. Margaret
Hicks Beach, Maj. W.	Maudling, Rt. Hon. Reginald	Thomas, Leslie (Canterbury)
Hill, Dr. Rt. Hon. Charles (Luton)	Mawby, Ray	Thomas, Peter (Conway)
Hill, J. E. B. (S. Norfolk)	Maxwell-Hyslop, R. J.	Thompson, Richard (Croydon, S.)
Hinchingbrooke, Viscount	Maydon, Lt.-Cmdr. S. L. C.	Thorneysroft, Rt. Hon. Peter
Hirst, Geoffrey	Mills, Stratton	Thornton-Kemsley, Sir Colin
Hobson, John	Montgomery, Fergus	Tiley, Arthur (Bradford, W.)
Hocking, Philip N.	More, Jasper (Ludlow)	Tilney, John (Wavertree)
Holland, Philip	Morgan, William	Turner, Colin
Hollingworth, John	Morrison, John	van Straubenzee, W. R.
Hopkins, Alan	Mott-Radclyffe, Sir Charles	Vane, W. M. F.
Hornhy, R. P.	Neave, Airey	Vaughan-Morgan, Sir John
Hornsby-Smith. Rt. Hon. Patricia	Nicholson, Sir Godfrey	Vesper, Rt. Hon. Dennis
Howard, John (Southampton, Test)	Noble, Michael	Walker-Smith, Rt. Hon. Sir Derek
Hughes Hallett, Vice-Admiral John	Nugent, Sir Richard	Watkinson, Rt. Hon. Harold
Hughes-Young, Michael	Oakehott, Sir Hendrie	Watts, James
Hulbert, Sir Norman	Orr, Capt. L. P. S.	Webster, David
Hutchison, Michael Clark	Orr-Ewing, C. Ian	Wells, John (Maidstone)
Iremonger, T. L.	Osborn, John (Hallam)	Whitelaw, William
Irvine, Bryant Godman (Rye)	Osborne, Cyril (Louth)	Williams, Dudley (Exeter)
Jackson, John	Page, John (Harrow, West)	Williams, Paul (Sunderland, S.)
Jenkins, Robert (Dulwich)	Pannell, Norman (Kirkdale)	Wills, Sir Gerald (Bridgwater)
Jennings, J. C.	Partridge, E.	Wilson, Geoffrey (Truro)
Johnson, Dr. Donald (Carlisle)	Pearson, Frank (Clitheroe)	Wise, A. R.
Johnson, Eric (Blackley)	Peel, John	Wolrige-Gordon, Patrick
Johnson Smith, Geoffrey	Peyton, John	Wood, Rt. Hon. Richard
Joseph, Sir Keith	Pickthorn, Sir Kenneth	Woodhouse, C. M.
Kaberry, Sir Donald	Pike, Miss Mervyn	Woodnutt, Mark
Kerans, Cdr. J. S.	Plikington, Sir Richard	Woollam, John
Kerby, Capt. Henry	Pitman, I. J.	Worsley, Marcus
Kershaw, Anthony	Pitt, Miss Edith
Kimball, Marcus	Pott, Percivall	TELLERS FOR THE AYES:
Kirk, Peter	Powell, Rt. Hon. J. Enoch	Mr. E. Wakefield and
Kitson, Timothy	Price, David (Eaetleigh)	Colonel J. H. Harrison.
NOES
Abse, Leo	Bowden Herbert W. (Leics, S.W.)	Chetwynd, George
Albu, Austen	Bowen, Roderic (Cardigan)	Cliffe, Michael
Allaun, Frank (Salford, E.)	Bowies, Frank	Collick, Percy
Awbery, Stan	Boyden, James	Corbel, Mrs. Freda
Baxter, William (Stirlingehire, W.)	Brockway, A. Fenner	Craddock, George (Bradford, S.)
Beaney, Alan	Broughton, Dr. A. D. D.	Cronin, John
Bence, Cyril (Dunbartonshire, E.)	Brown, Allan (Tottenham)	Crosland, Anthony
Benson, Sir George	Brown, Rt. Hon. George (Belper)	Grossman, R. H. S.
Blackburn, F.	Butler, Herbert (Hackney, C.)	Cullen, Mrs. Alice
Blyton, William	Butler, Mrs. Joyce (Wood Green)	Darling, George
Boardman, H.	Castle, Mrs. Barbara	Davies, G. Elfed (Rhondda, E.)

Davies, Harold (Leek)	Jones, Dan (Burnley)	Redhead, E. C.
Davies, Ifer (Gower)	Jones, Jack (Rotherham)	Reid, William
Davies, S. O. (Merthyr)	Jones, J. Idwal (Wrexham)	Reynolds, G. W.
Deer, George	Jones, T. W. (Merioneth)	Roberts, Albert (Normanton)
de Freitas, Geoffrey	Kelley, Richard	Roberts, Goronwy (Caernarvon)
Delargy, Hugh	Kenyon, Clifford	Robinson, Kenneth (St. Pancras, N.)
