SOCIAL SECURITY BILL

HC Deb 26 April 1971 vol 816 cc50-162

Order for Second Reading read.

4.12 p.m.

The Secretary of State for Social Services (Sir Keith Joseph)

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

The Bill has as its main purpose the pruning of the social security system, on the one hand of some abuses that have crept in and, on the other, of some elements, entirely justifiable in the past, which have become obsolete or in need of amendment.

I will take the House through the relatively few Clauses of the Bill and explain as briefly as I courteously and helpfully can the purpose of each.

Clause 1 and 2 together alter some of the rules governing the arrangements for supplementary benefit. Clause 1(2) deals with a person disqualified for up to six weeks from unemployment benefit because he has committed industrial misconduct, left his job voluntarily, or refused suitable work without good cause. If such a person disqualified from unemployment benefit for what is in general called "industrial misconduct" were to be able to make good the loss of unemployment benefit for those six weeks simply by claiming full supplementary benefit entitlement, there would be no effective sanction whatsoever.

Mr. Eric S. Heffer (Liverpool, Walton)

Dear, dear.

Mr. Stanley Orme (Salford, West)

The Secretary of State's opening tone in talking about penalising people who are unemployed and not having a sanction against them at present epitomises what the Bill is about.

Sir K. Joseph

I hope that the hon. Gentleman will pay more attention both to the Bill and to what I say about it. We are discussing in Clause 1(2) people who under a long-standing law—

Mr. Orme

We know about the law.

Sir K. Joseph

—are voluntarily unemployed; they have lost their jobs through what is called industrial misconduct.

Mr. Heffer

The Secretary of State must understand that some of us on this side have had experience of this matter. Is he not aware that many workers, particularly in small establishments, are constantly pressurised by their employer or foreman and their life is made intolerable? Such workers then leave their place of employment because of the circumstances and find they cannot receive unemployment pay. Does not the right hon. Gentleman understand that workers suffer that indignity every day of the week?

Sir K. Joseph

The provision for any deduction from supplementary benefit is subject to the discretion of the Supplementary Benefits Commission. I am sure that in such cases as the hon. Gentleman refers to a deduction would not occur. Under this subsection we are dealing with a situation where the Commission in its discretion already applies a deduction of 75p for up to six weeks. In the Government's view, such a deduction is too small; it is derisory. It is applied by the Commission in its own discretion. It would not be proper or right for the Government to ask the Commission to vary its discretion. Therefore, we are taking this decision out of the Commission's hands by requiring under this subsection that the deduction for industrial misconduct should be 40 per cent. of the single householder adult rate at maximum, namely, £2.05 for up to six weeks instead of 75p as now. The benefits for wife, children and rent will not be affected in any way.

The calculations given to me are that about 10,000 people at any one time are affected by this deduction, over half—probably two-thirds—of whom are single men.

Mr. John Mendelson (Penistone)

Does not the Secretary of State realise that in one and the same breath he has said that it would not be right to ask the Commission to vary its discretion downwards and that the Government propose to get round that difficulty by abolishing the discretion? We are taking the right hon. Gentleman up on the first point before we reach further points, because he seems to be talking in terms of punish- ments and sanctions for industrial misconduct. In many instances industrial misconduct is a highly disputed event and is only a formula. Therefore, the right hon. Gentleman has no right to talk about punishments or sanctions in such cases. These people are not criminals.

Sir K. Joseph

Nobody is accusing them of being criminals. The Commission will retain the discretion as whether to apply a deduction from supplementary benefits. If the Commission in its knowledge of the facts decides to apply a deduction, it is to be a deduction, if the House approves the Bill, of £2.05 at maximum instead of 75p.

Dame Joan Vickers (Plymouth, Devonport)

My right hon. Friend has mentioned single men. How will single women with dependants fare?

Sir K. Joseph

Single women with dependants will be subjected to a deduction, if there were to be a deduction and subject to the Commission's discretion, of the maximum for a single householder rate. The benefits for a dependant and for rent remain untouched. There is a limit of six weeks. In case hon. Members opposite are feeling uncomfortable about this provision they will no doubt be aware that this proposal was made by their own Government, at a deduction to rise from 75p to a third instead of 40 per cent., which this Government have decided.

Mr. John Mendelson

They were equally wrong.

Sir K. Joseph

It is a comfort to the Government to feel that on this matter the two Front Benches agree that something has to be done.

I turn to Clause 1(4) and Clause 2 which deal with the amount of supplementary benefit payable during and after trade disputes. One of the first things that this Government set in hand after the election was a review of the arrangements for the payment of supplementary benefits to the dependants of those involved in trade disputes. As the House knows, supplementary benefit, including rent, is payable for the dependants of claimants who are disqualified by Section 10 of the Ministry of Social Security Act, 1966, because of a trade dispute from having their own personal requirements far supplementary benefits met.

The Government have decided that for the present at least the main principle embodied in that legislation should continue unchanged. This is not to say that the Government may not decide at some stage to make some changes. A large number of people whose views are entitled to respect believe that the right to strike is often exercised irresponsibly and that it is unreasonable that the taxpayer should be expected to help finance strikes by men whose normal earnings are often quite sufficient to enable them to finance the strikes themselves.

There are others who do not go so far as that, who think that at least those who can afford it should repay, after the strike is over, the money provided by the taxpayer for wives and children. I have always sought to keep supplementary benefit payment to strikers' families in perspective. There is no supplementary benefit entitlement for the single striker. Probably about 20 per cent., no one knows the precise figures, of all strikers are single and they get no help from the Supplementary Benefits Commission except in very rare cases of real hardship during a strike. Such people in any one strike can be numbered virtually in handfuls. In general supplementary benefit is not payable for the first two weeks of a strike because the men and women concerned are still entitled to earnings from the employer. Of course the Post Office strike was a dramatic exception to the rule. Because of the arrangements of the Post Office, supplementary benefit came into payment in the very first week.

I am still reviewing the reasons why I think we have to keep supplementary benefit payments to dependants of strikers in perspective. Some 90 per cent. of trade disputes are over in two weeks. Up to this year only about 20 per cent. of those involved in strikes lasting more than two weeks had claimed supplementary benefit. With supplementary benefit on its present basis most workers' households suffer a sharp fall in net income when they draw supplementary benefit during a trade dispute.

All of these factors remain true but it is no longer possible, because of these factors, to shrug aside the scale and possible implications of supplementary bene- fit payments connected with trade disputes. I want to give the House two new facts. We have no firm statistics for 1971, but so far as I can estimate the proportion of all strikers who have received supplementary benefit for their dependants has leapt from a figure of the order of 2 per cent. over recent years to 25 per cent. so far this year—because of the most unusual Post Office experience and the Ford strike.

The second new fact is perhaps even more startling. In the first four months of 1971, £3¾ million has been paid out as a result of large trade disputes alone—more than the total of all supplementary benefits paid out in connection with strikes from the end of the war until the end of 1970. In the first four months of this year more supplementary benefit has been paid out to the dependants of strikers involved in large disputes than in all the time since the end of the war.

Mr. J. Bruce-Gardyne (South Angus)

Does this figure include the "tide-over" payment after resumption of work?

Sir K. Joseph

Yes it does.

Mr. John Mendelson

I thought that the right hon. Gentleman was rejecting the language of propagandists who talk about financing strikes by State funds. Now he seems to be moving close to it. He is the Secretary of State who has to defend the right of people who have paid contributions, as the Guardian pointed out in a leader the other day, for dependants who are in need of resources today. Surely he knows that the whole concept of financing strikes is fraudulent because under existing legisation only those in dire need are allowed to receive supplementary benefit payments for specific purposes.

Sir K. Joseph

It remains true that there is a very great difference between the insurance benefits for which people pay contributions and the situation in a strike where men and women, for their own personal purposes, for a greater or lesser time, are without earnings. The purpose of the supplementary benefit system is to mitigate hardship. People voluntarily, for their own purpose, choose to do without earnings. I have spelled out the factors which have to be taken into account and the new scale that we are now witnessing. I have taken into account, as one who has been scruplous in emphasising the relatively small proportion of payments made to strikers' dependants in the past, the change of scale we are now seeing. In these circumstances the least that we can do is to make certain that Parliament's decision about supplementary benefit entitlement for the families of strikers should be adhered to.

Mr. Orme

The right hon. Gentleman talks about scale and uses the Post Office strike as a decisive part of his argument. That was an official strike which ran for a long period of time this year. Is he not thereby directly coming down in a political way on one side in an official trade dispute? Does this not rob the Government of any vestige of independence in this matter?

Sir K. Joseph

The hon. Gentleman talked about the Post Office strike being an official strike and it was. But we normally would expect in an official strike that some strike pay would be made available. Here was a union which embarked upon a strike without strike pay and therefore to a greater extent than would be normal the men and women concerned turned to supplementary benefit. They were entitled to do so.

Mr. John Mendelson

Of course they were.

Sir K. Joseph

I am entitled to point out that what used to be the old relationship, with a very small proportion of strikers' families getting relatively small sums of money from the taxpayer is changing and is rapidly escalating to something totally different.

Mr. James Sillars (South Ayrshire)

The Secretary of State talks about what happens when a strike takes place, that is, when the men withdraw their labour. What happens when a lock-out takes place?

Sir K. Joseph

Precisely the same as has always happened when a lock-out takes place. Section 10 of the Ministry of Social Security Act passed by the former Government governs a lock-out just as much as a strike.

Section 10 of the Ministry of Social Security Act, 1966, is the latest statutory embodiment of the principle that supplementary benefit shall not be paid for personal requirements to a claimant disqualified because of a trade dispute. As is well known, the supplementary benefit position resulted from the long-standing practice of the National Assistance Board of ignoring, in its discretionary powers, any personal resources of such a claimant such as tax refunds, strike pay, up to £4.35 a week—the full amount of a claimant's personal requirements. This practice, which the S.B.C. inherited from the National Assistance Board has nullified Section 10 of the Ministry of Social Security Act, 1966.

Clause 1(4) of this Bill, therefore, provides that such resources shall be disregarded only to the extent of £1. That is the normal disregard for other people in this situation. The result will be that there will be a cut of £3.35 a week in household income of a person connected with a trade dispute whenever such a household has tax refunds or strike pay of £4.35 or more. Those who receive strike pay, whether their earnings are high or low, will be affected by this cut, but they will be affected by it only to the extent of conforming to the intention of Parliament in passing Section 10 of the Ministry of Social Security Act, 1966.

The present disregard brings in benefit to the low-wage earner provided he receives strike pay. I have inquired about the proportion of strikers who receive strike pay. No clear figure can be given me, but I have been told that about 95 per cent. of strikes are unofficial, so that prima facie it is expected that only about 5 per cent. of men who strike get strike pay. That may be slightly on the low side because often such official strikes as there are tend to continue longer. Therefore, probably 5 per cent. is the bottom of the likely bracket. The point I am making is that the low-wage earner will not be affected by this cut unless he receives strike pay, since he obtains no tax refund. There is no extra resource to be disregarded apart from strike pay. In that sense therefore, the low-wage earner will not be affected by the change we are proposing.

Mr. Brian O'Malley (Rotherham)

May I put a purely factual question? Presumably the low-wage earner to whom the right hon. Gentleman is referring could be receiving family income supplement which the right hon. Gentleman has introduced. Can he say what would be the position of the man who goes on strike? Does he continue to receive family income supplement? That is one question. The second question is, is the £1 of family income supplement disregarded, if it is being paid, or not? What is the situation?

Sir K. Joseph

Family income supplement? The hon. Gentleman is ingenious in setting very difficult questions, but I will try to answer off the cuff, certainly the first question. It is paid unconditionally for 26 weeks. It is granted unconditionally. As to the second question, I should like to give a provisional reply only because I may be wrong. Family income supplement implies that a man is receiving in effect less than supplementary benefit. Therefore, the supplementary benefit will be subject to a wage stop. For family income suplement one has to bear in mind the complicated interaction of the erstwhile wage stop, family income supplement and supplementary benefit. What I think I had better say to the hon. Gentleman, however, is that my hon. Friend will answer that if he catches your eye later, Mr. Deputy Speaker; or I will request him to put the question down.

A single person—I am going through the people who will be affected by this cut in supplementary benefit—will not be affected because the single person is not entitled to supplementary benefit in these circumstances, anyway.

At this stage I should tell the House, so that there will be no thought that I am concealing part of the background, that we are not modifying the grade and class or financing disqualifications as was recommended by the Donovan Commission. We have decided against carrying out these recommendations at the moment because, in our view, this is not the time, when strikes are so frequent, to make a change which could facilitate manipulation of the National Insurance Fund by the withdrawal of a few key workers.

I turn now to the second change in the application of supplementary benefit to those concerned in trade disputes. Suddenly, since 1969, a new way of exploiting the supplementary benefits scheme has been developed. As the House knows, the normal way by which people maintain themselves and their families after returning to work at the end of a period of interruption of work, whether due to unemployment or sickness or a strike, is by way of a sub from the employer, particularly where the individual worker is known to the employer. In these cases any sub from the employer was recoverable after the first 15 days after return to work. In cases where the employer was unwilling to sub workers returning after the strike, payment was made of supplementary benefit to support those workers' families. But as I have mentioned to the House, since 1969 a strange development has occurred.

More and more people have realised that, whereas the sub from the employer is repayable—that is to say, it is merely on account of future earnings and comes out of taxed income—supplementary benefit is neither repayable nor taxable, and so at a steadily accelerating rate men and women have been actually discouraged from taking subs during two weeks after a return to work at the end of a trade dispute and have been turning to the Supplementary Benefits Commission.

The result has been dramatic. In 1964, the total paid out by the Supplementary Benefits Commission after trade disputes had ended was some £4,000. Last year, the equivalent figure was very nearly £900,000, and for the first one-third of this year, the rate of increase had accelerated again and had reached £430,000. This is an abuse which no Government could contentedly accept. Therefore, Clause 2 provides that a payment of supplementary benefit made during the first 15 days to people returning to work after a trade dispute shall be recoverable through the employer. Clause 2(5), coupled with Schedule 1, protects earnings so as to ensure that the repayment through the employer shall not be at such a rate, or on such a scale, as to apply to any household with less than £2 above the supplementary benefit level for that household.

Mr. Orme

Does that also apply to the worker in a plant who comes out because of a trade dispute due to other workers taking strike action in the same plant, so that he is thrown out of employment through no fault of his own? Is it applicable to him?

Sir K. Joseph

This is why I went out of my way to explain that we are retaining the grade and class and financing disqualifications—for the reason I gave. So the hon. Gentleman is precisely right. I hope that the change of law proposed will remove the abuse and that once the availability of supplementary benefit on a non-repayable basis and tax-free has been removed, workers will be content to revert to the traditional practice of accepting subs to tide them over the period after a trade dispute.

We cannot tell what the supplementary benefit changes will save. The amount will vary according to the number of trade disputes, the number of people engaged on them and other relevant factors. I can only tell the House as a guide that, if the Bill had been law during 1970, the taxpayer would have saved about £1¼ million. Had Clause 1 been in effect during the Ford strike, the supplementary benefit paid to the families of the strikers—and the House will remember that there was both strike pay and in many cases, but not all, tax refunds—would have been cut to about one-third of the amount that was paid out.

Clause 3 enables a small pocket of duplicate payments of social security benefits to be closed. Clause 4 provides for inspectors the same powers of entry to business premises in connection with suspected supplementary benefit frauds as already exist with respect to suspected national insurance frauds. Clause 5 provides for reciprocity with Northern Ireland as regards supplementary benefit. Clause 6 extends the scope for reciprocal agreements on social security matters with other countries. I will come back to Clause 7.

Mr. O'Malley

Clause 6 is rather unusual. I understand that if a foreign citizen comes into the country and finds himself in difficulties he is entitled to receive help from the Supplementary Benefits Commission. British citizens who go overseas where supplementary benefit type systems exist do not at the moment get the same advantage as a foreigner coming to this country. Is the purpose of the Clause to ensure that they do?

Sir K. Joseph

I am looking unashamedly at my crib. In particular, we should be enabled by the Clause to come to an agreement to make supplementary benefit paid in one country reimbursable from arrears of insurance benefit that afterwards become payable for the same period from the other country. In other words, just as in this country restrospective payments of national insurance can be paid over to the Supplementary Benefits Commission to compensate it for supplementary benefit paid in advance of national insurance benefit becoming payable, so the Clause enables us to make similar arrangements between our supplementary benefit fund and the national insurance equivalent of other countries, and vice versa. The hon. Gentleman will be able to enjoy himself in Committee on this Clause.

Clause 8 increases the maximum fine for failure to pay contributions from the £10 fixed as long ago as 1911 to £50. Clause 9 ends the life of the local advisory committees. Clause 10 deals with the application of the Bill to Northern Ireland.

Clause 7 is an important Clause. Subsection (1) abolishes the retrospective payment of unemployment or sickness benefit for the three waiting days, and means that for periods of interruption of employment beginning after the appointed day benefit will never be payable for the first three days in the period. The change relates to flat rate benefit only. There never was a three waiting days period for earnings-related supplement, which begins only after 12 days interruption of employment and is not therefore affected. Subsection (2) does exactly the same for industrial injury benefit.

I was much cross-examined by hon. Members, particularly by my hon. Friends, after the Bill was published about the effect of Clause 7. There was widespread concern on both sides of the House that people would be hit by this withdrawal in the most vulnerable days immediately after the start of a bout of unemployment, sickness or industrial injury. I emphasise strongly that that is not what happens. The present rules which we are changing do not give anyone any benefit during the first days of sickness, unemployment or industrial injury. What is being taken away by Clause 7 is not protection during those early days but retrospective payment for those first three days more than two weeks and often as long as 13 weeks later.

The House will realise that the waiting days can be accumulated during a 13-week period. An insured person may have two days off sick and then go back to work, and another two days off seven weeks later. The four days can be added together provided that they occur during a 13-week period and so on, so that the retrospective payment for those first three waiting days can come as long as 13 weeks after the first bout starts. I do not want to mislead the House. The bulk of cases last two weeks straight off—three weeks perhaps—and the retrospective payment therefore occurs in the third week.

There is no doubt that when the National Insurance Scheme was founded the retrospective payment for the first three days made good sense. In any national insurance scheme it is virtually impossible to put an insurance benefit into the hands of the beneficiary within a day or so of the start of the bout of unemployment, sickness or industrial injury. This is not how a national insurance system works. A mass of paper is involved, and it would be hideously expensive administratively to make arrangements to meet immediately the needs of someone who was unemployed or sick. The immediate needs of any household are met, when necessary, by the Supplementary Benefits Commission.

Since the inauguration of the national insurance scheme together with the retrospective payment for the three waiting days, there has been a transformation in the position of the bulk of the work-people. Earnings have multiplied, net disposable personal income in real terms has rocketed. Whereas in 1951, 28 per cent. of married women brought earnings into the household, now, 45 per cent. of married women do so. Savings have increased. National insurance benefits have increased. Redundancy payments are now available in many cases. Employers' sick pay schemes cover a substantial proportion of the working force, and earnings-related supplement comes into payment for over 70 per cent. of those still hit by unemployment, sickness or industrial injury in about the third week of any bout. On all these counts there is more "fat" available out of which most people can bear the first few days.

Mr. Orme

It is all relative.

Sir K. Joseph

There is more reserve out of which most people hit by unemployment—where redundancy payments are available—sickness and industrial injury can support themselves during the first few days than there was 23 years ago. Often, retrospective payment of benefit for waiting days means a tax-free bonus when the person concerned has returned to work. There is even the possibility of a suspicion that the prospect of retrospective payment for waiting days could sometimes conceivably be a distorting factor tempting some people to prolong a spell of sickness. No one knows for sure, but it may be a factor.

Often retrospective payments coincide with the start of earnings-related supplement coming into payment. I would emphasise that the lowest paid are not affected by the change since the lowest paid would never be able to wait for sickness benefit, unemployment benefit or industrial injury benefit to come into payment. They would not have the reserves or the resources to do so. They would have had to go immediately on supplementary benefit. There will be no change in that situation. The retrospective payment which will be taken away if the Bill is passed would not have come to the low paid as an extra. It would simply have been set off against supplementary benefit.

Mr. John Mendelson

They are entitled by their contributions.

Sir K. Joseph

I shall deal a little later with the seated intervention of the hon. Member for Penistone (Mr. John Mendelson). The result of Clause 7 is that in a full year there will be a gross saving to the funds of about £22 million.

Mr. Orme

For the benefit of the surtax payer.

Sir K. Joseph

The surtax payer does not benefit from these changes. We are dealing with the National Insurance Fund and this represents a saving of £22 million to those Funds. There will be £3 million extra public expenditure, £2 million of which will represent a drain on supplementary benefits because of the offset no longer available when retrospective payment for three waiting days has gone. We believe that about £1 million will be claimed in extra supplementary benefit. Families which manage on the household income alone and do not consider it worth while applying for supplementary benefit since they expect later to receive retrospective payment for the three waiting days may, because of the change, decide on balance to apply for supplementary benefit. This is why we have provided for an extra payment of £1 million a year for extra supplementary benefit. This will relate to the cases where waiting-day payments make the difference between a family having to claim supplementary benefit and managing without it.

I should like to say something about the recent newspaper reports concerning the payment of unemployment benefit for relatively short periods to casual workers, particularly dockers. This is a practice used by relatively few people—not only dockers—which was recently brought to my notice. I am investigating the matter, and if I find that the present safeguards are insufficient I shall be taking steps to deal with it.

As the House knows I am about to lay before Parliament a commencement order bringing into operation from 1st January, 1972, a provision of the 1966 National Insurance Act which will stop the payment of flat rate benefit payable to workers on short time for the first six days of each such period of lay-off or suspension. At present workers such as dockers are regarded as having had their employment terminated rather than suspended each time they become unemployed and would not therefore come within the effect of the commencement order. If necessary, however, there is power to make regulations specifying the circumstances in which employment is to be treated as terminated or suspended.

The House will wish to know when the various ingredients of the Bill are expected to come into operation.

Mr. John Mendelson

What is the justification for a period of six days?

Sir K. Joseph

Is the hon. Gentleman seeking to intervene?

Mr. Mendelson

The Secretary of State has just made a new announcement, he has made only brief reference to it in the past. He has never given any justification for it. He is now slipping it in as if it is a matter of no great importance. Will he seek to justify this action and say which social policies compel him to take it?

Sir K. Joseph

My hon. Friend the Under Secretary of State reminds me that, here again, I can claim some support from the Opposition Front Bench, since the previous Government introduced legislation entitling them to disqualify for unemployment benefit people suspended for up to six days. It is true that they themselves flinched from taking action to bring in a commencement order.

Mr. John Mendelson

They were democratically prevented from doing so.

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Order. I hope that we shall not have sedentary interjections.

Sir K. Joseph

I do not want to be led too wide, but I have referred to this commencement order. The case for removing unemployment benefit for short periods of suspension is that such a practice enables employers who wish to reduce their own costs of employment for a period to use the National Insurance Fund for a purpose for which it was never intended.

