Lords Sitting of 14 March 1940

Preamble
The House met at four of the clock, The LORD CHANCELLOR on the Woolsack.
WESSEX ELECTRICITY BILL.
Brought from the Commons; read 1ª, and referred to the Examiners.

THE CAXTON HALL OUTRAGE.
LORD SNELL: My Lords, I beg to ask whether His Majesty's Government have any statement to make about the assassination of Sir Michael O'Dwyer and the wounding of Lord Zetland and other distinguished persons at the Caxton Hall yesterday afternoon.
THE LORD PRESIDENT OF THE COUNCIL (EARL STANHOPE): My Lords, you will be aware from the reports which have appeared in the Press that at the conclusion of a meeting held yesterday afternoon at the Caxton Hall under the auspices of the East India Association and the Royal Central Asian Society, several shots were fired by a man in the audience, with the result that Sir Michael O'Dwyer was killed and the Secretary of State for India, Lord Lamington and Sir Louis Dane were wounded. An Indian named Udham Singh, who is believed to have been responsible for the outrage, was detained by members of the audience and handed over to the police, and he has this morning been brought before the Magistrate at Bow Street Police Court on a charge of murder. In these circumstances it would not be proper for me to make any comment on the facts of the case.
I know, however, that your Lordships will wish to join with me in expressing our deep sense of sympathy with Lady O'Dwyer and her family in the sudden and tragic loss which they have suffered. The House will also desire to extend to those who were wounded their good wishes for a rapid recovery. Their injuries, happily, were not severe, and I understand that all are making satisfactory progress. As a matter of fact I had hoped that my noble friend Lord

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Zetland would have been present here this afternoon. He was, in fact, working at the India Office this morning when I telephoned to him. His escape is, indeed, miraculous. He was shot at from, I believe, some three feet away. The bullet entered just below the handkerchief pocket of his coat and hit a rib of the breast. Apart, however, from being much shaken and bruised, I am glad to say that my noble friend has not been badly hurt. I am sure that all your Lordships will wish to join with me in congratulating him on what has, indeed, been a providential escape.
NOBLE LORDS: Hear, hear.
4.3 p.m.
LORD SNELL: My Lords, my noble friends desire me on their behalf to offer first of all to Lady O'Dwyer their complete sympathy in the unexpected and tragic bereavement that has fallen upon her. Many of us had the privilege of knowing the late Sir Michael O'Dwyer, and working with him, and, though not always agreeing with him, feeling absolutely certain of his great sincerity. It is a very sad thing that at seventy-five years of age, when the controversies in which he was engaged had mostly been forgotten, this tragic end to a most distinguished career should have come. I should also like to express my sympathy with my very venerable colleague Lord Lamington, and to congratulate him on having escaped with, comparatively, a small injury. I have not the privilege of knowing Sir Louis Dane, I think, but he is a venerable gentleman who has done a great service, and to him also we should like to offer our sympathy and our congratulations on his escape. I cannot tell your Lordships with what thankfulness we have heard of the escape of His Majesty's Secretary of State Lord Zetland, and the comparatively slight injuries that he suffered. If he had been able to come this afternoon it would have been an embarrassing experience to him for we should all have wished most heartily to congratulate him and welcome him back. On the question of yesterday's experience I will not speak other than to say that if it was due to mental affliction that is to be regretted, but if it was due to political motives that was most reprehensible, and I feel certain
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that India will take the very earliest opportunity of repudiating any connection with it.
4.6 p.m.
VISCOUNT SAMUEL: My Lords, I am sure those on these Benches would desire to be associated with the observations that have fallen from the Leader of the House and from the Leader of the Opposition. We all of us must have read the news in this morning's papers with a feeling of horror and of indignation, and we are deeply grieved that this wanton outrage should have resulted in the death of so highly esteemed and distinguished an Indian civil servant as Sir Michael O'Dwyer. We sympathise deeply with the lady who has, in this tragic fashion, been robbed of a life's companion. We sympathise also with our old colleague Lord Lamington in the injury, not apparently a very light one, that he has suffered, and with Sir Louis Dane also, who is known to many of us, and we rejoice that the Secretary of State for India, the highly esteemed colleague and friend of all of us, should have escaped with so light on injury from the attack that has been made. I am sure that in India there will be a general feeling of abhorrence at this futile and dastardly crime.
4.8 p.m.
LORD CATTO: My Lords, I would like to associate myself with the expressions of regret and sympathy which have been made by noble Lords in all parts of the House in regard to this matter. In view of the expressions of sympathy that have already been made perhaps it is hardly necessary for me to intervene, but I feel as one who had long connections with India, and perhaps, if I may say so, as a representative of Indian commercial interests, that I would like to say that I feel sure that the tragedy of yesterday will be as deeply deplored in India as it is here, and by all classes of the population alike, Indian and European. I would also like to express my sympathy with the lady who has been bereaved and with those who have been injured; and to say what a happiness it is to me and all connected with the commercial interests of India and especially in Bengal, of which Province he was a very distinguished Governor and where he is held in great affection, that the Secretary of State has escaped from serious injury. I therefore

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will look forward with pleasure to seeing him back amongst us and giving him a welcome indicative of our affection and appreciation of his great qualities and public service.

