§ 2.48 p.m.
§ EARL MANVERSMy Lords, I listened with great interest to the remarks of the noble Lord, Lord Nathan, but I am sure he will not expect me to follow him through the detailed calculations and requests that he has made. It would be necessary to read his speech in the Official Report before one could even express an independent opinion upon the matters he has touched upon. The noble Lord has urged the matter of speed in carrying out these arrangements for social security. I wish, on the other hand, respectfully to urge on His Majesty's Government the need of caution.
The great popularity of Sir William Beveridge should cause little surprise. Lord Nathan has told us how popular Sir William Beveridge is throughout the country and a few days ago I seem to remember the noble Marquess, Lord Reading, saying how enormously popular Sir William Beveridge was with the Army. Why should that be considered remarkable? Some of us are old enough to remember the campaign for the National Insurance Bill of 1911. We remember how the noble Earl, then Mr. Lloyd George, toured the country and aroused the greatest enthusiasm with the cry of "9d. for 4d." Sir William Beveridge is not offering 9d. for 4d.; he is offering 1s. for 3d., and no wonder he is popular. But his popularity, I suggest, is as nothing compared with the popularity which will come to his successor some thirty years hence, when he offers 2s. 6d. for 2d. There is one point which perhaps has escaped the notice of some noble Lords and that is that each fresh advance we make in this direction is, in reality, a step to what is known to economists as the slave State—the State in which you provide everything you want to do for your workmen free of charge out of the wages which they must 1069 otherwise get. This may, or may not, be a good system. I am not saying anything against it now, but it has not been the system which has prevailed in this country up to the present, and I think it is a matter of very serious consideration how far we should advance in the direction of the slave State.
It will be remembered that Sir William Beveridge, in his great Report on social security, named three assumptions for his plan. The first assumption was the family allowances which, as Lord Nathan has just told us, have already entered upon their initial stages. A Bill was introduced by Sir William Jowitt in the other House only yesterday. The second assumption was a health service which is also capable of being contrived by agreement with the doctors and nurses and no doubt we shall see a suitable scheme for public health before long. The third assumption, however, was the assumption that there must be no mass unemployment. That, I must confess, is the consideration which is causing me a certain amount of anxiety.
There are many who say that our exports when loaded with Beveridge charges will prove unsaleable in foreign countries. Whether that is the case I do not know, but if it is it seems to me that it will very likely lead to further unemployment. Sir William Beveridge himself has taken so serious a view of the matter that he has actually written another book called Full Employment in a Free Society, in which he explains how full employment is to be attained. I have made it my business to study this book with some care in order to see what effect it will have on the Savings Movement in which I have taken great interest. Owing perhaps to paper 5horlage the book is very difficult to obtain. I myself obtained a copy through the somewhat curious channel of a young friend of mine who is in the Swedish Legation. The Swedish Legation perhaps has special facilities for acquiring literature of that type. It seems to me that other noble Lords may have experienced the same difficulty and have not been able to read this book. Some of the noble Lords who have spoken on this subject are elder statesmen and have a hereditary aptitude for dealing with questions of high finance; but it seems to me that if they had read this book they would have been alarmed, as I have been 1070 alarmed, by some of the suggestions contained in it.
May I give an example? On page 394 it is stated that as part of a full employment policy we may have to reckon with a steadily rising public Debt in peace-time. The National Debt was first created in the year 1688, and since that time it has been the practice to increase the National Debt in time of war and to pay it off as and when we can in times of peace. Apparently our modern economists have come to another conclusion. They have come to the conclusion that the public Debt can be allowed to rise in peace-time for an important object like the diminution of unemployment. The taxpayer is consoled by being told that the rate of interest is to be kept low. He is also told that the Government possess full control over the rate of interest, as has been shown in war-time. The question of cost at once arises. If the Government have complete control over the rate of interest, why not adopt a zero rate? Sir William Beveridge deals with this point and says there would be no objection in principle, but that it is a matter of expediency. If we were to reduce the rate of interest on the public Debt to zero all of a sudden it would cause great confusion in banks and insurance companies, charitable trusts and organizations of that sort. He adumbrates, however, that there should be a gradual lowering of the rate of interest. For instance, in twenty years the rate of interest could be lowered from 3 per cent. to 2 per cent. and in another twenty years to 1 per cent., and in another twenty years I daresay it would be further reduced. If lenders are backward, as very likely they would be, the money would be got by ways and means advances from the Bank of England. As the money was spent the total savings would increase and people would be obliged again to subscribe to what are known as "tap" issues if there were no other investments available. If there were other investments available they would of course not come in as subscribers to "tap" issues and so there is to be an investment board which will steady—the word used is "steady"—the investors of this country; in other words, shepherd them into the proper channel of investment.