Mr. O'Malley

On a question of fact, will the right hon. Gentleman clear one point? Is the effect of such a commencement order that anybody who goes on to short-time work—in other words, somebody who does not work on Thursday and Friday of one week and Monday and Tuesday of the next week—will have to have six days of such short-time work before he can get anything? Since the Secretary of State keeps claiming support from this side of the House, I would remind him that we are now in a new Parliament with new Members on both sides of the House, and that policy decisions on this side of the House are determined by the whole of the Parliamentary Labour Party.

Sir K. Joseph

It is always embarrassing for an Opposition after a period of government to be reminded of various matters. However, the hon. Gentleman will be able to make his own points on these questions when we lay our commencement order. There will be an opportunity to debate the matter if the Opposition wish to do so.

The abolition of the waiting days will come into effect, if the Bill passes, by order on the second Monday after Royal Assent. The change in disregards will come into effect one month after Royal Assent. The supplementary benefit repay-ability provision will come into effect at about the end of the year. The increased reduction for industrial misconduct will come into effect three months after the passing of the Act.

We shall naturally be asked to say what is the purpose of making these national insurance savings. This Government are aware that there are some large gaps in our social provision and in the coverage of the National Insurance Scheme. It seems to us that we are involved in an exercise of priorities, and indeed a civilised one, in reviewing payments out of the National Insurance Fund which are no longer needed for the purpose for which they were designed.

Mr. Orme

It was designed for unemployment, sickness and injury benefits.

Sir K. Joseph

The hon. Gentleman should bear in mind the simple fact that in this Bill we are dealing with the National Insurance Fund. If we save, as this Bill seeks to save, some £22 million a year, this will be a saving of benefits for national insurance contributors. To that extent we could either reduce the national insurance contribution or we could use the money for new social purposes. Although £22 million saved by this Bill is certainly not earmarked in a particular way, it makes the problem of financing the new selective benefits which we are introducing that much easier. I would remind the House that the up-rating Bill that is shortly to be debated contains a number of brand-new benefits within the National Insurance Scheme which have been welcomed on both sides of the House. In particular we have been proud to introduce a substantial package for the chronic sick which will cost £24 million in a full year.

There are additional benefits. There is to be an additional sum of money for the over-80s, on top of the national insurance increase, which will cost many millions of £s a year. We are able, therefore, to say that we have in effect switched money from priorities which have become, by the passage of time and the increased prosperity of the country, relatively less important than they were to priorities which by all accounts are high and urgent. That is why it seems to me that this is a civilised and sensible Bill.

Several themes of this Bill are familiar to Her Majesty's Opposition. When in government, they faced the same questions and priorities as we do. Naturally with their history and their Left-wing, they handled these subjects gingerly. They recognised the contradiction between Section 10 of their own Ministry of Social Security Act, 1966, and the £4.35 disregard. They legalised the disregard in the National Superannuation and Social Insurance Act, which fell at the election. That legitimation is curious because my predecessor, the right hon. Gentleman the present Editor of the New Statesman, stigmatised that disregard as "extraordinary" in one of the editions of his paper.

Mr. John Mendelson

The right hon. Gentleman knows very well that another of his predecessors, the right hon. Member who used to sit in this House for Llanelly for many years and who introduced and was the father of the scheme, would have condemned him outright today for what he is doing about the three days and the other measures that the first Labour Government introduced after the war. The right hon. Gentleman knows that there is no transfer from contributed funds to other payments for people who are disabled but that, instead, there is the Treasury which collects all money from taxation and other sources and allocates it for purposes like reducing surtax, so taking it from the injured and sick and giving it to the rich.

Sir K. Joseph

The hon. Gentleman must not get excited—

Mr. Mendelson

I am excited.

Sir K. Joseph

The hon. Gentleman is wrong. The £24 million package for the chronic sick comes out of national insurance contributions. The £22 million saving from the Bill is a saving to national insurance contributions. It is all national insurance. The £16 million extra benefit, on top of every other benefit, for all the over-80s in the land comes very largely out of national insurance contributions. We are providing from national insurance far more in new benefits than we are saving by this Bill.

I was going through the record of the previous Government, because it is important that we should recognise what happened. The previous Government realised that there was a growing abuse of post-trade dispute supplementary benefits. They paltered with the abuse by their proposals in the Bill which fell at the election. My predecessor, once out of office, called that abuse of supplementary benefits "a ridiculous anomaly". The previous Government even recognised that the case for waiting days was, to put it at the least, no longer as strong as it was originally. The previous Government produced half-hearted proposals to make the three waiting days absolute and to do what we are doing in Clause 7, and then withdrew vigorously under the counter-attack of their Left wing, abetted, I must admit, by the then Opposition.

Mr. Orme

May we have the record straight on that?

Sir K. Joseph

No, I shall not give way again.

Mr. Orme

Get the record straight.

Sir K. Joseph

Have I mis-stated it?

Mr. Orme

If the right hon. Gentleman wants to know the situation inside the Parliamentary Labour Party, I can tell him. My right hon. Friend who then represented Llanelly and who introduced the Act in 1948 was one of the main opponents of the then Labour Government's proposal. The overwhelming majority in the Parliamentary Labour Party urged the Cabinet to drop it, and they dropped it. The right hon. Gentleman said that he was under pressure from some of his hon. Friends who questioned what we intended to do.

Sir K. Joseph

Yes, but the then Labour Cabinet decided to introduce the change in waiting days and withdrew. That is the only point that I am making at the moment.

The only ingredient where we are doing as Labour intended is the increase in the deduction for industrial misconduct. We have gone further. But the Labour Government embarked on legislation to raise the deduction. I have therefore now to ask the Opposition to be sure to explain their present attitude. I understand that there is to be a vote tonight. I hope that the Opposition will make it plain whether they are against the whole Bill or against only parts of it.

There are two main items: the change in supplementary benefit arrangements in connection with trade disputes, and the making of waiting days absolute. I must ask the Opposition to be sure to make their position abundantly clear on each.

The Bill eliminates some expenditure, once justified but now no longer needed, and brings some urgently necessary changes into the application of supplementary benefits to the households of those involved in strikes. By the passage of the Bill, we shall be enabled to serve what have become higher priorities in the National Insurance Fund. I commend it to the House.

5.6 p.m.

Mrs. Shirley Williams (Hitchin)

I begin by saying that I rather wish the Secretary of State would shove his crib across the Table. This Bill outdoes in obscurity the average level of Bills from the Department of Health and Social Security, and we shall need to explore it in more detail in Committee.

The right hon. Gentleman had quite a good time talking about the Left wing of the Labour Party. I hope to be able to show that he has given way to the Right wing of his party. There are certain features of the Bill which are very disturbing and very inequitable and which, we hope, with the assistance of Amendments, the right hon. Gentleman will decide to return to the centre of his party and put right. I will explain carefully what these are and why the Opposition find them utterly unacceptable. They are, incidentally, the two most objectionable features of the Bill. They are both matters over which the right hon. Gentleman moved with considerable rapidity but into which I shall spend a good deal of time delving.

Before doing so, perhaps I might say a little more about the background to the Bill. The right hon. Gentleman pointed out quite fairly that there has been considerable exaggeration of the scale of the problems with which we are dealing, and the hon. Member for South Angus (Mr. Bruce-Gardyne) has done his best to bring it about. However, as the right hon. Gentleman pointed out, payments in the past to strikers have been relatively low. In the whole of 1970, the sum of £2,191 went from the Supplementary Benefits Commission to men who were on strike. We wish that the Government showed the same concern for those who evade income tax.

It has been proved in the past that very few strikers have claimed for their own dependants, as the right hon. Gentleman pointed out. The figure between 1967 and 1969 was less than 2.5 per cent. of all strikers. Of those qualified by reason of trade disputes, less than 2.5 per cent. applied for any form of supplementary benefit. The reason for this is that the great bulk of strikes do not last even a fortnight. Over 90 per cent. last less than this time, and, consequently, in normal conditions there is no heavy call upon the Supplementary Benefits Commission.

I am bound to point out that the escalation in claims on the Supplementary Benefits Commission to which the right hon. Gentleman pointed is not totally unrelated to his Government's industrial relations and industrial negotiations policy. It was the strong distinction made by the right hon. Gentleman's Government between the public sector and the private sector which exacerbated Post Office workers to the point where they came out on strike for weeks on end and were applying for supplementary benefit to support their families.

I shall not say—I shall come to this rather later in my speech—that there may not be some abuse against which we must protect the taxpayer. I shall be precise about what I think that abuse might be. The main cause for the soaring figures of demand on the Supplementary Benefits Commission are to be found not among the strikers, but in the policy of the Government towards industrial relations.

Mr. Bruce-Gardyne

The hon. Lady said just now that the main cause for the soaring burden placed on the Supplementary Benefits Commission was the Government's policy on industrial relations. The figures escalated from 1966 onwards and the progression has been in more or less a straight line taking off from a flat level before that.

Mrs. Williams

I cannot agree with the hon. Gentleman, because the Under-Secretary, in reply to a Question, pointed out that the annual rate of demand in the first quarter of this year, into which the Post Office strike completely falls, was 18 times the annual rate in 1970. There was an earlier increase, though it was bumpy. No other period shows anything like that rate of increase. I shall give the figures.

Sir K. Joseph rose—

Mrs. Williams

When I have finished I shall give way to the right hon. Gentleman.

In 1969 the amount paid to strikers' dependants was £774,000. In 1970 it was £1,445.000, which is double. In the first quarter of 1971, up to 23rd March, according to the Under-Secretary the figure was £3.25 million. That is for three months, not for six months. That shows an increased rate 18 times what it was in 1970. I think that I am entitled to describe the figures as a rapid escalation, as I did.

Sir K. Joseph

I have the figures here. I want to support my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne). In the last three years of the Labour Government the costs trebled, then doubled, and doubled again. There was a multiplication by 12 times in the last three years of the Labour Government.

Mrs. Williams

The right hon. Gentleman has given figures of doubling and trebling. I have given figures going up 18 times over the figure for 1970, which he has not challenegd. I think that that rates as an escalation—that is the only phrase I used—if language means anything.

I move on now to Clause 1(2), with which the right hon. Gentleman dealt in some detail. That refers to the 40 per cent. reduction in the adult scale. The right hon. Gentleman made considerable play, as he had every right to do, with the fact that the Labour Government proposed a reduction not quite as large as this but larger than the existing reduction, which is just under 15 per cent. I think that the Labour Government's proposal was too large a deduction. Therefore, by definition, I think that the right hon. Gentleman's deduction is much too large, and I shall explain why.

I say that, first, because supplementary benefit is a subsistence level benefit. It is based upon a family's needs. It does not, by definition, under the Ministry of Social Security Act, 1966, allow for nonessentials or luxuries; it is an essential level of subsistence. Therefore, by definition, any deduction reduces a family below what society believes to be a reasonable subsistence level. Let us make no bones about it. In effect, it means that the man who has had 40 per cent. deducted will be obliged either to live off his wife and children or to leave his wife and children so that he does not have to depend on them. We must make it clear that this is the effect of the deduction.

The right hon. Gentleman knows that there is a standard procedure which operates in the payment of supplementary benefit to people who are not making any effort to find employment. For example, this covers single fit men who can have the allowance withdrawn after four weeks. It also covers married men who can have the allowance withdrawn after a slightly longer time. The right hon. Gentleman has set up a Committee to deal with abuse which presumably will consider whether the standard procedure is in any way being wrongly used. But the standard procedure is, and always has been, regarded as a reasonable balance between good sense and humanity in the conduct of the treatment of supplementary benefit. The right hon. Gentleman's proposals override that procedure to the extent of 40 per cent. by making the immediate assumption that people who are unemployed because of industrial misconduct or who voluntarily leave their employment are, as it were, guilty men.

Let us look at the concept of voluntary unemployment and industrial misconduct. If a man is advised by his doctor to cease heavy lifting in a job which involves heavy lifting work he will find himself, if he leaves that job, voluntarily unemployed. If a man has domestic difficulties arising from his wife's illness and he cannot deal with these in a job which involves a great deal of travelling—for example, jobs in building or in certain kinds of public contracting often involve travelling—and he leaves, again he is described as voluntarily unemployed.

I advance these two cases because the right hon. Gentleman and his hon. Friends must be aware that this phrase covers everyone from the shirker who does not wish to hold a job to the man who acts responsibly in a domestic situation which involves him leaving his employment. Later I shall plead for a distinction to be made between these two cases.

A wide range of cases is covered by the phrase "industrial misconduct". For instance, I am advised that if a man engaged in lorry driving loses his licence as a result of an accident, not during working hours, he can be dismissed for industrial misconduct because he is no longer considered suitable to hold that job.

If the appeals procedure worked extremely quickly or if the right hon. Gentleman was prepared to amend the Bill so that wherever there was a right of appeal he would reinstate full benefit and not withdraw it unless and until the appeal was dismissed, one might consider that he was at least making an attempt to establish justice. But with our present extremely crude mechanisms for determining both voluntary unemployment and industrial misconduct, the Bill could be savagely unjust in certain cases.

There was to be a much wider dismissals procedure covering industrial misconduct in the Bill introduced by my right lion. Friend the Member for Blackburn (Mrs. Castle) than that involved in the Bill put forward by the right hon. Gentleman's colleague the Secretary of State for Employment, and that might have gone some way to mitigate the effects of these proposals.

I want to ask two questions on Clause 1. I should tell the right hon. Gtntleman that we shall certainly seek to amend the Bill in this way in Committee. First, will the right hon. Gentleman agree to pay full benefit without any reduction in supplementary benefit while the appeal period exists, subject to repayment if the appeal is dismissed since he has the repayment mechanism? Alternatively, will he at least suspend the reduction, if an appeal has been made, until the appeal has been decided? The parallel is that the court will often suspend a fine when an appeal is pending, so there is a precedent for this proposal.

I turn now to Clause 1(4) dealing with the drop in disregards. The right hon. Gentleman said that this provision nullified Section 10 of the Ministry of Social Security Act, 1966. I do not see it that way. The purpose of the 1966 Act was to disqualify men who were on strike, or those disqualified as a result of a trade dispute, from claiming supplementary benefit on their own behalf. But that Act did not intend—I am sure that it was not the wish of my right hon. and hon. Friends to intend—that such men could not legitimately seek to maintain themselves from other sources of income.

What the right hon. Gentleman is doing is not just withdrawing supplementary benefit from the striker—which was what my Government did—but refusing him the resources which he has available legitimately to survive during a period of industrial dispute. These resources are strike pay and P.A.Y.E. refund. The right hon. Gentleman is doubly penalising him in a way which we find unacceptable, because the £4.35 disregard, which is the exact equivalent of a single man's entitlement, or a married man's entitlement, leaving out his family, for his own personal needs, is the size of the disregard that was accepted by the Labour Government to be set against other sources of income. The right hon. Gentleman is saying to the breadwinner that he is disqualified from receiving supplementary benefit, and that he is also going to disqualify him from finding that money in any other way. In short, the right hon. Gentleman is saying that that man will have to live off his wife and kids, whether he likes it or not.

The first objection that we have to this drop in disregard to £1, which is spuriously described by the right hon. Gentleman as equivalent to that of other supplementary benefits, is that it is unlike every other case of supplementary benefit, because we start by disqualifying the man anyway, and this penalises only the married man. By definition, it does not penalise the single man. It singles out the man with family responsibilities to penalise.

Second, it has an extraordinary feature, which is that it specifically penalises only official strikers. This is an extraordinary feature of the Bill. During the debates on the Industrial Relations Bill the Secretary of State for Employment and Productivity repeatedly said that the Bill was not intended to prevent what he called justifiable strikes, but the Secretary of State for Social Services is now stepping in specifically to penalise the official strike, because it is only the official strike during which strike pay is paid. Curiously, therefore, the Government are going to take into account strike pay, which is paid only during official strikes—and presumably, therefore, in the Government's view, the most often justified strikes—but the unofficial strike will not be considered, for the simple reason that the unofficial striker has no strike pay to have taken into account.

The situation is extraordinary. There is to be direct discrimination against the official striker receiving official strike pay, because his supplementary benefit will be reduced to the extent of the strike pay if it is up to £4.35 a week. If I have got this wrong, I shall willingly give way to the Minister, but I do not think that I have, because the right hon. Gentleman said that strike pay would be taken into account, and everybody in the House knows that strike pay is paid only to official strikers.

My third point concerns the P.A.Y.E. refund, and this, understandably, the right hon. Gentleman barely mentioned. I do not blame him, because it is a curious piece of law that he is proposing. The P.A.Y.E. refund arises from the overpayment of tax in earlier periods. A person gets a refund only if the cumulative allowance exceeds the cumulative payment of tax up to that time. We are talking about a refund which arises from earnings before any trade dispute starts. The taxpayer has a legally enforceable entitlement to any tax that he has overpaid, but this legal entitlement will now be used by the Government to reduce supplementary benefit entitlement, though only in the case of people paying P.A.Y.E.

P.A.Y.E. is a convenience for the Revenue. It is not specifically for the convenience of the taxpayer. What is now to happen is that the refund—the size of which is wholly arbitrary according to the stage in the tax year that has been reached—will be used by the Government to reduce the entitlement of a man to supplementary benefit, and it is not surprising that even The Times said: Tax refunds are made beause tax has been overpaid. There can be no interference with that entitlement. But the Government apparently feel able to interfere with that entitlement in the way that I have outlined.

Mr. Bruce-Gardyne

The Government are not interfering in any way at all with a person's entitlement to refund of tax. The disallowance of P.A.Y.E. does not arise in respect of people who are not receiving tax refunds, for the simple reason that they are not receiving tax refunds.

Mrs. Williams

The hon. Gentleman's argument will not do, because the effect of what the Government are doing will be to single out one class of taxpayer. If a self-employed man, who pays his tax annually, receives supplementary benefit during the course of the year, the refund at the end of the year will not be taken into account for the purpose of reducing his supplementary benefit. In other words, the purpose of the Bill is to single out one group of taxpayers whose legal entitlement is the same as everybody else's, and this is to happen only because it is more convenient for the Revenue that P.A.Y.E. should be paid on the weekly wage. This provision cannot affect the self-employed man, who is an annual wage earner, and it is, therefore, socially intensely regressive.

Mr. Robert Redmond (Bolton, West)

Is the hon. Lady suggesting that a self-employed person might go on strike? If she is, I must tell her that I have never heard anything quite so crazy in my life.

Mrs. Williams

The hon. Gentleman is wrong. This has nothing to do with whether a person goes on strike. We are talking about payments to dependants, not to strikers. What we are saying is that a similar payment to the dependants of a self-employed man under the supplementary benefits scheme is not recoverable from tax refunds, whereas it is if a man is paying P.A.Y.E.

I have another comment to make about the P.A.Y.E. situation. Bizarrely enough, if a strike or trade dispute takes place on 6th April there will be no re- fund to be taken into account, and the same will be true during most of April. It may be that as a result of the Bill T. S. Eliot's remark that April is the cruellest month will come true, because it will be the one month in which people can strike without fear of the Government's seizing their tax refund as a way of avoiding their obligations under the supplementary benefits scheme—[Interruption.]—I think that hon. Gentlemen opposite should give a moment's serious thought to the special singling-out of one group of taxpayers from all others, and not find it a wholly frivolous kind of argument.

Hon. Gentlemen opposite may not be aware that people who are involved in trade disputes are being put into what one can only describe as double jeopardy from the point of view of tax because, when a man returns to work after a trade dispute, it is normal for additional overtime to be worked. Quite rightly, he has to pay tax on that overtime, but hon. Gentlemen opposite ought to realise that he will pay more tax on the overtime than he would otherwise do, because of the earlier tax refund. He will be taxed on the basis of having benefited from tax refunds which will have been used to reduce his supplementary benefit entitlement. There is no way around it, and what the Government are doing is using his tax twice over to reduce his earnings.

I now come to Clause 2, which the right hon. Gentleman mentioned specifically in the context of what the Labour Government had done. It may be that here I shall, to some extent, part company with some of my hon. Friends on the back benches, because I think that the Labour Government were right to extend the disqualification of the striker himself to the first 15 days, but what the Government are trying to do is very much more far-reaching. They are proposing that supplementary benefit paid to the dependants of strikers shall also be reduced to the extent of the advance made in those first 15 days. I part company with them again on that point because although it seems legitimate enough to disqualify the man himself from receiving supplementary benefit when he returns to work. I find it totally contrary to every principle of supplementary benefit schemes that his wife and children should also be penalised.

On the question of penalising a man's wife and children, let us be clear what we are talking about. We are not talking about an advance which may be made by the employer; we are talking about an offer of an advance which may not pass to the man or his wife and children at all. My first question is whether there was any discussion with the employers, because some do make advances—and I agree that that is the right way to proceed—but others neither make nor offer them. Very often it is the employers in the lowest-paid trades who make no offer.

Next, I want to consider the recovery procedure—the second main item in the Bill that I find utterly unacceptable, and one of the main reasons why I must ask my hon. Friends to vote against the Bill. The Secretary of State did not say very much about that, either. I want to explain what will happen. Under the Bill, a man who returns to work after a trade dispute of any length will have a protected wage. That protected wage, which cannot be deducted, is the supplementary benefit level plus £2, minus family allowances. Therefore, he will not benefit proportionately according to the size of his family.

After that protected wage has been allowed for—supplementary benefit, plus £2—the rest of his wages, up to one-eighth or, if his employer alone decides that it is right, up to one-quarter, can be taken to repay the supplementary benefit paid in the first 15 days. This places a considerable extra burden upon employers. If I were an employer I would not wish to undertake it. But above all, it totally misunderstands the circumstances of the families about whom we are talking—the families of workers who have been engaged in a dispute.

As my hon. Friend the Member for Salford West (Mr. Orme) pointed out, in many cases a man who was not himself directly involved in the dispute has been living off his family for the period of the dispute because he has not had any entitlement. He has used up his tax refund, because the Government will take that into account. He has had no benefit from strike pay, because the Government will take that into account. He and his family are almost bound to run into debt, with electricity bills, hire-purchase commitments, gas bills and rent arrears. When he goes back to work he tries to get overtime pay in order to get rid of his debts, but the Government seize the money that he makes from overtime to repay the supplementary benefit that he has got for his family during the first two weeks after returning to work.

I can think of no scheme more calculated to drive these families into debt and rent arrears—a situation from which it will be almost impossible for them to recover for weeks upon end. I cannot believe that that is what the Secretary of State intended, even if I am not sure that we can let off the hook some of his hon. Friends.

I now turn to the question of those who are disqualified. I am not sure how many hon. Members opposite appreciate the effect of the disqualification provision; if they did, I am sure that they would not have cheered the Bill to the extent they have. On 29th March the Secretary of State said that this reduction of supplementary benefit rate would affect strikers and others disqualified because of trade disputes. The Economist, hardly a Socialist newspaper, pointed out on 3rd February of this year that This will be rough on those affected by, rather than active in, any particular strike, since the definition of those involved in a trade dispute, laid down in the 1966 Social Security Act is, perhaps necessarily somewhat wide-ranging. The Ministry of Social Security, in evidence to the Donovan Commission, said that: The present law was based on the assumption that this special relationship, or community of interest, between a group of workers identified as a grade or class, is of reality of sufficient importance to justify treating them all alike, in the matter of entitlement to unemployment benefit, when work is lost as a result of a trade dispute. Whether this assumption is valid in modern industrial conditions may be open to doubt, and certainly there is evidence that its validity is not generally recognised or accepted by those who are adversely affected by it. The Donovan Commission said: This seems to us not so much the recognition of an interest as the invention of it.…Administrative convenience is not much of a commendation for a provision which is also capable of considerable injustice. The Government expressed sympathy for the recommendation on grade and class. The right hon. Gentleman has said that no change of that kind will be made in the Bill. Let us be clear; the Bill will penalise, in terms of entitlement to supplementary benefit, not just a man's wife and family; not just an unofficial striker but an official striker; not just an official striker but people of the same grade or class as an official striker; not just people of the same grade or class as the official striker, but those who are members of a union financing a strike in the same place of employment. If the Government wish to claim justice for the Bill they must act in such a way as to exclude those wholly innocent individuals from a swingeing penalty.

Mr. John Page (Harrow, West)

Will the hon. Lady read to the House the paragraphs in the conclusion of the evidence of the Ministry of Social Security to the Donovan Commission which support the retention of the existing grades?

Mrs. Williams

The Minister of Social Security certainly eventually came out in favour of grade and class, but after considering the evidence—and some important evidence was given by the Department of Employment and Productivity which I have not quoted—it came to the conclusion that there was no justification for retaining the financing provision, or not altering the grade and class provisions.

I come finally to the question of the three-day waiting time. The right hon. Gentleman is quite right in what he said about the proposal originally put forward by my right hon. Friend the then Minister for Pensions, although it is fair to say that she put them forward in very neutral terms. She said: Given all the considerations of public expenditure involved, we think that it will be sensible to look very fully at this aspect of our structure of short-term benefits and, therefore, at the particular provision in this Clause."—[OFFICIAL REPORT, 2nd April, 1968; Vol. 762, c. 183.] She made it clear that she was prepared to withdraw the Clause in Committee, and she later did so.

This Government, with their rather marked reversal on the RB211 and, I hope, their reversal on proportional prescription charges, had better not pursue the question of a change of mind too far, because any reasonably intelligent Government change their mind in the light of argument.

Mr. Orme

Let us have the record right. This proposal was first put forward by the Chancellor of the Exchequer in his Budget. It was a Treasury proposal. That is where it originated. That is what caused so much concern among my hon. Friends.

Mrs. Williams

I thank my hon. Friend for that intervention. I was making the point that when it was introduced it was made clear by the then Minister that it was subject to reconsideration later.

There are powerful arguments for not reintroducing that cut now. The first point was made by the right hon. Gentleman himself, namely, the extreme inequality between those workers who are covered by sick pay schemes and those who are not. Even on his figures only 60 per cent. are covered by sick pay schemes. The lower-paid workers are most affected by the withdrawal of the three-day waiting time whereas the better paid are usually members of sick pay schemes.

Second, the right hon. Gentleman referred at length to changes in circumstances over the past 20 years, but he did not refer to one change of circumstance which runs in exactly the opposite direction—the fact that we now have the highest unemployment for 30 years, much of which is relatively long term.

Finally, in the "Alice in Wonderland" of politics on this Bill, I am bound to ask the question which was asked by the noble Member for Hertford (Lord Balniel), the Secretary of State's distinguished predecessor as Shadow Secretary of State: What consultations were there with employers and the unions before introducing the change? I will ask all these questions of the right hon. Gentleman. What statistics are available to show the extent to which the loss of benefit will be made up by the employer? I hope that as many employers as possible will make good the cut, but it is being introduced"— it still is— in a thoroughly unfavourable climate and without any warning."—[OFFICIAL REPORT, 2nd April, 1968; Vol. 762, c. 204.] I underline the words of the noble Lord and ask those questions of the right hon. Gentleman.

I am sorry that the right hon. Gentleman has removed the local social security committees without considering the functions which they might serve. He may be right to do so, but the House would have liked to see a greater effort to discover whether these committees could be used for more effective safeguarding of claims and for better participation.

The most marked feature of the Bill, and the reason that we have to vote against it, is partly the two utterly unacceptable new principles which it embodies—the claiming of P.A.Y.E. refunds in reducing supplementary benefit, and the procedure for recovery against payments made for wives and children. But above all, it is marked by an indiscriminate desire to penalise those who are involved in strikes.

It is not surprising that The Guardian said on 30th March: Some Conservatives have been complaining that strikers' families are shirkers who should not be subsidised out of public funds. People who say this are declaring, though not in so many words, that they will always be on the employer's side in any conceivable strike, whatever the circumstances. They ignore or would like to abolish the purpose of the 1966 Act, which is to safeguard the whole community against the worst degrees of poverty, however the poverty is caused. Because I believe that that leader is absolutely right, and because I believe that this Bill is marked by a degree of discrimination which cannot be justified, I shall ask my right hon. and hon. Friends to vote against it.

5.43 p.m.

Mr. J. Bruce-Gardyne (South Angus)

It is a privilege to follow the hon. Member for Hitchen (Mrs. Shirley Williams) for whom, if it is not improper of me to say so, I have always had considerable respect and admiration. However, this afternoon she was in a spot of trouble. She referred to "Alice in Wonderland". There were overtones of "Shirley in Wonderland" today. In particular, I was fascinated—almost mesmerised—by her argument about the iniquity of calculating P.A.Y.E. refunds as a disregard for purposes of supplementary benefit. It was in "Alice in Wonderland" that there was reference to the race in which everyone was to win and everyone was to have a prize.

Her complaint seemed to be that we were discriminating against those who had not so far suffered a disregard in respect of their P.A.Y.E. refunds, as against those who had not received such refunds. In other words, by withdrawing a particular bonus to one group of people, one was penalising them against those who never received the bonuses in the first place. This was a bizarre piece of logic.

Mr. O'Malley

I think that the hon. Gentleman knows that, if anyone but a striker who is receiving supplementary benefit get a tax refund through P.A.Y.E., that tax refund is treated as capital, not as current income. Would he justify the Government's decision to treat the tax refunds of strikers differently from those received by any other taxpayer who is also receiving supplementary benefit?

Mr. Bruce-Gardyne

Surely the important point is that the striker, unlike other categories in this position, has taken a voluntary decision. What has happened is a reflection of that voluntary decision.

I agree with some of what the hon. Lady said about Clause 1. We shall have to look carefully at this, because there are problems. I accept something of what she said about so-called voluntary dismissal and dismissal for misconduct. I am thinking particularly of the action of her own Government in sacking a lot of teachers in Scotland—not for misconduct, but simply because they resented having to change the whole basis of their employment overnight. These people, who had indulged in no misconduct, suffered the six weeks disregard.

I very much welcome the broad proposals of the Bill. All of us who fought the last election must be aware that there is considerable public disquiet at what is regarded as an abuse of the social security system. This abuse is considered to take two forms. One is that claims and payments are made on the basis of misinformation, where there is clear breach of existing legislation. That does not come within the scope of the Bill.

But the other aspect, I believe, has led to a growing feeling that some of the legal entitlement to claims by individuals, particularly on the supplementary benefits system—

Mr. John Mendelson rose—

Mr. Bruce Gardyne

The hon. Gentleman had better make his own speech.

Mr. Mendelson rose—

Mr. Bruce-Gardyne

There is also anxiety about the occasions when a perfectly legal claim arises in such manner as the Bill is designed to deal with—

Mr. Mendelson

On this point—

Mr. Bruce-Gardyne

I am sorry, but the hon. Member has intervened and intervened. He must make his own speech—

Mr. Mendelson rose—

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Order. I am sure that the hon. Gentleman will obey the spirit of the House. As the hon. Member for South Angus (Mr. Bruce-Gardyne) obviously does not mean to give way, he should allow him to get on.

Mr. Mendelson

On a point of order. Is it not the custom of the House that, when an hon. Member says that every hon. Member in the last election had a certain experience, he should give way to one of those Members?

Mr. Deputy Speaker

That is still entirely within the discretion of the Member who has the floor, and if he does not give way, in the interests of free speech he should be allowed to continue.

Mr. Bruce-Gardyne

I am grateful, Sir. There was also some hypocrisy—although I appreciated her difficulty—in what the hon. Lady said about Clause 7. One sometimes has the feeling that the Front Bench opposite have gargantuan appetites for their own words. After the fairly considerable meal that hon. Members on the Front Bench opposite had to make of their words in pursuit of "In Place of Strife" in the industrial relations exercise, one might imagine that they would have indicated rather more indigestion in consuming what they had to say in support of their own proposals in 1968.

Mrs. Shirley Williams

I am grateful to the hon. Gentleman for giving way because I resent the phrase that he used. I tried to make it absolutely clear where I shared the views of the previous Government and where I differed from their views and where it was felt that the previous Government had taken the matter far enough. I hope the hon. Gentleman will withdraw the charge of hypocrisy.

Mr. Bruce-Gardyne

I withdraw at once the charge of hypocrisy against the hon. Lady. I am afraid that I was using a collective phrase for the entire Opposition Front Bench. I agree with her that she made her own position very clear.

I want to concentrate my remarks largely on Clause 1(3) and (4) and Clause 2, which deal with the position of supplementary benefits to strikers and their dependants, as this is a change in the law which I welcome all the more because I have to some extent campaigned for this over several years. I want, first of all, to deal with the question of the vertiginous progress of these payments over the years and in particular with the point that the hon. Lady made, on which I interrupted her, that the take off in the level of supplementary benefit payments to strikers occurred as a reflection of the present Government's industrial relations policies.

I do not wish to burden the House with many figures, but one or two are important. Between 1951 and 1966 there were only four years—1955, 1957, 1965 and 1966—in which the total of supplementary benefits to strikers and their dependants during strikes and after the termination of the strikes exceeded £100,000. In 1967 the total figure was £489,000; in 1968 £414,000; in 1969 £1.4 million and in 1970 £2.3 million. As my right hon. Friend has pointed out, in the first four months of this year the figure amounted to £3¾ million—a figure to which I should like to return in a moment.

The interesting thing is that the total payments during the 16-year period from 1951 to 1966 were exceeded in 1970, including the period before the present Government came into power, and in 1969. I believe that the figures make it quite clear that the real take-off point was not after the return of the present Government but was in 1966. I will explain in a moment why this happened. But before I come to that, I should like to query the figure of 3¾ million which my right hon. Friend gave for the first four months of this year. He also said that the figure for tide-over payments after the end of strikes for the first quarter of the year was £435,000. I am not sure that I can entirely reconcile that with the figure of £¾ million for the first four months of the year, if that is the total payment. In other words, if the £ ¾ million is the figure for payments, including payments after the end of strikes, I am not clear that I can reconcile that figure with the figures that we have been given for the level of payments up to 23rd March. That is a point of detail which it might be worth elucidating. Whatever the figures may be, the level of supplementary benefit payments in strikes during the first four months of this year were running at the rate of upwards of £11 million a year.

Sir K. Joseph

I think my hon. Friend is quite right. I think the total figure should be over £4 million. I should like to make sure of that and I will ask my hon. Friend the Under-Secretary of State to give the House the right figure later on.

Mr. Bruce-Gardyne

I am grateful to my right hon. Friend.

I was going to ask how this vertiginous escalation of payments had come about. I used to be told when the party opposite were in power that it was due to two reasons: first, the higher scale of rates of supplementary benefit, and that is certainly a fact which I do not dispute. The second reason was the tendency for strikes to last longer, which I am bound to say has always seemed to me to be like saying that the increase in the consumption of alcahol is attributable to the increase in alcoholism, rather than the other way round.

But apart from these two factors—and they certainly go some way to explaining the vertiginous increase in the level of benefits—there is a third factor, and it is this factor which has largely gone unnoticed. That is the change which was introduced—

Mr. Heffer

On this question of the longer period of strikes, is the hon. Gentleman aware that throughout the discussions on the Industrial Relations Bill his hon. Friends consistently argued that what they really wanted to deal with were the short unofficial disputes? They recognised that there might well be longer strikes as a result of the Bill, that there would be bigger strikes rather like those in the United States of America. Is the hon. Gentleman now saying, having put the position as he has, that we should ensure that the workers do not receive benefits?

Mr. Bruce-Gardyne

No, what I am saying is that instead of attributing an increase in the scale of supplementary benefits to the lengthening of strikes, one might attribute a lengthening of strikes to an increase in the scale of supplementary benefits. That is all I am saying.

Mr. Heffer

Nonsense.

Mr. Bruce-Gardyne

The third factor to which I want to turn, because it has been largely neglected, is the change that was introduced in the Ministry of Social Security Act, 1966. In the National Assistance Act, 1948, Section 5 reads: The question whether a person is in need of assistance, and the nature and extent of any assistance to be given to him, shall be decided by the Board. That is the National Assistance Board. The Ministry of Social Security Act, 1966, had an entirely different phrase. It said: Every person in Great Britain of or over the age of sixteen whose resources are insufficient to meet his requirements shall be entitled, subject to the provisions of this Act, to benefit as follows … I think this change was significant.

I notice also that in the Annual Report for 1966 of the Ministry of Social Security it is said: The new scheme … also provides for the first time a specific entitlement to benefit for those people who satisfy the conditions laid down in the Act and its regulations. I believe that a good deal, perhaps not all, of the escalation which has occurred is attributable to the change introduced in the 1966 Act.

I accept that hon. Members opposite will say that this change was entirely justified and desirable, but we should look rather more carefully at some of its implications. We notice, for instance, that in recent years the cause of strikes has appeared to change. In 1965, only 27 per cent. of industrial disputes were reckoned to be attributable to wage claims. The figure in 1966 was 22 per cent.; in 1967, 47 per cent.; in 198, 52 per cent.; in 1969, 57 per cent., and in 1970, 65 per cent. In other words, we have seen that a higher and higher proportion of industrial disputes has arisen over wage claims, and it is possibly fair to argue that the proportion of disputes relating to wage claims in which supplementary benefit has been paid has been higher still, in so far as those disputes may have been liable to continue for a longer period, and therefore likely to attract supplementary benefit.

That puts some doubt on Mr. Feather's statement the other day that under the provisions of the Bill the striker will be in a worse position than the individual who is sent to prison: because, apart from anything else, it can hardly be argued by any hon. Member opposite that the individual who is sent to prison hopes thereby to enhance the size of his wage packet.

We may also consider the occasions on which a strike may not have occurred, and an employer may have come to terms on a highly inflationary settlement precisely because of his awareness that through the operation, among other things, of the supplementary benefit system, a strike will be prolonged to a point at which intolerable damage will be done to the firm, and he therefore comes to the conclusion that he will be better advised to come to terms on a highly inflationary basis however damaging that may be in the long term.

My right hon. Friend proposes to deal with this situation to the extent of reducing the £4.35 discretionary payment to £1 a week, and to make the tide-over payment after the end of a strike subject to repayment. I must confess that I am a little doubtful about the suggestion of reclaiming the tide-over payments because I feel that this may be open to the same sort of objections which led the Ministry of Social Security, as I think, quite rightly, to reject the idea of making all supplementary benefits paid during a strike equally subject to repayment. There are complications which may need further scrutiny.

I am not convinced that the proposal in the Bill as it stands necessarily fully meets the position. My view has always been, perhaps, a rather crude and simplistic view—[HON. MEMBERS: "Hear, hear."] I expected to get some support from hon. Members opposite for that statement. My view is that the oblige- tion should lie squarely on the shoulders of the union that called the strike, or which allows one of its branches to call a strike, to finance that strike. I tabled an Amendment to the Industrial Relations Bill to make it a condition for registration of a union that it should maintain funds on such a scale that it could provide adequate financial support for its members as and when it called them out on strike. For reasons well known to the House, it was not possible to debate that Amendment, but that seems to me to be where logic should lead us.

Furthermore, I have always believed that the entitlement of the families of those involved in industrial disputes to receive supplementary benefit from the Supplementary Benefits Commission should be terminated. I have been accused by hon. Members opposite of wishing to go back to beyond the Poor Law. I make no suggestion of any such thing. I only suggest going back to the 1948 Act, an admirable Socialist Act introduced by the Attlee Government, and laying down that as the payment of national assistance used to be in the discretion of the National Assistance Board, so the payment of supplementary benefit in these cases, and these cases alone, should be subject to the clear discretion of the Supplementary Benefits Commission. I shall seek to table Amendments to that effect in due course.

My right hon. Friend the Prime Minister said last week, and it is indisputable, that one man's strike call is another man's redundancy notice. The hon. Lady the Member for Hitchin referred to the statement in The Guardian to the effect that this Bill proved that the Conservative Party was inalienably on the side of the employers in any industrial dispute. I do not think that it does any such thing. We must all recognise the truth of what my right hon. Friend said last week.

There is in my constituency a factory where week after week additional redundancies have been declared because that firm happens to be an important supplier of capital goods to the British motor car industry, and it is suffering from the fact that the British motor car industry has had drastically to reduce its capital investment because, thanks to industrial unrest last year, there was no profit from which to make the provision for that investment possible. If there could be a clearer indication than that of the way in which one man's strike call is another man's redundancy notice I have yet to see it.

I believe that we are getting to an intolerable situation when my constituents know that they are obliged through the tax system to contribute towards the cost of supplementary benefits in order to facilitate the objectives of a small minority of trade union militants who are engaged in fomenting industrial unrest and bringing about strikes which will in due course have the effect of driving those same constituents of mine out of employment. That is why I believe that this Bill is a splendid move towards the elimination of some of these abuses, and I hope that we can improve it in Committee.

6.10 p.m.

Mr. Reg Prentice (East Ham, North)

This mean little Bill is an example of the difference between the Conservatism of the period before 1964 and the Conservatism of 1971. I say that with some nostalgia because between 1957 and 1964 I took part in most of the national insurance debates. The Minister for most of that period was the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). My hon. Friends and I used to say some pretty rough things about him, but now I feel in the mood to demand his recall.

In those days our criticism of him and of that Government was that they moved far too slowly in improving social insurance provisions. We demanded higher rates of benefit and changes in the rules in favour of those in need. They tended to resist our demands, but at least, on the whole, they were not moving backwards. This Bill is an example of many others in which the Government are trying to take the social system backwards.

There are three main motives for the Bill. The first is to exploit for party reasons what the hon. Member for South Angus (Mr. Bruce-Gardyne) has just described as public disquiet about abuse of benefits. The myth about widespread abuse is perpetrated by some of the most reactionary newspapers in the country and is used by the Tories for party reasons. Apart from the damage done in general, awful damage is done to indi- vidual people in need, because these myths help to create among some people —I have met them in my advice bureau, and other hon. Members will have the same experience—the sense that there is something shameful about applying for benefits to which they are entitled.

Of course there are occasional abuses. Anyone who visits a local office of the Department of Health and Social Security, as I did in my constituency about a month ago, is impressed by the efficiency by which the officers of the Department, with the experience of many years, are able to recognise cases of abuse and to deal with them. Occasionally, someone gets through the net. But we all ought to be able to unite on the sentiment that we would rather that that happened occasionally than see other people refused the benefits to which they are entitled. That is no excuse whatever for reducing the scope of social insurance in the way that, to some extent, the Bill does.

The second reason for the Bill is to make a mean little attempt to hit at the strike situation through the children of strikers or, indeed, children of non-strikers, who will be disqualified from the benefit to which they would otherwise be entitled because of the provisions made in that respect.

The third and main reason for the Bill is to save £21 million a year. For that, the principal Clause is Clause 7, dealing with the waiting days, about which I shall say something shortly. It is no use the Secretary of State saying to the House that this has to be set alongside improvements for the chronic sick and so on. What happened was that this change was announced by the Chancellor of the Exchequer last October as part of his mini-Budget. It was part of a package of savings which enabled him to introduce tax reliefs mainly benefiting better-off people. It has to be faced absolutely squarely that that package of savings was designed for that purpose, and the House is being asked to rob people of three days of benefit, to which they are entitled, to contribute towards the financing of those tax reliefs.

I refer to three specific proposals. First, on the proposals dealing with supplementary benefit, in cases of unemployed people who are placed in the category of having committed misconduct or being voluntarily unemployed, and so on, this has been a disqualification from unemployment benefit dating back, I believe, in almost unaltered form to the original unemployment insurance scheme of 1911, and carried forward to the 1946 Act and ever since.

The Government think that we have to accept that, for the purpose of defining unemployment accurately, some rule has to exist to distinguish people who are unemployed as a result of misconduct or who remain unemployed by refusal of a suitable job from those who are voluntarily unemployed. Even so, the existing rules work too harshly on unemployment benefit. I am not talking about supplementary benefit.

For some years, as a trade union official, I was arguing appeals on these matters. At the time, it seemed that this blanket definition covered far too many circumstances. In some cases it covered the absolute scrounger, but, more often, it covered people who had perfectly sound reasons for not accepting the particular job or leaving the job which they had. It seems that we ought to seek some new definitions. This is a difficult task which has defeated many people who have looked at it. But in any case, we should not extend the disqualification to supplementary benefit. The Labour Government were wrong to move a little way along that road. But they moved along that road not as far as the 40 per cent. disqualification in the Bill. What is more, they modified their original proposals after consultation with the T.U.C. The present Government, true to type, do not discuss these matters with the T.U.C. any more, and therefore are not in a position to receive very often wise and experienced advice on these matters.

On Clause 7, I simply emphasise the points already made from the Front Bench, that surely we ought to regard supplementary benefits as creating a floor below the level of which people are not allowed to exist. We regard a certain standard of living as being the minimum. If people fall below that minimum we should provide the benefits to bring them up to that level. We ought not to introduce this element of guilt or blameworthiness into the argument, because in many other connections the authorities, quite rightly, do not ask how people come to be in a position in which they need to apply for supplementary benefits.

This applies equally to the argument about the payment of supplementary benefits to strikers or others laid off work during an industrial dispute. We ought not to be treating people in a particular way because their need arises from a voluntary decision to strike, and far less if it arises from someone else's decision to strike. The point has been made, by Mr. Victor Feather and others, that in this way we are dealing with the families of strikers on a worse basis than the families of men in prison who have been convicted of a serious crime.

That is a valid point and one which the House ought to consider with great care. Once we start trying to put into the supplementary benefit system this concept of guilt and inquiring into what has led to the family being without means, we are on dangerous ground. Obviously, we are penalising not merely the man himself, whom we may rightly or wrongly consider guilty, but we are penalising his entire family.

It is on that basis that I attack the provisions about industrial disputes. We have here a miserable little echo of the Industrial Relations Bill, attempting to put all strikers in the dock—whatever the protestations of Ministers in another context—and attempting to suggest that all strikes are wrong, all strikers are evil, all managements are good people who have committed no mistake, and that the strikers, if not evil, are at any rate being led astray by evil men and are a flock of sheep for being so led astray. This, again is a myth being exploited by the Tory Party in many different connections.

What worries me is that there seemed to be a hint in something that the Secretary of State said that these provisions might be only the first instalment in a series of provisions to operate against the supplementary benefits of those involved in industrial disputes. The hon. Member for South Angus wanted to go further in this direction. Such demands are frequently made by Conservatives.

Even if it were valid to put such pressure on someone on strike—I do not think that it is—there are three weaknesses. First, such pressure makes no distinction as to the cause of the industrial dispute and whether it is the type of dispute in which the Government themselves feel that people are justified in engaging.

Second, it is not possible to distinguish between the striker and his family. As long as the striker is living with his family, as long as he is paying the rent in one go, and as long as he is feeding from the same table, there is no such thing as depriving the striker of benefit and allowing members of his family their benefit. His family will share with the striker. So the Government are hitting at the striker through his dependants.

