NATIONAL INSURANCE &c. BILL

HC Deb 19 December 1968 vol 775 cc1578-618

Order for Second Reading read.

4.5 p.m.

The Minister of State, Department of Health and Social Security (Mr. Stephen Swingler)

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

This is a short Bill which has two limited but beneficial purposes. The first purpose is to continue the payment of flat rate unemployment benefit to suspended workers during the first week of suspension after 9th March 1969 when, under present statutes, it would other wise cease.

The second purpose is to pave the way for regulations to implement the recommendation of the National Insurance Advisory Committee that benefits should remain encashable for 12 months instead of six months as at present.

These are two quite separate issues with which I will deal separately.

Clause 1 follows from the Government's decision, announced by my hon. Friend the Under-Secretary of State for Employment and Productivity on 14th October, to give more time for negotiations with both sides of industry about pro posals for legislation requiring employers to make guarantee payments to workers on short time or laid off for a week or less. At present, such workers are en titled to flat rate unemployment benefit subject to the normal rules. But this entitlement is due to end, under section 3 (1) of the National Insurance Act, 1966, on 9th March next year. The first purpose of the Bill is to enable the payment of this flat rate unemployment benefit to continue for the time being beyond next March.

Section 3 of the 1966 Act reflects the principle that responsibility for short periods of suspension should rest with employers. The Government remain of the view that that principle is right.

Unemployment benefit is primarily in tended to provide for the wholly unemployed, not to provide extra income in addition to earnings for workers laid off by their employers for brief spells or on regular short time. The then Minister, my right hon Friend the Member for Lanarkshire, North (Miss Herbison), on Second Reading of the 1966 Act, said: It does not seem sense economically, nor is it right socially, that the contributions of the general mass of workers—many of whom earn less full time than others are getting when they are employed part-time or on short time—should be used in this way to subsidise earnings in certain industries. I think that any reasonable person would accept that view. With earnings-related benefits, especially, it would be quite wrong to pay benefit for part of the week to people who still have a job and have earnings during the rest of the week."—[OFFICIAL REPORT, 7th February 1966; Vol. 724, c. 43.] Accordingly, the 1966 Act, which introduced earnings-related supplement to unemployment benefit, provided that that supplement should never be paid during short time or lay-off for less than a week, and this provision is unaffected by the Bill. The Act further provided, as a permanent long-term measure, that flat rate unemployment benefit should also be withdrawn for these periods.

But it was recognised at that time that industry would need time to negotiate voluntary agreements to deal with short-time working in the industrial context. Three years, therefore, were allowed for these agreements by the 1966 Act—namely, until March, 1969. At that time Her Majesty's Government under took that, if voluntary agreements were not made, a statutory scheme of guarantee payments would be introduced.

My right hon. Friend the First Secretary of State and her Department have borne the responsibility, first, for stimulating voluntary agreements where they do not now exist and, subsequently, when it was made clear at the end of last year that voluntary agreements would not be reached, for initiating negotiations with both sides of industry for the introduction of a statutory scheme. Negotiations revealed substantial problems requiring further study—notably about the form and level of guarantee and provisions to be made for workers suspended because of strikes.

It was also necessary to take account of other related developments, as the House will be aware, especially the pro posals arising from the Report of the Donovan Commission and the plans for the Government's new social security scheme, on both of which White Papers will be published shortly.

Clause 1 will enable the payment of unemployment benefit to continue mean while beyond March of next year until a day to be appointed by my right hon. Friend the Secretary of State, and the commencement Order will be subject to the affirmative Resolution.

I turn to the second purpose of the Bill, which stems from a report of the National Insurance Advisory Committee. This Report, as many hon. Members will be aware, dealt with late claims as well as with the subject of not cashing drafts in time, and fresh legislation is required only for the encashment part of the recommendation. Hon. Members will be aware that the other aspects of it can be dealt with by regulations, to come into effect at the same time as the Bill itself.

Complete uniformity on claims is neither possible nor desirable. There are at present two types of the time limit on claims, an initial time limit, and an outer time limit. The initial time limit varies with the benefit, normally six days for sickness benefit, and three months for long-term benefits. But it can be extended if the adjudicating authorities accept that there is good cause for making late claims.

There is at present an outer limit—the second kind of limit—of six months, and on the recommendation of the N.I.A.C. we are proposing that that six months' outer limit should be ex tended to 12 months. There are good reasons for having these differences, in many cases to give an amount of flexibility, but it is, nevertheless, sensible that there should be a common time limit in all the scheme for encashment, and that is what is provided for by Clause 2.

Clause 2 enables us to make regulations to make 12 months, instead of six, as the outer time limit in the case of the Industrial Injuries, National Insurance, Supplementary Benefit, and Family Allowances Schemes, right across the board. Nevertheless, further extension will still be possible in special cases for those who, somehow, are unable to fulfil this principle.

The N.I.A.C. considered the argument that once a benefit had been awarded there should be no time limit at all on cashing the benefit, but the Committee pointed out to us that the cost factor here is important. If someone turned up after five years and tried to cash a postal draft, the Department would need to check that it had not been replaced in the meantime following an allegation of its loss, and the storing and searching through hundreds of millions—and it would be that number—of cashed orders and drafts would be an extensive business, for which other contributors would have to pay. Most benefit payments are conditional. The beneficiary has to sign that he is entitled to them, and there is no value in the declaration of entitlement in respect of a period so long ago that the beneficiary has forgotten all about the circumstances of the time.

The great majority of people cash benefits or pay them into a bank very shortly after getting them. For example, 99 per cent. of the postal drafts for sickness benefit are cashed within a month. But there is a minority who do not, and they include a wide range of people—the sick, the forgetful, and, of course, the careless. We are here making a generous provision by accepting the recommendation to extend the encashment period to 12 months, and a special extension beyond this will be allowed for to help in the tiny number of special cases which often attract considerable sympathy from hon. Members. I hope that this will be considered a reasonable provision.

Clause 3 embodies a customary provision of National Insurance legislation as regards regulations. As to unemployment benefit, it is intended to cover certain complicated and technical rules about the payment of unemployment benefit for days when a person would not normally be working. These regulations already exist, and are simply to remain in being. In regard to time limits, it covers regulations implementing all changes recommended by the N.I.A.C, which are to be brought into effect at the same time as the Bill becomes law.

Mr. Marcus Worsley (Chelsea)

Will the hon. Gentleman explain a little more fully what he said about the regulations with regard to unemployment benefit? Does he mean that there is to be no change? If that is so, why do they have to be reissued?

Mr. Swingler

They are simply to continue. There are regulations in regard to the five-day week, and so on. The hon. Gentleman is right in saying that there is to be no change, but these have to be related to the regulations which are issued under the Bill with regard to encashment and other provisions.

On the question of cost, the continued payment of unemployment benefit will cost about£3 million per annum, and the equivalent of about 300 members of the staff in the Department of my right hon. Friend the First Secretary of State will continue to be required for this work.

I commend the Bill to the House. As I said at the beginning, it is a simple Measure, modest but beneficial in its effects. On the one hand, it implements recommendations made to us by the N.I.A.C, and, on the other, it continues the payment of flat-rate unemployment benefit until we have negotiated a means of making the substitution for which pro vision was made in the 1966 Act.

4.17 p.m.

Mr. Marcus Worsley (Chelsea)

The Minister called this a modest Bill. I do not think that anybody will dispute that. I think we might say, too, that it is a typical production of this Government. It is bitty, ill-thought out, and has been brought forward in haste. What a name it starts with—" National Insurance &c." The hon. Gentleman did not explain what "&c." was. What is there in the Bill which is not National Insurance? Why" &c"? What an undignified way of describing an Act of Parliament. This is all part of the Walter Mitty approach to politics by the Government. In their day dreams they are a great reforming Government, full of marvellous new plans and promises. In real life they struggle from one muddle to the next, and this is another example of that.

