HC Deb 13 June 1966 vol 729 cc1147-63
Mr. Maurice Macmillan

I beg to move, in page 4, line 16, after "benefit", to insert: other than the additional family allowance".

The Temporary Chairman

It has been proposed, if the Committee agrees, that with this Amendment we take the proposed new Clause, entitled "Low-wage earning family" and the Amendment to Schedule 2, page 22, line 3, at end-insert: but for this purpose no account shall be taken of any additional family allowance payable under this Act both in the name of the hon. Member for Farnham (Mr. Maurice Macmillan).

Mr. Macmillan

The purpose of the Amendment which I am moving, together with the consequential Amendment to Schedule 2, is to validate the new Clause standing in my name relating to the low-wage-earning family. It reads: A person engaged in remunerative full-time work, whose resources are insufficient to meet his requirements as calculated under Part II of Schedule 2 to this Act, shall be entitled to an additional family allowance in accordance with a scale of requirements which the Minister will prescribe by regulations made under this Act. The purpose of the new Clause and of the Amendments is twofold. First, it is to deal, so far as supplementary allowances are concerned, simultaneously with the wage stop problem and with the low-wage-earning large family. Its second purpose is to do so in a way which avoids the delay inherent in the survey to which the Parliamentary Secretary referred on the Second Reading and to which the Minister referred today—the delay which the exigencies of the Parliamentary timetable, I fear, will impose, no matter with what dispatch the actual survey itself is conducted, and yet, in avoiding this delay, in no way to limit the Government's freedom of action when the survey is completed.

For this reason we did not seek to write into the wording of these Amendments and of the new Clause any attempt to provide a comprehensive solution in the Bill to the problems of the low wage-earning family, even if this were the appropriate Bill into which to put it. It is for this reason, too, that we did not seek to lay down what, in our view, was the appropriate scale of assistance. Like the Parliamentary Secretary, the right hon. Lady and others who have spoken on both sides of the Committee, I think that it is more efficient to act on facts rather than on hypotheses.

I also believe that another fact has been established to demonstrate now the need for immediate action and that the method of taking such action is available through the medium of regulations setting down requirements which this Bill provides in Clause 5. We have in the Bill both the opportunity for immediate action to meet a proven social need and the chance to provide the further more detailed and more efficient action when the surveys and inquiries set in train by the Government have a chance to be considered and digested, and proposals are made therefrom.

It is important to remember that those who are in need are looking to the Bill as a means of help. Those whom the Parliamentary Secretary referred to as the poorest in the country will be very disappointed with the party opposite if this Government are allowed to miss the opportunity provided by the Bill to help them.

9.15 p.m.

Let us look, first, at the facts. I do not know, and I cannot pretend to guess at, what the cost of these Amendments and this new Clause would be. What is more, I do not believe that it is relevant because we are only seeking to relieve those families who by definition are living below the subsistence level. If the position is really so difficult the Treasury can insist and the Minister can ensure, that the regulations are limited so that they are brought up only to the level of the supplementary allowance on the old National Assistance Board scales. Later, when the inquiries are completed, any further problems of the large families or low-wage earners can be dealt with.

In this context, I had rather understood from what had been said that the Government have accepted that cost was irrelevant. It was certainly accepted in various election manifestoes and documentations when the income guarantee was specifically exempted from being qualified by economic progress. The Joint Parliamentary Secretary, winding up the Second Reading debate, said: Before I proceed further I should perhaps say a few words about the relationship of these proposals to our public expenditure programme. The National Plan allocated a certain sum to provide real improvements, other than increases to make up for loss of value due to rising prices, in benefits and assistance up to 1970. That part of the cost of the present proposals which represents a real improvement in standards will be contained within the allocation in the Plan. We are convinced that the proposals now put before the House to improve the lot of the poorest of our people must have a prior claim on this allocation."—[OFFICIAL REPORT. 24th May, 1966; Vol. 728. c. 411.] It is not quite the sweeping exception that the election manifestoes produced. I hope that I did not, but I think that I did detect one or two remarks today about containing the assistance which this Bill is giving to meet the limitations of costs. I hope that it is not in any way going to apply to relieving those whom the Parliamentary Secretary has called the poorest in the land, and especially as far as this Amendment is concerned, the large families with very low incomes.