BUSINESS OF THE HOUSE.
4.10 p.m.
LORD SNELL: My Lords, I beg to ask the noble Earl the Leader of the House a question of which I have given him private notice. Is he in a position to say what the arrangements will be for the Easter Recess?
EARL STANHOPE: My Lords, as I have already informed your Lordships, it is proposed that the House should adjourn for the Easter Recess on Thursday next, March 21, on which day there will be a Royal Commission, and Parliament will reassemble on Tuesday, April 2. Perhaps I might take this opportunity of telling your Lordships what are the proposals for business next week. It will be unnecessary to have a meeting to-morrow, as I had suggested might be required, because I understand there will be no Amendments on the Rating and Valuation Bill, so that the Committee stage of that Bill will be purely formal, and I propose that it should be taken on Monday. I propose to put down for Monday next a Motion to give; Government business precedence until the Easter Recess and to allow more than one stage of a Bill to be taken on the same clay. On that day, Monday, we propose to take the Committee stage of the Old Age and Widows' Pensions Bill and also, as I have already announced, the Committee stage of the Rating and Valuation (Postponement of Valuations) Bill.
On Tuesday we propose to take the Third Reading of the Rating and Valuation Bill and the Report stage and Third Reading of the Old Age and Widows' Pensions Bill, unless there are no Amendments and the Report stage is taken on Monday. There will also be on Tuesday, a Government statement on the general situation of the war, similar to statements which have been made on previous occasions. On Wednesday there will be Lord Snell's Motion on Colonial development policy, and on Thursday we propose to take all stages of the Consolidated Fund Bill, followed by a Royal Commission. I propose that the House should meet at
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four o'clock on each day, except Thursday when it is expected that we shall meet at a quarter before twelve.
LORD SNELL: My Lords, I thank the noble Earl for his statement. It may be for the convenience both of the noble Earl himself and of the House generally, if I say that on Tuesday, after the Government's statement, there may possibly be some discussion on the general situation.

OLD AGE AND WIDOWS' PENSIONS BILL.
Order of the Day for the Second Reading read.
4.13 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR DOMINION AFFAIRS (THE DUKE OF DEVONSHIRE): My Lords, I think that the majority of your Lordships will feel the same sense of relief as I do in turning for a day from the consideration of war measures to the taking of one more step in building up the great structure of social reform which has been so marked a feature of the present century. The old age pensions scheme began well within the active lifetime of the majority of your Lordships. It has developed in the last thirty years into one of the most important features of our social structure and it is one of the most remarkable achievements of the century. When old age pensions were first introduced, the number of persons affected by the original Act was about 500,000. To-day there are 3,000,000. The cost of the original old age pensions was between £6,000,000 and £7,000,000 a year. Today it is £100,000,000 a year. It is, of course, the case that a very considerable proportion of this sum is covered by contributions received from those who ultimately benefit under the scheme, but even so, the taxpayer's contribution is about £65,000,000 a year against £6,000,000 in 1908.
At the time when old age pensions were first introduced there were very many people who sincerely believed that they would have a disastrous effect both on the finances of the country and in destroying all incentive to thrift. It is satisfactory that neither fear has proved justified. Our finances are still astonishingly stable, as is proved by our capacity to stand up to the colossal strain of the

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present emergency; and so far from thrift having diminished, it has immensely increased and year by year the volume of working-class savings shows a steady increase. It has been evident for some time past that there has been a general desire for a further improvement in the standard of living of the older people of the country and a feeling that the pension system should be improved. The fact that this desire was shared by members of all Parties and without distinction of Party is clearly shown by the fact that many of the local authorities up and down the country with most widely differing political complexions had already begun to supplement the existing old age pensions under certain conditions. This supplementation of pensions was in fact becoming a marked feature in the budgets of local authorities. It amounted in 1939 to a 4d. rate in England and Wales and to a rate of 5½d. in Scotland.
The local authorities had for some time felt that this burden was one which should be shouldered by the State and that it was not one which they should continue to assume. I think your Lordships will agree that it is in many ways equitable that this expenditure should have a national rather than a local basis. The problem has been repeatedly examined, and in July of last year the Prime Minister announced in Parliament that the Government intended to take up the question and were instituting an inquiry forthwith. The course of events made it impossible to complete that inquiry at once, but on November 1 last year the Government were able to announce that they intended to resume the investigation and that they would immediately get into touch with the representatives of the contributors, that is to say, employers and employed persons. Those consultations took place during November and December last and in January the Chancellor of the Exchequer announced the broad lines of the proposals which it was intended to lay before Parliament. He promised that the task of preparing legislation would be pressed on with the utmost expedition, and the fact that your Lordships are discussing the Bill this afternoon is evidence that the Government have been as good as their word.
The administrative tasks involved in bringing about the proposed changes in old age pensions so that they can come
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into force this summer are very formidable, but in spite of unforeseen delays which occurred in another place, my right honourable friend believes that they can be completed and that the Bill will operate as from the prescribed date. The Bill is based on two main principles; the first that there should be an improvement in the general pensions scheme, and the second that the responsibility for supplementary pensions shall be assumed by the State and no longer be shouldered by the local authority. I will now go through the Bill clause by clause and try to make plain to your Lordships how the Government intend to carry out this twofold object.
Part I of the Bill deals with the lowering of the pension age for women and makes consequential alterations in the schemes for national health insurance and unemployment insurance. It is provided in Clause 7 that the changes made in this Part of the Bill shall take effect from the 1st July this year. Clause 1 of the Bill provides that women shall become entitled to old age pensions under the Contributory Pensions Acts at the age of sixty—five years earlier than under the present law. This applies to women who are either themselves insured, whether they are single, married or widowed, or their husbands are insured and have already qualified for their own pensions. From the age of sixty these women will become entitled to an old age pension of 10s. a week, payable every week for the rest of their lives. The result of lowering the pension age for women to sixty will be to give pensions to about 310,000 new persons at the outset: 150,000 pensions to insured women in right of their own insurance, and 160,000 to the wives of pensioners in respect of their husbands' insurance. The capital value of the added benefits to persons already insured is about £260,000,000.
The existing contributions are 11d. for men and 5½d. for women, which under the present law are due to be increased by 2d. for men and 1d. for women in 1946, and again by the same amount in 1956, when ultimately contributions of is. 3d. and 7½d. respectively will be payable. Under the Bill the present contributions are increased by 2d. in the case of men and 3d. in the case of women, of which employers will pay a penny in each case. Under the replaced conditions the