We are being asked to postpone, per haps indefinitely, the transfer of unemployment benefit for short-time working from the National Insurance Fund to the employer. This is typical of the sort of legislation being brought forward during this Parliament. Perhaps I might remind the House of one or two other examples of this sort of thing. Prescription charges were abolished, and then reintroduced a few years later. It was then decided to give free school meals for all fourth children in a family, irrespective of the wealth of the family, but the present Secretary of State for Education and Science soon put paid to that. Then, only this year the proposal to transfer payment for the first three days of sickness from the Insurance Fund to the employer was introduced into a Bill, without consultation, and then dropped in Committee.

Each time we find the same pattern adopted by this Government of planners. A bright idea is suddenly taken up, some times for straight electoral reasons, some times because it sounds attractive. It is rushed into legislation, without careful thought, without consultation, and without the implications being realised, and the Bill is a perfect example of that.

Mr. John Ellis (Bristol, North-West)

indicated dissent.

Mr. Worsley

It is no good the hon. Gentleman leaning back and shaking his head, because those are clear examples of the Government, apparently in good faith, taking decisions which no Government would take without proper thought, and then having to come back to the House either years or weeks later and reversing their decisions. This is not the way in which the country should be governed. Our people feel this more and more.

The Government observed what any body who knows anything about industry could hardly fail to notice, namely, that the present system of paying unemployment benefits for short-time working is sometimes abused. I have often been amazed and confused by the complexity of the case law which has grown up round this subject. It is almost a form of folklore—a happy hunting ground for every barrack-room lawyer.

I hope that the Minister who winds up the debate will make clearer what his hon. Friend said about the regulations. As I understood him, he said that there would be no change. On the other hand, he included these regulations in Clause 3, therefore indicating that it was necessary to reissue them. I cannot understand that. If they are continuing, I can not see why they need to be reissued. Perhaps this minor point could be cleared up.

When the Government observed that there was abuse in this matter how did they react? Did they consider the rules that they intend to reissue without change? Did they seek to simplify them? Did they send them to the Advisory Com- mittee to see if they could be improved, so that abuse could be avoided? Did they even consider them carefully? Not this Government. How did they react? Simply and characteristically, they put the burden on industry.

They tried yet again in the 1966 Act to add to the already heavy weight of costs on industry—the heavy weight to which they have added enormously since. To Corporation Tax, redundancy payments, S.E.T., and dearer National Insurance stamps—all part of the easy and, from their point of view, seductive process of putting costs on industry; that is one reason why we are in our present economic mess—they tried to add unemployment benefit for short-time working. In stead of doing that they should have sought, by every means, to encourage industry.

Once again, they first announced the decision and then had consultations to see if the thing was possible. Typically, also, these consultations or discussions were under threat, the threat being that if there was no agreement within 18 months legislation would be introduced. The Minister said that his right hon. Friend had stimulated voluntary agreements of this kind. I hope that he can support that assertion. My information is to the opposite effect—that far from stimulating voluntary agreements of this kind, the natural attitude of the unions when told that the Government intended to legislate 18 months later was to stick out for far higher terms than they could otherwise reasonably have expected. Far from stimulating voluntary agreements, the effect of this threat was to slow them up.

During the period of 18 months there was an extension of voluntary agreements. I would have thought that it was hardly sensible to try to encourage voluntary agreements by putting forward a threat that if such agreements were not forthcoming negotiations would follow. When the negotiations started they revealed what should have been obvious from the start, namely, that voluntary agreements could not cover the whole of industry, for the simple reason that much of industry is not organised. I cannot believe that if the Government had considered this matter carefully they could have thought that a comprehensive system of voluntary agreements should be arrived at right across the board to meet this point.

I want to make two points about the general proposition of the transfer. First, no transfer of additional burdens to industry would be acceptable to us except in the context of the general climate of greater incentives to industry, and decreased burdens upon industry. It can not be right to add yet again to the burden which the Government have laid upon industry.

Ssecondly, I seriously wonder whether it is possible, even through legislation, to work out an equitable scheme in this way. I am certain that it is not possible to cover the whole of employment through voluntary agreements. Is it even possible through a compulsory scheme? I have my doubts, because, ignoring for the moment the graduated element, the benefits that the Bill continues—the National Insurance benefits for unemployment—are based primarily on family need.

As far as I can see it, benefits from employers are bound to be based on wages paid. All the propositions that have became public in this matter have referred to a certain proportion of wages. We saw recently that the Ford Motor Company would put forward the figure of two-thirds. When we consider the difference between these two principles we run into enormous difficulty. If we pitch the payment low the man with a large family tends to get too little, whereas if we pitch it high the man with the large wage and small commitments may get too much.

Nobody would wish to have a system which gave any sort of incentive to continued short-time working, whether the matter was viewed from the employer's or the employee's point of view. It is very difficult to establish an equitable system which both provides for social need and avoids the disincentive effect. I hope that the Minister will be able to say something about this.

Finally, there is the extremely difficult problem of the effect of this proposal on strikes. At present, most voluntary mini mum wage agreements exclude short-time working caused by strikes, even when they are outside the plant or industry concerned. The National Insurance Scheme is considerably more lax, although here, once more, a complex of case law—I almost called it folklore again—which governs these matters. The Donovan Report recommended a further relaxation in that respect.

The difficulty is that if we put the burden for this payment on employers we also put upon them the task of assessing who should or should not receive benefit in the event of strikes. This is a real difficulty, and I hope that the hon. Member will be able to say something about it. It is one thing to put on the Insurance Fund, by regulation, the assessment of liability in this matter; it is much more difficult when the task is put upon employers.

Furthermore, it would be easy to devise a scheme which gave a real incentive to the unofficial striker. If we substantially increase benefits in this way—and all the propositions put forward have involved a considerable increase—by so much do we encourage unofficial strikes, unless the rules are fairly strict. The C.B.I. has expressed extreme concern lest a scheme of this sort should actively encourage unofficial strikes.

There are, as the Minister admitted, considerable difficulties involved in all of this. I do not know whether they can be overcome, but certainly they can be considered only in the light of everything that comes from the Donovan Report and everything that will be in the White Paper which will, I suppose, appear.

On Clause 2, I am sure that the Government have done well to accept the Report of the Advisory Committee. We support their decision. The Committee made an unanswerable case for having a limit in so vast a scheme. If the Minister has not already received a great many constituency cases concerning this matter, he soon will. He will find that the question of limits often arises. The temptation to abolish limits must be great for any Minister, but with a scheme which involves 11 million claims a year for sickness benefit, 2½ million for unemployment benefit and half a million for retirement pension, then, if the scheme is not to get out of control, there must be limits.

The Minister was right to make it clear that for the huge majority of cases this change will have no consequence. In other words, for the great majority of cases the effective limit has not been in creased from six months to a year, but is either the three months he mentioned for long-term benefit or a much shorter period for sickness or unemployment. I hope that this debate will not give any one the idea that he can be more lax than now about applying for benefit. For all practical purposes, the limits are exactly what they have been. This is only a long stop device, and I hope that the Government will make this absolutely clear in any literature that they put out.

I said that constituency cases play a large part in our consideration of these matters. I therefore do not apologise for raising a constituency case. Is the provision in the Bill about putting the limit up from six months to a year to be retrospective? Would the constituency case which I intend to quote be covered by this legislation? If not, will the Government consider it? I refer to the case of a woman who was long separated from her husband, but not divorced. She completely lost contact with her husband, to the extent that she did not learn for seven years of his death. I do not remember the exact date, but she was over 50 at that time and, from the moment of his death, she became entitled to the widows' pension. She did not know this until, by accident—I think that it was due to the fact that she reached 60—she discovered that her husband was dead.

She naturally felt—and I sympathise with her in this—that during this time she should have obtained the widows' benefit. If she had claimed it she would have got it, but because of the operation of the rule she was not entitled to any back pay beyond the six months. Would this woman now be entitled to an additional six months benefit? In other words, is the Bill retrospective? Should not a case of this kind be treated as being outside the one year limit and be treated separately?