There are about 9 per cent. of all households with three or more children under 16. It is, unfortunately, true that the relatively lower wage earners, unskilled and semi-skilled, more than other sections of our population, tend to have rather larger families. These are about 1 million families in all, of whom the Minister of Labour has estimated between 150,000 and 200,000 are living below National Assistance Board scales. That was on 26th July, 1965, and I think that the right hon. Lady has later figures.

There is no need for me to emphasise to the Committee the plight of these people. Average earnings are something like £18 a week, and even with family allowance, these average earnings, with four children and high rents impose very strict limitations. There can be only the most essential spending to put it at its very lowest. About half the working population is earning less than £18 a week and there are many people whose jobs do not enable them to bring home more than £10 to £12 a week.

Not all of them have other "perks", such as cheap rents, as well. A big family tends to pay a high rent. I hope that there is no need to emphasise the urgency and importance of this problem. I hope that there is no lack of knowledge that a significant number of large families are living below and there are even more living just above, subsistence level.

We accept that our proposal leaves out of account quite a part of the problem. We accept that when the inquiry is complete there may well be a need to do more or even to change the manner in which the Minister acts under the regulations which she prescribes. But we are suggesting the minimum which should be applied now to all. In a rapidly changing society the pattern of help and benefit which will develop as the years go by is bound to change. I do not see any major disadvantage in helping people now even if, whenever the right hon. Lady can get Parliamentary time, her present help may be subsumed in a wider and more comprehensive Measure later. This is why we have followed Clause 5 in tabling the new Clause.

On Second Reading, the Parliamentary Secretary assured us that he recognised that this was a major social problem and that the Government were busy collecting information. But the Government have been promising action for a very long time. In every speech and broadcast they have implied that this Measure, among others, would take the sort of action which we are asking them to take now. It was implied that solutions to these problems were already in the pipeline. I will not risk incurring the Minister's displeasure by referring to the long delay in dealing with this problem, but I would refer to the discrepancy in this and other matters between the Government's words and actions. There is an urgency in their criticism of the Conservative record. There were assurances in successive election campaigns that this record would be rapidly improved. We had assurances of immediate action which it would be possible to take under the Bill, but the Government have notably failed to grasp the opportunity to take it.

As has been said several times, there is very little in the Bill which is new. The reason for this, given by the Minister, is that the Government must wait until they know more before taking action and until the action which they take has been made clear by its inquiries. They deny the value of any first aid. We remember the scorn which right hon. and hon. Members opposite poured on the Conservative Government when they waited to ascertain the facts. My hon. Friend the Member for Chelsea (Mr. Worsley) was very gentle with the right hon. Lady. I know that her inquiry will be valuable.

But why wait? All that we are suggesting is that low-wage earners who, because of their large families, cannot earn enough to support themselves and their families at a level which Parliament has decided is a subsistence level should be brought up to the subsistence level proposed in the Bill.

I know that this is not enough, but I suggest that the Government must act. We have suggested a line of action. The Minister should accept now the need to bring these families to a higher level. She should accept that the size of the family is a factor and should, indeed, accept our proposal. The right hon. Lady could vary the regulations later. Meanwhile, she would have relieved hardship.

To reject the Amendment and the new Clause out of hand would be to reject a provision which social justice demands. If it comes to a Division—which I hope it will not, because I hope that the right hon. Lady will accept the Amendment and the new Clause to vote against the new Clause would be to vote for continuing to keep some families below subsistence level, even though right hon. and hon. Members opposite have said that the new Ministry of Social Security will do more, will he bold and imaginative and will meet people's needs.

Some needs will be met, but unless the Amendment and the new Clause are accepted the needs of the poorest will still not be dealt with. In the Government's eyes, the treatment of need may be equal, but in rejecting the new Clause they would be making it clear that some are more equal than others.