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total contribution for women will be approximately two-thirds of the total men's figure, whereas hitherto women have paid half the men's rate. The reason for that change is to secure equality between the sexes, the lowering of the pension age by five years being, of course, a very valuable concession for insured women. It is calculated that the value of the pension at sixty instead of at sixty-five is about ten times as great as that of the average sickness and unemployment benefit which will be foregone. The present value of these additional contributions is about £100,000,000, so that the additional liability assumed by the Exchequer for this Part I of the Bill as a capital sum amounts to £160,000,000.
The granting to insured women at the age of sixty of an old age pension payable every week, whether they are employed or unemployed, well or sick, takes the place of the present provision under which they are entitled to sickness or disablement benefit under the scheme of national health insurance, or to unemployment benefit under the unemployment insurance scheme. Clause 2 of the Bill therefore provides that the contribution in respect of insured women under each of these schemes shall cease at the age of sixty. When the changes effected by the Bill are in full operation, the woman's title to insurance benefit during sickness or unemployment will also cease at the age of sixty, being replaced by the title to a continuous old age pension, which, as I have told your Lordships, is worth about ten times as much. But it is provided in Clause 3 that to avoid possible hardship which might at the outset arise out of the change, special provisions are to apply during the transitional period of five years. The lowering of the pension age for insured women from sixty-five to sixty, and the consequential determination of their right to sickness and disablement benefits under the National Health Insurance Acts from the latter age, will relieve approved societies of liability for these benefits in respect of the intervening period. Clause 4 therefore provides that the surplus reserves of approved societies which would be released as a result of their being relieved of this liability are to be carried to a special fund set up under the control of the National Health Insurance Joint Committee. The first charge on this sum will be the sums expended on the sickness
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payments to be provided during the transitional period under Clause 3 of the Bill, and Clause 4 provides that the residue is to be dealt with as Parliament may hereafter determine.
That covers Part I of the Bill. We now come to Part II, which deals with the supplementation of pension in cases where the figure is not sufficient to maintain a pensioner or his dependants. At present the supplementation of an old age pension on the ground of need is a matter for the public assistance authorities. There is no other public source from which the pensioner can get assistance, since unemployment insurance benefits, national health insurance cash benefits and unemployment assistance all cease at the age of sixty-five. In future any person other than a blind person—who is otherwise dealt with—in receipt of an old age pension, or, in the case of a person over the age of sixty, of a widow's pension, may on proof of need be granted a supplementary pension at the cost of the Exchequer. This supplementary pension will be granted on the ground of need, and the needs of the pensioner will include the needs of any members of the household of which he is himself a member who are dependent on or ordinarily supported by him. These supplementary pensions will be administered by the Unemployment Assistance Board—to be known in future as the Assistance Board. Not only will it be unnecessary for the pensioner who is in need to apply for outdoor relief to the Poor Law authorities, but those authorities will be precluded from granting outdoor relief except in cases of sudden or urgent necessity. To-day it frequently happens that a man in receipt of unemployment assistance has to go to the Poor Law on reaching his sixty-fifth birthday, as he is unable to live on the amount of his pension. In future he will draw a supplementary pension, and his needs will continue to be assessed and his case dealt with by the Board.
The clause goes on to deal with the necessary rules which will have to be made as to the manner in which eligibility for a pension is to be established. I do not think I need worry your Lordships with the detail of these rules, but I can say that they will be of the simplest character possible, and will require no more than production to the Board's

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officer of the pensions book or other document of title issued by the pensions authorities. The time and manner of application are also dealt with by this clause, and it is provided that in order to ensure that the supplementary pension shall be paid on the first permissible day in each individual case, application will have to be made in advance. Both the form of application and the formalities will be kept as simple as possible, and forms of application will be available in the Post Offices. It is also provided that pensions are payable weekly according to the class of pensioner, and so far as possible the rules will provide for the payment of supplementary pensions to each class of pensioner on the same day as that on which the main pension is payable.
The normal method of payment will be through the Post Office, but provision is also made for payments in cash to meet cases of urgency or those in which the pensioner is unable to go to the Post Office. Clause 9 places the responsibility for granting supplementary pensions on the Unemployment Assistance Board, which will be called in future the Assistance Board. The investigation of the need for the purpose of supplementary pensions, and the determination of claims for such pensions, are closely analogous to the work at present undertaken by the Board. In respect of their new functions the Board will generally be responsible to the Minister of Health, and in Scotland to the Secretary of State, in the same way as the Board are generally responsible to the Ministry of Labour in the exercise of their functions in regard to unemployment assistance. Subsection (3) of this clause provides that the main provisions of the Unemployment Assistance Act, 1934, shall apply, with modifications, to the Board's functions in the administration of supplementary pensions to be granted under this Bill. Those modifications are set out in the Second Schedule to the Bill.
We now come to Clause 10, which has been the subject of considerable discussion. This clause is intended to deal with cases in which special arrangements are necessary in the interests either of the applicant or of his dependants. The power given by subsection (1) to grant a supplementary pension to some person other than the pensioner is needed to
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meet two types of case: first of all, the case of a pensioner who, by reason of infirmity or other cause, is incapable of spending money to his own advantage: and secondly, the exceptional case in which the interests of dependants are involved. As an example, I will give your Lordships the case of where a supplementary pension includes the needs of dependants and the pensioner is addicted to spending more than he should on his own personal enjoyment. That is the kind of case which is contemplated. It must be remembered that where the needs of a person are included in a supplementary pension, the public assistance authority cannot order outdoor relief to that same person, and it is therefore necessary to have power to ensure that the money is applied for the purpose for which it was intended. There will be an unrestricted right of appeal against this determination.
Subsection (3) of this clause is intended to deal with cases in which either an infirm old age pensioner without friends or relations, who clearly ought to be properly looked after in an institution, is reluctant to enter one, or, more rarely, where a difference of opinion arises between the officers of the Board and the public assistance authority as to the proper treatment of a particular case. This subsection was subject to criticism during the passage of the Bill through the House of Commons, and my right honourable friend promised then that he would review the matter further before the Bill became law. I can at this stage assure your Lordships that we have now been into that matter, and that when we reach the Committee stage of this Bill I shall move an Amendment which will have the effect of withdrawing subsection (3) of this clause from the Bill.
Clause 11 is intended to deal with delays which may occur. It has necessarily been drafted in general terms, but I can perhaps explain it best by giving an example of the kind of difficulty which it is intended to meet. Take the case of a man who is in receipt of an old age pension and also of a supplementary pension, which takes account of the needs of a wife who is dependent upon him. In due course the wife herself becomes entitled to an old age pension, but there may be a period of some weeks between the date from which the title to the pension began, her sixtieth birthday, and the date when