The present law disqualifies from unemployment benefit, and therefore to some extent from supplementary benefit, not merely the person on strike but five other categories—those financing the strike, those who have an interest in the outcome of the strike, those belonging to a grade or class of workers any of whom are on strike, and so on. This is fundamentally unfair.

The T.U.C. should have made much more of this issue years ago and should have campaigned for the amendment of the law, but the T.U.C. was quiescent on this issue for a long period. Towards the end of its period in office, the Labour Government were committed to amending this facet of the law. In so far as there is any argument for what the Government are doing in this respect, it could have validity only if it were applied to strikers alone. It ceases to have a validity when it is applied to the other categories of people.

The Government are seeking to bring pressure to bear in the industrial situation, not only through the children of strikers but also through the children of non-strikers whose place of work or residence may be the same. This is a mean weapon. It is a terrible confession by the Government of failure in their attempt sensibly to deal with industrial relations.

The worst part of a Bill is Clause 7. It is certainly the biggest part of the Bill. It will save the greatest amount of money and will affect the largest amount of people. The Secretary of State was totally unconvincing in his reasoning for this Clause.

The essential point is that sickness, unemployment or industrial injury benefit is something to which a claimant is en- titled. It is something for which he has contributed through his national insurance contribution, possibly for a long time and possibly without having made any claim for many years. The claimant is entitled to the benefit as of right if he is genuinely sick, unemployed or injured for a given period of time. All along it has been fundamental to the system that the claimant is entitled to the benefit as of right without a means test. The provision in Clause 7 could be a dangerous precedent for the further erosion of the whole social insurance system.

The Secretary of State said that if the family concerned were very poor they could apply for supplementary benefits. He said that they would have done so in any event and would not have waited for the back payment of the three days. He argued that the position of very poor people would not be affected. We hear this kind of argument so often from the Government about so many of their Measures. The Government bring before the House a measure of redistribution in favour of the rich and say that it does not matter, because they have made various provisions for the very poor: there can be extras—free school meals, the family income supplement scheme, and so on.

The Government totally ignore the position of millions who are living below the average standard of living but who are not in the category of the very poor. They ignore the position of a man earning an average wage or less than an average wage who perhaps has to pay a large sum in rent or mortgage, who has hire-purchase obligations, who has bills coming in, and who in a period of sickness suddenly finds it difficult to make ends meet. Such a person needs the half a week of benefit of which he is now being deprived. He has paid for that half week of benefit by his contributions over the years.

This is just one more example of the thinking which the Goverment have shown on many different things and which we should oppose. The Government must not be allowed to get away with the argument that they can perpetrate an act of social injustice and then mitigate it by labelling a small minority of people as the poor. People still have feelings about that sort of thing. The Government must not be allowed to get away with the defence that by so labelling these people they can justify the whole operation.

Basically, this part of the Bill is taking away half a week's benefit from people who are sick, injured or unemployed, to provide tax reliefs for the rich. It is a mean, squalid little part of the Tory Government's social and economic policy and it should be thrown out.

6.26 p.m.

Mr. Kenneth Clarke (Rushcliffe)

I am one of the many hon. Members on this side who basically approve of an increasingly selective approach in social welfare. Many of us expect that one of the most desirable effects of a period of Conservative administration will be that the resources of the State will be concentrated increasingly on those who are most in need and whose needs are in many respects not met by the present system of social security.

If we are to move towards a more selective system, two things need to be done. The first is the ever-popular exercise, in which we are all glad to take part, of pressing upon the Government the claims of those whose benefits need to be increased. All hon. Members have their own favourites for whom they can press for an increase in benefit.

The other aspect of improving the selectivity of the social security system must be the elimination of the payment of benefits to those who are not in genuine need or not in any special need and the elimination of the payment of benefit to people who come much lower down the list of priorities than the chronic sick, the very poor, the aged and all the others whose claims we can urge.

The second approach is important, because the Bill is essentially one which eliminates the payment of benefits in certain circumstances. It is important to eliminate unjustified benefits because in that way we can release resources which can be devoted to relieving the greater need. The Bill cannot be regarded entirely separately from the much more popular National Insurance Bill which the House will consider next week and which will increase many benefits.

Another important reason for reducing the payment of unjustified benefits, or benefits which are not justified in our present list of priorities, is that public confidence in the social security system will be increased and the willingness of the taxpayer to continue to make heavy contributions towards its cost will be increased.

The right hon. Member for East Ham, North (Mr. Prentice) attributed certain reactions to the influence of newspapers, but in his surgery he must have encountered the feeling amongst members of the public that much of the money which they devote by way of taxation and national insurance contributions to the social security system is not being spent on the right people.

Nothing is more responsible for the present inadequate level of many of our welfare provisions than the unwillingness of the taxpayer readily to pay more to a system which he believes is in some respects deficient in the way in which it pays out money. There are two aspects to this. There is strong public feeling against the scrounger and the person who defrauds the system. The system cannot deal with this because it is expensive and difficult to go about. The second aspect is the feeling that some benefits are going quite lawfully to people who are not defrauding the system because they are entitled to claim the benefits but who are not deserving beneficiaries. This Bill covers a number of areas in which the payment of money is being made to people whom the taxpayer does not regard as worth-while beneficiaries.

It is important to acknowledge this. If we take no steps to reduce payments in areas where entitlement cannot be justified we shall simply increase this frustrated feeling on the part of many people that their money is being wasted and thereby increase their unwillingness to urge the Government to make higher provision where it is needed. This feeling is not inculcated by newspapers; it is a feeling known to any politician of any party who gets in touch with his constituents. It is a feeling that would be urged upon him by ordinary hard-working people with perfectly humanitarian instincts, who would be anxious to have their money devoted to aiding the weak in society and those genuinely in need, but who feel that one of the deficiencies of our welfare system is that payments of money are going in directions which cannot be supported.

Mr. Norman Buchan (Renfrew, West)

The hon. Member will realise that in repeating the views of others in this House he is endorsing them. Will he say which provisions under Clause 7 of this Bill he would regard as undeserving?

Mr. Clarke

I will comment on Clause 7 later. It is the most important Clause in terms of savings in the Bill. It is a Clause dealing with an entitlement to benefit which can no longer be regarded as a high priority and where the saving of £19 million is worth making. As the Bill deals with the elimination of unjustified benefits, I will deal first with the other and more controversial part of the Bill—Clause 1(4) dealing with the payment of supplementary benefit to strikers and the changes that are to be made in the discretion at the moment exercised in disregarding certain elements of strikers' income.

This illustrates the second of the two reasons I have given for eliminating unjustified benefits. There is not a great saving of money to be made here, as has been illustrated. The amounts of money to be saved, although growing with the increase in industrial disputes, are not in themselves a justification for reducing this payment. This change in the manner of calculating the level of benefit to which the families of strikers are entitled is justified in my opinion on the ground that it will stop a nonsense in the system whereby there is special treatment given in some respects to people who cannot be categorised as being among the poorest in society.

The way this discretion is exercised treats rather specially such claimants to supplementary benefits. They are put in a privileged position. The families of strikers cannot be regarded as being entirely on a footing with any other claimant to supplementary benefit. We cannot completely overlook the position whereby the head of the family, who is probably normally in well-paid employment, is voluntarily, in pursuit either of a justified or unjustified grievance, forgoing his income, in many cases simply to raise that income still further. Then there is the disregarding of a sum which happens, by coincidence, to be exactly the sum to which a single man would otherwise be entitled.

There are certain sources of income which at the moment are disregarded and which are quite exceptional to strikers. Strike pay has no analogy whatever in any other category of claimant for supplementary benefit. Strike pay is a source of income which the striker receives from someone who is prepared to support his forgoing income in pursuit of his claim for a higher wage.

Disregarding the first few pounds of strike pay, if it is a man not receiving P.A.Y.E. repayments, is an anomaly. Someone who is not for some reason receiving P.A.Y.E. repayment and is receiving strike pay has £4.35 disregarded. It is extraordinary that he should have this income disregarded in his special case when the other claimants going to the office for benefits will be the desparately needy in society. There is no justification for the special anomaly of disregarding strike pay income the man is actually receiving.

It is a complaint from hon. Members opposite that other people receiving P.A.Y.E. repayments who are also entitled to supplementary benefit can have those repayments disregarded in certain circumstances. I accept that. I have so far heard nothing from hon. Members opposite accepting the other side of the coin, which is that not only are strikers in this special category because they are on strike—it is a self-imposed loss of income—but also that they are specially treated by way of P.A.Y.E. repayments. They are in a privileged position when it comes to receiving P.A.Y.E. repayments.

In looking at their position we should look at the payment of supplementary benefit to those people who are in a special category, forgoing income, often to try to increase their wage in the long term. Not only do they have certain elements of what is coming to their household disregarded for the purposes of claiming benefit, but there is a further element, a "perk", which rather annoys members of the public when they realise it.

This is the fact that the supplementary benefit which they receive—these being people who are to return to an ordinary wage—is not treated as income for income tax purposes. That does not matter in the case of genuine poor who must rely on supplementary benefit, but it is very relevant in the case of strikers who are doing without income for a temporary period, who are generously having £4.35 in effect added to the supplementary benefit for their families. It is an important consideration, this tax-free "perk".

Hon. Members opposite will resist this fiercely. I have justified it in language which they obviously find too strong, but I think that their resistance over-rates the extent of this. This is not a Draconian change in the position of strikers. It is a welcome change, eliminating a comparatively small, in terms of the overall cost to the Welfare State, but nevertheless important, anomaly in the payment of supplementary benefit which tends to give a small but unjustified amount to a particular class of claimants who cannot be rated as the genuine poor.

Hon. Members opposite may be reacting because they expected much more swingeing measures to be taken against strikers and their families. Some of the speeches made by hon. Members opposite seem to have been prepared to attack changes which the Government have not made. I have listened to my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), whose views I respect on this issue. I know his strong feelings on the effects that this could have in reducing the level of strikes.

I congratulate the Government on not having gone beyond their present position and taken steps which would—not, as in this case, remove a privilege accorded to strikers—start biting into the supplementary benefit payable to the families of strikers. That could cause hardship. I have in mind particularly the hardship it might cause to the families of strikers who were unwilling participants in the strike in the first place. This happens in many cases at the moment. If we start biting into supplementary benefits, not only taking away privileges, but saying that these people are not entitled to supplementary benefit, real hardship could be caused. The majority of hon. Members on this side, despite their strong feelings on some strikes, would accept that we have to adopt other methods of dealing with our industrial problems than trying to impose hardship on the wives and families of strikers.

I cannot understand the indignation among hon. Members opposite about the removal of this privilege. It is a privilege that ought to be removed to make the system more effective; certainly it is a change that it is right to make. Hon. Members opposite may object that it is impossible to distinguish between the justified and unjustified strike in taking any step of this description. I quite accept that, but that is a double-edged point. It means that the social security system is used in support of all strikes, both justified and unjustified.

It has to be borne in mind that if special treatment is given to strikers who claim supplementary benefit, there are some extremely unpopular and unjustified strikes and those taking part would not, in the view of many members of the public, be entitled to this extra £4.35 because of the way that the Supplementary Benefits Commission has been exercising its discretion.

I promised to be brief, and I will not speak much longer, but I should like to deal with the other major aspect of the Bill concerning the ending of the three-days' waiting time. This has to be justified on the basis that it releases so much money. It is the only part of the Bill which falls into the category of cutting out a great deal of spending and releasing a valuable amount of resources —£19 million—which can, and will, be devoted to other sectors.

The elimination of this payment can be justified also on the basis of the selectivity of the changes which the Government are making. In the whole field of welfare, we have to decide where our priorities lie. Given the inadequacy of our Welfare State, the £19 million has to be spent on deserving cases in those areas where poverty and hardship are being suffered which can be eliminated by the use of such resources.

The plain fact is that the delayed payment of this three-days' waiting time sickness benefit is not doing a worth-while social job. It makes no difference to those in real need. None of our people lives entirely on national insurance sickness benefit at any stage—nor should people do so. They become immediately entitled to supplementary benefit and they get no benefit whatever from the three-days' waiting time, about which complaint is being made. To other people who do not fall into that category, it comes after they have already started receiving their sickness benefit. It comes after three weeks as a lump-sum extra payment. To people in sick pay schemes who have an income of their own, it arrives as a surprising bonus which many do not expect. Although it can be justified in some terms, it certainly is not an expenditure which can, in any way, be said to be serving a real social need, eliminating poverty or easing hardship.

Given the claims that are made on the State, in my opinion £19 million can be used in more worth-while directions. I conclude on this note, which is in many ways the most important one. It is too easy to restrict comments on social security to a demand for more money for every deserving claimant and resistance to the slightest change that is made in payment.

The right hon. Member for East Ham, North emphasised people's entitlements under the National Insurance Scheme and how these were benefits which they had paid for and to which they were, therefore, entitled. My view is that the enshrining of a so-called insurance principle in welfare will get us into severe difficulties of this sort, so that every payment is defended as a matter of strict entitlement for which someone has paid and any attempt to alter the direction in which payments are made, or the emphasis of welfare payments, will be resisted on that ground.

What is much more important is to bear in mind that as the insurance system is not, in fact, an insurance system, we are dealing with the devotion of resources to the first priorities in welfare. We are besieged by justified demands for more money for the poor, the disabled, the chronic sick and the aged. I regret, therefore, that a Bill of this sort, which releases resources and increases confidence in the system, is answered in part by a rather politically-inspired defence of payments to people who cannot, by any stretch of the imagination, be regarded as among the needy in our society.

6.44 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

I am not certain, but I believe that the hon. Member for Rushcliffe (Mr. Kenneth Clarke) is regarded as one of the younger bright liberals of the Conservative Party. All I can say to that is, "My God!". If that is the sort of liberal Conservative that we are getting into the House of Commons today, there is certainly no hope whatever for the Tory Party. I am amazed at the type of speech that the hon. Member has given us when one considers that it is supposedly on a liberal basis. Another so-called liberal apparently regards it as a very good speech.

That is typical of the Tory Party's thinking today and underlines the point made by my right hon. Friend the Member for East Ham, North (Mr. Prentice), who clearly pointed out that the attitude of the Conservative Party before 1964 in matters of this kind was fundamentally different from the attitude which is being adopted by the Conservative Party today.

Mrs. Peggy Fenner (Rochester and Chatham)

indicated assent.

Mr. Heffer

The hon. Lady nods. It is true. On television the other night, we saw the ex-Prime Minister, Mr. Macmillan, interviewed. He made the position clear that the middle way was dead for the present Conservative Party. Precisely. We have a reactionary Government of the first order who have brought the Bill forward as an adjunct to the Industrial Relations Bill. That is the objective. It is clearly intended to bolster up the efforts of the Government concerning workers who take industrial action to improve their positions.

When the Secretary of State made his first statement in the House, I said that the Government's proposals were mean and vicious. I repeat, they are mean and vicious. The mean part—which is, in a sense, the secondary part of the Bill, although it is important—is that relating to the benefits paid to the families of strikers. That is extremely mean. The particularly vicious part, however, is that which deals with the three waiting (lays. To me, this is the most important part of the Bill.

Very few hon. Members opposite have had personal experience of what the three waiting days mean. I know that my right hon. and hon. Friends for a period themselves decided to introduce this exact proposition. In fact, Clause 2 of their Bill and Clause 7 of the present Bill are identical, drafted in exactly the same way with the same wording. The difference between my hon. Friends and hon. Members opposite, however, is that my hon. Friends listened to the arguments and representations which were made by practically the whole of the Labour Party, in addition to the trade union movement outside. They were convinced by the sound and serious arguments that were put forward by hon. Members on this side. When the Bill came before the House, Clause 2 was withdrawn.

I remember the song and dance by hon. Members opposite about the withdrawal of Clause 2. It is important that I should quote the actual situation because of the charge that was made—I think, by the hon. Member for South Angus (Mr. Bruce-Gardyne)—to my hon. Friends about being hypocritical. The hon. Member said he included the whole of the Opposition Front Bench. If my right hon. and hon. Friends are hypocritical, then what about the hon. Member's hon. and right hon. Friends? Let me quote from the speech made by the hon. Member for Hertford (Lord Balniel). This is what he said: The matter which she has been discussing is of considerable importance". That is, the withdrawing of the Clause. The Clause which she seeks to withdraw is the basis on which family allowances are being financed, and the Clause ends the payment of the first three days of insurance benefit for those who have been ill or unemployed for a period of over a fortnight. He went on: On Second Reading, I stated our position on behalf of the Opposition absolutely clearly. I said that it was our intention to vote against the Clause and that we would remove it, so far as we were able to, in Committee."—[OFFICIAL REPORT, 23rd May, 1968; Vol. 765, c. 930.] That is what the hon. Gentleman said. How do hon. Members opposite have the audacity to come into this House and call my hon. Friends hypocritical when my hon. and right hon. Friends, on the basis of representations made from us, withdrew that Clause? Hon. and right hon. Gentlemen opposite said at that stage that they would have voted against that Clause. Who are the hypocrites now?

Mr. O'Malley

Will my hon. Friend bear in mind also—and I think the House would be wise to bear it in mind—that at the same time as the previous Government were introducing those tentative proposals they were engaged in a dialogue between themselves, the T.U.C. and the C.B.I. with a view to transferring the cost of the first three days unemployment and sickness benefit to the employer and that the C.B.I. refused to do that?

Mr. Heffer

I am very glad my hon. Friend has made that point because I was going to point out that I had a new Clause to propose to that earlier Bill, a new Clause which was intended to do precisely that, and it was on the basis of a statement made by my right hon. Friend indicating that those discussions were taking place on the three days and that my proposal would have been met by action on the part of the employers that I decided not to press that new Clause.

My hon. Friend the Member for Salford, West (Mr. Orme) indicated that a statement was made on this by the then Labour Chancellor of the Exchequer. I would point out what the late kin Macleod said in debate on the following day, he following the usual procedure of considering the Budget speech math on one day and analysing it properly and speaking to it the next day. He said: It seemed to me astonishing yesterday that as the Chancellor said what he did, not a mouse stirred on the other side of the House. He was wrong about that. Heifer stirred, I can assure the House, even if a mouse did not stir.

He quoted the Chancellor as saying: We propose to discontinue the payment for the first three days of sickness, injury or unemployment which is at present made after a period off work has lasted for a fortnight. That was the proposal by the then Chancellor of the Exchequer. What did lain Macleod say? He said: The method the Chancellor has adopted is bad from every conceivable point of view."—[OFFICIAL REPORT, 20th March, 1968; Vol. 761, c. 438.] That is what he said. Hon. and right hon. Members opposite cannot come to the House and challenge my right hon. and hon. Friends with hypocrisy on this issue, when hon. Members opposite made it perfectly clear at that time that had that proposal been proceeded with, they intended to vote against it.

This proposal about the three waiting days is particularly vicious. Let me relate the position which exists in the building industry in particular, although it is not confined entirely to the building industry but affects all casual workers and most workers who are manual workers. There are only 60 per cent. who are in any way involved in any sort of sickness scheme through their employers, and the sickness schemes are not always schemes which pay the full amount to a worker when he is sick. So at least 40 per cent. are in no sickness scheme at all, and those 40 per cent. rely entirely on the benefit they receive when they are off sick or unemployed for the first three days.

Why do I say that? Because building workers in particular often are unemployed. They are often sick through no fault of their own because they are often out working in the most atrocious conditions and contract influenza and rheumatism and all sorts of illness connected with outside work, and they are forced to take time off from their employment. There was a time when the first three days were not paid, and I have seen workers struggle back to work before they ought to have gone back to work, and they ended up in wooden boxes—they died because they contracted other illnesses because of having gone back to work too early.

Is that what hon. and right hon. Gentlemen opposite want to see? I know what the argument has always been: "If you do not pay the men you will drive them back to work." The real answer to that is the answer those of us on this side of the House who understand these things have always given—that they should be paid from the first day they are off, so that they could overcome their sickness before returning to work.

The argument about not paying for those first three days is absurd and vicious. It is the same with unemployment. The hon. Member for Rushcliffe says that the payment is not socially beneficial. Perhaps he has never been unemployed or sick. Well, I have, and I can assure him that those three days at the end of 12 days are very important to working people, and that is why this is one of the most vicious pieces of legislation.

Mr. Kenneth Clarke

Would the hon. Member not acknowledge that these people he is describing as being driven back to work from desperate poverty before they have recovered are all in receipt or ought to be in receipt of supplementary benefit? The change which the Government are making will not affect their position at all. Surely that 40 per cent. of the labour force in the building industry are receiving supplementary benefit and are not affected in any way, so that it is only a very small part of that force the hon. Member is talking about who can conceivably suffer any difficulties, still less the hardships he is talking about.

Mr. Heffer

The hon. Member should start to learn something about payment for and the receiving of benefit before he gets up in the House and talks such utter nonsense. When a worker goes off ill or becomes unemployed he is not automatically in receipt of benefit. I never heard such utter rubbish. The hon. Member obviously knows nothing about the situation, or else he would not make a statement of that kind. When a worker goes off ill or is unemployed, for the first three days he receives absolutely no payment from anyone at all. He can only begin to receive benefit after the first three days. He will get the three days benefit if he completes 12 full days off work. Supplementary benefit is granted on the basis of necessities that may be required, and the average worker in the building industry does not automatically receive supplementary benefit.

Sir K. Joseph

The hon. Member for Liverpool, Walton (Mr. Heffer) should be fair to my hon. Friend the Member for Rushcliffe (Mr. Kenneth Clarke). Does not the hon. Gentleman, who speaks with great sincerity, recognise that when a man is unemployed he receives his last week's pay during the first week after he is unemployed, and when he is sick he receives the pay to which he was entitled before he became sick. So the first few days of unemployment or sickness are compensated for, in part, by earnings which the man receives on his next habitual pay day or before he leaves his employment. It is during those first few days that his family applies for supplementary benefit. The hon. Gentleman would be wise to recognise that the poor do get supplementary benefit during that first week if they apply for it.

Mr. Heffer

The right hon. Gentleman must understand that even if the workers do apply for supplementary benefit there is no guarantee that they will automatically receive it. In any case, it is not usual for a worker to apply for supplementary benefit at that stage, because, if he is off work for any length of time through no fault of his own, he knows that after 12 days he will receive benefit for the first three days. In defending his hon. Friend, the right hon. Gentleman should not try to give the impression that workers automatically get supplementary benefit.

The withdrawal of benefit for the first three days is a vicious piece of legislation. The Secretary of State said that the money saved would be used for those who were in need. I am not sure whom he regards as being in need. A whole group of people will benefit from the Budget proposals—

Sir K. Joseph

I mean the chronic sick. This is not a Budget proposal.

Mr. Heffer

We are talking about balancing the overall books. The right hon. Gentleman cannot say that this has nothing to do with the Budget proposals. Balancing the books and getting money from someone to hand out to somebody else is all part of the same thing.

Sir K. Joseph

We are dealing here with the National Insurance Fund. The saving goes back into the National Insurance Fund and it is out of the National Insurance Fund that the chronic sick for the first time will get £24 million.