I am wondering how this will work. The term "moneylender" has always been a term of abuse in this country 1071 but it has never yet been applied, so far as I know, to people who make genuine investments of their money or form trust funds for their children or for charitable purposes or for anything of that sort. That type of person has never been known as a moneylender, but it looks as if anybody who has money in the future will be stigmatized as a moneylender and would be told that the correct rate of interest is zero. In the part of the country where I live the Bishop of South-well has been endeavouring to raise capital for church reconstruction. He wants £150,000 and we are doing our best to get him that £150,000. But I wonder what the right reverend Prelate and the dioscesan financiers will do when they get this money. Will they invest it? Will there be any means of investing it if Sir William Beveridge should become Chancellor of the Exchequer and if he should succeed in reducing the rate of interest to zero? Sir William Beveridge is in favour of something called the euthanasia of the rentier, which I suppose might be freely translated as the liquidation of the property owner. If the property chances to be Church property, I think Sir William Beveridge would run the risk of being cursed with bell, book and candle from every pulpit in the country. So if social security is dependent on full employment, if full employment is dependent on a rising public Debt in peace-time, if a rising public Debt involves a fall in the rate of interest to the vicinity of zero, with prohibition in a so-called free society of more profitable investments, then grave problems will confront us, problems which will need very careful consideration.
§ 3.0 p.m.
LORD MONKSWELLMy Lords, the first of the White Papers before us sets forth part of an immense scheme for dealing with the principal evils that flesh is heir to. Poverty and ignorance and ill-health are all to be abolished by law and unconditionally. The particular evil with which this White Paper deals is poverty. A set of regulations is to be drawn up, and is, at once, to be passed into law so that, no matter what happens, every citizen is to be for ever sure of being able to pass his life in comfort and, if need be, in idleness. Such safeguards as are suggested to prevent this latter are, obviously, futile and illusory. And all these revolutionary reforms are to be achieved by a stroke 1072 of the pen. It is so easy that one wonders how it is that nobody has ever done it before. There is only one thing that could cause misgiving—how long will it last? Nobody doubts that the most grandiose scheme of reform can be introduced and financed for a short time. But what is going to happen afterwards? Civilization and human life itself depend upon the continuous production of a sufficient supply of goods and services. The vital question is: What arrangements are there for ensuring this continuous supply? There is not a word about it in the White Paper, and I noted, without surprise, that the noble Lord who introduced this Motion was exceedingly careful not to say a single word on this subject.
People who have been so ill-mannered as to inquire have been informed that the thing is going to be done by faith. That is not very comforting. Faith or no faith, I think that everyone must agree that the one indispensable condition is to safeguard the value of the currency. Inflation must at once destroy all hope of achieving the object of this White Paper. In examining the question of inflation it is necessary to begin with inflation's progenitor—unemployment, because the shortage of goods and services due to unemployment is the principal cause of inflation. As I have before now ventured to point out, the course of events that led up to the excessive unemployment between the wars was more or less as follows. Up to the outbreak of the first World War unemployment was of manageable dimensions. Complete absence of unemployment means that no man-power is available for starting new industries, and is incompatible with progress. Unemployment up to one or two per cent. need mean nothing more than unemployment during the interval when workmen are moving from one workshop to another. Except for this, unemployment up to 1914 was mostly, though not entirely, confined to unemployables. Anyhow it was a far less serious problem than it became between the wars. Between the wars by far the most notable financial change was that the whole of the employed working classes were, on an average, allotted wages and subsidies which provided them with somewhere about double the goods and services they had had before 1914. To achieve this the goods and services in question must somehow 1073 or other be made available. It is, I think, obvious that no increase approaching the amount required was produced.
