§ 2.4 p.m.
§ LORD NATHAN rose to call attention to the policy of His Majesty's Government with reference to social insurance and industrial injury insurance (White Papers Cd. 6550 and 6551); and to move for Papers. The noble Lord said: My Lords, these two White Papers, the first dealing with social insurance and the other with workmen's compensation, outline a programme which constitutes the greatest and most important advance in social policy since the introduction, more than thirty years ago, of health and unemployment insurance by Mr. Lloyd George. Both with that beginning and with this further stride forward two names are associated—those of Mr. Churchill and Sir William Beveridge. The end crowns the work. I speak as a strong and wholehearted supporter of the policy of these White Papers. If I press for much more speed in the translation of these purposes into legislation and administrative fact, if I ask for a set time-table of achievement, if I ask for reconsideration of some of the proposed rates of benefit, if I devote my time to these matters rather than to applause, it is because the applause can be taken for granted. This is a good scheme. It is our duty to make it better if we can.
§ Let me say that I do not regard this programme of social security, as it should surely be called, in any starry-eyed fashion. Indeed, I recognize that the security of income which is promised by these White Papers will only, and can only, be real if the necessary goods and services are made available by the united efforts of the entire nation. Social security 1060 is self-help, self-help in a double sense. There is the self-help represented by the nation-wide scheme of weekly contributions, whereby all citizens pay into a pool for the assistance of the unfortunate, and there is the self-help represented by the nation-wide effort in production and in trade, which will be required to deliver the goods. I believe that this productive effort can be, and will be, forthcoming. Indeed, I am convinced that it would neither be forthcoming nor worth while unless its fruits were to be fairly and humanely distributed as this programme requires.
§ I say "this programme." .In fact, these White Papers are not yet a programme, but only the promise of a programme. The proposals have still to be made law and executed. That must, in any event, take time. When compulsory insurance was begun before the last war, by the Liberal Government of the day, a little over four years elapsed between the first official preparations in 1908 and the coming into force of the Act in 1913. We must do better this time. It is well over two years already since Sir William Beveridge reported. It is more than that since, under official commission, he began his inquiries. At least we should have had before us by now the draft legislation. We have not. Our demand must, therefore, be for that legislation with all speed. If I press, as I do press, for the process of execution to be cut down to the last indispensable day, if I ask, as I do ask, for a time-table, that is the measure of the tremendous value of this programme, the agenda of which is contained in these White Papers.
§ What is the agenda that is required? I reckon that at least half a dozen Acts will be needed. One, the Bill to set up a Ministry of National Insurance, as it is now to be called, has appeared and has been passed. The Ministry is being set up. It has a local habitation in Newcastle-on-Tyne. As well as a Ministry, there is a Minister. That is a start. One ancillary Bill has, I believe, been presented in another place. It introduces children's allowances. The Bill is in itself important, but in the building of the new structure it is a side issue. Then, a Bill is needed to replace the old unsatisfactory system of workmen's compensation. It is needed quickly, and before it comes surely there are important reforms and revisions which 1061 should be made in the second White Paper, reforms and revisions which will recognize that, while sickness and unemployment benefits are compensation for interruption of earnings, industrial payments are, in many cases, compensation for the loss of the power to earn itself. The fourth necessary Act will finally transfer outdoor relief from the local authorities to the Assistance Board under the new Ministry, of which it will be a central organ and agent. The fifth and most important Act, and far the most complex, is the National Insurance Act itself, which will bring into operation the new, comprehensive, compulsory contributory scheme to provide assurance against all the contingencies of birth, youth, life, work, age and death. It will perform the immensely important task of removing national health insurance, widened to include all dependants, and indeed all citizens, from the administration of the approved societies to the direct care and attention of the State. This crucial transfer must be prepared for and even set in motion months before the new scheme can begin. The sixth and parallel Act will bring into being the National Medical Services.
§ Now, what time-table can there be? These are complicated as well as crucial matters, but the ground has surely been well prepared. I am convinced that 1945 —the end of this present Session, three years, almost, after the Beveridge Report —should see already enacted, or at least well on the way to the Statute Book, all but perhaps one of these six measures. The Ministry we already have. The Bill relating to children's allowances was, I am glad to think, presented yesterday. Industrial injury, the transfer of public assistance, the beginnings of a National Medical Service—all these should be made law this year. If they are not, then the year 1946 cannot be, as it should be, the year of consummation with the National Insurance Act itself. This is the timetable—a two-year time-table at the most—upon which we can reasonably insist.
§ There is still time within this set progress for reforms and revisions, and I propose to make a few observations upon the White Paper on Social Insurance, which has been more fully discussed and is better known than the second White Paper, on Industrial Injury Insurance. Some changes in the proposals there must be if the claim ma de by the White Paper, 1062 that provision will have to be made against every one of the main attacks which economic ill-fortune can launch against individual well-being and peace of mind, is to be finally and fully justified. In general, I make bold to say that the claim is justified by the proposals as they stand. I need not rehearse those proposals, for they are by now well known —the single system of contributions by State, employer and employed, which is to provide sickness benefit, unemployment pay, training allowances for the unemployed, maternity benefit, retirement pensions, burial grant and payment of pensions for industrial injury. The scheme is comprehensive and complete; it rounds off the remarkable British development of social insurance.
§ But will it in fact provide for need and against want in all cases? Almost exactly two years ago, standing in this place, I laid emphasis on what seemed to be the central, essential and new principle of the Beveridge Report, which was the prevention of want. Are these proposed rates of benefit in the Government's version sufficient to remove the need for recourse to other sources of assistance? Will they be sufficient if the cost of living rises? Are they related to the ascertained requirements of a reasonable subsistence? Should not there be specific and definite means by which they can be so related from year to year, as prices move? I want to call attention again to the one main aim laid down in the Beveridge Report which the Government have not accepted. "Benefit," Sir William Beveridge urged in his Report, "should be sufficient to provide the minimum income needed for subsistence in all normal cases." It is true that, while rejecting this aim as too ambitious, the Government in fact propose to pay the Beveridge scale in the main categories of sickness and unemployment benefit, but the scales Proposed by Sir William Beveridge were based on the assumption that prices after the war would be 25 per cent. above the pre-war level. In fact they will be at least 33⅓ per cent. above the pre-war level, and may well be more. There is no provision in the White Paper for the upward revision of benefits; in fact it is explicitly stated that the rates are to remain fixed because of the administrative and political difficulties of frequent upward and downward revision in accordance with the cost of living.1063
§ I draw two conclusions from this. I admit the difficulty of downward revision, but I regard the subsistence principle as vital. I therefore say that the success of this social insurance scheme as a genuine policy of social security is dependent on the Government's ability, as promised in the White Paper on Employment Policy of last year, to keep the cost of living stable after the war by the same methods as during the war. I say further that the Minister of National Insurance should be specifically required by Statute to review both rates of benefit and rates of contribution periodically in relation to the expenditure necessary at ruling prices to maintain health and fitness and provide for necessities, and he should be aided in this regular duty by expert advisers.
§ The Government have already accepted the possibility of departing from fixed contributions. In the White Paper on Employment Policy, the suggestion is made that social security contributions might vary with the state of employment in order to even out the demand for labour. There is a case for the lowest possible contribution. The contribution principle in itself is invaluable; recognition of self-help is indispensable; but the contribution is a poll tax, unrelated to capacity to pay, and it must not be needlessly high. Sir William Beveridge, indeed, has suggested a reduction on the ground that if unemployment rises above 3 per cent. to the 8 per cent. assumed in the White Paper, it will be the Government's fault and the Government ought to pay. Others have suggested that it is wrong that part of the cost of the National Medical Services, as distinct from sickness benefit, should be placed on the Insurance Fund. It has been suggested that to ask self-employed persons to pay the employer's contribution as well as their own will be unfair. I ask that these considerations may be carefully studied, and I hope to see the result of that study reflected in the Bills which we await. I therefore say—"Get on with the job; keep benefits in line with subsistence, or vice versa; keep contributions down."
§ I have one other general comment to make on the social insurance as distinct from the industrial disabilty proposals. Over all, the costs of the Government's scheme now and in the future will be much the same as under the Beveridge proposals. The differences in the two budgets 1064 are due to arbitrary calculations of the cost of services in kind, such as the medical services and school meals. The Government's saving on children's allowances is balanced by a larger immediate expenditure on pensions. By and large the rates of benefit are much the same, but there are important differences. One relates to children's allowances, with which I will not delay your Lordships this afternoon, in view of the fact that with the presentation of the Bill for family allowances in another place we may hope soon to have before your Lordships the actual Bill itself, with its detailed provisions.
§ But there are two important differences relating to aged persons. At the start of the scheme pensions will be higher than Beveridge—35s. for a couple instead of 25s. In twenty years' time the Beveridge rate of pension, with twenty years' contributions paid, will have risen to 40s. for a couple (the subsistence rate); the Government rate will be still 35s. per couple. I doubt all these decisions. The proposal that 35s. is adequate for a pension is not, I believe, well founded, nor will the difference between 35s. and 40s. be saved. The old people will have to live somehow; assistance from public funds will have to make up the difference. I feel that this is a false economy, and indeed an unreal economy, and that it would be sounder to accept 35s. for pensioning a couple, as proposed by the Government, with. 20s. for a single pensioner as a starting point, and then to work up to 40s. per couple, with 24s. per single pensioner, as proposed by Beveridge. The White Paper seems to attempt to save on the children now and on the aged later on. But in fact that cannot be done. Children must be encouraged in view of the trend of our population and the aged must be properly cared for.
§ Now I come to the great category of industrial injuries, brought for the first time into the scope of national and social insurance. Workmen's compensation, with its miserable history of litigation, insufficient payments, inadequate care and attention, is now to become a public service. National liability except in cases of negligence replaces employer's liability. Formerly the employer insured and footed the bill. Now the cost will be met from contributions by workman and State as well as employer. This can 1065 be a great advance. But there must be assurances and safeguards. Formerly the workman paid nothing. He is now to pay 3d. a week. Workers as a whole will pay £10,000,000 a year for this cover. Employers will pay £10,000,000 a year less. The justification for this would be that the workman will now be fully covered and secured. It must be assured that he will in fact be so covered and secured.