Mr. Heffer

As a result of the proposals in the Budget for incomes over £80 a week, Lord Stokes will get an extra £67 a week, John Clark of Plessey will get an extra £124 a week and Sir Peter Allen of I.C.I. will get an extra £100 a week. The aid to the chronic sick could have come from the money which the Government are handing back to the surtax payers. The Government should have assisted the chronic sick, the people at the bottom end of the scale and large families suffering from poverty, instead of surtax payers. The disaggregation of child investment income—another little phrase used in the Budget—meant a hand-out of £15 million. If the Government were sincere about helping the lower paid and the chronic sick, this could have been done by other methods than withdrawing benefit for the three waiting days.

Coming back to strikers, Clause 1(4) provides that there will be taken into consideration: (b) any payment which he receives or is entitled to obtain (whether from a trade union or any other source) by reason of being without employment for any period during the stoppage of work due to a trade dispute at his place of employment. That means that any payment will be taken into consideration, not just strike pay. My hon. Friend the Member for Hitchin (Mrs. Shirley Williams) I think slightly misunderstood the position. She said that it applied only to people on official strike who were receiving strike pay but it does not apply only to them. This makes nonsense of the arguments on the Industrial Relations Bill when the Government said that it was all right as long as the strikes were justified and did not involve unfair industrial practices. Apparently, it is not all right, because official strikers will be caught, and so Will unofficial strikers.

My hon. Friend the Member for Birmingham, All Saints (Mr. Brian Walden), speaking on the Industrial Relations Bill, said that the Tories talked about solidarity, standing shoulder to shoulder for their party, their regiment or their public school, and that that is understood by them. It is equally understood by the workers who stand solidly shoulder to shoulder with their trade union when they are involved in industrial disputes. It is the same tribal feeling, the same sense of solidarity. In a dispute workers help their fellow workers who are on strike by taking collections. Presumably, those collections will be taken into consideration. If this is not an attack on workers who take industrial action, what is it? The Bill is part of the Government's overall strategy of fighting the trade unions and the workers and is an adjunct to the class legislation of the Industrial Relations Bill. I hope that my hon. Friends will treat it in that way and vote against it.

7.10 p.m.

Mr. John Page (Harrow, West)

We must all congratulate the hon. Member for Liverpool, Walton (Mr. Heffer) on trying to engender some heat into this debate. When my right hon. Friend announced these new policies on 29th March, the hon. Member said: This is one of the most vicious and mean acts any Government had ever perpetrated."—[OFFICIAL REPORT, 29th March, 1971; Vol. 114, c. 1157.] Again today he made a strong attack on my right hon. Friend and the Government. However, throughout his speech and the whole of the debate there have never been more than 12 hon. Gentlemen on the back benches opposite.

Mr. Alec Jones (Rhondda, West)

Not at all, quite untrue.

Mr. Page

That is quite right, though it so happens that during the earlier speeches there were over 20 Members on our benches. The difference is that we on this side support the Government and accept their views.

Mr. Alec Jones

Surprise, surprise.

Mr. Page

The Government realise they have not to persuade us with the logic of their arguments. On the benches opposite there is supposed to be a great attack on this fundamental injustice. The hon. Member for Walton talked about the change in the three-day rule and said that it would drive people back to work too early and would put them in a wooden box. He might have been referring to the situation a hundred years ago, but that is certainly not the case in 1971.

Mr. Buchan

It is worse than a hundred years ago. Since 1841 there has been a general extension in walfare benefits for the workers and the Government are the first Government since that time, 130 years ago, who have consciously set out to turn back the political clock. Therefore, we are talking in terms of going back a century and that is the sort of ideology which is being put forward by the hon. Gentleman and by the hon. Member for South Angus (Mr. BruceGardyne).

Mr. Page

The present Government in the short months they have been in office have done more for the welfare of the people than any other Government. This has been proved by the keeping of our election pledges. However, having heard the speech of the hon. Member for Walton, I will endeavour to keep down the temparture of the debate and I will continue by being completely uncontroversial.

The hon. Member for Hitchin (Mrs. Williams) made heavy weather of her arguments against the Bill. Since she is not here at the moment, I will not embarrass her by saying that she had to defend another example of full frontal nudity in the policy of the Opposition. It is a change round and, as she said, it is always a good thing for people to change their minds. Her argument was that disregards should not be allowed to people because it would be unfair on those who would not have the income to receive them anyhow. The hon. Lady seemed rather like the café proprietor who, when asked by a customer for a cup of coffee without cream, returned five minutes later to say, "I am sorry, we are out of cream. Do you mind having it without milk?" This line of argument seems to be analogous.

I wish to take up the hon. Lady's point about unfair dismissal for industrial misconduct under Clause 2(1). In view of the new privileges and opportunities given by the Industrial Relations Bill to individual employees, would my hon. Friend consider whether the statutory deduction under that subsection might be postponed when an employee appeals against unfair dismissal? This would appear to be a sensible use of the new industrial tribunals which are to be set up.

The right hon. Member for East Ham, North (Mr. Prentice), who is not in the Chamber at the moment, missed the point when he said that the Bill will lower the reputation of our social security system. I believe that it will have exactly the opposite effect. Many of my constituents and others have expressed resentment at the way they feel the present social security system is being abused. This sense of resentment will be taken away when they see that those people who have been fiddling the National Insurance Fund will be discouraged or stopped from doing so. My right hon. Friend mentioned the Newhaven dockers, and I am happy that the Government are to implement the provisions which were previously passed through the House by the Labour Government. There is a strong feeling that those involved in industrial disputes who are on strike are collecting social security benefits and at the same time undertaking "moonlighting" jobs. When there is a massive dispute, such as the Post Office and Ford disputes, I hope that the Government will carry out investigations to see that proper safeguards are taken to ensure that social security benefits are not abused.

Further cause for resentment on the part of many ordinary citizens is the cost of administering the paying out of social security benefits to those who are on strike. I asked a Question on this subject in early 1969 following a dispute in Ford and I was told that £96,000 was paid out to strikers, the administrative cost of this pay-out being £50,000. Many of my constituents and others felt this to be ridiculously out of proportion. On that occasion church halls were hired to pay supplementary benefits, special advertising was arranged giving details of where the pay-out was to be, and special officers were brought in from other branches of the service to hand out benefits. The Bill will give evidence to ordinary members of the public that the Government are taking steps to try to stop any abuse of the payment of supplementary benefits to those who are involved in disputes.

The hon. Member for Hitchin said that over the last six months or so there had been a sudden escalation of payments. We know that this is largely due to the postal strike. I asked a Question on this matter quite recently and was told that supplementary benefit payments to strikers in 1964 amounted to £49,000, in 1965 to £65,000, in 1966 to £126,000, and that this figure had steadily escalated and in the first four months of this year had reached £3¾ million.

The right hon. Member for East Ham, North felt that to change the system of paying benefits to strikers was an interference by the Government in industrial action. Certainly he spoke along those lines, though I do not suggest that he used those words. The right hon. Gentleman should remember that this is the only industrial country in the world where any kind of supplementary benefit is paid to strikers or their families, with the exception of Western Germany, where such payments are made in respect of certain official strikes. However, in Sweden, which is so often held out as an example of a country with modem and sensible industrial relations, many trade unionists and industrialists think that the payment of benefits during an industrial dispute would be quite wrong, since the Government would be intervening in disputes between employers and employees. We have to remember that our present system is unique in the industrial world. From that basis, we have to defend it.

The right hon. Gentleman also referred to Mr. Feather's remark that it seems strange that the family of a man who is in prison should be treated better than the family of a man who is on strike. I have given some thought to this point. When a man is in prison, the community has taken from him the right and opportunity to work. When a man is on strike, it might be said to be a voluntary action on his part. I think therefore that the community owes a greater debt to the family of a man in prison because it has imprisoned that family's breadwinner.

Mr. Prentice

There is the obvious debating point that probably the man went to prison as a result of a voluntary act in the first instance. But the essential point is that, hitherto, I think that all parties have accepted the principle that we look at a family in need, we measure the need, and we provide for that need to bring the family income up to a certain basic minimum, without asking how it arrived at that position. We are now presented with a new principle which, in my view, is dangerous.

Mr. Page

I take the right hon. Gentleman's point. It is the kind of Friday morning seminar debate in which I should enjoy taking part. However, the Government have come to the conclusion that the present system is being abused and, for that reason, that a change has to be made.

The hon. Member for Hitchin referred to the evidence from the Ministry of Social Security to the Donovan Commission. Perhaps I might quote two sentences from page 2318 of these minutes which defend the "grade and class" definition. The Ministry's evidence said: … the present test has survived because it can be applied reasonably well over the broad complex of industry and throughout the wide range of different types of dispute; and because it lays down objective criteria of involvement which in the great majority of cases achieve an acceptable measure of fairness all-round … And in the last analysis it must be judged, as all the provisions of the national insurance scheme have to be judged, in relation to its fairness and acceptability to the general body of contributors to the scheme and not simply those who would stand to gain or lose in any particular instance.

Mrs. Shirley Williams

My two points were, first, that the Donovan Commission itself reached a different conclusion and, secondly, that the Ministry of Social Security evidence was given in the light of the rules then applied to the payment of supplementary benefit, which are being altered by the Bill.

Mr. Page

I cannot be quick enough, standing on my feet, to think of a good riposte to the hon. Lady's last point. I must fall back on the look of sullen indignation of those who are presented with arguments that they cannot answer. However, I am sure that my hon. Friend the Under-Secretary will save me when he winds up the debate by making a proper counter-argument. It seems that, even if one is changing part of the method of payment, that does not mean that it is necessary to change the criteria as well. However, I always bow to the hon. Lady's arguments, which are extremely convincing and courteously presented. It is possibly because of that that I find myself at a loss for words.

Many of my hon. Friends thought that it might have been easier if my right hon. Friend, instead of presenting this Bill, had produced a Measure saying that all social security benefits should be taxable because, if they were, they could produce to the Exchequer, each year, some hundreds of millions of pounds of extra taxation. This is outside the present scheme. It would be a job for the Chancellor of the Exchequer. But I thought that it was right to mention it before saying that I sincerely support this Bill, which will release resources that can be used to help those who need them most.

Several Hon. Members rose—

Mr. Speaker

Order. There are about 90 minutes remaining before the wind-up speeches. Six hon. Members still wish to speak. Hon. Members who catch my eye may draw their own conclusions about the approximate length of time for which they should speak.

7.26 p.m.

Mr. Norman Buchan (Renfrew, West)

I shall be brief, since I wish only to deal with two or three of the speeches which have been made from the back benches opposite, notably that of the hon. Member for South Angus (Mr. BruceGardyne), who will realise that my chief reason for intervening in the debate is that he refused to give way to allow me to put one or two important points to him. For that reason, I make no apologies for intervening, certainly not to the hon. Member for South Angus.

Once again we see a populist argument being used like that of the hon. Member for Rushcliffe (Mr. Kenneth Clarke), who says that "many people think" that the social security arrangements are being abused. We hear these generalisations continuously from hon. Gentlemen opposite. They do not assert: "I know that it is being abused, and I shall prove it." Instead, they appeal to some vague generalised feeling, which is exploited by some of the worst elements of our Press and by members of the party opposite, not based upon a factual analysis, and excused by the fact that they do not assert it themselves but say that many people feel that what they say is true. It is an argument used by the right hon. Member for Wolverhampton, South-West (Mr. Powell) when he talks about immigration, and it is a serious state of affairs since it is one which is being used more and more in these discussions.

The argument is a populist one to deal with the section of the Bill which, in terms of cutting people's benefits, is of less importance than the real significance of the Measure. The real importance is the cutting of the three days' unemployment and sickness benefits. Furthermore, allied to the populist attack upon strikers and disputes, which is used as an excuse for the meanest and most squalid of all provisions, by which I mean the three-day cut, is the fact that it also applies to industrial injuries.

The basic assumption behind the Bill is that all disputes are bad. This is the asumption made by the hon. Member for South Angus whose argument I shall deal with later because I believe it more honestly reflects some of the Government's thinking. The basis may be industrial action, but industrial injuries are specified. The hon. Member for South Angus worked out the figures and there was no opposition from the Government. His argument was that the problem has become that of the long-term strike. This contradicts the Government's argument in putting forward the Industrial Relations Bill which was claimed to deal with the short-term strike. Instead, it will tend to create long-term strikes.

The hon. Member for South Angus said that the real problem was the longterm strikes which were taking place, and he quoted percentages. More strikes were due to wage disputes than to unfair dismissal or redundancy. Therefore, he was arguing that we should make this cut in supplementary benefit to make it more difficult for the long-term strike to continue. The hon. Gentleman was saying that the benefit allows strikes to continue and that, therefore, we should cut the benefit so that the strikes cannot continue.

The hon. Gentleman said that these strikes were connected with wage demands. The Government are asserting that the problem facing the country is inflated wage demands. In other words, not only does the Bill tie up with the Industrial Relations Bill as a means of attacking the one eventual defence which workers have, but it ties up with their economic strategy which is particularly directed against the long-term dispute for wage benefit. Therefore, it ties up with this equally phoney argument about wage inflation.

I stress this point because it was spelled out by speaker after speaker. The hon. Member for South Angus tried to claim that unemployment was being created because of wage demands. We have heard that argument so often. It is nonsense. What is causing unemployment is not only the failure to induce investment but the failure to create new jobs. This Bill is not unrelated to the Government's economic policy. It did not come in in terms of a pension background but in the context of saving money at the time or the Budget when this economic strategy for cutting down wage demands was unfolded.

I am glad that the hon. Member for South Angus has returned. I have been saying one or two things about him. The real argument is that up to now employers have tended to be careful about releasing workers and causing unemployment; they have been hoarding workers in the hope that they would get investment and growth again. But now that it is clear that the Government through this Bill, the Industrial Relations Bill and their economic policy are determined to create unemployment as a means of dealing with the workers, employers are now rapidly shedding employees because they know that they do not need to keep their labour force. An unemployed pool exists. This is happening particularly in Scotland, as the hon. Member for South Angus knows.

Therefore, it is no use putting forward a "pensions" argument. It is no use trying to put the blame on these unnamed people who say that it is because of the scroungers. I wish that people would accept responsibility for their own case instead of putting forward that kind of argument.

Mr. Kenneth Clarke

The hon. Gentleman keeps representing my case and putting it in the populist way. Will he accept, first, that every hon. Member on this side has said that the category of beneficiary attacked by the Bill does not consist of scroungers, but of people whose needs cannot be justified in our list of priorities in the Welfare State? The hon. Gentleman keeps saying that this argument is being used in a populist way. But it is dangerous to disregard public feeling in a matter of this kind. The Press is not responsible for this state of affairs. This feeling exists and the Press is not responsible for it, and it causes a grave lack of public confidence in the welfare system and so leads to resistance on the part of the public to do anything to improve the welfare system. This will have very harmful effects.

Mr. Buchan

The hon. Gentleman is now saying that, despite the lengthy introduction about scroungers, this is not the justification for the Bill. If so, it is even worse, because he is using a populist argument and not basing it on anything.

I accept that one problem which we face is that created by the large-scale scrounger. However, all who have examined the complaints know that they are rare indeed. The Bill is not dealing with that problem. On the one hand, it is dealing with those involved in disputes and, on the other, with people who are sick, unemployed, or suffering from industrial injuries.

The hon. Gentleman said that the Bill deals with those who most people feel —the hon. Gentleman is now including himself—should not get the benefit. Does he apply that to Pay-As-You-Earn? It seems that he does. Would he also apply it to those employers who for years have, for example, been shouting about S.E.T. and that they are entitled to get it back? The hon. Member for South Angus has said that one objection was that even employers who got the refund had for some months had to make a loan, as it were, to the Government. I am sure that I have heard the hon. Gentleman on this matter. If not, I should be very surprised. But hon. Gentlemen opposite are saying that, despite the fact that the money is due to them, they will not get it; it will be cut off in another way.

Hon. Members

No.

Mr. Buchan

Yes. This is involved in the disregard. Hon. Gentlemen opposite are saying that even a tax which has been paid and is now due to be returned will be taken into consideration in cutting down on the amount of the disregard.

I want to deal with the point made by the hon. Member for Harrow, East (Mr. John Page) that I was exaggerating when I said that this is the most reactionary Government we have had since the last century. The analogy is correct. I do not mean that they are the hardest or the toughest of Governments. I mean that they are the first Government since Governments were involved directly in the nature of society, welfare, industry and the economy—so far we have called Governments reactionary when they have failed to move forward—they are the first Government to turn back the clock consciously and deliberately.

If hon. Gentlemen opposite will not listen to me, I ask them to listen to their colleague, Lord Hailsham. At the weekend the noble Lord said that we were facing a new situation and that we were no longer automatically to be involved in Government in this way.

Even the hon. Member for Hertford (Lord Balniel) says this, though he does not push it back as far as I do, to 1841; he pushes it back to 1931. In attacking our tentative proposals which were tied up with the discussion of the three days being paid by the employer—I think that this is justified—the hon. Member for Hertford said that this was the first proposal to cut sickness and unemployment benefit since 1931. He at least recognised that this concept was 40 years behind the times. I said that the Government had pushed the clock back 130 years, to 1841 and the beginning of social welfare, but the hon. Gentleman said that they had pushed it back 40 years. That is why we say that this is the most reactionary Government that we have had.

The meanness and squalidness of the Bill tie in with the Government's economic policy of deliberately crating unemployment. Its provisions tie in, too, with their policy of arousing the fear of people about scroungers. I accept that it is a bad thing if the public are not convinced of the value of the legislation that we pass. The hon. Member for South Angus speaks with the concepts of the Sunday Post, and with the tones of Harrow or Eton. The Sunday Post is probably the most reactionary newspaper in Britain, and I have never heard the hon. Gentleman differing from any of its editorial views. Today we have heard him expressing the politics of "oor Willie" and "the Broons".

The Bill represents a deliberate attempt to attack the workers of this country and to turn back the clock in terms of social benefit, and it is these aspects which will condemn the Government as days go by.

7.41 p.m.

Mr. J. R. Kinsey (Birmingham, Perry Barr)

The debate is set against the background of the social security offered by the Welfare State. We on this side of the House support the idea of helping the needy in times of difficulty. We believe that help should be given to those whose need is the greatest.

What worries me, and what has worried people everywhere, is the abuse that has been taking place of the system of giving help, and all our efforts should be directed to seeing that help is given where it is most necessary. No matter how good a scheme may appear to be, in practice it will be a good scheme only if it provides help for the most deserving in our community, and we must always look dispassionately at any scheme we introduce to ensure that that is what it does.

One factor which the Opposition fail to recognise is that times have changed. Patterns of social behaviour and the means of helping the community change, too, and these factors must be taken into account. The pattern of providing help has changed considerably since the inception of the Welfare State. Not only the Government but people and industry have moved with the times, and these are factors which we must consider when we look at the system as a whole. It is important to help those whose need is the greatest. We must give them the greatest help, and it is my opinion that the country will welcome my right hon. Friend's action in introducing these proposals.

One of the first letters that I received as a Member of the House was from an old-age pensioner, previously a Socialist supporter, complaining about the abuse of the system for providing help. She complained about fit and able-bodied strikers getting more help than was given to pensioners and to people in real need, and that view is held not only by the majority of old-age pensioners but by the majority of ordinary people, too.

In view of the feelings of the people whom we govern, it would be irresponsible for the Government not to take the action that they propose. We cannot ignore the views of ordinary people, and it is fantastic to hear the arguments advanced by the hon. Lady the Member for Hitchin (Mrs. Shirley Williams). She does not think that it is wrong to have a system which provides financial support for those who are in a better financial position than most.

The Government's proposals will help strikers during a time of need, but in return the Government expect to be repaid when those men return to work and get good wages. What is wrong with that? There could not be a better system. I do not see how anyone can argue that strikers should be given extra financial support, bearing in mind that the decision to strike is their own. It is they who decide to strike, after considering all the economic factors involved. A decision to strike is usually made after considering what is being given up and what is to be gained. These are the factors which a man takes into account when he raises his hand to show his support for a strike in favour of a wage claim. He strikes for wages and conditions which he considers will be better than those under which he is working. In many cases he puts in for a wage claim which is greater than the amount received by some people receiving supplementary benefits. He forgets that they have to live on these benefits week after week throughout the year.

Such is the importance of social security benefits during a strike that sometimes instructions are issued by the unions telling their members what to claim. It is wrong that social security benefits should be considered as an adjunct to the strikers' funds, and the fact that this is done annoys those who are not in sympathy with the strike. This is the kind of thing about which people complain. We on these benches recognise the right of a man to strike. What we quarrel with is the method of financing strikes.

Complaints have been made about income tax refunds being taken into consideration in deciding what benefits should be paid. Appreciable sums of money are paid by way of refund, and these are part of the resources available to people on strike. No comparison can be made with repayments of S.E.T. The Government are saying that income tax refunds must be set against claims for social security benefits. Would anyone say that a firm should have its S.E.T. refund ignored for the purpose of assessing its taxable income?

If I am given the chance of choosing between giving financial support to the striker, or giving a lot more help to the old and sick in the community, I shall have no hesitation in saying what should be done. I should choose to give help to the old and the sick every time. The Opposition have adopted an amazing attitude. They support the striker, right or wrong.

The Secretary of State has my wholehearted support for his action. I particularly support him in respect of Clause 7 and the rather difficult question of the three waiting days—a provision that the Opposition claim to be heartless. No one likes having taken away from him payments that he has always had. He would be less than human if he did. But it is not merely a question of the amount involved in the three waiting days; it is a question of the use of the extra money to support people in time of need.

Mr. Michael Meacher (Oldham, West)

Will the hon. Member give us an estimate of the extent to which the pensions of the elderly—the people with whom he is particularly concerned—are likely to be increased if the whole of the money involved in the three waiting days proposal is devoted to an increase in the kind of pensions? What weekly increase would each pensioner get?

Mr. Kinsey

That is a fatuous argument. We must consider the whole concept of the Welfare State and the total amount of savings that might be made. There have been changes in respect of benefits for the over-80s and the long-term sick. Times have changed, and we should amend the system to take account of that fact.

More work schemes are available. Some workers need not claim during times of sickness, because they are staff-paid. There is no need for them to draw social security payment at any time. Even without work schemes, various other kinds of help are available. An ordinary worker on the factory floor may be getting sickness benefit plus related earnings benefit, and income tax rebate; he may have contributed to a private friendly society; his trade union may have a sickness payment system; he may have paid his mortgage through a firm that provides certain facilities and has an in-built insurance scheme, so that it pays his mortgage repayments and rate repayments when he is sick. He has no stamp to pay. He has no bus fare to pay. There is a works collection for him. He is not penalised at all, and he will not be penalised by the three waiting ways provision. He is in a better position when he is sick than when he is working.

Hon. Members opposite are wrong in saying that this will be a great hardship to everybody. It will not; it will affect different people in different ways. Those who are not helped in other ways have social security payments to fall back upon if they are in a lower income group. Any system that is abused must be examined.

I was told by a wages clerk that it is possible to abuse the three waiting days system. By going sick for three days on the Friday night before the holidays and drawing sickness payments plus holiday payments people are abusing the system. We must bear in mind the things that can go wrong with any system that we introduce. People who see a system being abused are apt to ask us, "What are you going to do about it?". I am pleased that my right hon. Friend has set up a commission to inquire into all the factors. People become incensed when they see the abuse of a system that everyone considers to be worth while and necessary.

Hon. Members opposite have contributed to welfare schemes in the past. They should be anxious to see that such schemes are not abused. I am sure that when they introduced a certain system they did so in order to help the needy.

Hon. Members opposite have expressed concern about unemployment, but the circumstances surrounding the unemployment position today are different from what they were. When people draw unemployment benefit for the first time they are often backed by a redundancy payment, which is a considerable help to them.

Mr. Heffer

The Labour Party brought that in.

Mr. Kinsey

The Opposition brought in that scheme. But they must relate it to existing conditions, and certain aspects need to be re-examined. The provision concerning the three waiting days is not so important, even at the worst time of unemployment.

Mr. Heffer

Men workers, especially in casual industries such as building, ship repairing and shipping, rarely receive redundancy pay. The three waiting days provision means a great deal to them.

Mr. Kinsey

I agree that a case can be made out for those workers, but not for all workers. We must seek to help those in the greatest need. The Government are doing exactly the right thing—and they are doing what hon. Members opposite want done. I do not see how they can argue against us.

I welcome the Government's determination to re-examination our welfare schemes not in a harsh, punitive way but so as to give most help to the needy. I welcome their determined effort to see that help goes to those who need it most, when they need it most. The Government are doing a great job. More strength to their arm!

7.59 p.m.

Mr. Stanley Orme (Salford, West)

I do not want to follow the theme of the hon. Member for Birmingham, Perry Barr (Mr. Kinsey), but he talked about one worker who would get more money when he was sick than when he was working. There are always exceptions which prove the rule, people who slip through the net. If 5,000 workers at a factory were told that they could take the next three or four weeks off sick, they would not accept the challenge, because the loss of their bonuses and overtime would mean a substantial reduction in their standard or living.

This Government's attitude to industrial relations shows that they do not understand that the people whom the hon. Member referred to are a minority and that the vast majority feel that they are discriminated against. This was the reason for the pressure for the reform of the superannuation benefit, to avoid the Tory fraud of the superannuation "bricks". Many millions of workers get no superannuation, and no unemployment sickness or industrial injuries benefit apart from what the State provides. They feel that they are being singled out for special treatment in Measures like this.

The reason for the tremendous uproar and resentment over the three waiting days provision for allowance for supplementary benefit under the previous Government was that it was aimed at one class of workers. For unfair dismissal and disallowance of benefit on leaving a job voluntarily a man can anneal but he gets nothing in the meantime and may have nothing but supplementary benefit.

One man who had worked all his life for two firms and had been 22 years with the second told me at my advice bureau that he had lost his job, and signed on at the labour exchange. Being an independent man, he refused the first job that he was offered, and then found that he was disallowed unemployment benefit. He told me how much he was opposed to scroungers and people who get benefits they are not entitled to, but asked, "Why should this happen to me? I am a worker. Why should I be treated in this way?".

Many people who criticise the payment of these benefits to other people soon realise, when circumstances change—as they are changing rapidly at the moment, with the present rate of unemployment—that they too can be affected. Workers at Rolls-Royce and at the Irlam steel works, who have worked for the same firm all their lives, are being thrown into a world of which they have been completely unaware and which is very frightening to them. They find that their security is gone and their normal life has changed.

This is what concerns me in any proposal to change the benefits for strikers. At the bottom of the scale, when a person is thrown on to State benefit, to which he has contributed all his working life, he faces a great deal of difficulty.

We are all in favour of people who are not entitled to benefits not being able to get them, but this means that people with a genuine case come under severe scrutiny from committees, the employment exchange and the social security office—a procedure with which they are completely unfamiliar.

An article in The Times Business News talks of the difficulties of two executives in finding other suitable employment after working in senior jobs in industry. It explains that their resources are running out, that they are having problems in educating their children, and it outlines the effect on the families and particularly on the morale of their wives. That situation can be multiplied 800,000 times with our present unemployment. Tens of thousands of homes are facing these problems every week.

The Secretary of State talked of people having more resources and a higher standard of living than ever before. Quite true, but it is all relative. In my days in industry, it was when there was a shortage of work or material and average earnings fell that the real problems came. Whether we like it or not, the vast majority of people live on their earnings. If they are getting reasonable money, they want a better home, a car, proper furnishings and holidays. These are not luxuries; they are necessities in present-day life. They help to create the wealth which enables people to enjoy these benefits.

We used to say in industry, "You are only one week away from the dole. When you are off work you will immediately be thrown on to its resources." This was particularly true in the 1920s and 1930s. Today, when the Minister talks about the three waiting days and obtaining benefit at the end of the 10 days or 12 days, I would remind him that the three waiting days period is vitally important to the average British family. Hon. Members opposite say that the resources exist, that people can apply for supplementary benefit, but the point is that the sort of people whom we are talking about are not on the level which allows them to apply immediately for supplementary benefit. A worker earning £20 or £22 a week may lose his job or become sick. He may have a wife and two or three children. In such a home after a fortnight's sickness, with the commitments that such a family has in order to maintain an average standard of life, every penny counts, even today.

Some of us on this side of the House, like my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and myself, have known what it is to look to those three days when we have been sick. We are aware of the antagonism among many workers who feel that they do not get the full benefit on the five days. Jim Griffiths, the former Member for Llanelly, told the Parliamentary Labour Party that it was the intention of a future Labour Government, after 1951, to abolish the three waiting days—in fact, to abolish the waiting period altogether. My hon. Friend the Member for Hitchin (Mrs. Shirley Williams) referred to the three waiting days—

Mr. Alex Eadie (Midlothian)

May I interrupt my hon. Friend? He is on a very important point. He will appreciate that to workers who are engaged in heavy industry, who are liable to accidents, such as miners and on-cost workers in the mining industry, the proposal is sheer brutality. This is penalising men who are doing a very important job. Would not my hon. Friend agree?

Mr. Orme

I agree. In the mining, heavy engineering and building industries the workers are particularly affected. They are also affected in uncertain or casual employment. The Minister said that this would affect only a minority of cases, but in fact on every occasion this three-day waiting period will be removed.

Sir K. Joseph indicated assent.

Mr. Orme

The right hon. Gentleman agrees. I accept what my hon. Friend said about the mining industry. Many manual workers and those in manufacturing industry feel that they are treated as second-class citizens. In the manufacturing industry they feel that sickness pay has been slow to come. Superannuation benefit is still not prevalent throughout many parts of industry. The benefits that some workers get—and I do not complain that they get them—are still not received by many millions of industrial workers. Those workers feel that they are being maltreated. They regard the situation with real bitterness and anger.

Sir K. Joseph

I know the hon. Gentleman is treating a serious subject seriously. I very much wish that the British trade unions had given the emphasis that many trade union movements in Europe have given to improving superannuation, pension and sick pay treatment. Can he not use his influence to get some more of these fringe benefits in the trade union sights?

Mr. Orme

Some of us have had some experience of this. May I refer to the Engineering Employers' Federation, of which the right hon. Member may know something. It was very difficult for us to get a basic wage of over £10 7s. 8d., even 10 years ago. To have gone to the engineering employers talking about superannuation and fringe benefits would never have got us anywhere at all.

We are dealing still with millions of workers who are dependent on the State scheme. The Government are discriminating directly against those workers, and the manual workers in particular. I remember the right hon. Gentleman's speech at the Tory Party conference. I was interested in it because he was under great pressure from his party. Many people in his party, such as the hon. Member for South Angus (Mr. Bruce-Gardyne), want to go even further than the Minister has gone and they have already expressed their views in the debate today. The Minister then defended the current situation. He highlighted the fact that only one-tenth of strikes went beyond the second or third week. I felt at the time that he was urging caution. That caution has now apparently gone out of the window. We have got to take this as a package because it will impinge on all sectors of our industrial society. It will affect the man who is out of work because another man in a similar category, or a similar firm, is on strike, which Donovan asked to be changed, but which the Minister has said we cannot change. This is because of the political climate in his own party. This will affect the person who suffers industrial injury, the man who is unemployed and the man who becomes sick. It will introduce into our society this means test aspect.

The Minister glibly said this afternoon that if people are entitled to supplementary benefit they must go and get it. But the vast majority of workers want to avoid supplementary benefit. They want to stand on their own feet, as the Government so often exhort them to do. They want to have their independence, through decent wages and working conditions—the sort of conditions which the Minister has talked about and which his friends in industry have been so slow in giving. But this is an adjunct to the Industrial Relations Bill.

The Minister dwelt on the Post Office strike, an official dispute, and the amount that the postal workers' families got in the way of supplemenary benefit. The families will be penalised, by this Bill. A man who has been thrown out of work by another strike, or by a lock-out, may be out for many weeks. When he goes back, he will be forced to ask for a sub because of lack of supplementary benefit or, if he has had supplementary benefit in the meantime, he will have to pay it back. The employer will have the right to deduct it.

What about interference with the Truck Acts and the right of a person to his wages? It is another infringement of those Acts. It is an infringement of individual freedom if ever there were one. Schedule 1 is difficult to understand but, as I read it, the employer who does not deduct that money can be surcharged. Is it thought that such action will improve industrial relations? This provision should be put alongside the Industrial Relations Bill, and all the legalistic jargon and paraphernalia in that Measure. We talk about the collective freedom of the trade unions, but such provisions as this will create real bitterness, because the industrial worker will see that he has been singled out while other sections of the community get away with it.

Those of us with industrial experience sometimes speak rather passionately on this subject because we have spent many years on the shop floor trying to improve conditions and industrial relations; trying to get a strong trade union movement; trying to create the type of industrial democracy and democratic Socialist society that we want to see. Instead, we are faced with the introduction of bitterness and antagonism. Hon. Members opposite may say that they do not see anyone marching with banners at the moment, but there will be anger, bitterness and antagonism when the workers realise the implications of a Bill which in any case will save only a small sum of money. It does not even close a door to abuse, but only does what the Tory Party wants to see implemented. This is a political Measure, and we on this side must recognise it to be so.

We are opposed to the whole Bill. We will fight it in Committee. Out of the circumstances which the Government will create, we will seek to come forward with much more far-reaching elements of reform which will ensure that justice is done. The workers will demand it. If we did not fight the last election on industrial affairs, I believe that we shall have to fight the next election on that basis. To listen to some hon. Members opposite who are supposed to be on the liberal wing of the Conservative Party makes one shudder, but it shows the division there is between the two sides. I shall be pleased and proud tonight to vote against the Bill, and to fight against it in the country.

8.25 p.m.

Mr. Charles Curran (Uxbridge)

I listened attentively, as I always do, to the hon. Member for Salford, West (Mr. Orme), and I hope that it will not shock him if I say that I agree with quite a lot of what he said. I agree without qualification that in our society the worker is in many respects at a disadvantage compared with other sections of the community. It is true that he is treated with discriminatory unfairness in respect of, for instance, notice of dismissal, illness, holidays, redundancy pay, and so on. With all of that I agree.

I only wish that the hon. Member had been a little more explicit and had said that, to a great extent, the responsibility for this differential disadvantage suffered by the working class lies with the trade union movement. I very much wish that our unions had done what the German and American unions have done—to demand, as our own trade unions could so easily have done, something like parity of economic esteem for the worker. The unions could have done it. They could have exploited the sellers' market for labour in this country after the war as ruthlessly as did the American unions, and I wish that they had done so.

When the hon. Member concentrated on that part of the Bill dealing with the three-day waiting period, I listened with almost complete agreement, and I tell him frankly that, if that were the only question before us, I should find it difficult to vote for it. I recognise the force and substance of his case in respect particularly of the worker living on what might be called the economic margin; the man with a small income and a large family, for whom three days must seem an economic eternity. I recognise that.

But in some ways the most significant aspect of the hon. Gentleman's speech was how little, how lightly and how ineffectually, by contrast with his usual form, he addressed himself to the main issue of the Bill. The main issue is not the waiting period, but what attitude the State should take in 1971 towards men who strike. How far shall the State provide support for the families of strikers? We are arguing about the rules that govern the payment of public money to the wives and dependants of strikers.

The Bill makes changes in the rules. Those changes are right. I was interested to notice in the hon. Gentleman's speech that, effective as he was in the areas to which I have referred, when he dealt with this part of the Bill it seemed that his speech was simply a vacuum. I want to fill that vacuum by quoting someone whom he will not dismiss as a Tory stooge, or as a Fascist hyena, or a spokesman for the military-industrial complex, or any other such person. Like most of us, I imagine, I have been reading with great interest the reminiscences of the gentleman we still call George Brown. I hope that I am not out of order in calling him George Brown. That is the name by which posterity will know him, as we do. [Interruption.] Perhaps hon. Gentleman opposite will listen to me as carefully as I listened to them, without barracking.

In this autobiography, which is being read with great curiosity by us as well as by his colleagues, George Brown has something to say which is very relevant to the Bill. I do not mean what he has to say about his former Prime Minister or about his former Cabinet colleagues. Piquant and diverting as these statements are, I forbear from quoting them. I quote what he has to say about strikes—textually, with no omissions. If you are called out on strike now, it is not like the old days. You don't have to worry about the rent or the mortgage, because they will be suspended. You don't have to worry about your wife and children, because they will be taken care of by social security. You don't even have to bother much about whether your union is going to give you strike pay or not, because there are various sources of income open to you, like a bit of window cleaning, and you don't necessarily have to tell the tax inspector exactly what you earn. And if you stay out a couple of weeks the Chancellor starts paying back the tax money which, in your view, he quite improperly took away from you in the first instance. Of course, there are still people who suffer severely in a strike, but for quite a lot of people a strike nowadays is just a form of paid holiday.

Mr. Dennis Skinner (Bolsover)

On the question of being on strike being simply a matter of luxury, perhaps the hon. Gentleman would comment on the fact that when a strike takes place, for instance, the Post Office strike or the Ford strike, a great deal of attention is paid by television commentators and by the public media generally as to how difficult it is for a family, particularly a housewife with children, while the husband is on strike, and that theme is played up rather than the fact that they are living in the lap of luxury.

Mr. Curran

I cannot see the point of that interruption. It is not addressed to me. Is it addressed to the absent astral body of George Brown? Perhaps it is. It seems to have no relevance to what I am saying. I was quoting what George Brown says about strikes.

Mr. Skinner

I say that he is wrong.

Mr. Curran

That comes as a surprise. I should never have dreamed that the hon. Gentleman would make that comment. But the hon. Gentleman can fight this out. It is a private war. I am not concerned to take sides in it.

George Brown gives it as his opinion that in the England of 1971 the economic conditions of men who strike are very different from those in the early days of the Labour movement. I should have thought that that was not only elementary but self-evident everywhere—except, perhaps, in the constituency of the hon. Member for Bolsover (Mr. Skinner), though I should think it is self-evident even there.

Therefore, like the hon. Lady the Member for Hitchin (Mrs. Shirley Williams), who opened the debate, and most of the speakers who followed her, I address myself to the question of fact: what sort of rules should we make for the payment of money to the wives and children of strikers? That is what we are arguing about, and basically this is a Bill to change the rules.

People outside the House will agree, and I invite the House to agree, that when a man strikes we should not leave his wife and children to suffer because he is on strike. I doubt if anyone would be in favour of that. I doubt if anybody would suggest—I certainly would not suggest, either directly or by innuendo—that we should drive a man back to work by starving his wife and children. I believe that we should give to the wife and family of a man on strike as much money as they need to maintain the standard of living which the State regards as the minimum. That is not the question.

The question is—who should pay for this aid? Should the money which rightly goes to the wife and children of the striker come out of the pockets of the taxpayer, or should it come out of the pockets of the striker? The Bill does not go as far in that direction as many of us think that it should, but that is the root question. Whose duty is it to maintain the wife and family of a man on strike? Is it his duty, or is it the duty of the taxpayer? I believe that it is the man's duty. When he is on strike he cannot do it. Therefore, the State should and does provide the wife and family with the support that they need; and I for one will always say that it should go on doing so.

Mr. O'Malley

The striker is also a taxpayer.

Mr. Curran

He is a taxpayer, but he is not the only taxpayer. The great body of taxpayers are entitled to an opinion of their own. That can be said even of the trade union movement. There are about nine million people in unions affiliated to the T.U.C., but there are about 25 million people at work. Therefore, the T.U.C. speaks at the most for no more than two in five of the working population.

Therefore, I ask, as the Bill asks, whether it is the business of the taxpayer to provide by way of gift the money which is needed to support the wife and family of a striker while he is on strike. I reply that it is not. I am not disputing the right to strike. However, when a man exercises his right to strike, that is a voluntary act. Exercising the right to strike does not confer upon him the right to offload on to others his burden as a husband and a father. It is for him to support his wife and children. The duty which rests upon him is not one that he can shuffle off on the plea that he has gone on strike. He cannot discharge that burden while he is on strike, but I see no reason why he should not discharge it out of his earnings after he returns to work.

Dr. Alan Glyn (Windsor)

My hon. Friend is arguing that it is the State's duty to support the wife and family of a striker. Does he agree that if the man's union is responsible for the strike it should participate in helping a man when he is on strike?

Mr. Curran

I agree. I repeat that striking is a voluntary act. Nobody does it with a revolver thrust into his ribs. If a man strikes, he must expect to shoulder—and if it is a union that calls him out on strike the union must expect to shoulder—the consequences of that action. If a man goes on official strike, it is the union's business and not the taxpayer's business to look after him. If the taxpayer decides, as I think that the taxpayer should decide, to support the man's wife and family while a man is on strike, I see no reason why that support should not be granted by way of loan and not by way of gift. This basically is what we are arguing about—the terms on which the taxpayer shall grant help, as he should grant help, to the dependants of those on strike.

When we come to examine the way in which the Bill deals with it and when we listen to the speeches from hon. Members opposite there is one thing which is instantly apparent—the very wide gap between those members of the Opposition who have sat in Government and those who have not. Those who have sat in government have become aware of the economic realities involved in supplementary benefit for strikers. Those who have sat in government have been pretty candid about it. I was interested to listen to the hon. Lady the Member for Hitchin. She took a different line from that taken by some back bench critics opposite. She has been in government once and no doubt hopes to be there again. She is not giving any hostages to fortune. She recognises that no State can provide money, ad lib, for people on strike, whether it be a Labour-controlled State or a Tory-controlled State.

The same consideration applies to the invisible man of this debate. There has been floating over the benches opposite a body of whose presence we are aware but which none of us can see. We sit here almost like people at an economic seance. We have not got him with us corporeally although we have him here non-corporeally—the right hon. Member for Coventry, East (Mr. Crossman). He is the invisible man of any debate now about social security.

Instead of coming here and taking part in debates on social security the right hon. Gentleman prefers to sit behind a pillar of cloud in Great Turnstile, hurling thunderbolts—and long may he continue to hurl them. The more thunderbolts he hurls the more we welcome it. I have been looking at what the right hon. Gentleman said in the New Statesman about one of the matters which has caused a good deal of argument during the debate, namely the question of disregards—whether we should disregard, for instance, the tax refunds.

The right hon. Gentleman who now edits the New Statesman was the social security overlord; he was on the inside track, and he is not talking as an outside commentator. This is what the right hon. Gentleman said in the New Statesman of 4th September last: For many years the law has been interpreted as requiring the Commission —that is the Supplementary Benefits Commission— to disregard refunds in assessing the needs of a striker's family. This mainly benefits the higher-paid worker. Indeed, under the present system the more you earn and the less you need assistance the more you are entitled to claim from the Government. Quite apart from its economic effect in encouraging strikes and its outrageous social implications the greatest doubts have been voiced in the highest legal circles about this interpretation of the law. Here we have the former Secretary of State for Social Security proclaiming, once he is safely outside the area of decision in Whitehall, that the present system, which will be changed by the Bill, has been, in recent years, a system with outrageous implications which, in his own words, gives more money to the better-off and less money to the worse-off.

Mr. Buchan

Would the hon. Member keep in mind the argument being adduced here? The situation which was regarded as being outrageous was to back the argument in favour of a redistribution of wealth from the wealthy to the less well-off. This Measure is being introduced as part of the Budget proposals to redistribute wealth from the less-well-off to the wealthy.

Mr. Curran

That may be an argument, to be pressed against my right hon. Friend or against me, but I am sure that it is not an argument the hon. Gentleman can press against his right hon. Friend who edits the New Statesman. If he is shooting at that target he is indeed shooting at the air. It is idle for him to say that in reply to this quotation. I suggest that he restrains himself and makes the interruption at a more appropriate time. This is the wrong time to make it.

I want to take another quotation from the same inspired source. Another matter being debated here, which my right hon. Friend proposes to put right, is that of strike refunds, the preferential treatment given to a man on strike as compared with a man who becomes redundant or unemployed. Again the former Secretary of State for Social Security, the present editor of the New Statesman, wrote: It takes three or four weeks before a worker who is made redundant receives his tax refund. Not so the striker, who is treated much more sympathetically. Indeed, the Ministry, the employer and the Inland Revenue all collaborate to ensure that he gets his refund in the first week. Sir Keith"— that is, my right hon. Friend— might very well ask himself why, if you voluntarily withdraw your labour, you should be treated so much better by everybody concerned than if you are a genuine victim of unemployment. My right hon. Friend indeed might ask himself that question. He has, in fact, taken the right hon. Gentleman's advice. He has asked himself that question, and the Bill is part of his answer to it.

I invite any hon. Member opposite who disagrees with that argument to address himself, not to my right hon. Friend, who is completely guiltless, but to the former Secretary of State for Social Security, who has now departed the battlefield.

Mr. Orme

Perhaps some of us have addressed that argument in the past, as we are addressing it now. The only point that I would like to make to the hon. Member is that when we addressed it to either the previous or the present Minister, we were also talking beyond them to those who advise them in the Ministry and in the Treasury, where many of these cock-eyed ideas come from which many of us who have had experience in industry basically refute.

Mr. Curran

The hon. Member may well be right. I should hate to pry into the processes of perception and reproduction in Whitehall. If the hon. Member wants to do it, he can do so by himself. It is no use his asking me to come with him. I would no more think of doing that than of going into a cinema in Birmingham.

I repeat, we are debating whether we shall change the rules under which the State comes to the rescue of the dependants of men who go on strike. I believe that we are right to change the rules, because we are right to recognise that a strike is something which affects the taxpayer. The taxpayer cannot stand back from it. I got the impression when I listened to some of the speeches from hon. Members opposite—I could identify them, but perhaps I had better not—that some of them regard strikes as intrinsically desirable, as a sort of art form like painting, playwriting or ballet dancing, and that they regard the Supplementary Benefits Commission as a sort of branch of the Arts Council, something which ought to supply money for these cultural activities without asking any questions about it.

That is a point of view. I wish that it could be argued a bit more explicitly than it has been argued. It has been argued largely by inference, but I wish that it were argued dogmatically. There is, I suppose, a case for it, but it is no good expecting any British Government to believe that case. No British Government can consider that whether we have strikes or whether we do not is a matter of theoretical interest, like whether we have a visit from the Russian ballet or from the Monte Carlo ballet. A British Government must take the position, and the British taxpayer must take the position, that strikes affect our bread and butter and that, therefore, we are entitled to look, and look narrowly, at the rules whereby we provide help for the dependants of men on strike.