A certain amount was found by the crude expedient of increasing the taxation of the thrifty, but the sums required were far in excess of anything that could be secured in this way. The volume of goods and services produced was totally insufficient to provide the whole of the working classes with the standard of living which those in employment were actually enjoying, and at the same time a large slice of what, with lower taxation of the thrifty, would have been reinvested in new productive enterprises was taken in taxation and used as subsidies, which—whatever their theoreticalmerits—do not directly produce anything in the nature of goods or services. These sums were, in fact, forcibly prevented from giving productive employment, and, as regards production, were sterilized. This proceeding had the effect of further handicapping that production of a largely increased volume of goods and services which alone could have justified, and, in the long run, alone could have made possible, the increased wages and subsidies allotted to the working classes since 1914. There was in fact, complete lack of balance between revenue and expenditure which the war has inevitably intensified. Before the war, no attempt was made to co-ordinate them, and none, to all appearances, is being planned now —least of all by the proposals now before us, which very largely increase that part of the national wealth which is being sterilized.
Our troubles are primarily due to an insufficient supply of goods and services. These proposals are exactly calculated to increase the shortage, which, as I have already remarked, is the principal cause of inflation. It cannot be too often repeated that inflation, by its very nature, must destroy all hope of social security, no matter what measures are passed by Parliament. The fatal mistake that political philanthropists are always and for ever making is to assume that goods and services will produce themselves, and that all that need be done is to regulate their distribution. The fact, of course, is that production is a delicate and complicated matter that can easily be thrown out of gear, and that all sorts of things, particularly costs of produc 1074 tion, methods of production, supply of capital and import of raw material have all to be carefully and skilfully arranged before production becomes possible. It is dishonest and futile to promise the working classes all sorts of good things without, at the same time, making it clear to them that their own co-operation in accepting economic rates of wages and conditions of service is the foundation of the whole matter and that without this co-operation the whole scheme must collapse.
To decide what we should do, we must begin by defining where we stand. The first obvious fact is that only a very small part of our immense war-time production is of such a nature as to increase our capital assets. It will no doubt be possible to adapt some of the new factories for peace-time production; many of the machine tools will continue to serve; there have been a number of useful inventions due to the war, and that valuable capital asset, the workman's skill, will be increased in some directions. But all this is very small compensation for the huge losses of the war and the huge arrears of maintenance due to the war. More than ever shall we be in need of a very largely increased supply of goods and services. I suggest that before we do anything else on the home front we should put our utmost endeavours into increasing the production of all those goods and services which have been in short supply during the war, and of many others.
If we are to do this, we must first of all find the capital for providing the factories, tools and raw materials which are required. We are extremely short of capital which can be turned into cash. During the war we have lost most of what we had, and almost all our savings during the war have had to be invested in Government loans, which cannot possibly be turned into cash on any considerable scale for many years to come; they are, indeed, nothing but debt, with no assets behind them for the present. Almost the only free capital that we shall have after the war will be the savings which we shall put by, which will no longer be required to finance the war. It will be of the utmost importance to use these savings so as to produce the greatest possible amount of goods and services.
This brings me to that overwhelmingly important matter, costs of production. To 1075 begin with there will be, as there is now, not nearly enough goods and services to go round. We shall all have to go short, but, if the shortage is to be overcome quickly, the largest possible number of persons should be at work and should work as hard as they can. As wages we can afford to pay them only their fair share of the insufficient supply of goods and services that are available. During the war wages have been heavily inflated and economic facts have been ignored, with the result that we have piled up a huge debt. In spite of this, I notice with dismay that the Government propose to maintain these inflated wages by law, and apparently they propose to continue to ignore economic facts and to continue to pile up debt. Wages pegged at a heavily inflated level will ensure the permanent devaluation of our currency, and this at a moment when, being extremely short of free capital, it will be essential to maintain the value of the currency. If the Government proceed as announced they will be fostering unemployment, ensuring inflation, and putting heavy obstacles in the way of imports, which we must have if we are to live. It is impossible to combine internal inflation with copious imports.
So far as can be foreseen, then, by far our greatest need at the end of the war will be capital to get our industries going and to provide us, as quickly as possible, with the goods and services of which the war has deprived us. Our health and our solvency depend upon it. On the other hand, all the big political Parties have united to make to the voters of this country what I for one regard as a whole series of reckless promises of a large number of extremely expensive social reforms, which for many years at least will add nothing to our material wealth. It must also be remembered that every halfpenny spent on the social services, in so far as these services do not pay for themselves, is an added cast of production. We are thus faced with a dilemma. Capital is in any case very short. Shall we use what is left of it, and any fresh savings we can make after the war is over, to get our people to work and to provide ourselves with the necessities of civilized life, or shall we sterilize several hundred million pounds a year by endeavouring to carry out these promises? Obviously the situation requires a drastic reduction of taxa- 1076 tion, which can be achieved only by the postponement of the social security programme.
