HL Deb 22 December 1919 vol 38 cc511-25

Order of the Day for the Second Reading read.


My Lords, in asking your Lordships to pass this Bill through all its stages this evening, I do not think, looking at the state of the House, that those of your Lordships who are present will expect me to go into the whole history of the legislation with regard to old age pensions. Your Lordships will remember that the existing legislation is based upon an Act passed in the year 1908 under which, roughly speaking, the main provisions were that any person who attained the age of seventy and could prove that his income was less than a certain very small amount was entitled to a pension of 5s. weekly. Certain persons were disqualified for the receipt of that pension notwithstanding the fulfilment of the statutory conditions, and those exceptions, if you glance at the Act of 1908, your Lordships will see there specified. Three years later, in 1911, there was another Act of Parliament, as the result of experience gained in administration, under which certain not very important changes were introduced into the legislation with regard to old age pensions, and I need not, perhaps, dwell upon those this evening.

The next important step that was taken was in the year 1916, and it was followed by another step in 1917, by which old age pensions in certain circumstances were increased by 2s. 6d. a week. That was not done by legislation but by the wave of the administrative pen, and in the measure which is brought to your Lordships' notice this evening you will see that the position, which was intended only to last during the war, is now regularised. It is notorious, of course, that the cost of living has not diminished since the Armistice. So far as I am aware, "has rather increased, and the 5s. a week to which the old age pensioners were entitled under the Act of 1908 would, perhaps, be barely represented by the 10s. which it is proposed to give them under the new legislation.

This state of affairs was pressed upon the notice of the Government for some months and, in consequence, the Chancellor of the Exchequer appointed, I think in the month of April, a strong Committee to consider the whole question. The terms of reference to this Committee were as follows— To consider and report what, alterations, if any, as regards rates of pensions or qualification, should be made in the existing scheme of old age pensions. That Committee had a number of meetings and the Report was presented to Parliament last month. When I say "Report," as a matter of fact there were two Reports, the Majority Report and the Minority Report, the former signed by ten members and the latter by seven, while there were various reservations, also printed and presented to your Lordships, made by certain members both of the majority and the minority. The Cabinet, having considered the Reports, introduced the Bill which is now before your Lordships. The main proposal of the Bill, as your Lordships will see, is to increase the maximum rate of the old age pension from the present figure of 7s. 6d.—that is to say, as I explained just now, the 5s. pension originally given, plus the addition of 2s. 6d. granted during the war—to 10s. Your Lordships will find that this sum was recommended in both the Majority and the Minority Reports of the Departmental Committee on Old Age Pensions, on the ground that 10s. was barely the equivalent of the pre-War pensions of 5s., and that the increase was necessary to prevent severe hardship to the poorest pensioners who were living on the margin of subsistence. This is effected by Clause 1 and the First Schedule of the Bill.

It is also proposed, for similar reasons, to increase the existing means limit for pensions. This at present runs, in steps of 1s., from 8s. per week, which entitles to the maximum pension of 5s., to 12s. a week which entitles to the minimum pension. When the income is 1s. above that figure no pension is granted. The new scale runs, in steps of 2s., from 10s. per week, which will entitle the claimant to the maximum pension of 10s. to 18s., and then, by 1s., to 19s., at which figure the minimum pension of 1s. will be given, bringing the total income of the pensioner up to £1 a week. The Majority Report, your Lordships will find, recommended the complete abolition of the means limit, which would involve, it has been calculated, an additional cost to the State of over £23,000,000 a year. In fact, the Report of the Majority recommended that everybody in this country, on attaining the age of seventy, whatever his means, should be entitled to an old age pension. The Minority Report recommended that the existing means limit should be doubled—that is, that the new scale should run from 16s. to 24s. per week. The adoption of this recommendation would have entailed an additional expenditure of over £14,000,000 per annum, and the Government were unable to recommend so large an increase.