Mrs. Lena Jeger

There must indeed be rejoicing in heaven tonight over the sinners who have repenteth; but the repentance is none the less welcome for its tardiness. I should be the last to deprecate the concern of the Committee for the low-income family, which presents one of the most intractable social problems of our time. I hope, however, that the Committee will not accept these Amendments and will recall rather the assurances of my right hon. Friend about the investigations which are being carried out into this complicated question.

Family allowances were accepted only after a long campaign of education, in which the name of Eleanor Rathbone comes quickly to mind. When family allowances were adopted, the sum of 5s. for a child which was agreed upon seemed small enough, but in purchasing power it was worth more than the family allowances which are available today. That is another reason why I feel that the whole question of family allowances needs to be gone into separately from the Bill.

I would strongly resist any attempt to divide families into two, into the poor extra-family-allowance families and those which are above the line. It seems to me to be basic to Tory thought on improving the social services to divide the country according to means in the way that happened under the old panel system, when a person who earned more than a certain figure could not be on the panel. Such a suggestion could also have a serious effect upon claims for increased wages. I can imagine many employers using the availability of this kind of extra family allowance as a reason for holding down wage claims I am sure that the Committee would not want this to happen. Having said that rather destructively, I would not want it to be thought that any of us on this side are unaware of or insensitive to the problem.

9.30 p.m.

There is another aspect of family allowances to which the hon. Member did not refer, and which benefits thousands of people in the family allowances which Income Tax payers receive in respect of their children. We subsidise Income Tax payers to about £100 million a year whereas we spend only £150 million a year at present on family allowances. If we are to tackle the problem we must do something quite drastic—completely abolish Income Tax allowances for children and give the increased family allowances right across the board, recouping in taxation from the better-off. I am sure that that is the more ethical way of dealing with this kind of social problem than saying to certain families, "You are just poor enough to get a little extra dole whereas the next-door family is just a few shillings better off and cannot have it."

This Amendment would not achieve the abject which the hon. Member seems to have in mind. I agree with him, as I know my right hon Friend does, about the urgency of the problem. Beveridge has been mentioned several times in the debate, and I will conclude by recalling a remark of his soon after his Report was published. He said: It is unreasonable to seek to guarantee an income sufficient for subsistence while earnings are interrupted by unemployment or disability without ensuring sufficient income during earning.

That is the problem which he left to us and to which we have not found an answer. The Amendment will not help us find that answer.

Mr. Philip Holland (Carlton)

I find it a little difficult to follow the argument of the hon. Lady the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger), who suggests that we must not try to help the poorest people in case that splits the community. The proposal made was that we should try to give supplementary allowances to those who are in the greatest need rather than to give a flat rate across the board which would go to the wealthiest, too. I do not understand how that would split the community.

Mrs. Jeger

If the hon. Member cannot understand how dividing families along a street into two categories would create a split, then he does not live near enough to ordinary people to understand how they feel.

Mr. Holland

I should like to set the Amendment in its context in the Clause and to support what was said by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) about the urgency of the matter. Without amendment the Clause states clearly that supplementary benefits should not be paid to a man in full-time employment, and in general this principle is absolutely right and we all agree with it. If a man is capable of earning enough to support his wife and family, he should do so and retain his independence. Indeed, he should be encouraged to do so. This is the general trend of thinking in our social security system and has been the trend with both Governments.

But there are special cases which must be exceptions to the rule. The Clause recognises one of them—the man who suffers loss of earning power through disability. That is in subsection (3). It recognises, too, in subsection (4), that there should be exceptions in the case of subsidising appliances.

But the Clause could do a lot, and does nothing, in the large area of hardship which is known to exist, and here lies what we regard in putting forward the Amendment as a sin of omission of the Clause. As my hon. Friend made clear, we feel that exceptions to the general rule should be made for the low-wage earner with the large family whose total earned income, including family allowances, falls below the level of income laid down by the National Assistance Board scale, which is designed to keep a family above the subsistence borderline. According to figures given by the right hon. Lady on Second Reading, which were mentioned in the debate on Clause 1, there are between 200,000 and 300,000 families where the wage earner's earned income is below the current amount under the National Assistance Board's scale.