I am afraid that these difficulties by no means exhaust the objections to the proposals. There are the further drawbacks that they are designed to plunder the efficient for the benefit of the inefficient and, what is even more sinister, the young for the benefit of the old. Up to the present it has been easy to persuade the great majority of the voters to approve the penal taxation of the thrifty minority, because they could be made to believe that such taxation did not affect themselves. This was, of course, perfectly untrue, but it was swallowed. To finance all the new proposals there is no longer any question of the money being found by the taxation of thrift. The vast sums required, even if they can be found at all, which I doubt, must largely come from the pretty smart direct taxation of the wage-earners. It will be interesting to watch the reactions of the skilled workers' trade unions when they become aware of this fact.
There is also the rather apposite consideration that the present time, when the shrinkage of the population is causing widespread apprehension, is not exactly the moment to force those citizens who are in employment to assume the additional burden of paying largely increased subsidies to the old; subsidies, moveover, which, owing to our ageing population, will become year by year more burdensome. No nation can continue to exist that makes the comfort of the inefficient and the unlucky the first charge on its revenues and fails to make adequate arrangements for the production of wealth. Social security is entirely dependent upon the maintenance and expansion of production, which, from the nature of the case, is a first charge upon the revenues of the country. The Government policy is to ignore facts, make social security a first charge, and, except for floods and floods of entirely unconvincing talk, to leave production to look after itself. The thing is impossible. I am unfavourably impressed by the attempt which is being made by the advocates of all these social security measures to represent them as a crusade against the ills of life; to my mind they would be more accurately described as a political variation of the confidence trick.
§ 3.20 p.m.
§ LORD AMMONMy Lords, I find myself in some difficulty in following the two previous speakers. With every respect, it seems to me that their speeches have had no relation whatever to the subject before your Lordships' House, so that if I follow them I shall be paying no attention to the question on which I am supposed to be speaking. Until today I always thought your Lordships were able to view the matters discussed here very objectively, and that one obtained from your debates a better idea of the subjects under discussion than was the case in some other assemblies. In spite of what the noble Lord, Lord Monkswell, has just said, however, this particular scheme of social insurance has already received the approval and strong backing of the trade unions. One of the objects is that we should do something to improve child life and to give the child a better start; we are also very much concerned at the present time about our population and the necessity of seeing that the rising generation are well nourished. It is interesting to note, in view of what has been said, that it will be two years to-morrow since the Beveridge Report was first discussed in Parliament. In the interval we have had the White Papers, and I suppose one may reasonably assume that the Conservative Chancellor of the Exchequer and other Ministers have given consideration during those two years to the possible incidence of the expenditure on the State and on the taxpayers and to the question of whether or not we shall be able to bear it. It is fair also to assume that they have examined the Beveridge Report, for they have now given us their White Papers which are, in effect the Beveridge Report with some improvement. I think that is a sufficient proof that the Government have considered and have accepted the responsibility for the cost that is likely to be imposed upon the community.
It seems to me that the scheme adumbrated in the White Paper is wholly dependent upon a reasonably high level of prosperity being maintained after the war and one has a right to believe that that has been given proper consideration. I agree that in some respects the White Paper does not go far enough because there are no proposals for the elimination of unemployment. The proposals are prepared in order to meet it when it arises. 1078 In short the new world is to be built out of the timbers of the old. But even so I am bound to say that I welcome these proposals as a very great advance on anything that has gone before and the speeches we heard just now are the kind of speeches, I imagine, that were heard nearly a century ago in the days of the industrial revolution. In the debates of those days one can read the prophecies of disaster that would follow from the improvement of the lot of the community. Of course history shows that an entirely different result followed.
The noble Lord, Lord Nathan, put the principles of the scheme before your Lordships very ably and eloquently, leaving little for subsequent speakers to deal with. But there are one or two points that I wish to raise, and I hope the noble Lord, Lord Woolton, will be able to reply. One should note that the scheme depends on a general level of prosperity and, one must add, on the ability of future Governments of this country to maintain the general standard of living. It would, of course, suffer in case of inflation, and the cost would then fall largely on the taxpayers. I accept the Report and the White Paper as a real contribution to social security and the building up of a better social order after hostilities have ceased, but a good deal depends on the scheme being worked in co-operation with the local authorities. Some of the benefits are to be supplemented by such things as school meals, and I venture to suggest that the cost in that case ought to be met out of the Exchequer; because otherwise it is likely more than to counterbalance the £15,000,000 paid in respect of domiciliary relief—though I should be glad to be told whether I am correct in that. Certainly paragraph 34 of Appendix 1 in the White Paper on Social Insurance seems to suggest that there is to be something in the nature of a block grant. I am bound to say that that will not be at all a satisfactory method of meeting the difficulty, and I hope that it is going to be dealt with in some other manner, otherwise a pretty heavy burden will be imposed upon the local authorities.
Then with regard to pensions. The provisions are bound to call for some modification of existing schemes, and the White Paper recognizes that that will present a good many difficulties. It has been suggested that the simplest course 1079 would be to pay both the occupational and the contributory pensions, but that might have the effect in the case of the lower-paid workers of making the pensions equal to their earnings. I wonder whether attention has been given to that point. Another question that has been raised is with regard to the benefit paid in respect of the first child. Is that to be transferred? That is to say, when a child has reached an age when it is no longer eligible for a grant and there are other children in the family, does another child move up, so to speak, and become the first child with the benefit continuing? That is a question that has been asked by some of the authorities.
I turn now to the question of industrial insurance. We in this country have been behind a good many other countries in that respect. It has already been mentioned that in this country there was no legal right to compensation for industrial injuries before 1897. The present proposals in some measure consolidate existing standards or place them under other authorities or under other Acts. They also abolish commutation. Anybody who has been a Member of Parliament for an industrial district and has had brought to his notice cases where people have received injury must be very familiar with a certain sort of association, and, I regret to say, some lawyers, who have made it their particular business to try to persuade poor people to accept small sums of money in settlement of their claims, thus landing them in great difficulties later on when it was found that the injury continued for some time. The proposals also reduce to a minimum the need for legal proceedings. As the Home Secretary said, the main and truly revolutionary feature of the scheme is that for the first time it transfers to the community as a whole the responsibility for the casualties of industry. That, I imagine, is the very gravamen of the complaint of the two noble Lords who preceded me, though I should have thought that it was, on the contrary, a matter for great congratulation that the scheme would give a sense of responsibility to all of us one for another and would help to share out the burden and the incidence of hardship, to the great advantage of the community as a whole.
Workmen's compensation will now become part of the general social structure. Let us see what that means. In the Re- 1080 port it is stated that last year 2,000 persons lost their lives in factories and mines alone, and nearly 500,000 were injured. Since then I have got some figures from other industries which I know have never been published. In the last six months of last year no less than 2,450 persons were injured in the docks in South Wales alone. Of those no fewer than 430 were serious injuries—such things as broken spines, split skulls, severed limbs, etc.—and in the Mersey Docks nearly 5,000 additional cases in about the same period emerged. That can, of course, be carried into other industries. Certainly these figures show that there must be a tremendous national loss in many ways, through loss of earning capacity, to say nothing of the expenditure that has to be directed to the maintenance and support of and attention to these people. The latter is already in a large measure inadequate, and it would have greatly added to the common wealth in industry and to the well-being and earning capacity of these people had they received better and quicker treatment.
The scheme abolishes compensation on ground of earning capacity, and I understand there is some dispute with regard to that matter. Some people have not quite made up their minds on which side they think the advantage rests. On that subject I am not quite certain myself, although it does seem to me that the level of compensation should have a greater regard to responsibilities than to individual difficulty. There are two other questions I would like to ask, and with them I shall have finished. I should like to ask where the medical treatment and services commence. Do they commence right at the beginning, in first aid, or only as and when things are serious and call for hospital treatment? So far as I can see from paragraph 50, the Ministry has no responsibility for prevention. That is true; but they have a certain amount of responsibility for rehabilitation. Now quite a number of industries have undertaken and are carrying forward schemes of rehabilitation for their workers. One hopes that legislation will not be long delayed, because I have had evidence only this morning of industries which are uncertain how far they can commit themselves in advance to schemes which they already have under consideration for establishing the facilities and the necessary equipment to carry forward rehabili- 1081 tation. Is that going to be taken away altogether from them and become part and parcel of the scheme carried out under national auspices?
I, for one, rejoice, as many others do, that this is a step in the right direction. I remember saving that the Education Act was the first post-war Act and that I thought the Government had started off on the right foot, having regard not only to physical but also to moral and spiritual needs. It seems to me that this is the next best step—a step that has regard to the sufferings of the people and to the need for having a healthy, contented population in the days immediately after the war, so that we may endeavour, as far as possible, to make good the ravages and losses of war with as little loss of time as possible. I think our gratitude is due to Sir William Beveridge to a very large extent for bringing this policy to the front. I admit that the Government have grappled with it and have brought forward this Paper in order that they may get the views and the reactions of the people regarding the lines to be pursued in post-war years.