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the facts are fully established and she can actually begin to draw pension payments. During this period the Assistance Board, in discharge of the duty imposed upon them by Clause 8 to award the man a supplementary pension commensurate with his needs and those of his dependants, will in effect be making what are advances on account of the pension of the wife which is from day to day accruing but which has not been paid. The object of the clause is to secure that when the wife's title to pension is established and the pension paid with the accrued arrears, those arrears, or such part of them as corresponds with the portion of the man's supplementary pension attributable to his wife's needs, may be deducted by the appropriate authority from any payments made to the wife and paid to the Assistance Board.
Clause 12 deals with the position of persons who are in receipt of outdoor relief immediately or shortly before the date on which the payment of supplementary pensions will begin. Its effect is to enable the Board to have regard to the rate of relief which the applicant was receiving, and, if that rate is in excess of the amount at which the pension would otherwise be assessed under the Board's regulations, to bring up the supplementary pension to an amount not exceeding the outdoor relief rate. Clause 13 is really machinery. It gives the date for the commencement of the Board's responsibility, the 3rd August, 1940, and contains provisions for facilitating a change-over from the local authorities to the Board. It contemplates that the Board may, for a limited period and by agreement with the local authority, leave the whole responsibility for the pensioner for a time in the hands of the public assistance authority. If it does so, the authority will be entitled to reclaim from the Board the expense to which it is put in consequence of the delay. Clause 14 is also machinery, and gives Parliamentary sanction to the additional administrative expenses which may be incurred by or on behalf of the Board.
With regard to Clause 15, the effect of the Local Government Acts, 1929 and 1937, is that for any fixed grant period the general Exchequer grant is a fixed proportion of the total of the rate- and grant-borne expenditure of local authorities in the year next but one preceding
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a fixed grant period. The grant now distributed among local authorities in accordance with those Acts includes that arising from the cost of relief to old age and other pensioners in the year upon which the grant was based. Under Part II of this Bill local authorities will be relieved of expenditure amounting, roughly, to £5,000,000 a year in respect of out-relief, and it is equitable that the grant should be reduced. This clause accordingly provides for payments to the Exchequer of sums at the annual rate of £1,000,000 in England and Wales and £175,000 a year in Scotland by the local authorities. It is proposed that these sums shall be repaid to the Exchequer by a deduction from the sums due to the authorities in respect of the general Exchequer grant. Your Lordships may wonder why, when the local authorities are saving £5,000,000 a year, the return made by them should be only £1,175,000. The answer is that that is all the grant which they were receiving in respect of this particular service.
Clause 16 makes provision for the compensation by public assistance authorities of their officers or servants suffering pecuniary loss by reason of loss of office or diminution of emoluments in consequence of the passing of this Act. Clause 17 is merely machinery. Clause 18 is an interpretation clause for Part II of the Bill, and Clause 19 applies Part II of the Bill to Scotland with suitable modifications. Clause 20 is the short title and extent.
There, my Lords, is the Bill. It does not go so far as some social reformers would like to see it go, but it does go some considerable distance, and I think we may legitimately take pride in the fact that it has been found possible to make this considerable advance in our Social Services under present conditions. Part II of the Bill has been criticised on the ground that the increase in pensions should have been on a flat-rate basis and that it contains the objectionable feature of a means test. A flat-rate increase would have cost a very great deal more than the present proposal. It would still have been inadequate in many cases which will be adequately dealt with by the present scheme, and in other cases, where old age pensioners possess savings or some pension from some other source than the

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State scheme, or have relatives who are willing and able to contribute to their support in their old age, it would have been unnecessary. And I believe that your Lordships will agree that the present proposals, which enable the Board to deal with cases on their merits, will prove very much more satisfactory.
As I told your Lordships, the Bill will immediately give pensions to no fewer than 310,000 women under Part I. It is less easy to be sure of the effect of Part II. There is little doubt that there are now a considerable number of persons—how many it is impossible to say—who are deterred by the stigma which still attaches to the receipt of poor relief and to the Poor Law from drawing pensions from the local authorities, and I think there is no doubt that very considerable numbers of these will be prepared to receive supplementary pensions under the new system, and that this Bill will enable very large numbers of persons to face the prospect of old age with greater equanimity than is possible for them to-day. The Bill does not go all the way that some people would like it to go, but it does represent a very considerable advance in our system of Social Services. As such, I recommend it to your Lordships, and I beg to move.
Moved, That the Bill be now read 2ª.—(The Duke of Devonshire.)
4.43 p.m.
THE EARL OF LISTOWEL: My Lords, I think we are all extremely grateful to the noble Duke for the clarity and the grasp of detail with which he has explained the contents of an important and extremely complex measure. I should also like, before I go any further, to thank him and the Minister of Health for the important concession on Clause 10, subsection (3). As the noble Duke pointed out, very strong exception has been taken to this subsection in another place, for reasons which we need not enter into, and I had myself intended to put down an Amendment for its omission. I am therefore grateful to the noble Duke, both for saving me the trouble and for removing what was generally agreed in another place to be an undoubted weakness in the Bill itself.
I think that whatever differences of opinion there may be on the merits and demerits of the Bill, no one would deny
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that it has occasioned more bitter political controversy than any other measure that the Government have introduced since the war began. The discussion in another place fills the best part of ten stout volumes of the daily reports of Parliamentary debates, as the noble Duke and I have learnt to our cost, and the Bill's many critics in another place, who were drawn, we are glad to say, from all political Parties, were voicing the dissatisfaction of thousands of their constituents. So that we in playing the part of devil's advocate, from the Government point of view, are trying from these Benches to act as the mouthpiece of the many sincere people for whom this measure is not by any means the unmixed blessing described in such glowing terms by the Government spokesmen.
But though we may be outspoken, and even severe, critics, we believe that our criticism is fair criticism, and we have not the least desire to ignore, to underestimate or to minimise the value of even minor social reforms in war-time. The Government, by the introduction of this Bill, are setting a useful precedent for the expansion of the Social Services, both at home and, by other measures of theirs, in the Colonies, and at a time when our financial resources are engaged up to the hilt in promoting a really unparalleled war effort. We concede the Government that point, and we concede it gladly. I assure the Government that, although we are not as a rule sticklers for precedent, this is not one we shall allow them to forget. We are as gratified as they are that after July 1 of this year no fewer than 310,000 insured women (that, I believe, was the figure given by the noble Duke) will be receiving a pension of 10s. a week, which they would not otherwise have received till they reached the age of sixty-five. It is, we believe, an excellent thing that unmarried women should be encouraged to retire from industry at the age of sixty, before they are completely worn out in body and mind, and much hardship will certainly be removed when husbands of between sixty-five and seventy whose wives are a few years younger than they, have no longer to provide for two persons out of their meagre pensions.
Again—this is another virtue which we recognise in the Bill—the transfer of responsibility for old age pensions from local authorities to Parliament is a reform that is long overdue. I well