May I refer to the Answer given on 26th July by the Parliamentary Secretary to the Ministry of Labour which has also been mentioned earlier? It was stated that the average number of children is slightly more than three per family. This means that about 650,000 children are being brought up in this area of poverty under conditions which Parliament, through the medium of the National Assistance Board, regards as being below subsistence level. There are about 650,000 children in this area of poverty who are undernourished and underprivileged. This is a great breeding ground for vice, misery, delinquency and degradation which the Bill—and Clause 8, which we seek to amend, is the relevant Clause—could do something about, but, in fact, does nothing about.

The difference between the income of the low wage earner with the large family and the scale rate of National Assistance income, which is the best guide we have as a generally recognised standard of subsistence, can be quite substantial. In the memorandum presented last December to the Prime Minister by the Child Poverty Action Group we were given the example of a married couple with six young children, three below the age of 5 and three between 5 and 11 years of age, with a net wage of £10 a week, plus family allowances, paying a rent of £2 10s. a week. The income of this family works out at about £3 16s. a week less than the total allowed in the National Assistance Board's scale.

With children from 5 years of age right through the range, the income according to that memorandum would be £5 9s. a week below what is regarded as the subsistence level by the National Assistance Board. If such a man had only three children between the ages of 3 and 12 and a net wage of £12 a week plus family allowances, and a rent of £2 10s. a week, his family's income would still be £2 14s. 2d. a week less than the National Assistance Board scale.

These differences are quite substantial. The wife of this man with a family of three children, after paying the rent and paying for fuel and light, would, even if she were lucky, have £6 a week less with which to feed and clothe a family of five and replace household equipment and then do little more than dream about family holidays.

The Committee is aware of the argument that some of the increase in the number of families living below the level of income allowed within National Assistance scales is due to the progressive increase in those scales during the last 15 years—nine increases since 1951 including that of last year—raising their value by about the same amount as the increase in male industrial earnings during the same period.

But although this may account for the increase in the numbers below the present level, surely the Committee will agree that in a society in which incomes are steadily rising and standards are, therefore, constantly improving, it is right and proper that we should also be raising the minimum standard of what we regard as subsistence level, because, as was said earlier, poverty is relative.

As a general principle, non-contributory benefits, as they are now becoming known, follow the guide lines of the Beveridge system for the payment of benefit against interruption or loss of earning power, so that benefits cannot be paid to a man in full employment. This is probably the basic rule behind the regulation not to pay benefits to men in full employment, which is what Clause 8 says.

On this side of the Committee, we agree that it is a right and proper principle, so long as we base our social security on Beveridge, but there are plenty of precedents for helping the children of families in financial straits without breaching the Beveridge principle. Family allowances are paid irrespective of earnings and whether or not the breadwinner is in employment. There is the special help, which we all know about and appreciate, which is given to the children of the widowed mother whether or not she is in employment, and, to mention a third, there is the special children's allowance for the children of deserted and divorced wives.

These do not breach the Beveridge principle, but they give assistance to families through the children's allowances or supplements. Why not make some supplementary benefit available to be added to the family allowance paid to the low wage earner with the large family even though he may be in full employment?

As it stands without the Amendment, the Clause misses a great opportunity to help the low-wage earner with the large family who is undoubtedly in need and, what is more important, to help the children who are undoubtedly in need, because without the Amendment the Clause seems to shut firmly the door against any attempt to alleviate within the Bill an area of need which certainly exists and which all hon. Members know to exist from their own constituency experiences.

Of course, I accept that the right hon. Lady is anxious to do something about the problem and I therefore ask her just as a possibility whether it is envisaged that regulations might be laid under subsection (2) postponing indefinitely the application of subsection (1) to persons of large families becoming engaged in full-time occupations from which the remuneration is not adequate to maintain their families above recognised standards of subsistence. I am not sure whether that would be possible, but I would like to know whether it is and, if so, whether there is any intention of using the subsection in that way.

I am sure that the right hon. Lady knows that none of us doubts her sincerity or desire to do something about this problem or her awareness of it, but we want to try to persuade her to treat it as a matter of great urgency, and one way of giving some help quickly would be to accept the Amendment.