§ 3.35 P.m.
§ THE MINISTER OF RECONSTRUCTION (LORD WOOLTON)My Lords, I do not quite know how I best can deal with some of the speeches that have been made this afternoon. The noble Lord, Lord Monkswell, complained that a person who made inquiries concerning the policy of His Majesty's Government was considered to be ill-mannered.
LORD MONKSWELLI said I was told it was going to be done by faith. It was the Chancellor of the Exchequer who said that.
§ LORD WOOLTONAnd was told that it was going to be done by faith. And the noble Lord, having complained of ill manners, then proceeds to describe His Majesty's Government as people who are putting before the public a confidence trick.
§ LORD WOOLTONWell, I do not recognize myself in that capacity.
§ LORD WOOLTONI can only regret, if the noble Lord complains of other 1082 people's ill manners, that when he asks questions he should have thought proper to use such a phrase regarding people who at any rate are seeking to do their best for their country—
§ LORD WOOLTON—and whose personal integrity is not such—
§ LORD WOOLTONPersonal integrity—
§ LORD WOOLTONPlease be good enough to allow me to finish my remark—whose personal integrity is not such as is associated with confidence tricks. I listened to the noble Lord and wondered why, in point of fact, he was complaining. Because what did he say? He said that prosperity for the country depends upon the production of goods and services, and he said it again and again. I agree, if those goods that are produced are consumed and if those services are used.
§ LORD WOOLTONWell, my Lords, I do not propose to conduct a back-chat discussion with the noble Lord, but I am just trying to get him to come, if he will, on to our side in this matter. He may find it a little difficult, but this is the truth: that we believe that if we are to get prosperity in this country we must get both the production and the consumption of goods, and that by that interchange of goods, internal and external, we shall secure full employment. That is all that I want to say. Our philosophies —yours and mine—I think differ. As I listened I heard, coming from afar, "Peace, Retrenchment"—I was not sure about the "Reform." I stand on another policy: it is "Peace, Expansion anti Reform," and I believe that it is along those lines that we shall get the highest prosperity for this country.
1083 While the noble Earl, Lord Manvers, was talking I felt that one thing had escaped him, and that is that my friend Sir William Beveridge has not yet joined His Majesty's Government. The noble Earl referred constantly to what Sir William Beveridge has proposed. I would like to point out that it is an entirely independent matter. Originally Sir William came in at the invitation of my right honourable friend Mr. Greenwood, to make a report on behalf of His Majesty's Government on this issue of insurance. He did that and then he proceeded to make his own economic examination on the subject of full employment. May I say we are not completely at one always with Sir Wiliiam Beveridge on that issue? That may give the noble Earl a certain amount of satisfaction. If I may, I would with great respect, say this in reply to the noble Earl. Whatever we may do to get full employment may perhaps give some cause for alarm, but there is another cause for alarm and a great one, and that is if we do not do anything we shall find ourselves with great unemployment. Look back before 1914, to 1908. There was a mass of unemployment then. Look back again to the period between the two wars. There was great unemployment in this country and the production of goods and services was in no way nearly equal to the consumptive power of the country. Think what strife and disorder that means. It is that which we fear and it is in order to fight that kind of situation that we are, believe me, my Lords, most cautious—so cautious that the noble Lord opposite, Lord Nathan, complains about it—in trying to deal with this situation.
What did the noble Lord, Lord Nathan, say? He said that he gave general approval to this scheme but that he feared that it would be put into pigeon-holes, that we were treating the young not well enough and as for the old that we were going to treat them badly. But, primarily, what he said was: "Will you give us a programme; will you tell us what you are going to do?" I can answer the noble Lord and let me do it in some detail. In legislation, as he indicated, we have already set up the Ministry. Before that was done we could not do anything. I do not propose to discuss the family allowances or to reply to the noble Lord, Lord Ammon, 1084 because the Bill dealing with family allowances is already in another place and presently it will come here and we shall have ample opportunity of discussing it. Thirdly, we have already in train, and it will be introduced into Parliament this Session,. a Bill on industrial injury insurance. In the meantime my right honourable friend the Minister is having many conversations, as the noble Lord knows, both with employers' representatives and the trade unions, and the preparatory work that is now being done will probably hasten the passage of the Bill when it comes before your Lordships' House. I do not suppose the noble Lord, Lord Ammon, will expect me to tell him now what is going to be in that Bill. The reason for my reticence is ignorance, because all I know at present are the general headings, the details have not yet been told to me. Then there are other legislative proposals, including, of course, the main National Insurance Bill which is now in preparation. It would be foolish of me to say when that Bill will be ready or when the other House will be able to give time for its introduction there. I hope I have satisfied the noble Lord that there is no lack of activity on our part in carrying out the preparatory work for legislation.
There is another side to this subject and this is not entirely a matter of legislation but one of administration. From the time that we were authorized by Parliament to set up a Ministry of National Insurance, we were able to proceed with the administration, and from April 1 next the existing schemes of health and pensions insurance and unemployment insurance now administered by the Health Department and by the Ministry of Labour and National Service, will be taken over by my right honourable friend Sir William Jowitt. Certain duties in connexion with workmen's compensation will be taken over by the new Ministry from the Home Office. The determination of old age pension appeals will be taken over from the Health Department and the Minister of National Insurance will become responsible to Parliament for the work of the Assistance Board. The Bill to deal with the breakup of the Poor Law must come last. It would not be right to deal with that until the new rates of insurance benefit have been finally settled, and that means it must wait till the main National Insurance Bill has become law. This transfer of 1085 work that I have indicated will involve the transfer of about 6,000 people. We are arranging, as your Lordships know, for the Ministry to be located in Newcastle-on-Tyne. But in addition to the central staff at Newcastle there will be a wide network of local offices to meet the general convenience of the public and to avoid delays.
I have given your Lordships that rather long explanation because I hope that by doing so I should convince the noble Lord, Lord Nathan, that there was no danger of anything being put into pigeonholes or of any sloth. I admit at once that it has taken us rather a long time to get this far. The noble Earl, Lord Manvers, I hope will be satisfied that we have shown reasonable caution. The noble Lord, Lord Ammon, referred to my right honourable friend Sir William Jowitt and the work he had done. I only came to this branch of the work when I as appointed Minister of Reconstruction. I was amazed at the detail which was involved in the preparation not only of tin se White Papers but of the legislation required to carry them into effect. It will involve Bills that will take a great deal of Parliamentary time. I do not think it is a good thing to hurry. No good purpose will be served by hurrying in the preparation of these Bills. Lot us make them into good Bills which will stand up to experience and be Bills perhaps which will not result in so much litigation as there has been in connexion with workmen's compensation. On the subject of children's allowances, with your Lordships' agreement, I do not propose to say anything now in view of the fact that you will presently have the Bill dealing with them before you.
There is one point on which I can give no satisfaction whatever to the noble Lord, Lord Nathan. We have definitely rejected the linking of benefits with subsistence rates. We gave that matter great consideration and we came to the conclusion that frequent variation of benefits according to a cost of living standard was going to be difficult. Primarily, and this surely is the essential point, this is an insurance scheme, a scheme in which people pay a certain amount in contributions, whatever the value of money so to speak may be, and as a result of paying that amount they get in certain circumstances certain rates of benefit. To 1086 start playing about with the amount of the benefits according to some standard of living would surely give rise to a great deal of subsequent trouble. The noble Lord said that in the White Paper on Employment Policy we did say we would vary rates of contribution. There the proposition is that it should be a flat rate. It is in fact a reduction of taxation on the individual and the insurance scheme is merely used as an easy means of securing that the reduction of taxation would go to everybody so that they might have a fuller use of goods and services.
The noble Lord then complained about retiring pensions. Look at the facts at the present time. People are getting old age pensions of £1 for two people. We are going to put it up to 35s. and the noble Lord, instead of cheering us on our way for doing it, said we should put it up still more in the future. The noble Lord said also that he was speaking for the Labour Party. My right honourable friends the Deputy Prime Minister, the Home Secretary and the Minister of Labour are the people who supported these proposals in a Coalition Government. We must have the Labour Party following its leaders in the War Cabinet in this matter. Surely we do not want to arrive at the position in which with this vast amount of money that is going to be spent people would be saying "Put it up, put it up." If this had happened in another place I might have suspected that the noble Lord had views about an election coming, but I know he did not have such views in his mind.