We have got to do two things at once. First, we must ensure that the people who are dependent upon strikers are looked after adequately and in a civilised fashion. Secondly, we must ensure that the rules under which they are looked after adequately and in a sympathetic fashion are rules which do not make it easy for people to go on strike.

I repeat, we cannot regard strikes with neutrality. Even Mr. Brown does not regard them with neutrality. Who am I to say that Mr. Brown is wrong? Mr. Brown says, quite rightly, and I should have thought it a platitude at this time, that strikes are economically harmful. We should not, therefore, encourage people to go on strike by relieving them not only for the time being but for all time of their economic responsibilities and of their liability to support their wives and families. We should ensure that that liability remains firmly tied around their necks. It is socially desirable that it should be. It is socially necessary that it should be. At present we do not impose that liability on strikers, and that is one reason, to which, again, Mr. Brown is witness, why strikes have proliferated so immensely.

This Bill takes a long step, though not all the steps, to restoring a sense of economic responsibility to men who have gone on strike, and for that reason I welcome it warmly.

8.51 p.m.

Mr. James Sillars (South Ayrshire)

I intend to refer to one or two things which the hon. Member for Uxbridge (Mr. Curran) said. There was a basic contradiction between the remarks which he made at one point in relation to British trade unions acting in the same manner as German trade unions and American trade unions and the winding up part of his speech which was an attack on trade unions as looking after only themselves and not paying attention to the general needs of the general community. I will deal with that later.

I found his speech very entertaining. He is an excellent debater, and I am very grateful to him for refreshing my memory by quotations from both the right hon. Member for Coventry, East (Mr. Crossman) and Mr. George Brown, who now sits in another place. The quotations merely confirmed my own point of view that both gentlemen were completely out of touch with the rank and file of this party before the last election. Indeed, there may in both those quotations be some clues why the Labour Party did not win in June, 1970. I am sure that the hon. Gentleman's speech will be read with great interest by all constituency Labour Parties which buy HANSARD.

We have heard that the Secretary of State is, allegedly, one of the most able men and one of the most compassionate men in this Cabinet. I have looked for some time for signs of his compassion. He will have to do better than he has with his family income proposals and this Bill to make him one of the most compassionate of the Tories anywhere in the country. As to his ability, I have not had opportunity of watching him over the years, but if he is to register with me and some of us on this side of the House as an able person he will have to deliver his next Bill a great deal better than he delivered this for Second Reading today, because he left a good deal to be desired by way of information to hon. Members.

I will give him this—he is a reasonably clever politician, for this Bill contains two elements. One is a very important element, the abolition of the three waiting days and the camouflage of the £1.5 million which is taken away from people who go on strike. This is what is to be promoted to the public in the hope that, should they become interested in this abolition, they will be blinded by the headlines and not realise that they are being robbed of £19 million by this Bill. We will give to the Secretary of State at least that he is politically clever if nothing else. There are two major issues. One is the proposition in the Bill about the reduction in cash made available to the families of people on strike.

We recently discussed on the Industrial Relations Bill the right to picket. Members of the Conservative Party made passionate speeches about a man's home and a man's family being sacrosanct. They said that no one should ever worry a man's family even by walking around outside his home and that the last thing they would ever do would be to damage a man's family simply because he was on strike. They will have to eat their words tonight because the Bill seriously affects the families of men who have withdrawn their labour.

Mr. Vic Feather, the General Secretary of the T.U.C., was right when he said that there was a queer part of the Bill—the proposition that the family of a man in prison, let us say for committing the great train robbery, is in a privileged position compared with the family of a man who is on strike. No Conservative has answered that charge—

Mr. Curran

Will the hon. Gentleman allow me to have a shot? The distinction is elementary. I decline to believe that it is not just as obvious to Vic Feather as it is to the hon. Gentleman. When a man goes on strike, it is a voluntary act. Does the hon. Gentleman know of anybody who has broken into a gaol?

Mr. Sillars

No one breaks into gaol voluntarily, but it is a voluntary decision to rob a train. As a consequence, a man might go to prison, but the initial act is voluntary and it is in his pecuniary interests, as it is with a striker.

Mr. Curran

Surely the hon. Gentleman will not take refuge in that semantic cat's-cradle. People go on strike because they choose to do so. Nobody ever chooses to go to gaol. I make that statement with almost complete confidence. A man goes to prison because the State puts him there. The State never puts a man on strike.

Mr. Sillars

If we had the time and were being pedantic, we could prove that men occasionally land in gaol because they want to go there, as the hon. Gentleman opposite knows full well if he has read probation reports.

Mr. James Dempsey (Coatbridge and Airdrie)

When my hon. Friend speaks of the great train robbery, will he bear in mind that these men were not sent to gaol for robbing the train but because they were caught.

Mr. Sillars

My hon. Friend asks me to bear that in mind, and I will do so. The Government seem to believe that this Measure will help to arrest strikes. It will do nothing of the kind. It will merely change the character of industrial conflict. I support the contention that we should provide supplementary benefit for the families of men on strike. We should not punish the families of people who are exercising a right. If the Conservatives seek to sharpen the conflict in industry in this fashion, the result will be conflict of a nature we have never seen before. Once men are on strike, it is extremely difficult to get them back. The more commitment the men have to debt—and that is the practical consequence of the Bill—the more determined they will be to get what they set out to get in the first place.

The contentions of the Secretary of State when he spoke about Clause 7 were ludicrous. He said that there was no great loss simply because one was taking away a retrospective payment at the end of 13 weeks. He showed a total lack of understanding of working budgeting. He should know that working-class people budget in totality. Often the housewife or grandmother knows that the Co-op dividend is coming along—that was when there was such a thing as Co-op dividend—or that some other money will be coming into the family budget and she will take it into account in deciding what has to be spent. The three waiting days, whether they come at the end of three weeks or 13 weeks, are important to all families.

The Secretary of State said that there has been a transformation of our society since the early 1950s. He certainly did not say that during the election campaign last June. In fact, he told the people that they were extremely hard up, that they were being hit by rising prices and that their standard of living was falling. Certainly nothing has happened since 18th June last year which has led to any transformation to justify an abolition of a person's entitlement to three waiting days.

The right hon. Gentleman also said that some people were covered by employers' schemes, but it has been pointed out from this side of the House that thousands of workers are not covered by such schemes. The hon. Member for Uxbridge said that we should act like the German and United States trade unions. If next year our trade unions take industrial action to secure from every employer a guarantee of coverage during the first three days of unemployment or sickness, will the hon. Gentleman and his party back that action? No, they certainly will not.

Mr. Curran rose—

Mr. Sillars

No, I cannot give way. The hon. Member's own speech lasted 35 minutes and I have only a few minutes left. The hon. Gentleman talked about the British trade unions exercising their power in times of shortage of labour. He knows that the Government would be the first to stop them doing so. Indeed, they tried to stop the miners exercising their powerful position in the energy market late last year.

I come to what the Secretary of State said about redundancy being an element which he took into calculation. It is sad to see a Measure, which was brought in to ease the way for ordinary people in terms of technology, now being used to substantiate a Bill which erodes some of the rights which they have built up over a number of years. I hope that the Government will abandon this platform of their social security policy.

The Secretary of State said that he found that at times people were reluctant to go back to their work, the impression being that they sometimes do not go back to work when they are really fit to do so. If this is the case, then it is high time that the Secretary of State examined the medical profession because such men are said to be unfit for employment because of sickness or injury by means of certificates issued by general practitioners. If a fiddle is going on and if there is looseness in administration, then it is not to the workpeople that the Secretary of State should turn, but to his friends in the British Medical Association and elsewhere.

Dr. Glyn rose—

Mr. Sillars

No, I will not give way. The Secretary of State also said that the National Insurance Fund was absolutely watertight. That is not true. Even the Secretary of State must understand that this fund is not isolated in every respect from other areas of Government income and expenditure.

The Secretary of State mentioned his proposal to cut the benefit of workers on short-time working. He told us that his reason for introducing this Measure was to remove the temptation from an employer to use the National Insurance Fund to offload his employees during a difficult period for his company. I cannot think of any employer in my experience who has offloaded employees on to the National Insurance Fund saying, "I am transferring you lads temporarily up the road. Come back next week, when we shall be out of our mutual difficulties." Even if that happens, it is no excuse for taking it out on workers. The logical method is to deal with offending employers by taking a levy off them individually or collectively.

There are very difficult days ahead for the country and for the Government. No matter how much power the Government have in the Ministries in Whitehall, above all they need the co-operation of working-class people. They will not proceed an inch along the way that they want to go or in any other direction without the co-operation and good will of ordinary working people. The Bill is another of the Measures which have been introduced since 18th June declaring war on the interests of ordinary working people. The Government must understand that, if they continue to provoke resentment among working people, there will be no co-operation from those people.

It may be that the Labour Party lost the last election because of apathy among our supporters. Many of us on the left of the Labour Party have been concerned for years about how we can re-stir the old passions among working-class people and stimulate their desire for more power and a better way of life. To some extent we have failed. Where we have failed, the Government have succeeded. We may have lost in 1970 because of the apathy of our supporters. We shall win next time because the wrath of the people will be properly directed against the Conservative Government.

9.8 p.m.

Mr. Brian O'Malley (Rotherham)

It has become clear in the debate that there are deep differences in attitudes between the two sides of the House. In spite of the intentional and rather professional light relief of the hon. Member for Uxbridge (Mr. Curran) and the unintentional light relief of the hon. Member for Harrow, West (Mr. John Page), who always makes his own peculiar contributions to debates of this kind, strong feelings have been expressed, especially by members of the Parliamentary Labour Party who have themselves experienced unemployment and known utter dependence on the State system in times of unemployment and sickness.

We on this side of the House reject the Bill, first, because of the consideration that must be given to a Bill of this kind in a broader context. The House recognises that, during the post-war period, the bitter class antagonisms and resentments which scarred British society in the earlier part of the century have faded under the impact of increasing affluence, the virtual disappearance of the worst extremes of poverty, and the provisions of the Welfare State.

The lessening of the sense of social divisions in this country during this period has been partial; but large areas of poverty and relative deprivation, as measured by any yardstick appropriate to modern conditions, remain. Despite this partial progress there was no need for pessimism for the rest of the 1970s and beyond. The problems were not of such scale and magnitude that they could not have been overcome in a wealthy society such as ours.

Last June the Conservative Government were elected. My right hon. Friend the Member for East Ham, North (Mr. Prentice) said that the Government were turning the clock backwards. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) pointed out that the middle way, as envisaged by Mr. Harold Macmillan, was dead. So within less than a year the Government have begun to revive old antagonisms and to exacerbate the sense and reality of social division in this country. Our first complaint against the Bill is that its major aspects continue this extremely undesirable and unhealthy process.

The Bill has been introduced without consultation with the Supplementary Benefits Commission, which consists of experts in social security. It has been introduced without any form of consultation with the Trades Union Congress. The Bill panders to the worst instincts within the Conservative Party.

I listened carefully to the comments made by the hon. Member for South Angus (Mr. Bruce-Gardyne) earlier this afternoon. It was quite clear that he thought that the Secretary of State and the Cabinet had gone only part of the way towards what he regarded as a satisfactory solution. Indeed, the Secretary of State in his introductory speech made it clear that the Bill was not necessarily the last word on the subject.

I suppose that one has to look for good in any hon. Member or any man on any subject. Having listened to and, in the previous Government, answered Questions from the hon. Member for South Angus, it always seemed to me that he took the most reactionary view of anyone in the House on the subject of strikers. This afternoon the hon. Gentleman looked into and tried to find a bit of good in himself on this subject. He said that he really did not want to deprive strikers of supplementary benefit altogether; he wanted it to be at the discretion of the local officer dealing with each case on its individual merits.

I think that I should tell him—

Mr. Orme

The hon. Gentleman is not here.

Mr. O'Malley

—that this would put the people who administer the system locally into an impossible position. They would be placed under an intolerable strain and given an impossible job to do.

For example, if there were a strike in an engineering or a steel works and several thousand people were out, ft would be quite impracticable to suggest that discretion as between one individual and another could properly be exercised by local officials, busy as they are even without the pressures of a major strike on their hands.

This is a Bill from a Government who apparently expect, and are certainly inciting, continuing industrial warfare with themselves participating as a partisan force. It is interesting to notice the persistent rumours in the Press, which the hon. Member for South Angus in a recent newspaper article confirmed—I suspect that as a Government back bencher he knew what was happening—that so inflammatory did the Government regard the Bill, particularly the provision about strikers, that they held it back until after the postal strike. Of course, it is an open secret in Whitehall that the Bill would have been introduced several weeks ago had it not been for the postal strike.

The Bill is in line with the general philosophy of the Government—increased means testing, more selectivity, for which the hon. Member for Rushcliffe (Mr. Kenneth Clarke) asked this afternoon, and higher charges for the treatment of and prevention of sickness. At a time when tax concessions are being given for the wealthy—when advertisements in all the newspapers are explaining how one can obtain a tax concession of £4,000 instead of £2,000 for a car—there is to be no concession in respect of the three days' sickness and unemployment benefit for lower-paid workers and people of the kind particularly referred to by my hon. Friend the Member for East Ham, North—those who are living on wages somewhat below the national average. That reflects our general attitude towards the Bill in the broader context of Tory policies and Tory philosophy, which we completely reject.

I now turn to the major aspects of the Bill which we find highly objectionable and shall want to debate and oppose in detail in Committee. First, in Clause 7, the three waiting days' provision is abolished. In a full year that will save the National Insurance Fund £19 million. The Bill is introduced at a time when the unemployment figure is about 814,000—the highest figure since the war. It is being introduced at a time when the Prime Minister and the economic Ministers are refusing to give any estimate of the unemployment figures in the coming winter. Economic commentators in more than one periodical and newspaper are mentioning the possibility of 1 million unemployed. The Bill is being introduced when short-time working is widespread through the whole of the heavy industrial areas.

The Secretary of State has charmingly and cunningly appealed to the Opposition Front Bench by referring to what happened when the Labour Government were in power. This proposal was put forward by the Labour Government—but it was withdrawn by that Government because of back-bench pressure. There has been precious little sign of backbench pressure on this Secretary of State from the Conservative Party.

I should point out that when the Labour Government introduced this proposal they were attempting to negotiate with the T.U.C. and the C.B.I. They were trying to persuade employers to take the responsibility of paying for the first three days' sickness benefit. Those discussions came to nothing, but the Labour Government tried. There is no indication that the present Government are having any such discussions.

Mr. Orme

My hon. Friend probably heard the Minister interrupt me to suggest that the T.U.C. should go for this benefit. We notice that the Minister has not asked the C.B.I. to pay for the three days.

Mr. O'Malley

The best thing that the Minister can do is to make a public declaration urging the C.B.I. to do this, saying that they will give the T.U.C. full co-operation.

Mr. Heffer

Or put down an Amendment to that effect.

Mr. O'Malley

Or put down an Amendment. We should welcome such an Amendment in Committee. All the objection to the abolition of the three days' waiting system would then be removed at a stroke, and everybody would be satisfied.

We are entitled to ask why the proposal is being introduced now. We know that it will save £19 million in a full year, but it is interesting to consider the underlying philosophy and the basic reason for its introduction—because it is not only a question of saving £19 million. The hon. Member for Liverpool, Garston (Mr. Fortescue), now in a state of monastic silence as a member of the Government Whips' Office, used to have plenty to say on this subject. In the debate on the National Superannuation and Social Insurance Bill, he said: …there is in the country at the moment dissatisfaction with the fact that it is possible for people drawing unemployment benefit or sickness benefit to live as well as, or even better than, they live when they are employed."—[OFFICIAL REPORT, Standing Committee F; 24th February, 1970, c. 378.] I must tell the hon. Gentleman, who is present, that we take the view that, when a man is sick, in a decent and fair society, his income should not be drastically reduced. It is at precisely that time that he needs money.

In that debate, the hon. Member for Garston was worried about workers taking advantage of the system and said that some people thought that, when sickness benefits were introduced or increased, more people went off work. This has not always been so. A few progressive firms have found that, when they have given their workpeople sickness benefit for the first few days unemployment, absenteeism through sickness during those days was reduced.

But even if it has increased, one of the reasons is that people, if they have a decent sickness benefit, can afford to be off work when they should never be at work at all. Some hon. Members opposite sneered at my hon. Friend the Member for Walton when he spoke about the condition of the building workers. In building and mining in the old days—I grew up in a mining village—people went to work, as they often still do, because they could not afford to be off work. It is right that they should be able to stay off work when they are not fit to attend.

The Government, when in opposition, opposed such proposals as they are now introducing. The noble Lord the present Minister of State for Defence said that they would vote against them. He could see that they might be acceptable if there were "sociological rethinking". Presumably, we now have that rethinking, and what it comes to is the ending of food subsidies, higher prices, public and private sector workers in two different positions, higher fares, higher health charges—

Mr. Curran

Higher pensions.

Mr. O'Malley

The hon. Member's point is not relevant. We are talking about the working population, not the retired.

The Government opposed this in opposition. Perhaps the Under-Secretary of State, who has the unenviable job of winding up the debate—he often gets the dirty end of the stick in these matters—would explain why he said in the debates on the National Superannuation and Social Insurance Bill that, if such proposals were introduced to knock off the first three waiting days, some people, particularly at the lower end of the income scale, who were genuinely sick, would suffer. Of course they would, and they will suffer under these proposals.

The hon. Gentleman is at one with my hon. Friend the Member for Walton, who said that these proposals are vicious. They are vicious for the reasons which the hon. Gentleman himself gave as an Opposition Front Bench spokesman. We oppose this Clause for the reasons which he gave, because it will hit the 6 to 8 million people, lower-paid people, because it will affect people living, as far too many people do, in poverty, because it will affect the working mother of a fatherless family—there were 400,000 of them in 1966—because it will hit yet again the development areas, where the number of lower-paid workers is higher than the national average. The Bill will hit people in the building and mining industries where there is higher than average sickness, and absence through sickness, because of the conditions in which people in those industries work. We oppose it because it will affect large and increasing numbers of people in this country who are on short-time work and who, under the existing regulations and law, can benefit if two or more days of unemployment are within six consecutive working days.

The result of the introduction of this Clause is to create two nations in this aspect of our life. We are told that 60 per cent. of the population are already in sick pay schemes of one kind or another, and so we are going to put into an inferior position the 40 per cent. of our people—largely the lower-paid workers—who have no such schemes.

We say to the Secretary of State that he should withdraw the Clause. The first thing that he should do before considering introducing such a proposal is to go to the T.U.C. and the C.B.I. If they could achieve a situation in which the employer paid, it would achieve administrative savings.

The Under-Secretary said previously that we should try. I am now saying that the present Government should try, too. The hon. Member for Garston told us when we considered the superannuation Bill that we would not get agreement with companies and with the C.B.I. because of the high level of taxation and S.E.T. Corporation tax has now been reduced, and so has S.E.T. This is the time to get going. But until there is such an agreement, the Secretary of State should not come to the House with proposals of this kind.

I turn next to the question of men on strike and the position of those men when they return to work after a strike. Certainly, the Government have been successful in the first quarter of 1971 in having an unprecedented number of days lost through strikes. It does not say much for their industrial relations policy. Certainly the cost to the Supplementary Benefits Commission through strikes is rocketing, and this is directly the result of the industrial policies of the present Government. It has been pointed out that 90 per cent. of all strikes last for less than two weeks and, therefore, contrary to public opinion which feels that at the drop of a hat everybody will go on strike and draw benefit, in 90 per cent. of the cases strikes end before two weeks. Therefore, the men get nothing.

Between 1967 and 1969 less than 2.5 per cent. of all strikers received supplementary benefit for their families during strikes, and even in the longer ones only 17.7 per cent. of workers on strike for over two weeks received supplementary benefit. The Secretary of State pointed out that the figure had grown from 2.5 per cent. in 1967 to 1969 to 25 per cent. this year. But one would expect this kind of variation in strike figures. It depends on the type of strike. We have had the Ford Motor strike and the postal workers' strike—and the present Government have a direct responsibility for the postal strike situation.

The Government are now introducing a 20s. disregard, whereas the previous Labour Government put in statutory form the entitlement of the striker to a disregard of £4.35. I will tell the House why we did it. First of all, under successive Governments, before the present Government came into power, in matters of social security the State acted as a neutral agent in strike situations. We did it as previous Governments had allowed it to happen because we were concerned about the position of the wives and children of men on strike. The present Government have not done it. They have reduced the amount to £1. It inevitably means that the lower-paid, the men on national average earnings and in the range below, are the people who will suffer. Employers will be put in difficulty, because we are told that what has to be taken into account is not advance of earnings but advance of earnings made or offered. If that is not a recipe for industrial argument, I do not know what is.

What is even worse—and here I should like to know the Inland Revenue's views—tax refunds are to be taken into account whether paid or not paid. If an employer does as the C.B.I. have recommended, and says, "I shall not pay out the tax refund", the matter has to go to the Inland Revenue and there is delay. How will the Supplementary Benefits Commission and its officers get this kind of information in probably several thousands of cases in a short time and deal with it?

Even worse than the reduction of disregard from over £4 to 20s., which will affect the wives and children of genuine strikers, is the fact that the Government are not willing to follow the advice of the Donovan Commission to amend the grade or class provisions, with the result that innocent parties will be hit by these proposals. One of my hon. Friends spoke of lockouts, and I confess that I had not considered this aspect before. We shall want to consider it in some detail in Committee.

I turn now to the process of paying to ex-strikers money on loan for themselves and their dependants and then reclaiming it. That means that the ex-striker will be treated worse than the ex-prisoner who has been in prison for a criminal offence. Further, if any private sector organisation—bank, hire-purchase company, loan company, or whatever it might be—tried to exercise such powers in the way in which the Schedule sets them out there would be a major public outcry.

What happens? The Secretary of State or his Department has to give to the employer private information about the protected earnings, in the sense that they are defined by the Bill. A man might be paying for an illegitimate child—all the details of his private life are immediately available to the employer. The employer is then instructed to deduct, at his discretion, without reference to the employee at all, between one-eighth and one-quarter of the debt owing to the Supplementary Benefits Commission. Anyone who knows anything about the situation on the factory floor—and I can envisage it in a large engineering works—knows that if on the Friday pay day some employer deducts money in this way, at his own discretion, there will be major trouble.

One must ask the Secretary of State whether the employers agreed to the introduction of these proposals. One effect will be that workers whose normal earnings are little above the protected earnings, as defined, will be very reluctant to work overtime, certainly in the 14 weeks in which the order is operative. That will not help the factory which needs overtime to be worked after a strike has ended. It does not provide good industrial relations but a source of continuous irritation.

Once again, dependants will suffer. This provision brings endless possibilities in regard to people trying to change from one job to another, and we all know the situation in times of low employment when people have tried to dodge their maintenance payments. I understand that in some areas the authorities were still trying in 1948, to collect debts incurred by loans from the National Assistance Board during the General Strike of 1926.

I believe that the proposals in Schedule 1 are monstrous and that their purpose is to prevent people from applying at all or, if they do apply, to make them crawl for it.

The effect of this legislation will not be to reduce strikes by depriving the strikers of their standard of living. I find it hard to believe that a Member such as the hon. Member for South Angus could believe that longer strikes are at least partly caused by higher supplementary benefit rates.