In its Report, the Advisory Committee dealt in paragraph 25 with the general question of people who, because of mental incapacity, were incapable of making a claim. Its recommendation went wider and said: … where the adjudicating authorities are satisfied that a person has throughout a given period been incapable of obtaining payment of an award, that period should be ignored in calculating the year during which payment of an award must be obtained. I would have thought that the wording of that recommendation—although I admit that it is not supported by the wording of the Report generally—included the sort of case I have cited.

I ask the Minister to bear this point in mind and to see whether, in cases where a beneficiary could not—because of some ignorance or inability to obtain vital in formation relative to a claim—make a claim, the type of procedure recommended for mental incapacity should apply.

I do not apologise for raising a constituency case because the provisions of the Bill are bound to end up as constituency cases in the Minister's tray. I suggest that we should give the Bill a Second Reading, while hoping that, when replying to the debate, the Minister will answer the questions we have asked.

4.36 p.m.

Mr. Douglas Houghton (Sowerby)

I had not intended to intervene in the debate until I heard the hon. Member for Chelsea (Mr. Worsley) try to launch a political attack on the Government on the slender foundations of the Bill. I respectfully suggest to him that it is too near Christmas and that he does not have the necessary streak of malice or aggression to mount such a political attack at this time on this subject.

The Bill is necessary because of the abortive attempts of the Government to get an arrangement with employers about their obligations towards workers who are suspended. I had a good deal to do with the provisions of the 1966 Act. At that time we embarked on a reform of unemployment and related benefits after the first 12 days This was a most expensive change in National Insurance benefits. To do it for unemployment benefit, we found that we had to do it for sickness benefit, which was far more expensive.

At one stage we considered whether we could make a change for unemployment and not for sickness. What we were doing then was an act of economic rather than of social policy. We were trying to make it more possible for a man to change his job without serious loss of financial resources by the redundancy payments and earnings related unemployment benefit.

That was approved and welcomed by the House. We did not introduce earnings related benefit for very short periods of sickness and unemployment for obvious reasons; the administrative problems and the fact that many workers would be unlikely to get their benefit before they returned to work because of the need to check the assessment of their earnings related benefit, and so on. The earnings related benefit scheme was introduced to general approval and I believe that it has worked quite well.

The particular problem which is the subject of the Bill was what to do with workers who are not unemployed in the strict sense of the term for a few days, a fortnight, or some other period, but are, as the Bill says, suspended. The hon. Member for Chelsea said that it would be unacceptable to his hon. and right hon. Friends if the Government tried to push further obligations and burdens on industry. The fact is that we were trying to stop industry from pushing burdens on to the National Insurance Fund, because these men were not discharged, they were not given their cards, they were not looking for other jobs; they were put off in conditions which in my constituency of Yorkshire are described as "playing"—that is to say, they are suspended from work, but they are not discharged. Their employers still have a tag on them. They may want them back in a fortnight, and frequently do want them back.

An employer may be short of orders, or there may be some other reason why, for a short period, he does not want to continue to pay the wages of his work force, and he wants the unemployment benefit to take the place of wages in those circumstances. It frequently happened that workers had to go to the Ministry of Labour to sign on for unemployment benefit when, strictly speaking, they were not unemployed and, strictly speaking, they were certainly not looking for other jobs. One of the first conditions of unemployment benefit is that a man or woman shall be available for other employment and that if the employment officer says, "I have a job for which you may be suitable", the man or woman shall go in search of it. But that did not happen and does not happen when workers are suspended.

We therefore said in 1966, "This short-term suspension period, during which employers are hiving off their obligations on to the National Insurance Fund, ought to be reviewed, and we will try to get a different arrangement". The then Minister of Pensions and National Insurance put into the Bill a proviso that three years from introduction of the 1966 Act payment of unemployment benefit for the first six days of suspension—not unemployment—should not be made. It was hoped that during three years an arrangement would be reached with employers which would relieve the National Insurance Fund of this obligation in these circumstances.

That effort has failed. Three years seemed long enough to achieve that object, but the three years expire in March, 1969 and the Bill has to anticipate the unlikelihood of an agreement being reached before March. Provision must be made to put the termination of the three years period into abeyance, and that is what the earlier part of the Bill seeks to do. This is a temporary post ponement. I hope, of the period during which we hope that employers will come to some sensible arrangement about conditions of this kind.

Surely that does not constitute a ground on which the hon. Member for Chelsea can say, "This is just like the Labour Government. They can do nothing properly. It is all bits and pieces. What an incompetent lot they are". That is what he said. On this Bill? Surely the hon. Member must recover his sense of proportion.

This Bill is merely safeguarding workers against the termination of unemployment benefit for the first six days of suspension for which provision was made in the 1966 Act—and the safeguard is made necessary because we have been unable to make other arrangements to take the place of unemployment benefit. Of course, the workers would much prefer to be paid than to be driven to apply for the flat-rate unemployment benefit. Their interests lie in getting a better arrangement than we have at present.

I am disappointed in the hon. Member for Chelsea. I thought that he would say that this was obviously a desirable Bill in the circumstances and that the Government were wise to anticipate the need for action, and then wish us all a Happy Christmas, as did his right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg) yesterday. We could then conclude the Bill in a spirit of amity and harmony. Instead of that, we have the hon. Member trying to pick a quarrel with the Minister, with me sitting here knowing much more about the whole matter than he does.

Lord Balniel (Hertford) rose —

Mr. Houghton

I will not give way at the moment. The Christmas spirit has not yet come over me.

I am still refuting the hon. Member for Chelsea, because I think he deserves it. The noble Lord is not in it at the moment. He has not spoken a word. Later, he will no doubt say what he wishes to say, but at the moment I am dealing with his hon. Friend—and I hope I have disposed of him.

In the rest of the Bill there are provisions which clearly can be put in a Bill being introduced at this time, particularly the provisions in Clause 2, which were the subject of consideration by the National Insurance Advisory Committee. When that Committee makes recommendations on matters of this kind, the Government naturally take the first opportunity of incorporating the recommendations into a Bill. This is what they have done—and full marks for them so far.

There are other questions which might be dealt with in the Bill—for instance, the length of retrospection in the award of benefit not previously claimed. But that is not in the Bill. We shall have to deal with such matters later when we come to the much bigger questions relating to social security in the future.

I see nothing wrong with the Bill. It is a desirable and an essential Bill. It takes time by the forelock so that we are not in a mess when March arrives—otherwise, the provisions of the 1966 Act will come into operation. I commend my right hon. Friends for what they have done. Recently, I have been rather critical of the Government on one or two matters, but I commend them for having brought in the Bill. I had hoped to sit here placid, happy and comfortable and to watch events unfold in respect of which I had something to do in 1966, instead of which I have been provoked by the unnecessary and unjustifiable attack on the Government by the hon. Member for Chelsea.

4.48 p.m.

Mr. Tim Fortescue (Liverpool, Garston)

I will not attempt to follow the eloquence, the passion and the fire of the right hon. Member for Sowerby (Mr. Houghton), except, of course, to wish him a Happy Christmas. I hope that he enjoys his Christmas as much as he enjoyed making that speech.

In defence of my hon. Friend the Member for Chelsea (Mr. Worsley), I would point out that he was attacking the Government not for the Bill, but for doing something entirely different from that which they said they would do during the Second Reading debate on the previous Bill. Previously, the Government said that if a negotiated agreement was not possible within three years, legislation would be introduced to make such an arrangement compulsory. In fact, they have done something entirely different. Their promise has not been kept. My hon. Friend was not attacking the Government for the reason which the right hon. Gentleman gave. He was attacking them on quite a different matter.

Mr. Houghton

The hon. Member for Chelsea said that if any such proposal had been made the Opposition would have opposed it.

Mr. Fortescue

The proposal has not been made. Having promised on Second Reading of the previous Bill that they would bring in legislation to make these arrangements compulsory, the Government have not done so. This is a subject for attack, and this is what we are attacking.

My remarks will be directed to two quite different points. The first relates to Clause 2, the time limit Clause, which has been generally welcomed. I should like to consider it a little more critically than perhaps it has been considered so far.