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remember myself, in the days when I served on a public assistance committee or, as it was then called, a board of guardians, in the East end of London, what a shockingly large proportion of those who came before us for help were old people whose only fault was that they were unable to continue at work. In those days of course we had also to help the unemployed who were unable to draw unemployment benefit, and it is gratifying that the Government have at long last decided to treat the aged, like the unemployed, as a national, and not a local responsibility. It follows from that, and indeed it is right and proper, that the financial burden should be shifted from the shoulders of the ratepayers to those of the taxpayers, and the saving of £5,000,000 a year in rates to which the noble Duke has referred—from which, of course, the Exchequer giant must be deducted—will be particularly welcome in those densely populated but poverty-stricken urban areas where the cost of maintaining the aged has always been highest.
I have done my level best to do justice to what we consider to be the redeeming features of the Bill. It was because they recognised the benefits that would undoubtedly be derived from certain of its provisions that my colleagues in another place decided to facilitate its passage into law before Easter by withholding much of the criticism they would otherwise have liked to make. We are no less anxious not to impede its progress and to give it an unchallenged Second Reading, but we cannot remain silent about those features of the Bill to which the strongest exception has already been taken by a very considerable volume of public opinion. I am referring more particularly to the provision in Part II of the Bill that those who apply for supplementary pensions must submit to a household means test. I do hope that I shall be able to make our own position perfectly clear in this respect. No one would quarrel with the principle that public money cannot be used without careful inquiry into every case. Under the Old Age Pensions Act of 1908, to which the noble Duke referred as being the starting point of the whole system of old age pensions, a pension of 5s. a week was first offered to persons of seventy and over when they lacked sufficient private means to give them a reasonable standard of
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comfort in old age. This Act also laid down, in figures, the amount of private income a single person or a married couple might have without being debarred from receiving a pension—that is to say, the principle of a personal or, in the case of married couples, a joint means test, for non-contributory pensions was introduced over thirty years ago, and has been in operation ever since without serious opposition from any quarter.
The Labour Party has never questioned the desirability of applying a personal test to all claims arising under this Act, and many of us believe that a similar test might well be applied to other and more distinguished recipients of pensions from the State. We should have welcomed this Bill if it had only asked for a personal means test when supplementary pensions are claimed. I am justified in labouring this point because the noble Duke, in the course of his remarks, referred to our objection to the means test. What I should like to make as clear as possible is that we draw a very hard and fast distinction between the personal or, in the case of married couples, the joint means test, and the household means test which includes all others living under the same roof. I must say it is surprising that a Conservative Government, which in this case is untrue to the excellent Conservative principle of preserving the best from the past, has broken with the ancient and admirable tradition of the personal test, and substituted for it the odious innovation borrowed from unemployment assistance—I mean the household means test which aroused such bitter hostility when it was first applied to the unemployed. I cannot imagine, for my part, greater unhappiness in my old age than to feel I was a constant burden to my children or grandchildren, and I have no doubt most of your Lordships would share that sentiment.
In many cases old people will be deprived of their greatest solace—the company of their own children—because the latter will be obliged to seek shelter elsewhere, and in more cases still an element of discord and strain will be introduced to mar the harmony of family life. We believe that this provision of the Bill will bring avoidable and unnecessary hardship to thousands of working-class households. I have used advisedly the epithets

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"avoidable" and "unnecessary" because I really cannot see why the Government cannot shoulder the loss that would be incurred by preserving the personal test. It is true that one cannot find even a rough estimate of the exact amount in any Government statement, and I have perused the reports of the debates in another place for many hours in vain, searching for such a figure; but I should be surprised if the reticence of the Government on this point were concealing a very large figure. I should very much like the information during the passage of the Bill through this Chamber if it is possible for the Government to give it. I should be surprised, as I say, if it were a large figure, because in that event the Government would be depriving their own supporters, who are naturally most anxious to make out as good a case as possible, of the most effective argument in favour of the household test.
That, as briefly as I can express myself, is our main complaint against the present Bill. But there are other provisions that seem to us unnecessarily stingy on the part of the Government, even in war-time. I am referring to the sums that will be ignored or, to use the technical term, "disregarded" when the household income is assessed; but as I am putting down some Amendments on these points on the Committee stage, I will not weary the House by stating my objections at this moment. I have tried to emulate the noble Duke in being as brief as possible, but I should like, in conclusion, to recommend to the consideration of the Government in all diffidence, but with a strong sense that it is a recommendation that might be of some value, the policy towards the aged that has been officially adopted by the Party to which I belong. I do so because, though we should agree with them that it may not be practical politics at the present moment, I believe they will agree with us that the time is not far distant when every British citizen must be able to look forward, as a right, to a reasonable degree of comfort and security in the twilight of life. This will be guaranteed, like the other Social Services, by the social conscience of the community to those who have served faithfully through the active years of their working life, as a reward for services rendered and not out of charity towards the infirm. If the present system of con-
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tributory pensions were extended and enlarged so that all three partners—the employer, the employee, and the State—were paying more money into the common pool, a large enough fund would be thus realised to provide every wage-earner with a really adequate pension at the age of sixty-five.
There would then no longer be any need for supplementary pensions, as they are now called, or for any test of means. There would be no penalising or discouragement of thrift, which is undoubtedly the effect of the present system, and the aged would no longer feel they were regarded half as self-supporting citizens and half as paupers. This surely is one of those schemes for the development and completion of our Social Services—and our most vital Social Services—that should be undertaken immediately war is over. It is an obvious method by means of which civilian spending can rapidly be substituted for Government spending, and help to avert the catastrophe of the post-war slump. It looks as though the Government do not intend to accept the scheme of Mr. Maynard Keynes, but that is only a stronger argument for pressing forward on a liberal scale with the Social Services. I recommend this plan of ours for the serious consideration of the present Government, because it happens so frequently in this country that what the Socialists advocate to-day the Conservatives practise to-morrow.
5 p.m.
VISCOUNT SAMUEL: My Lords, the Bill that has been brought to your Lordships' consideration to-day is unquestionably one of great importance, perhaps the most important that has been laid before the House in the present Session in the domestic sphere. It touches closely the lives of some hundreds of thousands of our fellow citizens. We are grateful to the noble Duke for having explained a somewhat complicated measure in a speech which was both compact and comprehensive. This is a necessary Bill, and I have no doubt it will readily receive the approval of your Lordships' House. It has long been recognised that it is the duty of any civilised society to come to the rescue of its least fortunate members. That principle was enshrined hundreds of years ago in the Elizabethan Poor Law, but that Poor Law was left as almost the

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sole measure of State assistance, supplemented though it was by very large measures of private charity, until recent times. With enlarged ideas as to the duty of the State, and in a more wealthy society, we have had during the present century a most marked expansion of the Social Services, and, as a deliberate principle of policy, Parliament has laid it down that it is the duty of the State to assure to all its members at least a minimum subsistence. Therefore we have our laws dealing with those who are suffering from sickness, unemployment, blindness, cases of destitute children, and these cases of the aged.
The first Old Age Pensions Bill was introduced in 1908, and will always be connected with the name of Mr. Asquith. That Bill, I well remember, was subjected to criticisms such as those of which the noble Duke has reminded us to-day. We were told it was the first step towards the demoralisation of the nation, and the undermining of self-respect and self-confidence. Now the noble Duke has told us, speaking for a Government predominantly Conservative, that that measure has, after thirty years, fully vindicated itself, and, so far from undermining self-reliance, has increased national thrift and induced greater saving. But, as time has gone on, necessarily that measure has required amendment and expansion, and that has been effected during the long intervening period. Still to-day, prior to the introduction of this Bill, there has been a very grave defect in the existing system—namely, that the amount given to the aged people has been found in practice not to be adequate for the fundamental purposes in view, and the public assistance authorities have been driven by the facts of the case to supplement these pensions by what would have been called, in previous years, Poor Law relief. That is quite contrary to the whole idea of the old age pension system.
There are some 275,000 people out of the 3,000,000 old age pensioners who have to be helped from public assistance funds at the cost, as we have been told to-day, of some £5,000,000. Of this £1,000,000 is provided by the Treasury from the block grant and the other £4,000,000 by the ratepayers, which has meant on the average fourpence in the pound on
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the rates and in many districts has attained a figure considerably exceeding that. Nevertheless there are still many who are left in penury who will not go to the local authorities for relief of that character, and there are undoubtedly a vast number who need either that these supplementary payments should be converted into parts of the national pension or that they should be granted allowances which at present they have not applied for. There are great numbers of cases among the working-classes of husbands and wives where the wage of the breadwinner is adequate for the support of two people, or even for the support of a family consisting of more than two, but when the breadwinner reaches the age of sixty-five and his employers are no longer willing to keep him in employment or he himself is not physically fit, and the wage ceases, he may obtain a pension for himself of 10s. a week, but the pension for one person is not adequate for the maintenance of two. In such a case, as a general rule the wife is of the age of sixty or thereabouts, and is unfitted for work; therefore as soon as the ordinary wage ceases they are reduced to a position of great penury. That is the typical case which will be dealt with by this Bill, which enables the wife also to receive the pension at the age of sixty while the man receives it at the age of sixty-five.
Necessarily, as I say, Acts such as the Old Age Pension Act have to be revised from time to time. We put into an Act of Parliament a figure such as 5s. a week, or 10s. a week as the case may be, and that figure remains embodied in the Statute year after year without change; yet the circumstances may change. When the particular figure is left to Regulations this point does not arise. In the Old Age Pensions Act a statutory figure is inserted. The cost of living has greatly increased, the pound is not what is was either in its gold value or in what is more important, its commodity value, and prior to the present war—I am not speaking now of fluctuations caused by war conditions—the cost-of-living-figure index was in the neighbourhood of 140 compared with 100 pre-war. That means that what used to be bought at 10s. would now cost 14s., but still the figure of 10s. remains enshrined within the Statute and cannot be altered except by Act of Parliament. That is an example of the

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need that must arise from time to time for the reconsideration of measures of this character, and also the reason why it is better to proceed by some elastic process such as giving supplemental payments, and not to fix statutory amounts but amounts that may be determined by a properly constituted authority as is proposed to be done in this Bill.
When this scheme is carried into effect the cost of old age pensions to the State will be £67,000,000 apart from the sums derived from the contributions of employers and employed, and will rise in the period of ten years to £87,000,000. On the other side of the account there will be a net saving to the local authorities of £4,000,000, which is of course a relief to the public purse—it does not matter very much from which pocket the amount comes—and against the sums that will be expended by the State must be set the saving which will accrue to the local authorities in respect of present payments. I am informed on inquiry that it is estimated the additional cost to the Treasury arising from this Bill will not be considerable within the next few years, and will amount to about £3,000,000 a year in the decade from 1946 to 1956 and rise to £4,000,000 a year in the following decade.
There are some critics who feel great alarm at the large sums which are now being devoted to Social Services, and occasionally voices are raised in your Lordships' House which, in gloomy and indeed tragic terms, speak of the enormous burden that is laid upon the State by the continuous growth in the cost of education and in the cost of other public services such as pensions and national insurance. There is this factor to be borne in mind on the other side. During the period that has elapsed since this class of legislation was initiated by the Old Age Pensions Act, 1908, there has been an amazing growth in the total national income, from which these sums and all other sums spent in the country are derived. The best statistical investigations have arrived at a figure that in 1908 and in the years about that period the total national income was in the neighbourhood of £2,000,000,000 a year, while, apart from any difference that may be made now by war conditions, it is estimated on the most
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reliable authority that the total national income has risen to the astonishing figure of £4,500,000,000 a year—more than twice what it was a generation ago. Of course it is true that when we are speaking of the pound sterling we are speaking of a somewhat different pound to-day from what it was then, but even taking that into account there has been an amazing increase in the total national wealth.
That enables the higher standard of comfort to be provided which has been reached throughout the nation—comparatively higher; I am by no means saying that it is one with which we should be permanently content—and while no doubt the burden on individuals is very heavy and will compel a change in the mode of life of particular classes and the lessening of the number of great establishments, still the nation, taken as a whole, does enjoy a position of remarkable strength. It is this immense increase in the total national income that enables us to provide for the Chancellor of the Exchequer a revenue of £1,000,000,000 a year instead of the much smaller revenue of generations ago and will enable us to bear the colossal charges imposed by-war. Let it not be thought that in drawing attention to these facts I am minimising the importance of a careful husbanding of the national wealth and of looking with a prudent eye upon all proposals for public expenditure. On the contrary, I am one of those who attach the greatest importance to that. But these considerations do give an answer to those who say that we are heading for bankruptcy because we spend an additional £3,000,000 or £4,000,000 a year on old age pensions and other sums for purposes of national education.
So far, with regard to the Bill in general. There are two provisions to which members in another place who belong to the Liberal Party took strong exception and to which I here, on behalf of the Liberal Party, would also take exception. The first is the enshrinement in this Bill in respect of supplementary pensions of the principle of the household means test. I agree with my noble friend who has just spoken that that is wrong and ought not to have been embodied in this Bill. There must indeed be some inquiry as to the means of the individual pensioner. That has been a principle of the Old Age Pensions Acts from the very beginning. It would be profligate finance to give the

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full pension to persons who are rich or well-to-do, or even of moderate means, and who really do not require the 10s. a week which the pension gives. Similarly, with respect to the supplementary allowance.
This principle, of course, does not apply where the pension is granted as the consequence of insurance contributions paid by the recipient. There there is not, and obviously ought not to be, any inquiry into individual means. There is a contract between the insured person and the State and whatever his personal position may be he is entitled to the benefit of his insurance, just as any other person is entitled to the benefit of any other insurance no matter what his personal financial circumstances may chance to be. But where the payment is outside what has been contracted for under the system of insurance, it is right that there should be inquiry into means. I heard with great satisfaction, but with much surprise, what was said by my noble friend the Earl of Listowel, that the Labour Party is in favour, and always has been in favour, of that principle. In all the controversies on the Unemployment Insurance Act, which sometimes reached conditions of considerable bitterness, the Labour Party always denounced any means test as such, while the difference between the attitude taken by the Liberal Party and that taken by the Labour Party is that we have always denounced the household means test—pooling the family earnings, in order to decide whether there is any need on the part of the recipient of the payment.
THE EARL OF LISTOWEL: Will the noble Viscount allow me to say that I was endeavouring to make clear the attitude of the Labour Party as regards the means test under the Old Age Pensions Act? My remark was intended to apply particularly to the means test under the Act of 1908. I did not intend what I said to be understood in a more general sense.
VISCOUNT SAMUEL: I think the noble Earl's observations were not so qualified. I listened very carefully to what was said and, as I say, I heard it with much surprise, having been immersed in these controversies myself for several years. Why there should be any difference in principle between an unemployed man and an aged man in that particular, I do not know. If it is right in the case of an
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aged man, it must be right in the case of an unemployed man, and vice versa. But I entirely concur with my noble friend that the family means test is a wrong principle.
While I congratulate the noble Duke on a speech which was comprehensive, there was one omission. I do not think he said anything to repudiate the strong arguments used in another place against the principle of the household means test. All through the very great depression which began in 1929, I represented in another place a constituency in Lancashire that was one of the most stricken districts in the country and there I could see at first hand, going in and out of the homes of the people, the effect of the household means test. I came to the very clear conclusion that it was wrong and that it ought to be abolished. It disturbs family relations and it results in all kinds of inequalities and injustice. It conduces to friction and similar families are treated in different ways. For example, under this Bill if an old man has a son living in his house who is earning money, that will be taken into account when it is determined whether or not he is to receive a supplementary allowance. But in the same street there may be another old man, with a son in the same works earning the same money, but living next door, and not in the old man's house. His earnings will not be taken into account. I can imagine a logical argument that children should be responsible for the maintenance of their parents and that families should be regarded as a whole, but I cannot imagine a logical argument for taking as a basis of need of a supplementary pension the circumstance whether members of a family live under the same roof. It is a wrong principle, and I regret that it has been perpetuated in this Bill and ex-tended to another sphere where hitherto it has not prevailed.
Another objection relates to the Unemployment Assistance Board, which in future is to be called the Assistance Board. I do not wish to criticise the administration of the Board, but the constitution of the Board is such as we do not approve, both in this connection and in connection with the Unemployment Insurance Acts. The noble Duke said the Board was generally responsible to a Minister, but it is not really a part of any public department. It is not fully