Mr. Pardoe

The hon. Lady the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) said that there was joy in Heaven that sinners had repented on this side of the Committee. I am glad that she thinks heaven is even looking at this side of the Committee. But although sitting on this side of the Committee, I do not count myself a sinner or repenter, because the Liberal line on this issue has been clear for a very long time. We support the Amendment, not in a party political sense, but primarily because this is very much a regional problem. It is a regional problem because low income families are concentrated in certain regions, and I want to draw attention to the problem in the regions.

In Cornwall we have a very low average income and there are many families whose total disposable income is below the scales laid down in the Bill. I have a great deal of sympathy with the seamen's case, but when we in Cornwall hear that the seamen are getting only £14 a week or so, admittedly for many hours over the 40-hour week, we do not raise our hands in horror, as people in the South-East of England do, because it is extremely difficult to find anybody in Cornwall earning that amount of money for a 56, or a 60, or even a 70-hour week. There are many people in Cornwall living well below the minimum levels laid down in this Bill.

I said on the Second Reading that in one large rural district in my constituency 70 per cent. of the ratepayers were eligible for rate relief, thus indicating the extent of the problem. When benefits in a Bill such as this are very close to, or in excess of, what can be earned in full-time employment, there is something very wrong.

Many people write to me saying, "Why should I work when somebody next door is getting more than I am, and for doing nothing at all?" And it is true in Cornwall. It is a Right-wing truism, if you like, elsewhere in the country, but it is very very true in Cornwall. Therefore I hope that the right hon. Lady will think again about this Amendment, because we certainly support it.

9.45 p.m.

Miss Herbison

Again, we have had what I consider an excellent debate. One of the things which has surprised me greatly during Second Reading and in the debates we have had on Amendments and on the Clauses is that we have had excellent non-party speeches from the Opposition back benches. They have been in glaring contrast with the type of speech we have had from the hon. Member on the Opposition Front Bench, the hon. Member for Farnham (Mr. Maurice Macmillan), who moved the Amendment. It seemed to me that the Opposition Front Bench seemed to think of this not as a serious Bill trying to bring social justice to many, many thousands of people, but as a vehicle of propaganda for the Opposition.

I am glad that the Liberal Member, the hon. Member for Cornwall, North (Mr. Pardoe), who spoke on Second Reading and has spoken twice today, does not treat it like that, and I am glad that a great many back-bench Members of the Opposition are not treating it like that, but have been trying to bring their point of view to the Minister and to the Government and, I hope, to the country.

The hon. Member for Farnham, particularly at the end of his speech, was most indignant because we have not solved all the problems—in less than two years. We became the Government only in October, 1964, and really began government only in November, 1964. We are now only in June, 1966, less than two years afterwards. The hon. Member had synthetic indignation because we have not solved every single problem in the social security field in that short time. How I would love to be able to stand here tonight and say that the problems have all been solved; but there are so many of them which have been left to us. I will not weary the Committee by enumerating the things which we have already done in these few short months and the many problems with which we have already dealt, but I will now deal with this Amendment.

The hon. Member spoke about the family with a high rent. There are many families—yes, even of low-wage earners—who are suffering high rents, not because of anything we have done, but because of the action of the hon. Member's own party when in power. We have not been sitting back doing nothing for the people on those small incomes. They are the very people, the low-wage earners with families, who from April this year will be benefiting under the provisions of the rent rebate scheme. That, at least, is something which is helping them.

It has been said that we should not reject this Amendment because we might feel we were breaching the Beveridge principle. In these last months we have breached the Beveridge principle time and time again. I do not think it is a sacred principle. From the first week of October this year workers will be getting earnings-related sickness and unemployment benefit, and widows will be getting earnings-related supplement on top of their widows' allowance for 26 weeks. Well, that is something very, very different from Beveridge.

I am not in the least worried about the principles of Beveridge. The Beveridge Report was a wonderful job and all right for its time, but we are in a very different time today, and matters are moving very quickly.

What disturbs me is that one would think that the new movements in our country began only in October 1964. Many of those movements have been going on for a very long time, and I wish that there had not been so many problems left for me to solve as Minister of Pensions and National Insurance. But I am glad to have had the honour to be able to solve some of them, and I am determined, if I continue as Minister, to find a solution for the one which we are debating tonight.