It shows a complete and abysmal ignorance of our industrial relations system. As my hon. Friend the Member for Salford, West (Mr. Orme) pointed out, the proposals will increase bitterness, and, incidentally—going against all the ideas of the Secretary of State for Employment—they are a positive encouragement to trade unions to pay low strike pay. Why should they pay over £1 when everything they pay over £1 is taken by the Supplementary Benefits Commission?

Briefly, on the question of industrial misconduct, we believe that the 40 per cent. rate is too high. Second, there is a need to seek new definitions, so that people caught under this section of the legislation should obtain and be able to feel that they are obtaining a fairer deal than they are at present.

My hon. Friend the Member for Hitchin (Mrs. Shirley Williams) gave an example of people who, by following their domestic commitments, found themselves cut off from benefit because the national insurance officer, in his constricted terms of reference, had no alternative but to disqualify them. We shall want to look in considerable detail at all these proposals during the Committee stage.

On the abolition of the local committees, it is interesting that the Beveridge Report talked about the outstanding importance of Decentralisation and close contact with local agencies of all kinds in dealing with the varied needs of insured persons". Before we reach the Committee stage, I hope that the Secretary of State will tell us why he has done this. If he thinks that they are not doing a useful job at present, or only a very limited job, perhaps in Committee we should consider how the rôle of those local committees can be increased and improved.

We are concerned at the major aspects of the Bill. The lower paid and children will be hurt. One section of the population is to be labelled poor. It is to be means tested and to be treated differently from the rest of the population. The administration of the Bill will place considerable strain on the administration of the Department of Health and Social Security. We believe that strikers are being met with weapons of deterrence by a Government who always regard the striker as wrong. The Bill is the product of an insensitive Government, whose partisanship is for the wealthy while making second-class citizens of the poor. We shall, therefore, vote against the Bill.

9.38 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)

This has been an interesting debate. It has been noteworthy for the differences of view which have been expressed, notably the differences between the views expressed by the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) in opening the debate and those expressed in some of the speeches from the back benches on this side of the House. It has also been noteworthy for the parentage of the Bill which has been called in aid.

We have heard the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) quoted as the first author of the proposal for waiting days, followed by the right hon. Lady the Member for Lanark (Mrs. Hart) who put it in her Bill and later withdrew it. The right hon. Member for Coventry, East (Mr. Crossman), whose views on these matters we all respect whether we agree with them or not has described, in his usual expressive language, the possibility of supplementary benefit being paid to strikers after they return to work as "a ridiculous anomaly". When one looks at this respectable parentage, some of the rather extravagant language used from the Opposition benches cannot be justified. The other notable feature of the debate has been the speeches from my hon. Friends, all of whom have supported the Bill strongly and with moderation.

I come to consider some points made on Clause 2, which deals with industrial misconduct and voluntary unemployment. The hon. Lady the Member for Hitchin spent some time expressing her misgivings about the Clause. My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) gave instances concerning teachers in Scotland. The Clause was mentioned by the right hon. Member for East Ham, North (Mr. Prentice), whom we all welcome back to social security debates, and by my hon. Friend the Member for Harrow, West (Mr. John Page), who expressed the view that there was a close link between the Bill and the unfair dismissal procedure of the Industrial Relations Bill. What has been said on this highly technical matter, and indeed what has been said on all other aspects of the Bill, will be carefully considered by my right hon. Friend between now and the later stages of the Bill.

The hon. Lady the Member for Hitchin instanced the example of a man in heavy work who, because he could no longer lift heavy weights, had to leave his job and who might be caught by this provision. It is unlikely that this would be the case. I am advised that when there was medical advice that a man should leave heavy employment it would certainly not amount to misconduct and he would not lose his unemployment benefit.

In reply to my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers), who asked about the position of single women with dependants, if a single woman who is disqualified for industrial misconduct has dependants, she will not be required to register for work. The reduction which is tied to the requirement to register will not be applied in her case. Therefore, the disqualification in such cases bites on unemployment benefit only; and if the effect of disqualification is to bring the woman below supplementary benefit level she will get supplementary benefit at the normal level.

My right hon. Friend made three points, and I want to reiterate them, as to why we think that the provision with regard to waiting days is justified in the context of the substantial improvements which we are making in social security benefits in no fewer than three Bills which have either been through the House or which are now before the House. The reasons are, first, that this is a retrospective payment; second, it does not help those who are on supplementary benefit at all; third, there is now a widespread practice of sick-pay schemes and redundancy schemes which make provision for a growing number of people.

This cannot be denied. The other practical point is that to do with the 13-week linking. The hon. Members for Liverpool, Walton (Mr. Heffer) and Salford, West (Mr. Orme)—I apologise in that I did not hear the latter's speech—referred to this and in particular to building workers, to those who work outside and are prone to influenza or are troubled by bronchitis during the winter months. This 13-week linking is of substantial help for those who have a few days off sick during the winter months. It means that, having served their waiting days at the beginning of the winter period, this carries them over, broadly, the winter months.

The present rules give no one benefit during the first three days absence from work. What is being done is to take away under Clause 7 not the protection during those three days but the retrospective payments for them—payments which might be made up to 13 weeks later. Since 1948, when the present provisions were introduced with the start of the national insurance scheme, the background has changed a good deal.

First, employers have increasingly provided sick pay for employees temporarily incapacitated. It is estimated that sick pay schemes cover well over 50 per cent of employees. Secondly, the Contracts of Employment Act and the Redundancy Payments Act have enlarged considerably the provision made for workers who are unemployed. Third, national insurance benefits have improved and are shortly to be improved again. The March, 1971, equivalent of the £1 6s. single rate of unemployment and sickness benefit operating at the start of the scheme in 1948 was £3.23, whereas the present single rate is £5 and the rate from September, 1971, as proposed in the National Insurance Bill, which the House will be considering next week, will be £6.

Fourth, since 1966 the flat-rate benefits have been substantially augmented by earnings-related benefits. Finally, savings have gone up and, with them, the ability of people to manage on their own resources during short interruptions of earnings. These are substantial reasons why this expenditure of money can now be much better allocated to more immediate and urgent needs.

Mr. Heffer

Earlier the hon. Gentleman talked about the 13-week link period. Clause 7(1) reads: A person shall not in any event…for the first three days of any period… My hon. Friend the Member for Salford, West (Mr. Orme) challenged the Secretary of State during his speech, and the right hon. Gentleman agreed with my hon. Friend. We must know what the position is. Was the right hon. Gentleman wrong, or is the hon. Gentleman wrong? We must have the exact position. There is nothing in the Bill about this.

Mr. Dean

I am sure that my right hon. Friend expressed what was in the Bill. Let me repeat it so that there is no misunderstanding. The 13-week linking period means that once the first three days of sickness or unemployment have been gone through, if the person concerned then has a short period at work, if he goes back to work and is then unemployed again, the waiting days do not apply to that, as long as no more than 13 weeks elapse between the first period of becoming unemployed or sick and the following period.

The other main point in the debate dealt with the position with regard to strikers. I thought that my hon. Friend the Member for Rushcliffe (Mr. Kenneth Clarke) and my hon. Friend the Member for Uxbridge (Mr. Curran) made an effective case for what the Government propose to do. We claim that there is here a misuse of supplementary benefit which the Bill aims to put right. The traditional position for a great many years has been that the striker himself is not entitled to supplementary benefit while he is on strike. This is a situation which has been accepted by all Governments, of all political colours, for a great many years.

When the hon. Lady the Member for Hitchin was speaking, I thought that the logic of her arguments was completely to reverse that traditional position, because she suggested that these men were being penalised. In particular, she mentioned married men. Married men are in the same position in this regard as single men. The hon. Lady suggested that one group of taxpayers was being penalised. What we are doing is to build on the traditional position—which has existed and, I thought, was generally accepted—that it was right that we should see that the wives and children of strikers do not suffer but that the strikers themselves were not entitled to support from the taxpayer while they were voluntarily, by their own action, away from their work.

What is the present position? Let us take, first, the person who has gone back to work. The hon. Lady conceded here that a change was required. Is it fair that not only the family but also the man who has gone back should get a tax-free grant—because that is what it amounts to? The man is back at work. My right hon. Friend quoted figures to show how this problem has grown. The figures for the receipt of supplementary benefit for people who are actually back at work have grown from £4,000 in 1964 to nearly £889,000 in 1970, and in the first four months of this year to a figure of £430,000. I submit that it is not fair to expect the taxpayer to support the person who is back at work and, therefore, has earnings eventually coming to him in conditions of this kind.

There will however, be protected earnings of supplementary benefits plus £2 in the case of the employee who is receiving supplementary benefit because arrangements are not available by his employer. It will be recovered through the employer. We hope—and, indeed, expect—that these will be, on the whole, fairly rare cases and that the traditional practice of "subs", as they are called, will be restored, assuming that the House accepts the principle of the Bill.

Where that is not the case, however, and where, owing to hardship, the Supplementary Benefits Commission pays men after they have gone back to work, I put it to the hon. Lady that some of her remarks were, perhaps, a little out of context. We are talking about a period of a fortnight at the very most. We cannot be talking in terms of debts to be repayable of more than £10 on the average. When one takes into account the comparatively small sum, the real prospect which men will have during this period of earning overtime and the reasonable repayable arrangement that the Bill provides, I do not think that one can justify the extravagant language which has been used.

Mrs. Shirley Williams

May I ask the hon. Gentleman whether he can think of many cases in which a man's overtime constitutes more than one-quarter of his wages? Up to one-quarter of his wages at the employer's discretion can be deducted now for the Government's purposes.

Mr. Dean

I am saying that I do not think that the hon. Lady, in the remarks which she made this afternoon, sufficiently realised that we are talking in terms only of a sum of £10 or probably less. Taking into account the protected earnings which are written into these arrangements, I do not think that the House will accept that there can be any substantial degree of hardship in the repayment involved.

The second point on which the debate has centred concerns payment during strikes. As my hon. Friends have asked quite clearly, why is it right that there should be a higher disregard for strikers than for anyone else—at the present time £4.35 instead of £1? Surely this amounts to a back-door method of paying the striker himself supplementary benefit. Both sides of the House, in legislation in previous Parliaments, have accepted that that is a thing we have not done and should not do. Surely, equally, it is not fair between strikers either, because it is those with the largest strike pay and the biggest tax refunds who gain most under this arrangement.

Some hon. Gentlemen tried to suggest that there would be hardship in withdrawing from the strikers this disregard which has grown up over the years, but do the facts substantiate that? I remind the House that rent will be met in full in nearly every case. Supplementary benefit scale rates will provide for the family, ranging from £4.15 for a childless couple to £11.25 for a couple with two children, plus £1 of disregard in the

case of those who are getting strike pay or income tax refund. I do not believe that the House will seriously accept that difficulties of that kind are grinding the strikers into the dust, or will justify that and other extravagant language used—I accept not from the Front Bench opposite—in some speeches from the back benches opposite.

My right hon. Friend is entitled to ask the House to support this Bill tonight. My final reason for saying that—and my hon. Friend the Member for Rushcliffe put this so well—is that my right hon. Friend has presented to this House during this Session four major social security Bills dealing with cash benefits. The first Bill of the Parliament, the National Insurance Bill, 1970, meant £30 million more expenditure on priority groups—the over-80s, widows between the ages of 40 and 50 and attendance allowance for the disabled. My right hon. Friend has presented the Family Income Supplement Bill with £8 million to deal with family poverty. He has presented the National Insurance Bill to uprate pensions and other benefits and war pensions; £560 million of additional social service expenditure is involved there. Two priority groups, the over-80s and the chronically sick and disabled are having substantial additional help.

That is £600 million of additional social service expenditure. I think we are entitled in that context to say to the House that if we are to go on, as we are determined to do, spending more where the needs are greatest, we are equally obliged to try to save where national expenditure is of a non-priority nature. It is on that basis that I recommend the Bill to the House.

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

The House divided: Ayes 203, Noes 155.

Division No. 349.]	AYES	[10.0 p.m.
Adley, Robert	Boardman, Tom (Leicester, S.W.)	Buchanan-Smith, Alick(Angus,N&M)
Alison, Michael (Barkston, Ash)	Boscawen, Robert	Bullus, Sir Eric
Archer, Jeffrey (Louth)	Bossom, Sir Clive	Butler, Adam (Bosworth)
Astor, John	Bowden, Andrew	Carlisle, Mark
Atkins, Humphrey	Boyd-Carpemer, Rt. Hn. John	Chataway, Rt. Hn. Christopher
Baker, Kenneth (St. Marylebone)	Bray, Ronald	Chichester-Clark, R.
Berry, Hn, Anthony	Brewis, John	Churchill, W. S.
Biffen, John	Brinton, Sir Tatton	Clark, William (Surrey, E.)
Biggs-Davison, John	Bruce-Gardyne, J.	Clarke, Kenneth (Rushcliffe)
Blaker, Peter	Bryan, Paul	Clegg, Walter
Cockeram, Eric	Jessel, Toby	Pym, Rt. Hn. Francis
Cooke, Robert	Jopling, Michael	Raison, Timothy
Coombs, Derek	Joseph, Rt. Hn. Sir Keith	Ramsden, Rt. Hn. James
Cooper, A. E.	Kaberry, Sir Donald	Rawlinson, Rt. Hn. Sir Peter
Cormack, Patrick	Kellett, Mrs. Elaine	Redmond, Robert
Costain, A. P.	Kilfedder, James	Reed, Laurance (Bolton, E.)
Critchley, Julian	King, Evelyn (Dorset, S.)	Rees, Peter (Dover)
Crowder, F. P.	King, Tom (Bridgwater)	Rees-Davies, W. R.
Curran, Charles	Kinsey, J. R.	Renton, Rt. Hn. Sir David
d'Avigdor-Goldsmid, Sir Henry	Kitson, Timothy	Rhys Williams, Sir Brandon
d'Avigdor-Goldsmid,Maj.-Gen.James	Knight, Mrs. Jill	Ridley, Hn. Nicholas
Dean, Paul	Knox, David	Ridsdale, Julian
Dixon, Piers	Lane, David	Roberts, Wyn (Conway)
Dodds-Parker, Douglas	Legge-Bourke, Sir Harry	Rossi, Hugh (Hornsey)
Drayson, G. B.	Le Marchant, Spencer	Host, Peter
Dykes, Hugh	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)	Russell, Sir Ronald
Edwards, Nicholas (Pembroke)	Loveridge, John	Scott-Hopkins, James
Elliot, Capt. Walter (Carshalton)	Luce, R. N.	Sharpies, Richard
Elliott, R. W. (N'c'tle-upon-Tyne.N.)	McCrindle, R. A.	Shaw, Michael (Sc'b'gh & Whitby)
Eyre, Reginald	McLaren, Martin	Shelton, William (Clapham)
Fell, Anthony	Maclean, Sir Fitzroy	Simeons, Charles
Fenner, Mrs. Peggy	McMaster, Stanley	Sinclair, Sir George
Finsberg, Geoffrey (Hampstead)	Macmilan, Maurice (Farnham)	Skeet, T. H. H.
Fisher, Nigel (Surbiton)	McNair-Wilson, Michael	Soref Harold
Fletcher-Cooke, Charles	McNair-Wilson, Patrick (NewForest)	Spence, John
Fookes, Miss Janet	Maddan, Martin	Staintton, Keith
Fry, Peter	Madel, David	Stanbrook, Ivor
Gibson-Watt, David	Maginnis, John E.	Stewart-Smith, D. G. (Belper)
Clyn, Dr. Alan	Marten, Neil	Stodart, Anthony (Edinburgh, W.)
Good hew, Victor	Maude, Angus	Stoddart-Scott, Col. Sir M.
Gorst, John	Mawby, Ray	Stokes, John
Gower, Raymond	Meyer, Sir Anthony	Tapsell, Peter
Crant, Anthony (Harrow, C.)	Mills, Peter (Torrington)	Taylor, Sir Charles (Eastbourne)
Green, Alan	Mills, Stratton (Belfast, N.)	Taylor, Edward M. (G'gow, Cathcart)
Gummer, Selwyn	Miscampbell, Norman	Taylor, Robert (Croydon, N.W.)
Hall, Miss John (Keighley)	Mitchell, Lt.-Col.C. (Aberdeenshire, W)	Tebbit, Norman
Hall, John (Wycombe)	Mitchell, David (Basingstoke)	Temple, John M.
Hamilton, Michael (Salisbury)	Moate, Roger	Thomas, Rt. Hn. Peter (Hendon, S.)
Haselhurst, Alan	Molyneaux, James	Trafford, Dr. Anthony
Hastings, Stephen	Monks, Mrs. Connie	Turton, Rt. Hn. R. H.
Havers, Michael	Monro, Hector	van Straubenzee, W, R.
Hawkins, Paul	Montgomery, Fergus	Walker-Smith, Rt. Hn. Sir Derek
Hay, John	More, Jasper	Walters, Dennis
Hayhoe, Barney	Morrison, Charles (Devizes)	Ward, Dame Irene
Heath, Rt. Hn. Edward	Mudd, David	Warren, Kenneth
Hicks, Robert	Neave, Airey	Weatherill, Bernard
Hiley, Joseph	Normanton, Tom	Wells, John (Maidstone)
Hid, James (Southampton, Test)	Nott, John	White, Roger (Gravesend)
Holland, Philip	Onslow, Cranley	Whitetaw Rt. Hn. William
Holt, Miss Mary	Owen, Idris (Stockport, N.)	Wiggin, Jerry
Hornby, Richard	Page, Graham (Crosby)	Wilkinson, John
Hornsby-Smith, Rt. Hn. Dame Patricia	Page, John (Harrow, W.)	Woodhouse, Hn. Christopher
Howe, Hn. Sir Geoffrey (Reigafe)	Parkinson, Cecil (Enfield, W.)	Woodnutt, Mark
Howell, David (Guildford)	Percival, Ian	Worsley, Marcus
Howell, Ralph (Norfolk, N.)	Pounder, Rafton	Wylie, Rt. Hn. N. R.
Irvine, Bryant Godman (Rye)	Powell, Rt. Hn. J. Enoch
James, David	Price, David (Eastleigh)	TELLERS FOR THE AYES:
Jenkin, Patrick (Woodford)	Prior, Rt. Hn. J. M. L.	Mr. Tim Forteseue and
Jennings, J. C. (Burton)	Proudfoot, Wilfred	Mr. Keith Speed.
NOES
Abse, Leo	Coleman, Donald	Foley, Maurice
Albu, Austen	Con cannon, J. D.	Fraser, John (Norwood)
Allaun, Frank (Salford, E.)	Cox, Thomas (Wandsworth, C.)	Freeson, Reginald
Allen, Scholefield	Cunningham, G. (Islington, S.W.)	Gatpern, Sir Myer
Archer, Peter (Rowley Regis)	Dalyell, Tam	Gilbert, Dr. John
Ashton, Joe	Davies, Ifor (Gower)	Golding, John
Atkinson, Norman	Davis, Clinton (Hackney, C.)	Grant, George (Morpeth)
Bamett, Joel	Deakins, Eric	Grant, John D. (Islington, E.)
Beaney, Alan	Dempsey, James	Griffithe, Will (Exchange)
Benn, Rt. Hn. Anthony Wedgwood	Doig, Peter	Hamilton, James (Bothwell)
Bishop, E. S.	Dormand, J. D.	Hamilton, William (Fife, W.)
Blenkinsop, Arthur	Douglas, Dick (Stirlingshire, E.)	Hamling, William
Booth, Albert	Duffy, A. E. P.	Hardy, Peter
Brown, Ronald (Shoreditch & F'bury)	Dunnett, Jack	Harrison, Walter (Wakefield)
Buchan, Norman	Eadie, Alex	Hattersley, Roy
Carmichael, Neil	Edwards, Robert (Bilston)	Heffer, Eric S.
Carter, Ray (Birmingh'm, Northfield)	Ellis, Tom	Houghton, Rt. Hn. Douglas
Carter-Jones, Lewis (Eccles)	Evans, Fred	Huckfield, Leslie
Castle, Rt. Hn. Barbara	Faulds, Andrew	Hughes, Mark (Durham)
Clark, David (Colne Valley)	Fisher.Mrs. Doris (B 'ham, Ladywood)	Hunter, Adam
Cocks, Michael (Bristol, S.)	Fitch, Alan (Wigan)	Janner, Greville

Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)	Mallalieu, E. L. (Brigg)	Sheldon, Robert (Ashton-under-Lyne)
Jenkins, Rt. Hn. Roy (Stechford)	Marks, Kenneth	Short, Rt. Hn. Edward(N'c'tle-u-Tyne)
John, Brynmor	Marsden, F.	Sillars, James
Johnson, Carol (Lewisham, S.)	Meacher, Michael	Silverman, Julius
Jones, Barry (Flint, E.)	Mellish, Rt. Hn. Robert	Skinner, Dennis
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)	Mendefson, John	Small, William
Jones, T. Alec (Rhondda, W.)	MilIan, Bruce	Spearing, Nigel
Judd, Frank	Miller, Dr. M. S.	Spriggs, Leslie
Kaufman, Gerald	Morgan, Elystan (Cardiganshire)	Stallard, A. W.
Kelley, Richard	Morris, Charles R. (Openshaw)	Stewart, Donald (Western Isles)
Kerr, Russell	Morris, Rt. Hn. John (Aberavon)	Stoddart, David (Swindon)
Kinnock, Neil	Murray, Ronald King	Storehouse, Rt. Hn. John
Lambie, David		Strang, Gavin
Lamond, James	Ogden, Eric	Taverne, Dick
Latham, Arthur	O'Halloran, Michael	Thorpe, Rt. Hn. Jeremy
Lawson, George	O'Malley, Brian	Tinn, James
Leadbitter, Ted	Oram, Bert	Wainwright, Edwin
Lee, Rt. Hn. Frederick	Orme, Stanley	Watkins, David
Leonard, Dick	Owen, Dr. David (Plymouth, Sutton)	Weitzman, David
Lestor, Miss Joan	Parker, John (Dagenham)	Wells, William (Walsall, N.)
Lewis, Arthur (W. Ham N.)	Pendry, Tom	Whitehead, Phillip
Lewis, Ron (Carlisle)	Portland, Norman	Whitlock, William
Lipton, Marcus	Perry, Ernest G.	Williams, Mrs. Shirley (Hitchin)
Lyons, Edward (Bradford, E.)	Prentice, Rt. Hn. Reg.	Williams, W. T. (Warrington)
Mabon, Dr. J. Dickson	Probert, Arthur	Wilson, Alexander (Hamilton)
McBride, Neil	Rankin, John	Wilson, Rt. Hn. Harold (Huyton)
McElhone, Frank	Rees, Merlyn (Leeds, S.)	Wilson, William (Coventry, S.)
McGuire, Michael	Richard, Ivor	Woof, Robert
Mackenzie, Gregor	Roberts, Albert (Normanton)
Mackie, John	Roberts, Rt. Hn. Goronwy (Caemarvon)	TELLERS FOR THE NOES:
Maclennan, Robert	Roper, John	Mr. Ernest Armstrong and
McNamara, J. Kevin	Ross, Rt. Hn William (Kilmarnock)	Mr. Joseph Harper.
MacPherson, Malcolm

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).