It is of interest that no time limit was laid down in the National Insurance Act or the Ministry of Social Security Act, 1966. The time limit of six months to which so much reference has been made today was imposed in regulations made under the two Acts. But now the Government seek, for reasons which have not been made clear, to enshrine the not less than 12 months stipulation in an amending Act. They propose to amend the original Acts rather than the regulations.

I should like to know why this course is being adopted. It would have been possible to amend the regulations simply by changing six months to 12 months. That would have been completely in tune with what was done originally. I should be grateful for an explanation for this change of attitude. Why make this part of legislation rather than part of regulations under the Acts?

Should not a different approach be made to time limits under the National Insurance Acts from the approach made under the Ministry of Social Security Act? Payments made under the National Insurance Act are payments of right which citizens have earned through their contributions to the National Insurance Scheme. They are entitled to them. Therefore, in strict theory, one could say that there should be no time limit and that whenever a person wants to claim benefits he should be able to get them.

However, the National Advisory Committee and the Minister of State have explained cogently why that would not be practical, and I entirely agree with them. But it is practical for the Inland Revenue to demand payment from the citizen for six years after that payment is due, and no one seems to think that that is impossible. No one has told me that that is a wrong attitude for the Inland Revenue to adopt and that it causes complications in the citizen's accounts and record-keeping because he must keep those accounts and records for six years. Yet, when the boot is on the other foot and the citizen claims money from the Government, a limit of six months, or now 12 months, is imposed. Perhaps the Minister will tell us why this distinction is made in respect of the citizen.

My main point is this. Section 4 (1) of the Ministry of Social Security Act, 1966 provides: Every person in Great Britain of or over the age of sixteen whose resources are insufficient to meet his requirements"— and those words are written in letters of gold in every Ministry of Social Security office which I have entered— shall be entitled to certain payments.

Is it not a little ridiculous to say that the time limit within which a social security payment should be made to a citizen whose resources are insufficient to meet his requirements should be extended from six to 12 months simply to put the matter on all fours with the time limit in the National Insurance Act? The insurance payment is a matter of right. It is a matter of compassion to meet the situation of a man or woman whose resources are insufficient. It is not logical or sensible to say that that condition continues 12 months later.

Payments made under the Supplementary Benefit Scheme are urgently needed to help a man or woman in trouble. The period of six months under the regulations appears to be excessive. One could perhaps say that six months is necessary to seek out the people who are in real need. But deliberately to extend in an amending Bill six months to 12 months is not sensible. It has a degree of illogicality which does not appeal to me and of seeking to bring everything into line and to make everything tidy administratively, which is a characteristic of all Governments, but which might be considered again in the context of the Bill.

Secondly, by the Bill the Government are to postpone indefinitely economies of£3 million a year. In 1966, they saw£3 million for the saving, and they have failed to save it. The Minister of State said that they had failed, and he was right. This£3 million a year has presumably been taken into account in all the calculations of Government expenditure and saving which we have had since the Government came to power.

The Government have been looking for the saving of much smaller sums than£3 million a year in the last 12 or 18 months. They have been scraping the barrell. They have deprived the fourth child of free school milk and have done other similar earth-shattering things. Here they have lost£3 million, which is very regrettable, particularly to me. Recently, I have been trying to persuade Ministers, and even the Prime Minister, in connection with this matter. I make no apology for that. I know that someone will say that I am seeking to increase Government expenditure and that that is what Tories do not do. But I am speaking for myself and not for the Tory Party.

I have been trying to persuade the Prime Minister that a certain amount of money should be spent on improving the conditions and amenities of the offices of the Ministry of Social Security. Some of them are disgraceful. If any hon. Gentle man or member of the public goes to the Ministry offices at the Elephant and Castle, or in John Adam Street, or to the offices of the Department of Employment and Productivity in St. James's Square, and we are on legitimate business, we are shown into a comfortable waiting room, with carpets on the floor, magazines to read and comfortable chairs. Everything is very hospitable and friendly, which is as it should be.

However, if a person in less fortunate circumstances goes to a Ministry of Social Security office—and I have one in my constituency which I know well—the conditions which he finds there are very different. Why? The Government, rightly—and I commend them for this—have spent much time and energy in telling people that they have a right to social security benefits and that there is nothing to be ashamed of in taking them.

Hon. Members know that they have to persuade visitors to their weekly "surgeries" of this. Many people, and especially the elderly, come to us for help and we say to them, "You are entitled to help. Go to the Ministry". They reply, "No, I will not go there. I do not want to go. I do not like it". They make every excuse for not going. One of the reasons for that is the conditions which they find at the offices.

I asked the Prime Minister about this matter on 22nd October and he replied: Naturally"— the provision of amenities at the offices— will be one of the duties of the new-merged Department, within, of course, the overall limitations on expenditure to which the Government must have very close regard."—[OFFICIAL REPORT, 22nd October, 1968; Vol. 770, c. 1086.] On 24th October, the Secretary of State said: We had to take over hundreds of offices all over the place, and we have inherited some in poor condition…. We have to improve our offices…I shall compete with the First Secretary of State in insisting in getting as much money spent on our offices as she does on her offices."—[OFFICIAL REPORT, 24th October, 1968; Vol. 770, c. 1659.] These two remarks from the Prime Minister and the Secretary of State gave me much encouragement. I believed that an effort would be made to make comfortable and warm, perhaps even attractive, the places where large numbers of our fellow citizens—most of whom are in trouble, a lot of whom are ill and old—have to wait sometimes for a very long time, to receive their rights under our legislation. The only offence which these people have committed against society is that they have been caught in the act of appearing to be poor. I ask the hon. Gentleman whether this deferment means a deferment of the provision of better amenities, for they will also be part of 1969.

5.0 p.m.

Mr. Albert Booth (Barrow-in-Furness)

Clause 1 of the Bill stems from a situation whereby it has been impossible to secure the transfer of the cost of unemployment benefit to the employer from the National Insurance Fund. One of my right hon. Friends has already referred to the conditions under which a number of men are suspended from employment, without being regarded as unemployed. These are men on short-time working, men who have not had their cards returned to them, men whose cards are still held by their employers. Among such men are those on strike. It is in the nature of strikes that their length cannot be predicted. Some of them will be settled within 24 hours, while some, like the terrible one in my constituency, will go on for half a year or more.

In this situation we have to look at the effect of our current regulations in the light of what we are attempting to do when we try to pass on to the employer the liability to pay unemployment benefit to men whom they suspend for a short time. I do not accept that it inevitably follows that there should be any uniformity between the way in which the State treats men and the way in which employers treat them. Neither does it follow that all employers will treat suspended men, men involved in industrial disputes worse than the State does now. In certain circumstances the way in which the State treats men who are rendered unemployed because of a strike is abominable.

Under Section 22 of the 1965 Act a provision whereby men laid off due to a dispute, who are in a similar class or grade to others who happen to be financing or participating in the dispute or directly interested in it, are excluded entirely from unemployment benefit. By a parallel provision of our social security legislation, they are also excluded from receiving social security benefits. They are, therefore, left without any means of income whatever. While I agree with the Minister that this is a modest and worthwhile Measure I would urge upon him that it could have been less modest and more worth while if it had addressed itself to this very grievious defect in our National Insurance legislation.

Under the regulation there may be men who are not regarded by the general public, their employer, or by them selves as participating in the dispute, but who still cannot draw unemployment or social security benefit. We must face up to this if we are to have any form of legislation which will transfer to employers the liability for payment of men suspended, for any reason, from employment for a short period. The way in which trade unionism is evolving means that there are men who are recruited into what were at one time the craft unions. These men were until a few years ago members of general workers' unions. For example, there are within the membership of the Amalgamated Engineers and Foundryworkers Union, men who are slingers, crane drivers, hardeners, and semi-skilled machinists. There are men doing exactly the same job, sometimes working on the next machine or in the same shop, organised by the General and Municipal Workers Union. If the General and Municipal Workers Union brings those men out on strike, the members of the A.E.F. are automatically excluded from benefits because they are in the same class or grade.

The reverse is true. It may be that the non-striking union is totally opposed to the strike and refuses to assist in any way with it. By its rules many of its members can be excluded from union benefit because the union does not regard them as being on strike. We are faced with a very serious problem, and I urge my hon. Friend to press his colleagues in the Government to bring before us a measure dealing with this serious anomaly as quickly as possible.

It may be that the reply I will get will be ": Wait for Donovan". That will not be a satisfactory reply. There are many serious, sophisticated industrial problems to which the Donovan Report addresses itself, including this one. But here it was dealing with an anachronism, something which has existed for far too long and which could be got out of the way without any controversy, and which would be welcomed, I hope, by both sides of the House. I have less reason to hope for this now than I had before the C.B.I. made its most recent statement on its attitude towards this problem.

I turn now to a Clause which deals with the extension of the time limit within which certain claims can be made. This is a particularly welcome provision, but I question how far it goes. It has been said that the legislation we pass here dealing with National Insurance in many cases lands up as a constituency problem on a Minister's desk. I wonder whether any Ministers have more constituency problems than those who deal with National Insurance problems.

To appreciate why so many of these problems arise we have to realise the complexity of our National Insurance regulations. I am not at all surprised that many of my constituents cannot understand the way in which some of these regulations are applied, and this is no reflection on their intelligence. I consider that the overwhelming majority of my constituents are very intelligent. I sometimes wonder whether Ministers—and I do not refer only to Ministers of the present Government—have under stood our National Insurance regulations. Bearing in mind their complexity, we have to realise that it is almost inevitable that some people will make late claims.

I will not weary the House by giving many examples, but I should like to give just one of a constituent of mine who made a late claim; and I do so just to demonstrate the problem which I see in this Clause. A woman in my constituency, during her work, which involved visiting a number of people in the constituency, had an accident; she was involved in a car crash and knocked off her scooter by the car. She applied for industrial injury benefit. She was told she was not entitled to benefit and so ceased to make a claim during the period she was off work. She was advised later, however, by a Ministry official that she should continue to make a claim if she was going to appeal against the decision.

The woman successfully appealed against the decision. The tribunal found that she was entitled to benefit. How ever, it said she had not got a good cause, because of making a late claim—although she continued to make the claim on being informed she was en titled to do so. Here is a woman denied benefit, to which she was clearly en titled, merely because her claim was late in circumstances which would be under stood by 99.9 per cent. of the population.

I therefore welcome the Bill so far as it goes in that it makes the financial provision necessary to accompany the regulations which will extend the period in which people can claim benefit. I would, however, welcome an assurance from my hon. Friend tonight that, in dealing with this problem, regard will be had to the complexity of our insurance regulations and some understanding that because of this complexity there may inevitably be a number of late claims.

5.12 p.m.

Mr. Kenneth Baker (Acton)

As this is the season of good cheer, I should like to start with a compliment to one of the Members of the party opposite. Unfortunately he is not in his place to receive it. I refer to the hon. Member for Liverpool, Walton (Mr. Heffer). It is a fairly rare thing for him to have a compliment from this side of the House, even rarer from his own party. He, in 1966, during the Second Reading of the Bill of that year, was the only Member in the debate who foresaw the difficulty which is contained in Clause 1 of this Bill. He foresaw that it would be very difficult indeed to get an arrangement whereby employers would contribute to the pay of suspended workers instead of the State having to do so. It is a pity he is not in his place to see that the chicken has come home to roost. I am not making a party political point. I think it is regrettable that in the last three years there has been no progress in arrangements between industry, the employers and the Trades Union Congress and the Government for a system where by employers as such should take over this responsibility.

I certainly support this Bill, because if it does not come into force that will mean that the 1966 Act will come into force automatically, and that would mean simply that the workers who are suspended because of a lull in the work of their firms would not get any unemployment benefit for six days. It would mean, for example, that if a worker was laid off on Christmas Eve this year—if the 1966 Act were in force on 24th December—he would not get any benefit at all till 2nd January. Obviously, this is some thing the House cannot consider approving.

I ask the Minister what negotiations have been made or are under way between the Government and industry, what negotiations are under way between the T.U.C. and the C.B.I., if he knows of them, what negotiations are under way between the T.U.C. and the Government, to establish a system to cover this eventuality.

My own industrial experience has been mainly with the textile and clothing industries in which one practice is to lay off workers when business is slack. I know firms in certain parts of the country which still have this deplorable practice. I do not think that today any progressive company would do this. Most progressive companies would be quite willing to take on this obligation. How ever, it must be accepted that if they are to do this it will mean an increase in industrial costs.

I have been reading recently Kitty Muggeridge's life of Beatrice Webb. It is very interesting to see what the thinking of many early Fabians was on this question. We would not be having this debate today if that thinking of some of the early Fabians had prevailed. She and her husband were concerned to cover this sort of eventuality. The question is whether this responsibility should be borne by industry rather than by the State.

I would only say that if we increase industry's burden in the way of social security benefits we must accept that this is an additional industrial cost. It is not something that could just be paid for out of the air; it is something which industry will bear. I would remind the House that industry already pays about£800 million a year as its contribution to social security, and the C.B.I, today has made a very generous offer that industry will contribute£7 million to the Redundancy Fund to help it out of the red. I do not think industry would at all shirk this responsibility. I only hope the Government can establish the basis of negotiations to bring this about. Till they do so the 1966 Act has to be held in suspense.

It is not an easy problem to solve because workers are suspended or laid off for a short time for a variety of reasons. If it is the responsibility of a company to have laid off a worker be cause the order book is not long enough and business is generally slack, it is the responsibility of the company either to fire him or carry him on the payroll, but there are circumstances in which industry may have to lay off a worker not as a result of its own inefficiency but because of the inefficiency of one of its suppliers. An obvious example of this is the car industry, where production may be held up on the production line because of a breakdown of supplies from one of the components suppliers. This raises a series of problems which any agreement must take into account. I suspect—perhaps I am being a little pessimistic—that in the long run it may not be possible to cover these sorts of eventualities by any form of agreement, because I do not see how we can impose on, for example, a car manufacturer an obligation to keep a very large labour force not working in the plant if he is not directly responsible for the fact that they are not working. None the less, I think the Government should continue to explore ways to do this, because unless they do so this is a charge the Government will have to go on paying,£3 million a year for the foreseeable future.

5.18 p.m.

Mr. Michael McGuire (Ince)

I want to refer briefly to the last few sentences of the hon. Member for Acton (Mr. Kenneth Baker)—and this will be a repudiation, I hope an effective one, of what his hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) said—when he unfairly accused the Government of not fulfilling what he says was a threat or a promise that they would introduce compulsory legislation about this six day rule under which, as my right hon. Friend the Member for Sowerby (Mr. Houghton) said, workers went to a limbo because they were unemployed, because they were in a dispute or laid off by their employers.

I have been reading what my right hon. Friend who was then Minister of Social Security said. She gave the promise that if necessary the Government would introduce legislation, but the main theme was to direct attention to continuing negotiations to solve this very difficult question. It is interesting to note what my hon. Friend the present Under-Secretary of State for Employment and Productivity said in answer to a Question on this very point on 14th October, 1968. He was asked by my hon. Friend the Member for Accrington (Mr. Arthur Davidson) what the Government were doing about this difficult question. The answer was a fairly long Written Answer, which says it is a very big problem, negotiations are continuing, the Government are fulfilling the promise which they made in the original debate. There was not a definite statement that the Government would introduce legislation. There was the promise that, if necessary, legislation would be introduced, but the emphasis was, rightly, on continuing negotiation.

Mr. Fortescue

Would the hon. Gentle man refer to the OFFICIAL REPORT of 29th January, 1968, c. 870, where the same Parliamentary Secretary said, in answer to a Question, that the then Minister of Labour had decided that legislation would be necessary and was consulting industry about the details. The hon. Gentleman added: … I hope that my hon. Friend is reassured by the knowledge that we understand perfectly well that the legislation must be passed and operated by March 1969. I gladly give that reassurance to the House."—[OFFICIAL REPORT, 29th Jan., 1968; Vol. 757, c. 870.]

Mr. McGuire

The hon. Gentleman first based his accusation on what was said in the debate on Second Reading of the National Insurance (Industrial In juries) Bill in February, 1966. My right hon. Friend said this: Since it is imperative that satisfactory wage agreements should be made between workers and employees before the end of the three years, the Government will examine the position reached at the end of 18 months—half way through—and, if necessary, will introduce legislation to make such agreements compulsory."—[OFFICIAL REPORT, 7th February 1966; Vol. 724. c. 45.] That effectively answers the hon. Gentle man's accusation.

I turn to the question of the extension of the period in which a person can claim benefit. The difficulties arising in relation to the retirement pensions for women have been mentioned. The question of benefits which are due as of right but which through an oversight are not claimed when they first become due applies almost exclusively to women. The case mentioned by the hon. Member for Chelsea (Mr. Worsley) was rather different because that was the case of a woman who was entitled as a result of her husband's contributions. The cases I have in mind are those where women suddenly wake up to their rights but learn that their claims are outside the time limit. The Advisory Committee commented in favour of the limit being set aside if a person could prove that he was unable to claim within the time limit. I believe that that will be too narrowly interpreted and that cases of the type I have in mind will still fall outside this province. I have taken this question up with the local office of the Department of Social Security.

I believe that there is a common law duty upon any Government Department to use reasonable diligence in seeking out those entitled to a benefit to which they have contributed. The Department of Social Security is not lax in the matter of drawing people's attention to the necessity of keeping their cards properly stamped. There is a sanction in the form of a penalty for anyone who fails to bring their contributions quickly up to date.

This failure to make application in due time generally applies to women, because a man who retires has known for some time that his retirement is pending and he makes his claim within the period allowed by law. When a woman hears or reads something—barrack room lawyers often serve a useful purpose—and asks Social Security, "Am I entitled to benefit?", she is told, "Yes. Your contributions are in order. Unfortunately, though, you must forgo benefit from the date when you first became entitled". This is wrong.

I appreciate that it is unlikely that the Government will accede to my modest request, but the introduction of this modest reform would not lead to catastrophic harm. The Advisory Commit tee's terms of reference were wide enough to deal with this. Sickness benefits, unemployment problems, and the question of people being out of work for other reasons, were mentioned, but this question was not mentioned in detail. It is not a glaring omission, but I wish that the Advisory Committee had directed its attention to the matter.

Contributors would like to think that the quid pro quo of the Government's seeking them out and making them fulfil their obligations regarding contributions is that the Government would also seek them out to pay them benefits to which they are entitled and that the Government would no longer shelter behind the protection of an arbitrary time limit with in which claims must be made.

The hon. Member for Garston referred to the£3 million which the Government would seem to have forgone, in the sense that they are still to shoulder the burden for this; because the employers are trying to reconcile the principle that men unemployed because of a trade dispute should not be able to benefit from their own wrongdoing, so to speak, when acceding to the Minister's request that for the initial period they should shoulder this burden by giving them a guaranteed minimum weekly wage. The hon. Member said that, if this problem could be overcome, he would like the£3 million to be used to—

Mr. Fortescue

Probably I caused con fusion. I mentioned the two matters in the same breath, but I did not suggest that£3 million should be spent in that way. I said that, because£3 million less would be available than had been thought, I hope that the improvements in the amenities of the offices would not be delayed.

Mr. McGuire

I understood the hon. Gentleman to mean that he would like a large part of the£3 million spent on improving the offices. The point he has made in his intervention has effectively snookered a point I was about to make. This is a very modest Bill. It does no one any great harm, but I wish that it had done more good to those who are disqualified from benefit because they are outside the period laid down under the old regulations and will still be out side the period under the new regulations.

I hope that the Government will quickly conclude with employers a scheme to overcome the problem of the six days' loss of benefit. If the Government cannot reach a satisfactory agreement, presumably the necessary pro visions will be included in the comprehensive review of the whole question of social security. We await that major Bill with anxiety. When we introduce a satisfactory wage-related benefit scheme, with allied schemes, it will offer another great difficulty for hon. Members opposite in that they will not be able to chant about another failure on the part of the Government to put into effect some of their promises.

If my hon. Friend cannot meet in this Bill the point which I made about women pensioners, I hope that it will be included in the next Bill following that complete review. I welcome this modest Measure, which will do nobody any harm and will do some people some good.

5.32 p.m.

Mr. Arthur Blenkinsop (South Shields)

I apologise for not having been here when the Minister moved the Second Reading of the Bill.

I intervene because this is a subject which affects a large number of my con stituents in the shipyards and the repair yards who are caught by this provision on many occasions. It is an unhappy fact that, particularly in the repair yards, men are suspended for brief periods throughout their working lives. It is, unfortunately, a habit. I and, I know, all union Members concerned are anxious to see that situation ended. These men seem to get the worst of all worlds. For some purposes they are treated as not being unemployed and for other purposes they are treated as though they were unemployed. That affects not only the matters raised in the Bill but also problems of holiday pay, redundancy pay and other matters, too. It is one of those wretched issues which has embittered feeling in the shipyards and repair yards for a long time.

One reason why I am glad that the Government are introducing this continuing Bill instead of immediately imposing a scheme, as otherwise they would wish to do, is that we are still in the midst of very complicated negotiations in the shipyards and repair yards on wage issues, of which this is inevitably an element. None of us wishes to endanger those discussions. We hope that they will be fruitful and that we shall reach the agreement for which we seek.

Hon. Members opposite have said that if this provision were imposed by law or accepted voluntarily by employers, as part of a general agreement, as a charge upon them, it would add to their costs. That may be true, but it must be remembered that employers in this country are relatively fortunate in this respect com pared with most of their Continental competitors, who have to pay much greater sums for such provisions than do employers in this country. From that point of view employers should not regard it with quite as much fear and anxiety as that with which in fact they seem to regard it. I very much hope that my hon. Friend will seek to reach an early conclusion on this subject and will not regard the Bill as an indefinite extension of the present procedure war ranting further unnecessary delay in negotiations. I hope that the Ministry will look closely at the complicated and generally unsatisfactory situation of the suspended worker, because it gives rise to much ill will and bitterness which we might be able to overcome.

5.36 p.m.

Mr. William Wilson (Coventry, South)

I will not detain the House for long, but this is the right opportunity to reiterate what was said by my "hon. Friend the Member for Ince (Mr. McGuire) about what the Bill does not contain. It is clear from Clause 2 that the Government are intent on tidying up the National Insurance legislation, but beyond any doubt what calls out for tidying up is the position which has existed since 1924 in respect of the payment of unemployment pay to those who are put out of work not because they are directly involved in disputes but because, indirectly, they are caught up within them. The Government could have taken the opportunity to tidy up that very important part of the legislation.

This opportunity not having been taken, I want the Minister in his reply to assure me that the whole question is not being shelved for another Session. If it is to be shelved, then many who are caught in this anomaly in National Insurance legislation will be disappointed.

5.38 p.m.

Mr. Peter Tapsell (Horncastle)

I suspect that this Bill is not quite as modestly innocuous as the Minister of State suggested in his pleasant opening speech, nor as robustly beneficial a contribution to the festive season as was implied by the right hon. Member for Sowerby (Mr. Houghton). Contrary to what the right hon. Member for Sowerby suggested, the 1966 National Insurance Act has not been forced to lapse in this respect because employers have been unreasonable in making trivial difficulties and in dragging their feet. It goes deeper than that. Clause 1 is made necessary by one of the Government's many broken Election pledges—the failure to introduce a compulsory guaranteed minimum wage.

When the right hon. Lady the Member for Lanarkshire, North (Miss Herbison) made her speech in February, 1966, we were on the eve of a General Election. At that point we had not had the July, 1966 economic crisis. In those days it was both politically attractive and possibly even economically sound to suppose that these proposals could be implemented. The right hon. Member for Sowerby said that at that time it seemed reasonable to suppose that over a period of three years these proposals would be amicably worked out with industry and put into effect. I suggest that one of the reasons why it has not been found possible to do so it that it is not easy to transfer this obligation right across the board from the State to industry until there is a compulsory minimum national wage. If one attempted to do it in the present situation hardship would be caused in many cases.

The transitional period of three years which the right hon. Member for Lanarkshire, North mentioned, when introducing the 1966 National Insurance Act must, therefore, be extended—rather like those other transitional periods at present covering 2½ per cent. house mortgages, the surplus on the balance of payments and the 6 per cent. growth rate in the economy. The Bill is, therefore, only the small tip of a large iceberg.

The Government are never lucky in their attempts to control expenditure. Normally, increased expenditure is caused by the Government introducing new legislation. On this occasion they will be involved in an extra£3 million a year expenditure because they are not able to give effect to legislation which they passed three years ago. The unfortunate people of Britain seem to suffer either way.

In considering Clause 1, three questions must be asked: first, will the proposals be fair to workers; secondly, will they be fair to employers; and, thirdly, will they be fair to the nation as a whole? When one considers whether they will be fair to workers, one must be careful not to fall into the trap which is increasingly being set for us by intellectuals—and particularly those who have never had much to do with assembly lines or blast furnaces—that the workers of this country are a lot of layabouts who will seize every possible opportunity to abuse the National Insurance Scheme.

Those who have had the privilege to represent industrial constituencies know that that is far from the case. One of the great problems in all these matters is how to operate a scheme fairly for the 95 per cent. of our fellow countrymen who would not seek to abuse it, without at the same time laying it open to exploitation by the feckless 5 per cent. who make all our planning in these spheres so difficult.

It is in that context that we must consider the whole idea of the six-day suspension rule. This rule is a fairly new development in the approach to unemployment benefit. Although I fully take the point, which the right hon. Member for Sowerby made about the extent to which these provision have been abused in the past, and the extent to which certain employers have sought to shift their responsibilities on to the National Insurance Scheme, it is not always easy to draw a clear-cut distinction between unemployment and suspension.

The right hon. Member for Sowerby gave an example of a factory in his constituency which sometimes did not require its labour for a fortnight or so, but did not want to get rid of its workers.

There are other examples. A serious fire in a factory might mean that while the workers were not to be dismissed, they could not be employed for two or three weeks, or even longer. As I say, it is not always easy to draw a clear cut distinction in these matters. We should not, therefore, be too certain that the proposed provisions would in all cases be as beneficial in their effect as has been suggested

As to whether or not they will be fair to employers, will the Minister give a clear answer to the question which many hon. Members have asked; do the Government intend to introduce legislation to compel all employers to pay the equivalent of unemployment benefit to suspended or short-time workers? If that is their intention and if it is not to be done by agreement, or when a compulsory national basic minimum wage is in operation, then, this will be difficult at a time when other tax burdens on industry have gone up sharply—this applies particularly to smaller factories. I now represent a constituency which has only small industrial units and they are finding the effects, for example, of the new special import deposits extremely difficult, so the Government should be careful before pressing ahead without the agreement of industry.

As to whether the proposals are likely to be fair to the nation as a whole, one must strike a note of anxiety about whether or not unofficial strikes will be made more likely. It appears on the face of it that, if an employer must pay suspension benefits to any of his employees who are put out of work as a result of an unofficial strike in another part of the industry, or perhaps as a result of the activities of a trade union operating in his factory but different from the union representing the men who are put out of work, the pressures on employers to meet the demands of unofficial strike leaders could be increased.

My only comment about Clause 2 is on the proposal to extend from six months to 12 months the period within which social security benefits may be encashed. As hon. Members have made clear, this is a generally acceptable doc trine, both in terms of extending the period of time and also in keeping some limit on the period. We have all had constituency cases brought to our attention of people who, for good reason, have not claimed their benefit within six months. By extending it to 12 months we appear to be giving a fair answer to this problem. We must thank the National Insurance Advisory Committee for its Report on this subject.

But it is worth noting that the Inland Revenue can claim back money due to it from taxpayers for a period of six years after it becomes due It seems that one criterion is used when the State is owed money and another when it owes money. I have never been able to understand why, in dealing with individuals, the State is always allowed to have the law so heavily loaded in its favour. Why should a national insurance contributor who happens to be, even under the new proposals, a year and a day over the period in which he should have applied, excluded from benefit, while the State has up to six years to demand payment from any taxpayer who owes it money. This extraordinary distinction seem to underline one aspect of the present national discontent, which is the subordination of the individual to the State.

Mr. Houghton

I suppose the hon. Gentleman has not overlooked the fact that the taxpayer can go back six years to claim back tax paid in excess of his true liability. It works both ways.

Mr. Tapsell

That is a fair point. On the other hand, the National Insurance contributor may have contributed to the Fund for 30 or even 40 years, but if he has failed to claim benefit for a period, at present, of six months, and, under the Bill, of one year, he forfeits the benefit for which he has made a lifetime's contributions. I do not know whether the right hon. Gentleman has any private insurance policies, but I am sure that if he had some benefit to claim under them and a private enterprise insurance company told him, "We are very sorry, but payment fell due a week and a year ago so we will not give you anything, although you have paid your insurance premiums for 40 years," his attitude would be as lacking in the Christmas spirit as he pre tended it to be in attacking my hon. Friend the Member for Chelsea (Mr. Worsley).

5.52 p.m.

The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley)

The hon. Member for Chelsea (Mr. Worsley), described the Bill, in what, I am sure, he believed to be a bravura opening, as a typical product of the Government—" bitty and brought for ward in haste." Neither of these descriptions is true, as I hope to show. How ever, before turning to the main criticisms that he and some of his hon. Friends offered on Clause 1, I attempt to answer some specific questions on Clauses 2 and 3.

The hon. Member asked why my hon. Friend the Minister of State had said that under Clause 3 certain regulations need not be referred to the National Insurance Advisory Committee. He asked why, if that were the customary practice, it need be repeated in the Bill. The pro vision is in the Bill because although the practice is identical to practices operating on other occasions it needs to be reiterated in respect of the new provisions. It simply enables the provisions of Clause 1 to go ahead without the otherwise necessary reference. It is, therefore, identical with past practice but applies to the new practice in Clause 1.

The hon. Gentleman then developed what he described, familiarly to us, as a constituency case. I must remind him and other hon. Members on both sides that Clause 2 covers encashment—payment—rather than claims. From the error of confusing claims and payment I totaly absolve the hon. Member for Horn-castle (Mr. Tapsell), byt many of the points made by the hon. Member for Chelsea and other Members opposite are not relevant to the Bill at all, in that they had to do with claims for benefit rather than for application for that benefit to be paid.

Since the rules governing Second Reading debates enable me to go sufficiently wide to answer the question, I can say that claims will be dealt with by regulations soon to be presented to the House. They are related to existing Statutes and will enable the hon. Gentle man to raise some of his points at that time. I assure him that if he wants his specific case looked into my hon. Friend will be happy to do so.

The hon. Gentleman also complained that the Bill had an inelegant title, indica- tive, so he said, of its "bitty" nature. If he looks at the provisions he will see that it is the sensible way to cover subjects so diverse, despite similarities, that "&c" is almost the only description that could be used to encompass them all adequately.

The Bill covers a number of social security subjects, including the three points that were raised by the hon. Member for Liverpool, Garston (Mr. Fortescue). He asked: why put a 12 months' limit on supplementary benefits as well as on National Insurance payment? There are two answers. The first concerns the fundamental disagreement between my right hon. Friends, my hon. Friends and myself, and the hon. Member, for he distinguished between those benefits which are paid "as of right" and those which are paid "not as of right". To my right hon. Friends, my hon. Friends and myself all the payments are paid as of right. There may have to be a demonstration that the right is appropriate, but a right it still is.

The second, and not less important, though more practical point is that very often the two payments are made together, and some of us regard it as a great social advance that that should be so. If they are made together, it seems reasonable that representations for payment should cover the same period.

Mr. Fortescue

I take the hon. Gentle man's second point, and thank him for it. On the other question, these payments are made as of right, but they are made as of right to a person whose resources are insufficient to meet his requirements. My point was that this, as stated in the 1966 Act, implies, anyway, that it is pre sent need which is the right, and not the need 12 months later.

Mr. Hattersley

Again. I must put it to the hon. Gentleman, with all respect, that he makes a false distinction. All payments are made subject to some rules and regulations, and the quotation he gave is just one of the rules which govern the payment of supplementary benefit. The issue of rights does not enter into it.

I turn now to what was clearly the subject of the more substantial criticism of the Bill made by hon. Members opposite, and what is clearly the most controversial aspect—Clause 1. The hon. Mem- ber for Chelsea described it—I think absolutely accurately—as "postponing the transfer of responsibility for suspended workers from the Government to individual employers". That was clearly our intention in 1966. That was what we set out to do. That is what we thought was demanded of us, both in terms of equity and, what is not unimportant, of intellectual consistency.

Let me make it quite clear to the hon. Member for Acton (Mr. Kenneth Baker) that such a transfer remains our hope. I shall try to answer directly and specifically the last questions put to me by the hon. Member for Horncastle, but I say again that transfer remains our hope. It remains our hope because of the considerations of equity and of intellectual consistency which guided our original statement.

In terms of consistency, the case was demonstrated by my right hon. Friend the Member for Sowerby (Mr. Houghton). Men suspended for a short period are clearly the responsibility of the individual employer. In a real sense they are still the employer's employees. They have no intention of seeking new employment. They expect to return to their old employment, and are encouraged to expect so to do.

In terms of equity, the question should be asked: why should these people who are laid off for a short time be a charge on the general insurance fund? Why should the£3 million—quoted as the benefits they receive from the Fund in a full year—be paid by other contributors to the Fund? That question has a special force when one remembers that suspended workers are very often to be found in highly paid industries. It has to be remembered that suspended workers very often receive in a year which includes periods of suspension wages substantially in excess of what other contributors to the Fund will receive in a full year, in which no suspensions occur—

Mr. Eric S. Heffer (Liverpool, Walton)

I have been attending a meeting of the Race Relations Committee for two hours, so I apologise if what I ask has already been dealt with. If it is to be the responsibility of the employer, why is it not contained in the Bill? This is an important point.

Mr. Hattersley

My hon. Friend could not have returned at a more appropriate moment because, having established the principle, I want now to explain why it cannot at present be applied. The establishment and the application of the principle remain our hope and intention. If it was right that the suspended worker should be the responsibility of the individual employer, it was equally right that we should hope that responsibility would be assumed by the individual employer as a result of a voluntary agreement.

I assure the House that when, three years ago, we announced our intention of abandoning the then procedure, it was our earnest hope and belief that voluntary agreements would be brought about to meet the position. At the same time it was equally necessary—this is why the charge of coercion is absurd—for us to assure the working population that in the absence of such voluntary agreements the Government would not leave them during suspension without any payment at all. We had to give that assurance and it in no way eroder our intention that voluntary agreements should fill the place of the insurance payment.

Through the Ministry of Labour and later through the National Joint Advisory Council, my right hon. Friend and her predecessor constantly urged on industry the preparation of voluntary agreements. The C.B.I, did all it could to encourage voluntary agreements. We always accepted that provision of voluntary agreements would be difficult and that there would be some conflict between the parties to those agreements. Today's Bill is before the House because those conflicts and those disagreements are so substantial and so related to other matters which must shortly come before the House that a longer time is necessary for the Government to pursue their original aim. But I say again that the original aim will be pursued.

The C.B.I, and the Trades Union Congress disagree—perhaps it is not unfair to say fundamentally—about the nature of such voluntary agreements and any provision which the Government might make. They disagree about the methods in which a guarantee would be calculated and about the level of guarantee. The C.B.I, was particularly and properly concerned about the cost of the scheme and its effect on strikes. The T.U.C. was particularly and properly concerned about the need to ensure that no worker should be less well off under a private scheme of an individual employer than by the previous and now to be continued State provision. Clearly, for low paid workers with large families, since the State scheme is related to needs and dependants, there would always be a danger at the margin of the scheme that some workers would be less well off under a private guarantee.

Because of these disagreements and because of impending decisions by the Government both in the labour field and in the social security field, we felt it right to introduce this Bill asking for a postponement of our original intentions. I very much regret that hon. Members opposite have chosen to use a sensible and rational decision by the Government in an attempt to make party political capital out of a provision which others see in less partisan terms.

I can think of nothing more reasonable. The Government had a point of view which they hope to see accepted by industry. We discussed it with industry for some time. Then, because of the substantial and real problems which industry found in implementing that point of view, we agreed to postpone our original plans for a period. This seems to be the best sort of responsible government. I am happy to say that it seems to be the view of the Confederation of British Industries, which described it in a newsletter as "constituting a notable victory for the consultative process which we have long advocated".

Related to the disagreements between the C.B.I. and the T.U.C. over the nature of the provision is the question raised by the hon. Member for Horncastle—the effect on strikes. I accept entirely that one can conceive of a situation in which a guarantee, paid for by industry and industry alone, creates an added pressure for that industry to settle strikes at any cost. One thinks of a components manufacturer in the industry quoted by the hon. Member for Liverpool, Garston (Mr. Fortescue), the motor industry. A few men on strike may bring to an end a production line in motor-car assembly plant and put out of work thousands, perhaps tens of thousands, of men. The cost to that individual company of maintaining its guaranteed week would be substantial. That company would naturally and inevitably urge the components manufacturer to settle the strike on terms which they might otherwise regard as unacceptable. I accept that.

That is one of the reasons why the scheme we are discussing and the Bill which we recommend to the House are intimately associated with the Donovan Report, and the White Paper on Indus trial Relations, which is expected in the New Year. This is why there holding provisions should continue until our eventual conclusions on Donovan are made public and operate within industry.

This seems particularly appropriate to our attitude towards the disqualifications for benefit under Section 22 (1) of the 1965 Act to which my hon. Friend the Member for Barrow in Furnace (Mr. Booth) referred. He warned me half way through his speech that he would not be satisfied if I said that the Government view on that disqualification would be revealed only as part of the Donovan White Paper. I regret that I must anticipate his dissatisfaction, but that is the answer he will have to receive. The specific Section of the Bill to which he referred is commented on in the Donovan Report. Donovan recommended that the Government should take action on that specific subsection—" grade and class "—about which he was concerned. It is only reasonable to expect that when we respond in one way or the other it must be done in the general Donovan context rather than in anticipation of the other things we have to say and do about the Donovan Report.

Finally, a word about the£3 million cost, which the hon. Member for Horn castle said whichever way it goes industry has to suffer—

Mr. Tapsell

The country.

Mr. Hattersley

—which the country suffers. Some of us find it difficult to draw a distinction between the interests of the two. I am sure the hon. Member does on most occasions. I say, as I believe the whole House says, that a man suspended through no fault of his own, be cause there is a shortage of components, because there is a strike in another factory, because there is a fall-off in demand or a change in trade or a break down of equipment, must be paid some thing in the period during which he is laid off. The money in one form or another must come from industry. It may come by direct payment; from taxation paid by industry, from the National Insurance contribution from industry. Or it may come from tax or National Insurance contributions paid by the employees. That in itself will be reflected in industrial costs.

What we are saying is that since these men must and should be paid a guaranteed week during the period of suspension, the Government have an obligation to find the most equitable and efficient way in which society should meet that cost. All we are asking is for more time to consider how best that can be done and for more time to do it with the co-operation of both sides of industry.

Mr. Tapsell

Since the hon. Gentle man took me up on my correction, may I make a point which I am sure the visiting team of the International Monetary Fund makes every quarter to his right hon. Friend the Chancellor of the Exchequer, that one characteristic of this Government is their inability to control Government expenditure.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Harper.]

Committee Tomorrow.