§ The principle of benefit can be put in a single sentence and it is this:—an injury allowance will be paid to a workman incapacitated for work until replaced by an industrial pension in case of permanent or prolonged incapacity, total or partial. At the end of thirteen weeks, and pending the assessment of industrial pension, the injury allowance will in any case be raised to the rate of an industrial pension for 100 per cent. disablement. One or two quite obvious comments arise. The principle is sound; it all depends on the rates of allowance and pension. Injury allowance is to be 35s. a week plus additions for family, and 100 per cent. industrial pension 40s. plus the same additions. It seems to me, and it seems to the Labour Party for whom I speak, that these are too low. The basic sickness rate is 35s. I agree. But there is a difference, potentially at any rate, the difference as I have already said between the interruption of earnings and the loss, at least partial, of power to earn. Moreover there may be the widest gap between 35s. plus allowances and the earnings lost in the occupation where the injury was risked and incurred.
§ Similarly with the industrial pension. This is not on all fours with the retirement pension. These industrial casualties have their life before them and 40s. is a small recompense for the loss of all or half or a quarter of a total working life. There is a strong case, I believe and the Labour Movement believe, for special rates for these special contingencies. Fifty-five shillings instead of 35s. for the injury allowance and 60s. instead of 40s. for the 100 per cent. industrial pension have been suggested, with of course an upward adjustment for those whose injuries render them permanently unemployable. These are suggestions which should be met. Industrial injury is a special case and it would be a great pity if its assimilation in the general insur- 1066 ance scheme, valuable and welcome as it is, were to cause its special requirements to be overlooked and injustice to be done. It is not merely a matter of money. In the case of industrial pensions, for instance, the intention is to make the payments vary according to the degree of disablement, as is done under war pensions, which are the model. The medical board will assess the condition of the injured workman "as compared with the condition of a normal healthy person of the same age and sex." The effect is that there will be a tariff of the kind with which we used to be familiar in accident assurance—so much for an eye, so much for a left leg, so much for a thumb and so on. This may be quite all right, it may be equitable, in the case of war injuries when the injured person is considered simply as a citizen, but these are industrial injuries, the consequences of industrial accidents.
§ The degree of disablement in these cases should surely be related, not to the general disability to perform the general activities of ordinary individuals, but to the degree of incapacity which the individual will find to carry on his own particular avocation, to perform his particular job. The loss of a left thumb may not mean much to, say, a clerk, but I am told that the loss of a left thumb will entirely prevent a bricklayer from resuming his former occupation at all. It is essential, it seems to me, that this element of occupational disability should be admitted in the assessment of disablement. These are, I repeat, industrial injuries and the basis of assessment should be an industrial basis. It can of course be argued that by retraining and rehabilitation the disabled bricklayer who has lost his thumb might become a clerk or transfer to some other occupation where the loss of a left thumb may be little or no disability. This can be provided for. There can be a reclassification and a reassessment, but so long as the man wishes to return, wholly or partially, to his former job, occupational disability should, in my submission, be the basis of judgment.
§ Now let me summarize the gist of all these remarks. There is an overriding need for the utmost speed in putting these proposals into practice. The demobilized Armies really must not find this great reform still under consideration or in the pigeon-holes when the last shots have 1067 been fired. It is all-important that the benefits paid under the general insurance scheme should bear a continuous relation to the cost of living. It is hardly less important that the charge made upon the ordinary individual should not be too onerous in relation to the benefit received by those who fall into misfortune. It is imperative that there should be a reconsideration of the scheme so far as retirement pensions are concerned. I say nothing of children's allowances—I reserve the position until I have had an opportunity of studying the Bill that will be printed to-day. It is no less imperative that the industrial injury scheme, admirable in its conception, should be reviewed in the light of its special requirements and its inherent differences from the other portions of the general insurance scheme.
§ Now, my Lords, I end with a plea for the utmost simplification in the construction and the execution of this historic programme. It is a project that could easily be strangled by red tape or ruined by lack of understanding and sympathetic administration. On the other hand, this new Ministry of National Insurance can be a social centre of quite unlimited worth. It can be the focus of all the social services, the centre of social information, the pivot of social research, the link between the individual citizen and the community of citizens organized through their contributions for the common good. But, above all, it is as part of a positive and constructive social and economic policy that this great security scheme should be regarded. Social security, full employment, productive efficiency—these must go hand in hand if each is to be realized to the full. I beg, to move.
§ 2.34 p.m.
§ THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR INDIA AND BURMA (THE EARL OF LISTOWEL)
My Lords, I think it would now be convenient for the House to adjourn this debate, as His Majesty has issued a Commission for giving the Royal Assent to several Bills agreed upon by both Houses of Parliament.
§ House adjourned during pleasure.
§ House resumed.