I am going to make this reply to him. The 35s. may in his view be an inadequate amount for an old couple to live on. We have not suggested that it should be the only amount that they have. It is quite conceivable that they have in the course of their lives saved money, that they have exercised the virtues of thrift, which I am sure the noble Lord would applaud, and that they have some other means than this insurance fund on which they can draw. If indeed they have not and if they are living in poverty on 35s. a week they can state their circumstances to the Assistance Board and there is a means of keeping them from starvation. But let us remember this. If we have any temptation to say to people "Put the price up," we 1087 shall be saying "Put the contributions up" because this is an insurance scheme and higher benefits mean higher contributions. I am not at all sure that the general mass of the public would thank anybody who went along to them and suggested that these contributions, which are indeed already high, should be raised above those that we propose. I hope I have given an adequate reply if not satisfaction to the noble Lord, Lord Nathan.
I will conclude, if I may, by saying this about these proposals, which your Lordships will have ample opportunity to discuss in detail when they are brought before you in legislative form. All the time we have had in mind that this country if it is to achieve prosperity must have industrial stability. Poverty is no use to any country just as low rates of wages are no use to any industry in the long run. You get the most efficient industries where you have the highest skill employed. We have set out to put before the public an insurance scheme—again I repeat that it is an insurance scheme—in which the people who are going to get benefits are the people who are going to contribute. I believe in it. I have no fear that the parts of that scheme that are going to fall upon the employers of labour are going to make it difficult for us to compete in the markets of the world. I have had some experience of business and I have given great consideration to this and that is the conclusion at which I have arrived. Let us be proud of the work we are doing to prepare for industrial stability when the war is over. When the fighting ceases the whole world is going to be in a very peculiar state. There will be so many changes: changes in systems of government, changes in men's attitude. We want people to come back to this country to work here and to be happy here, to feel that they have some reasonable hope for their own development in the future. That is the principle of social stability—I do not use the expression social security. I venture humbly to suggest that in these matters the thought of Britain is leading the world. I think we can be proud of the things we are doing and the preparations we are making in these days when most of us have our minds primarily concerned with the war, and I believe that we shall reap a very good harvest in the future.
§ 3.59 P.m.
§ LORD NATHANMy Lords, I am grateful to the noble Lord for his most interesting speech and for the care and trouble he has taken in preparing his reply in the midst of the manifold preoccupations which beset him. It was an interesting reply. I rejoice to learn that the Industrial Injury Insurance Bill is expected during the present Session—I hope in sufficient time for it to be passed into law during this Session.
§ LORD WOOLTONI hope so, but I have not promised.
§ LORD NATHANI am delighted to learn that the Ministry of National Insurance is to come into what I will call active functioning by, as I understand, about the 1st April and will be really performing the administrative and Ministerial functions that its name denotes so far as existing legislation confers the powers which will be largely passing to it by that date. I think that that is all to the good. It enables the Ministry to get accustomed to doing practical work along the lines of what it will have to do later in a more extended field, and it enables the public to get accustomed to co-operating and functioning with that Ministry. I am glad to hear that.
On the other hand, I regret to learn of the Government's determined resistance to the principle of linking benefits to the cost of living—variations in the cost of living. That is a principle which I have, not only on this occasion but on earlier occasions, pressed upon your Lordships' House, and I shall hope to do so in the future, for I feel no doubt whatever that, either in the forthcoming legislation or by force of circumstances thereafter, in fact benefits and cost of living will be linked. That, in my view, is a condition of that social stability to which the noble Lord referred with such eloquence, in words with which I find myself in complete agreement. I thought that perhaps I discerned in the noble Lord's observations an attempt to drive a wedge between myself and the leaders of my Party. But I am sure that I did an injustice to him there, and I may say that if he did make such an attempt he would not succeed. Liberty of expression is still one of our attributes.
One thing which I wish to say to the noble Lord is this: that I, for my part, 1089 shall never be found standing here taking part in an auction. I deprecate the tendency which has sometimes been shown in certain quarters to put up these matters for auction. I shall never be found a participant in or a supporter of that. Any suggestions that I make—as I have to-day—for an increase are based not upon the principle of outbidding those who have made proposals, but on what seem to me—whether I am right or wrong—sound principles. I thought that I would like to make that point quite clear to the noble Lord. There is one sentence in his speech which I regret that he should have uttered. That is his last sentence, because he has taken from me the peroration which I had hoped to make myself: that these schemes do indeed put Britain in the vanguard of the march into the Century of the Common Man. I beg leave to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.