The hon. Member for Cornwall, North touched a chord in my own heart when he spoke about this being in many respects a regional problem. Wherever there has been heavy unemployment over a long time, earnings will be much lower. We are affected by it in Scotland. The North-East of England is affected by it, and Cornwall is affected by it. If we take what I call the tip of the iceberg—the 15,000 unemployed who are on the wage stop in National Assistance—there are a far greater number in Scotland and the North-East of England than anywhere else in the United Kingdom. The reason is that in those areas wages are lower than in other areas. The point made by the hon. Gentleman about Cornwall is one which I understand very well.

Looking at the Amendment, it is clear from what my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) said that, if one were to accept it as it is, there might be very strong feeling in the country about it, and that it was the way to deal with the problem as it affects children.

I am not going to take any side this evening. I know where my own feelings lie, but what I want to find is a solution which will bring help to the families of the low wage earners.

For the benefit of hon. Members who did not hear the beginning of the debate, the proposals which have been put forward by hon. Members opposite would give entitlement to an additional family allowance, not to every family in the country, but to those families whose breadwinners are in full-time employment but whose incomes are below the non-contributory benefit scales laid down in the Bill.

I do not think that there can be any doubt on either side of the Committee or in the country of the Government's grave concern about poverty amongst the families of low wage earners. On 23rd February, the Leader of the Opposition expanded his Birmingham speech, and my hon. Friend the Minister without Portfolio made quite clear the concern which we had and the examination which we were giving not only to the financial help but all the other forms of help that could be given to such families. They must all he taken into account if we are to find a real solution to this problem.

During the Second Reading debate, without any prompting at all, I told the House that the Bill did nothing to solve this problem, that as far as the wage-stop was concerned the 15,000 families would not have their problems solved by it. But I made it clear that various estimates have been given of the number of children of men in work who are suffering because the income for the family is below the level.

The hon. Member for Melton (Miss Pike) was puzzled about the figures given by my hon. Friend the Member for Glasgow, Provan (Mr. Hugh D. Brown) during the Second Reading debate, and the figure that I gave. The figure which I gave, which might be anything from 200,000 to 300,000, was the number of families. The figure given by my hon. Friend was the number of people affected, and, of course, that was a very much higher figure than the number of families.

We were concerned about this problem long before we became the Government. If the hon. Member for Farnham criticises us for not having done the work, perhaps I might tell him that if some of the research work had been done, and some concern shown about this before we came to power, this might have been dealt with like some of the other matters have been, and we might have had a solution ready for introduction in this Bill.

We are not shelving this problem in any way. When discussing an earlier Amendment I told the House that on the 20th of this month we were beginning the field work of the survey into the circumstances of the bigger family with two or more children. My officers will visit more than 2,000 families during June. This will give us a great deal of information on which to base the kind of solution which I am determined we must find.

As I said during the Second Reading debate, we are not waiting until we get the results of this survey. We have been doing a great deal of work trying to find ways and means of finding an equitable solution to this problem, and this work is going on at the present time. My right hon. Friend the Minister without Portfolio was twitted by the Leader of the Opposition, but we have not waited for the review to be completed before bringing forward improvements. They have been coming forward. They have been passed into law, just as this will be when we are ready to do it.

I say to the Committee, and, in particular, to the hon. Member for Farnham, and to the Liberals, that until the results of the survey are available, and the Government have completed their study of the whole question of how best to relieve child poverty, it would be wrong to decide on, or indeed to rule out, any particular solution. I am not ruling out the suggestion which has been put forward tonight. I do not know whether it will be the right solution.

Quite frankly, I would prefer the solution which my hon. Friend touched on when she spoke, but I am so concerned about this matter, and so determined that something will be done, that until this work which I and other Ministers are doing as a matter of urgency is completed, and until we have the results of the survey, I shall not rule out any solution at all, though I must say that my leanings are towards the kind of solution that my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) discussed.

It must be recognised that apart from any question of—

It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress.