HL Deb 22 July 1935 vol 98 cc645-7

Order of the Day for the Second Reading read.


My Lords, this is a Bill which affects a large number of the working classes, but as it is largely concerned with finance and as, moreover, it has been welcomed as far as it goes by all Parties I think it would be unnecessary for me to give more than the broad outlines of what it does. Your Lordships may remember that in 1931 the Third Report of the Government Actuary revealed that there was a grave danger of the financial breakdown of the whole scheme of national health insurance. A number of measures had been passed previous to that year designed to keep within insurance a number of the unemployed who, because of their unemployment, were unable to pay their contributions; but as unemployment rose it became increasingly obvious that some more drastic step had to be undertaken. Accordingly, in 1930, 1931 and 1932 Bills were passed which relieved the approved societies, partly by putting a limit on the time during which the unemployed could draw benefits without making any contributions and partly by increasing the burden on the Exchequer.

These Bills were admittedly emergency measures, and it was contemplated then that a further review of the situation would take place before the year 1936. This review has now been made. If no Amending Bill were passed about 200,000 people would go right out of insurance at the end of this year, and about 5,000,000 would suffer reductions or suspensions of cash benefits unless they paid up their arrears. Fortunately to-day the economic position of the country is much stronger than it was in 1932, and so is the position of the approved societies. The income of these approved societies in 1934 was greater than was the income of the same societies in 1932 by reason of the increased contributions to the extent of £2,375,000—or put in another way 30,000,000 weeks more work was done in 1934 than in 1932.

Briefly, this is what the Bill does. Firstly, it maintains the existing provision whereby all insured persons who become unemployed and cannot pay their contributions by reason of unemployment may continue to enjoy full pension and insurance rights for a period of twenty-one months. After the expiration of the twenty-one months they are differently treated according to how long they had been insured before becoming unemployed. Those who have a period of ten years full insurance to their credit continue to enjoy for a further unlimited period all their pension rights and all their medical benefits; all they lose are cash benefits connected with sickness or disablement. Those who have only four years insurance and 160 contributions to their credit are entitled after the first twenty-one months to a further period of one year during which their pension rights are maintained. I need hardly mention that all persons who get work again during these periods and pay the statutory number of contributions are immediately restored to full insurance and pension rights.

There remains a further class of persons who, by reason of the casual nature of their employment or for other reasons, become in arrears with their contributions, although they do pay when they can. At present half these arrears are excused, but unless the other half is made up either by the insured person or his society cash benefits are reduced on a sliding scale. Now it is proposed, as from June, 1934, to excuse all arrears in full. This concession will ensure, firstly, that any person who remains unemployed throughout a pre-insurance period will suffer no reduction of benefits during that period by reason of unemployment; and, secondly, prevent any reduction from the benefits of the very large number of persons who, though in fairly regular employment, have varying periods of unemployment in the course of a contribution year. That is a very rough sketch, but I think it indicates the nature of the major provisions of the Bill. There are other minor amendments in the existing law.

I have one addition to make, which has arisen owing to the debate in another place. I must refer to a question relating to the powers of the referees under the Contributory Pensions Act, which, as I said, was raised in another place. It was there stated that the effect of an alteration by this Bill of the phraseology which has appeared in previous Acts was to withdraw certain types of cases from the pension referees. The representations made have been considered, but the matter is not so simple as was suggested. A question of interpretation is involved, and the English referees have adopted one interpretation and the Scottish referees another. It is obviously desirable that the Act should be applied in the same way in the two countries. The interpretation adopted by the English referees is in accordance with the intention of the framers of the Contributory Pensions Act of 1925, and the changes in phraseology to which exception was taken in another place were adopted to make the legal position conform beyond question with the intention. I think it will be seen from an examination of the Bill that it is a Bill which bristles with technicalities, and in offering to answer any questions that may be put I do so with a certain reserve. I think I have said enough to show that, even if the position of the unemployed from a health insurance point of view is not yet ideal, it is immensely better than it was, and in those circumstances I confidently recommend the Bill for Second Reading.

Moved, That the Bill be now read 2a.—(Viscount Gage.)

On Question, Bill read 2a, and committed to a Committee of the Whole House.