They have, accordingly, adopted the lower scale set out in the Schedule of the Bill which, it is estimated, will involve an additional expenditure of about £10,353,000 a year, bringing up the total expenditure on old age pensions, which now stands at £17,650,000, to about £28,000,000. The addition is made up in the following way—the increase of existing pensions will amount to about £6,000,000, and the new pensions and minor concessions will cost about £4,350,000, making a total of £10,350,000. It is estimated, though I must inform your Lordships that the estimate is a very conjectural one, that the new means scale and other changes which are proposed will add about 220,000 new pensioners to the existing number of 920,000. In this connection the Government have adopted the proposal in the Minority Report with regard to the calculation of means. It is designed, on the one hand, to limit the amount of capital that may be possessed by the old age pensioners and, on the other, to ease the conditions with regard to poorer pensioners and to obviate friction in the application of the means limit.

Your Lordships will see that it is proposed to substitute for the present flat rate of 5 per cent. on capital value a sliding scale under which the first £25 will be disregarded; the next £375 will be calculated at 5 per cent. and the balance at 10 per cent., which is roughly the annuity value. The maximum capital value of the property of a pensioner entitled to minimum pension of 1s. will be about £710, as compared with £630 at present. It is also proposed to exclude temporary sick pay, to exclude from the calculation sick pay received during six months, and to exclude any furniture or personal effects which may belong to the old age pensioner. The Bill has adopted the remaining proposals in which the Committee were unanimous.

Although there was, as I have said, both the Majority and the Minority Reports, it is a fact that there were certain recommendations to which the whole of the members of the Committee agreed; and with regard to those to which I am about to allude, the Committee were unanimous. The most important proposal is the removal of the poor law disqualification as regards outdoor relief, which will enable additional assistance to be given from local funds in case of hardship, without the pension being forfeited. This is proposed in view of the fact that the Government have adopted in principle the Report known as the Maclean Report, which was the Report of the Committee on the Poor Law presided over by Sir Donald Maclean, I think last year. That Report recommends the substitution in such cases of home assistance free from the pauper taint. That is an expression which, I confess, was new to me, but I am told it is an expression meaning in old days what was known as outdoor relief. The existing disqualification is maintained as regards indoor relief but a pensioner who has entered the workhouse for medical or surgical treatment may continue to draw his pension for three months. This, I am told, is virtually the practice under the existing Acts, but, the legal position being at present obscure, it is thought well to define it in this Bill.

It is proposed also to abolish the existing disqualification for failure to work. Under the old Acts (I think I am correct in stating) it was possible to refuse to pay a pension to a man who was otherwise qualifield if, in the opinion of the officials in charge of the case, it could be held that the pensioner was able to work, and that work was within his reach, and he declined to avail himself of this possibility of work ing. As a matter of fact, I am told that this disqualification was practically inoperative. It turned out to be extremely difficult to get any legal proof that the man or woman refused to do work that was within his or her power, and I think last year—I should not like to bind myself absolutely to these figures without verifying them—but I think I am right in saving that last year out of the great number of old age pensions that were granted only something like fifty were refused in the first instance—I do not know that even those fifty were refused eventually—on the ground that the applicant had declined to avail himself or herself of the opportunity to work. Consequently it is proposed to abolish this disqualification really on the ground that it has proved inoperative.

It is further proposed to abolish the disqualification for periods following a term of imprisonment. The argument, I think, in favour of the abolition of that disqualification is that it involves a double penalty for the same offence. There are some minor alterations also proposed as regards nationality and residence which your Lordships will find in Clause 2. It is further provided that in future pensions or increase of pensions shall run from the date when the claim is made, not from the date, as has hitherto been the practice, when the claim was decided. It appears that deferring the grant of the pension until the day when the claim was decided sometimes involved a considerable period of waiting. There is another provision under Clause 5 that pensions shall be inalienable as against the pensioners' creditors. The remaining provisions of the Bill, I think, are merely machinery, Clause 8 being designed to expedite the increase of existing pensions. It is proposed, if your Lordships think proper to pass this Bill, that it shall come into operation on January 2, but, in view of the amount of administrative work involved, it will not be possible, I am told, actually to pay the new increased pensions until about the middle of February, though they will then be paid with effect from the earlier date. If any of your Lordships desire any further information with regard to the clauses I will do my best to answer any questions that are put to me. I beg to move that the Bill be read a second time.

Moved, That the Bill be now read 2a.—(Lord Hylton.)


My Lords, it is, of course, impossible that in the circumstances in which this House now finds itself your Lordships could deny passage to this Bill. Nor does it seem to me that it is proper or right for us to postpone its consideration. But it does appear to me that this House has every right to protest against the manner in which its judgment is asked upon an important measure such as this at this stage of the session. For what is it that has occurred? There has been a Committee sitting since April. Its Report, so the noble Lord who introduced this measure tells us, was in the possession of the Government last month. And a day or two ago this Bill was introduced into the House of Commons and passed through it without consideration, and it is now brought before your Lordships' House and we are asked this afternoon to pass it, with the necessary consequence that we cannot consider, or discuss, or amend any of the provisions that it contains. Of course we shall be told that it is open to us to move Amendments. No doubt it is, but it is impossible for us to consider this Bill as it deserves to be considered, and to see whether or not it might not be desirable in some respect or another to improve its provisions. That does seem to me to be a very serious matter.

There is another thing not less serious. This Bill will undoubtedly add at least £10,000,000 a year to our expenditure in perpetuity. That is the estimated sum. If the amount is kept within that estimate it will be about the first time in Parliamentary experience when an estimate made as to the expense of a Bill at the time of its introduction was ever found justified by practice. But it is not the expense in this connection that troubles me, because I think every one of us must realise that when the Government once started on the system of finance which was based upon inflated currency and which necessarily involved the raising of the salaries of all the people under their control and the gifts of war bonuses, even to salaried servants at the very highest rates—£2,000 a year and upwards—from that moment it was completely impossible to deny the people at the very bottom of the scale a corresponding relief. And therefore the £10,000,000 had to be spent. But it ought to have been spent at an earlier moment in the year, so that the rest of the expenditure might have been made to agree with it. For only so late as autumn of this year, when in another place an attempt was being made to give a more rosy and optimistic view of our financial position than that which had been justified by the grave statement made by the Chancellor of the Exchequer just before the House adjourned, the Chancellor of the Exchequer, in order to show that he might be able at the present time, with our present prospects of revenue, to meet our normal expenditure without further taxation, prepared an imaginary balance sheet, and in that balance sheet there is not one single farthing to be found for this £10,000,000—and yet it was upon that balance sheet alone that the Chancellor of the Exchequer justified our continuing at our present rate of taxation.

What has happened since then? There have been at least two increases. The estimated increase in the War Pensions has been found to be exceeded, and something more has happened. A statement was made that suggested a decrease in the War Office estimates of £12,500,000. It really is impossible to understand the finance of this Government. The proposed decrease was effected by transferring from the Air Service the cost of the liquidation of the existing contracts of the Air Ministry and putting them on to the Ministry of Munitions. You simply take £12,500,000 from one Department and add it to another and say the estimates are down by £12,500,000. If you put this sum into its proper place you will find, in fact, the estimates of the Air Service have still been increased; not by a large sum, but by £500,000 or £750,000.


The Secretary of State for War made it quite clear in the other House.


It is unfortunate that this information is not made clear in the public Press. In the White Paper that was issued in regard to this matter it required careful and close investigation to make this out. I should be glad to know whether the responsible Minister in the House of Commons explained that in fact the Air Ministry estimates had increased.


I think he explained the whole matter in detail.


I should like to know whether he explained that the estimates for the Air Service had increased. This is a point you have to consider. All these estimates are not going down, they are increasing. Now we have a further £10,000,000 added on. This £10,000,000, and the money spent on war pensions, are so far as I can recollect the only justifiable items of increased expenditure we have been asked to consider throughout the whole of this session. The whole of the rest of the increases should have been postponed. I do not say they were not right in themselves, but I say that they are brought forward and add to the burden on this country at a moment when the most sagacious financier is unable to explain how we can justify the burden we have to bear.

This matter demands far more grave and careful attention than the Government gives to it. It is no use trying to repair a tottering and broken structure by putting new storeys on the top. The only way to restore it is by rebuilding the foundations. The Government ought not to have commenced by putting forward all these schemes without any attempt to stabilise and strengthen the foundations of our social structure. They should have begun that first and then brought forward their schemes afterwards. In regard to the Housing scheme no one can measure the expense in connection with it or say that it will ever be brought to fruition. The electricity scheme, thanks to your Lordships' House, has for the moment been postponed. But one expenditure after another is brought forward for your Lordships' consideration and although from time to time protests are heard in this House and requests are made that the Government should tell us what are the means by which they propose to meet the expense, no answer is ever returned. On the last occasion I took some pains, I fear I wearied your Lordships, to examine in detail what were the actual minimum expenses to which we were committed, and I pointed out that, even after allowing a return of income tax in excess of that which Viscount Milner estimated at a penny in the £, the flat rate of income tax required for the expenditure necessary is between 9s. and 10s.. in the £. No answer was made to it; and there never has been any answer excepting this, that Viscount Milner said I was wrong in assuming that we were not going to get some payment from Germany and that we were not going to get payments from France.

Since I made that speech elections have taken place in France. I know that elec- tion speeches are not necessarily the place to which you look for careful and scientific analysis of a financial position, but the Minister for Reconstruction in France (he was Minister of Munitions) is reported in responsible papers in this country in a speech at Lille as saying that the only way in which the French would be able to meet their financial position was that the Allies, I suppose he meant England, should guarantee the German debt to them. That is the position, not by an irresponsible person but by a person who knows; and yet I am told that, in not relying upon a speedy return from France of payments in respect of the debt she owes us, I am overlooking an asset on which we have to rely.

The other thing is the payment by Germany. It is no use discussing that matter again. Everybody knows that the hope of getting money out of Germany gets less and less as the days go by, and it really would be a profitable piece of self-justification if the Government would give some information to the country as to the authority upon which they base their extravagant claims that Germany is capable of paying £24,000,000,000, and that we might look to 5 per cent. a year upon that as the proper sum they would pay. That has all gone away like the leaves of last year, and we are placed in this position, that the only suggested alteration in the figures I gave are an alteration due to the payments from these foreign countries, and there is nobody who will say that you can look to these for immediate relief in respect of our immediate expenses.

The position is that this £10,000,000 is added on to our previous burdens and no provision is made for its payment. It can only be met in one proper way, and it should be honestly met in that way. The Government should do what an honest man does when incurring expenditure which he cannot meet. He reduces his own expenditure on other items in order to bring his expenditure within his normal budget. If we are going to keep ourselves on the side of financial safety we ought to increase taxation. Not because any one wants to be taxed, but we do want to pay our way; and unless we pay our way there is something before us that is far worse than the loss of individual fortunes. That is comparatively a small loss. There is the loss of our social stability and social organisation which has taken centuries to build up.


My Lords, I do not propose to enter into the merits of this Bill in any way. I desire only to say a few words upon the circumstances in which it comes to us and the method by which it has been passed in the other House. The rules and usages of the House of Commons, which is the ruling power and the driving wheel of our constitution, are really a part of the constitution. They are among its most vital parts, and it is from the constitutional point of view that I want to say some words. Those rules and usages are the result of prudent care and of thought given to them by great men in the past. Prudence suggested them, and experience has approved them. They ought not lightly to be set aside. They have furnished a most valuable safeguard for centuries against hasty and imprudent legislation and against any action which might be thought to have something approaching a demagogic character.

It is not for me to presume to criticise in this place the action taken in another place. But I may say a word about the way in which this Bill comes to us. I may be permitted, I hope, as having sat in the other House of Parliament for twenty-seven years and given a good deal of attention to questions of Parliamentary procedure, to express astonishment at what has been done there in respect of this Bill. It is a Bill which not only adds £10,000,000 to our expenditure, but which makes, as your Lordships will have gathered from the explanation given by the noble Lord who brought it forward, far-reaching changes in our laws—momentous changes which will have a great effect on the character of our population—changes about which the economists of the last generation thought and wrote much, and which require most careful consideration before they are made. To do all this—not only to add this expenditure, but suddenly to make these changes in the law, and to set aside the ancient rules by suspending the ordinary practice of the House of Commons—is a new thing and it sets a precedent—


Oh, no!