Dempsey, James	King, Dr. Horace	Ross, William
Diamond, John	Ledger, Ron	Short, Edward
Dodds, Norman	Lee, Frederick (Newton)	Silverman, Julius (Aston)
Driberg, Tom	Lee, miss Jennie (Cannock)	Silverman, Sydney (Nelson)
Dugdale, Rt. Hon. John	Lever, Harold (Cheetham)	Slater, Mrs. Harriet (Stoke, N.)
Ede, Rt. Hon. C.	Lever, L. M. (Ardwick)	Slater, Joseph (Sedgefield)
Edelman, Maurice	Lewis, Arthur (West Ham, N.)	Small, William
Edwards, Rt. Hon. Ness (Caerphilly)	Lipton, Marcus	Smith, Ellis (Stoke, S.)
Edwards, Robert (Bilston)	Loughlin, Charles	Snow, Julian
Edwards, Walter (Stepney)	MacColf, James	Sorensen, R. W.
Evans, Albert	McKay, John (Wallsend)	Soskioe, Rt. Hon. Sir Frank
Finch, Harold	Mackle, John	Spriggs, Leslie
Fitch, Alan	MacMillan, Malcolm (Western Isles)	Steele, Thomas
Foot, Michael (Ebbw Vale)	MacPherson, Malcolm (Stirling)	Stewart, Michael (Fulham)
Forman, J. C.	Mallalieu, E. L. (Brigg)	Stonehouse, John
Fraser, Thomas (Hamilton)	Mallalieu, J.P.W.(Huddersfield, E.)	Stones, William
Gaitskell, Rt. Hon. Hugh	Manuel, A. C.	Strachey, Rt. Hon. John
Galpern, Sir Myer	Mapp, Charles	Strauss, Rt. Hn. G. R. (Vauxhall)
George,LadyMeganLloyd(Crmrthn)	Marquand, Rt. Hon. H. A.	Stross, Dr. Barnett(Stoke-on-Trent, C.)
Ginsburg, David	Marsh, Richard	Swain, Thomas
Gordon Walker, Rt. Hon. P. C.	Mason, Roy	Swingler, Stephen
Gourley, Harry	Mayhew, Christopher	Sylvester, George
Greenwood, Anthony	Mendelson, J. J.	Taylor, Bernard (Mansfield)
Grey, Charles	Millian, Bruce	Taylor, John (West Lothlan)
Griffiths, Rt. Hon. dames (Lianelly)	Milne, Edward J.	Thomson, G. M. (Dundee, E.)
Griffiths, W. (Exchange)	Mitchison, G. R.	Thornton, Ernest
Hall, Rt. Hn. Gienvll (Colne Vailey)	Monsiow, waiter	Timmons, John
Hamilton, William (West Fife)	Moody, A. S.	Tourney, Frank
Hannan, William	Morris, John	Ungoed-Thomas, Sir Lynn
Hart, Mrs. Judith	Moyle, Arthur	Wainwright, Edwin
Hayman, F. H.	Noel-Baker, Francis (Swindon)	Warbey, William
Healey, Denis	Noel-Baker, Rt. Hn. Phllip(Derby,S.)	Weitzman, David
Henderson, Rt. Hn. Arthur(RwiyRegis)	Oliver, G. H.	Wells, Percy (Faversham)
Herbison, Miss Margaret	Oswald, Thomas	Wells, William (Walsall, N.)
Hilton, A. V.	Owen, Will	White, Mrs. Eirene
Holman, Percy	Padley, W. E.	Wilcock, Group Capt. C. A. B.
Holt, Arthur	Paget, R. T.	Wilkins, W. A.
Houghton, Douglas	Pannell, Charles (Leeds, W.)	Willey, Frederick
Hoy, James H.	Pargiter, G. A.	Williams, D. J. (Neath)
Hughes, Emrys (S. Ayrshire)	Parker, John (Dagenham)	Williams, LI. (Abertillery)
Hughes, Hector (Aberdeen, N.)	Parkin, B. T. (Paddington, N.)	Williams, W. R. (Openshaw)
Hunter, A. E.	Pavitt, Laurence	Willis, E. G. (Edinburgh, E.)
Hynd, H. (Accrington)	Pearson, Arthur (Pontypridd)	Wilson, Rt. Hon. Harold (Huyton)
Hynd, John (Attercliffe)	Peart, Frederick	Woodburn, Rt. Hon. A.
Irvine, A. J. (Edge Hill)	Pentland, Norman	Woof, Robert
Irving, Sydney (Dartford)	Plummer, Sir Leslie	Wyatt, Woodrow
Janner, Sir Barnett	Prentice, R. E.	Yates, Victor (Ladywood)
Jay, Rt. Hon. Douglas	Price, J. T. (Westhoughton)	Zilliacus, K.
Jeger, George	Probert, Arthur
Jenkins, Hoy (Stechford)	Proctor, W. T.	TELLERS FOR THE NOES:
Johnson, Carol (Lewisham, S.)	Randall, Harry	Mr. Howell and Mr. Lawson.
Jones, Rt. Hn. A. Creech(Wakefield)	Rankin, John

Bill accordingly read the Third time, and passed.