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responsible to any Minister. It has a quasi independent position. It is not subject to the full control of Parliament through a Minister, although it expends immense sums of public money and although its activities touch very closely the lives of great numbers of people. That is why we disapprove of the Unemployment Assistance Board, with its present constitution, being brought in as part of the machinery of this Bill.
The national insurance system, closely related as it is to the old age pension system, has grown up over a period of years piecemeal—one might almost say haphazard. It has become excessively complicated: anyone reading this Bill can see how complicated it is. It is only understood fully by specialists, and the time seems to be approaching when some effort should be made to co-ordinate it as a whole and introduce an element of greater simplicity. Where there is complexity and often confusion, there is likely to be excessive expenditure, and simplicity will frequently lead to greater economy. I trust, therefore, that—not now during the war but soon after the war—a comprehensive overhaul of the whole of our legislation dealing with national insurance and old age pensions will be undertaken, with a view to the matter being placed on a simpler basis and the creation of a comprehensive system of all-in insurance.
Finally I would only add that I am very glad that the Government have not, on the ground of the prevalence of war conditions, postponed dealing with the matters that are in fact dealt with in this Bill. To remove causes of justifiable discontent among the masses of the population is itself a strengthening of the Home Front and therefore will indirectly help our war effort. I am glad, therefore, that even at the present time this grievance—and it is a real grievance—that prevails among so many people is not being left un-remedied. Further, it is a great sign of national strength that we are able to undertake measures such as these, involving though they do additional expenditure; or again, that we are able to announce a great policy of Colonial development, which we are to discuss next week, involving considerable national expenditure, even at a time when we are engaged in a gigantic effort to maintain
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the national independence and liberty. I feel sure that this House will give to this Bill on its Second Reading a cordial welcome.
5.23 p.m.
LORD BALFOUR OF BURLEIGH: My Lords, I should like to join in the congratulations which have been offered, both to the noble Duke for the comprehensiveness and clarity of his speech, and also to the Government for the introduction of this Bill. There is, however, one matter which I think constitutes a blot on the Bill and to which I venture to call attention in the hope that the noble Duke will see whether between now and the Committee stage some remedial Amendment could be introduced. The Bill allows the first 7s. 6d. of any pension derived from a charity associated with the pensioner's trade or calling to be disregarded. That provision, however, applies only to charities associated with the trade or calling. It will have the most unfortunate results, because it will lead to the breaking of links between many old people and charities with which they have associations of a realty valuable and precious kind. I can perhaps illustrate my point by giving your Lordships some account of a charity with which I have the honour to be associated—namely, the Royal Scottish Corporation. The Royal Scottish Corporation was founded as long ago as 1611, and it has disbursed a sum of about £11,000 a year in pensions to those of the Scottish race who are in London and who have in old age or infirmity fallen into need of such assistance. It seems to be the intention of the Government to interpret this exemption in a generous manner, because I understand—although I must admit that I have not read the eight volumes of the OFFICIAL REPORT which the noble Duke and the noble Lord opposite have read——
THE EARL OF LISTOWEL: Ten volumes.
LORD BALFOUR OF BURLEIGH: —that it was mentioned in another place that the Royal Seamen's Fund would be included in the exemption. I cannot quite see why that exemption should not apply to any reputable charity. The effect in the case of the Royal Scottish Corporation will be to break the link which has existed for many years between many of these old people and

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the charity. No less than 400 really fine old Scottish men and women draw their pensions from this charity, and some of them have been linked with it for upwards of twenty years. Up to the outbreak of the war, at all events, these old people would meet once a month in the hall of the Corporation: there they would forgather with their friends and have tea. I think sometimes they had a simple church service, and it was for them the event of the month. If this exemption is not extended to such a charity as the Royal Scottish Corporation, that link will be broken. It may be said that the Royal Scottish Corporation should continue to supply the pension and so relieve the Government. That, however, is on the face of it impossible, because the subscribers to the charity would not feel that this was a right way of conducting its business. If the Government have undertaken the obligation, then they must shoulder it.
It might possibly be argued that these meetings and so on could take place without the administration of the charity. I do not think it is only because this is a Scottish charity that I need say that the link of practical sympathy in the payment of the pension is the link which binds the whole thing together. These old people come for a great deal more than the money, but without the practical sympathy, obviously the link would cease to exist. This exemption in the Bill is based on charities administering pensions in connection with the trade or calling of the individual. This charity that I am talking about is based on something much more precious than that: it is based on pride of race, and I have no doubt the same thing could be said mutatis mutandis of other charities. I venture to hope that the Government will look into this matter and see whether it would not be appropriate to put an Amendment down on the next stage of the Bill exempting all reputable pension-paying charities in the same way as those charities which are based on the trade or calling of the individual.
5.28 p.m.
THE DUKE OF DEVONSHIRE: My Lords, I am very grateful to the noble Lords opposite who have spoken on this Bill for the kind reception they have given it. Boiled down, it seems to me that the principles of the Bill are generally agreed, with the one exception that
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objection is taken by the Benches opposite to the household means test as opposed to the individual means test. I gather that Amendments are going to be moved on that subject, and I will not detain your Lordships now with arguments which I shall have to use in replying to the debate on those Amendments. I would only at this stage point out that the supplementary pension is going to take into account the household needs. If a pensioner has persons dependent on him, his commitments are very definitely taken into account in assessing his needs of pension, and it seems therefore to be equally just that, if he has people living with him who are in a position to support him or to contribute to the wellbeing of the household, that also should be taken into account.
With regard to the point raised by my noble friend behind me (Lord Balfour of Burleigh), it is a question of detail on which I must confess that I am not fully informed at this stage, but I can tell him that I will go into the matter and, while I can make no promise of any kind, after the moving appeal which he has made I shall certainly do my best to induce my advisers to meet his views.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

AGRICULTURE (MISCELLANEOUS WAR PROVISIONS) BILL.
Read 3ª (according to Order), with the Amendments, and passed, and returned to the Commons.

SOLICITORS (EMERGENCY PROVISIONS) BILL. [H.L.]
Order of the Day for the Third Reading read.
5.32 p.m.
THE LORD CHANCELLOR (VISCOUNT CALDECOTE): My Lords, I beg to move that this Bill be read a third time. Perhaps I may give one word of explanation as to the reason for my doing so in place of my noble and learned friend Lord Wright, who is really the parent of the Bill. The sole motive of this action on my part is to secure a better chance for this Bill in another place, where Bills which have the support of the Government secure precedence. I beg to move.
Moved, That the Bill be now read 3ª.—(The Lord Chancellor.)
On Question, Bill read 3ª, and passed, and sent to the Commons.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The following Bills received the Royal Assent:

Mental Deficiency (Scotland),

Cotton Industry,

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Industrial Assurance and Friendly Societies (Emergency Protection from Forfeiture),

Dumbarton Burgh Order Confirmation,

Glasgow Water and Tramways Order Confirmation,

Aberdeen Corporation (Administration Finance, &c.) Order Confirmation.

House adjourned at five minutes before six o'clock.