I cannot think of a case quite like this, but if there is such a case I shall be glad to hear of it. Of course there have been cases of grave urgency when rules have been suspended. I remember how once in the House of Commons we were delighted to do this in passing a Bill dealing with the Dynamite outrages, but that was a case of extraordinary urgency, and here is a matter which might just as well have been done at any time during the last session.


Not at any time during the last session, because the Committee's Report is only dated November 7, and it could not have been considered by the Cabinet till some time after that.


The Cabinet, of course, could not have considered the Report until it was made, but if the matter was so urgent a Committee could have been appointed sooner, or it might have reported more quickly. At any rate the thing might have been done sooner, and here in the last days of the session, without any opportunity of debate, this change is proposed, a change which seems to me to set a precedent in the working of our Constitution which may have very formidable consequences; and it is because this will be regarded as a precedent which is likely to be followed hereafter, in cases which it is not pleasant to contemplate, that I venture to express my astonishment and regret at what has been done.


I do not rise to oppose this Bill, for I honestly believe it is fully justified on social and humane grounds. I hardly think we required the Report of a Select Committee to convince us that those who have suffered most from the enormous rise in prices are the pensioners of both sexes. But in common with those who have just spoken I wish to register my protest against the unparliamentary methods by which this measure is being passed into law in both Houses. I do not think that it is good for the commonwealth to become used to lightning legislation, and whatever precedent in emergency there may be, I cannot help thinking that this particular method of procedure is of sinister augury.

My object in rising, however, is to point out to the Government that the increase in pensions cannot stop with the increase of Old Age Pensions under the various Acts which the noble Lord enumerated. It is quite true that these particular pensioners, persons of the industrial class, have suffered most, because they have been the poorest, and they have not been able to increase their earnings in proportion to the cost of living; and although the figures of the Board of Trade always seem to be highly misleading, because they consider the individual and not the family as the industrial unit, and do not allow sufficiently for the operation of the Restriction of Rent Act, still it is the Old Age Pensioners who come under this Bill who have undoubtedly suffered more than any other class in the community. They are, however, a comprehensive class. They include those who deserve well of the State and those who do not. They include those who have been the recipients of Poor Law relief, and those who have suffered imprisonment for offences against the law. What are you going to do for those who have been the servants of the State? We all know of the "New Poor," and of the plight of the professional man, and I sympathise particularly with the men who have been in the various professions, and have served the State, not only in any salaried posts in the Army and the Navy and the Civil Service, and in the Police, and members of the teaching profession. The hardships which those people are enduring on pensions which were fixed at pre-war rates are difficult to estimate, and yet you are going to deal, and no warning is given, with one class of pensioners only, and leave the other pensioners untouched. In another place a direct refusal was made to amend in any particulars their scales of pension.

I do not think that policy can be persisted in when this Bill has passed into law and you have doubled the rates under this Bill, because you will have to deal with the scales of pension for those who have deserved well of the State and who are now finding it so difficult to meet the increased cost of living, which falls upon them far more severely than it does upon the industrial classes generally, because they are not always protected by the Restriction of Rent Act. Has that been thought of? I do not think that in another place any mention was made of it, and I venture to give a warning, because "Consequences," as a great writer said, are "unpitying." You cannot expect people who are suffering, because their pensions are halved for all effective purposes, to acquiesce without protest in the continuance of such a state of things.

I have received many letters from those who have received pensions on the old scale, and I can tell the noble Lord who is in charge of the Bill that their impatience is giving way to indignation, and that it is perfectly certain that a claim will be made upon the State to which I do not think this House or the other House can turn a deaf ear. It is the case of people who positively deserve well of the State, and yet nothing is being done for them in any particular. What will that mean as an addition to the burdens of the State? It will mean £25,000,000 a year increase, and rightly so, for that purpose. I have drawn the attention of the Government to this because this Bill is class legislation, it is legislation for the benefit of a particular class, and it leaves unredressed the hardships and grievances of those who have a far greater claim upon the House and upon the community than those for whom we are now providing. I do not deny the justice of this Bill, but I say that it is partial and one-sided justice, and that it cannot endure for very long.


Lord Burnham, I think, is more inclined to blame the Government for what they have not put into the Bill than is Lord Bryce for the unconstitutional manner in which they have presented the Bill. I readily acknowledge that this Bill only deals with one section of pensioners, and it has produced considerable criticism owing to the circumstances and nature of its introduction. I do not know what would have been said if the amount proposed to be added to the burdens of the Exchequer had been twice or perhaps three times as large as the Bill proposes. Lord Burnham, I think, understands that this Bill is based on the Report of a Committee which was only directed to inquire into what we familiarly know as Old Age Pensions, irrespective of the pensions of sailors and soldiers which are dealt with under a different group of statutes, and, of course, it has nothing whatever to do with teachers' pensions, which are largely paid by the local authorities. But I am more concerned to answer what Lord Bryce, and indeed what the noble and learned Lord opposite (Lord Buckmaster) said, as to the unconstitutional action of the Government. It is irregular—admittedly so—that a Bill which requires six or eight different stages in the House of Commons should have gone through at a single sitting. It is most unusual, if not unparalleled, as Lord Bryce indicated, that a Bill of this magnitude should pass through your Lordships' House in a single sitting, but I do not think that the matter can be so simply dismissed, because the circumstances are unusual and because they have involved a large suspension of Parliamentary procedure. I would remind your Lordships that this Committee has been sitting since some time in the early summer—April I think—but the Report was only published on November 12 last. Lord Bryce says that legislation could have been just as well introduced soon after this Committee was appointed to inquire into this matter. One could no doubt have anticipated the Report of the Committee, but that scarcely would have been wise, especially as the Committee itself was by no means unanimous, for it had to conduct inquiries into one of the most complicated matters which really cannot be dealt with offhand, as Lord Bryce seemed to indicate.


I was far from thinking that it could be dealt with offhand. My regret is that neither the House of Commons nor this House seems to have given it more than the briefest possible consideration.


No, that is the point. The noble Lord said that this is not an urgent affair. As I was saying, the Report was published on November 12, and it was not unanimous. It dealt with highly complicated matters which had to be assessed by the Treasury actuaries in the most meticulous manner. The Report was carefully examined. The Bill was not ready till December 19. Lord Bryce says that it could have been dealt with later. That is the whole issue between us. How much later? How much later does Lord Bryce think in order to preserve the critical functions of Parliament this Bill should have been postponed? Parliament is going to rise now. Speaking personally I think it desirable that Parliament should rise. Perhaps Lord Bryce thinks that we should have sat on for another week or fortnight, but in my view it is not merely for the convenience of Ministers that it is desirable that Parliament should rise now. When Parliament is sitting anything from 200 to 500 Questions are asked per day in the House of Commons. The strain that that puts upon the Civil Service is enormous, gigantic, and very often overwhelming. Quite apart, therefore, from the perso al convenience of Ministers I think that it is in the interests of good Government by the State to give some relief to Public Departments.

I understand that Parliament is to rise to-morrow until early in February. When Parliament meets in February there is a debate on the Address. I see a number of Peers present who have been in the House of Commons. The debate on the Address has to be followed by a Motion getting the Speaker out of the Chair on this, that, and the other estimate. There may, indeed, be supplementary estimates, though I hope not, and by postponing this Bill you might have to postpone the granting of these old age pensions certainly for two and perhaps for three months. That would not have mattered so much if the months in question had been May, June or July, but when they are December, January and February, I think that circumstance must be taken as a real mitigation of the blame attributed to the Government for pushing this Bill through at such short notice and at such an inconvenient time. That on the whole is a consideration which must be taken into account when judging or criticising the Government for the brief time offered to Parliament for taking this Bill. It is a Bill to relieve a class who have been specially hard hit by reason of the social and economic conditions of this country, and if Parliament had not been willing to submit to this unconstitutional (as Lord Bryce calls it) manner of dealing with this, very worthy people would have suffered seriously.

On Question, Bill read 2a; Committee negatived. Then (Standing Order No. XXXIX having been suspended) Bill read 3a, and passed.