NATIONAL INSURANCE BILL (Hansard, 30 June 1953)

§ THE EARL OF BIRKENHEAD

My Lords, this is a more pleasant task than sometimes falls to one's lot. I consider myself fortunate that it has fallen to me to ask the House to give a Second Reading to this Bill to improve the maternity benefits of the National Insurance Scheme and to increase the amount of money available for mothers at the time of childbirth. My noble friend Lord Reading foreshadowed the present Bill when, in presenting the Family Allowances and National Insurance Bill for your Lordships' consideration about a year ago, he indicated that it had been decided to introduce legislation on maternity benefits without awaiting the general review of the National Insurance scheme which will commence next year.

The changes now proposed are largely based upon the recommendations made by the National Insurance Advisory Committee in their excellent Report on maternity benefit which was published last year, and the increased amounts of maternity benefit proposed in the Bill are in accordance with the increases made last year in other National Insurance benefits; that is to say, a 25 per cent. increase in the weekly benefits. I anticipate, therefore, that your Lordships will find that this measure is a wholly uncontroversial one and that it will be welcomed by this House as a further contribution to the progressive development of social legislation in this country. I might also add that it had a smooth passage in another place.

Benefit for childbirth has been provided under the social insurance schemes of this country since their inception in 20 1911, and immediately before the beginning of the present National Insurance scheme a woman was entitled, when she had her baby, to £2 on the insurance of her husband, and to a further £2 if she was herself insured. The Report on Social Insurance made by the noble Lord, Lord Beveridge, from which so many features of the present National Insurance scheme are derived, recommended that in addition to a grant of £4 for all births, there should be a weekly maternity allowance of 36s. a week for thirteen weeks for women ordinarily in employment. These proposals were incorporated in the National Insurance Act, 1946, and in addition, an attendance allowance of £1 weekly for the four weeks after confinement was provided for mothers who did not qualify for the maternity allowance. It was these provisions which were examined, at the request of the right honourable lady who was Minister of National Insurance in the previous Government, by the National Insurance Advisory Committee, and it is these provisions which are now being changed, substantially, as I have said, in accordance with the recommendations of that Committee.

The Advisory Committee proposed that the amount of the benefit which will be payable for any birth (that is, disregarding the special benefit for working mothers) should be so distributed that mothers who, whether from choice or because they are unable to do so, do not have their babies in the free accommodation of the National Health Service, should receive more in cash maternity benefit. The Committee found that confinement in hospital meant a considerable financial saving in comparison with confinement at home, and that the payment of the same maternity benefit for both gave rise to a widespread sense of injustice. Moreover, this arrangement created a financial incentive to hospital confinements as against confinements at home, and the Committee thought that, whatever the other relative advantages, it was not right that the National Insurance scheme should supply a financial inducement one way or the other. My right honourable friend the Minister of National Insurance has accepted this argument, and the present Bill provides that women who do not take advantage of the free provision under the National 21 Health Service for their confinement shall be entitled to a home confinement grant of £3. The weekly attendance allowance, amounting to £4, which a mother now receives if she does not qualify for the maternity allowance, will not be continued as a separate benefit; instead, the maternity grant is to be increased from £4 to £9, with, in addition, the new grant of £3 for confinements at home. In effect, the present benefits have been rearranged and increased, with the advantage to mothers that the £9 for one birth will be available for them to claim at any time between nine weeks before and three months after confinement, instead of being partly tied to certain weeks after confinement. Where more than one child is born at a confinement, an additional £9 maternity grant may be paid. Further, unlike the attendance allowance, this grant and the home confinement grant will be payable in full with the new maternity allowance.

Important charges are also made in the maternity allowance—the weekly benefit for women who normally rely upon their earnings, but who cease work because of the impending arrival of their baby. The present allowance is for thirteen weeks and begins six weeks before the baby is expected, and it depends on the record of work done in the qualifying period of a year ending with the commencement of the allowance. The National Insurance Advisory Committee found that women generally preferred to give up work some time before this—about three months before their confinements were due—but that the present maternity allowance and the conditions for it sometimes actually encouraged women to carry on working until too near their confinement. Other women whose health or whose conditions of work did not permit this, were failing to qualify for the allowance because they had to stop working too early. The present higher rate of maternity allowance—36s. weekly—was fixed so as to make it easy for women to stop working about the time of their confinements. The Committee found no need for this higher rate of benefit, and suggested that it would be preferable instead to extend the maternity allowance period by five weeks and to make the rate the same as the standard rate of benefit—then 26s. now 22 32s. 6d. My right honourable friend has accepted the recommendations of the Committee on all these matters, and the maternity allowance provided under the Bill is to be at 32s. 6d. a week, for eighteen weeks, beginning with the eleventh week before the confinement is expected. The qualifying year ends thirteen weeks before the confinement. A new provision is introduced for a reduced rate of the allowance to be paid if a claimant only partially satisfies the contribution conditions for it. At present, the entire benefit is lost if the claimant fails by even one contribution or credit. Another new provision is the power to pay in excess of the maternity allowance for dependents. This will help the mother who is perforce the family's bread-winner.

Qualification for the new maternity allowance will be by contributions paid by the claimant for weeks of employment or self-employment. At present, a married woman has the right not to pay contributions, but if she exercises this right she may receive credits for weeks of work which, for maternity allowance only, count as if they were paid contributions. At present, I understand that one-third of the maternity allowances paid are based on these "special" credits. The future condition that maternity allowance claimants must rely on contributions paid has been decided upon for two reasons, both put forwarding its favour by the National Insurance Advisory Committee. In the first place, the cost of the maternity allowance is largely met out of the contributions paid by women. It seems unfair, therefore, that an insurance benefit so financed should be paid to women who freely choose not to pay contributions while they are working, who thus secure a benefit drawn from the contributions of other working women who do pay. In the second place, the maternity allowance is designed for women who, up to the approach of their confinement, have been relying on their earnings. Such women will usually be paying national insurance contributions in order to qualify for sickness or unemployment benefit or, in due course, retirement pension.

The introduction of the new maternity allowance and the new conditions for it involves complicated transitional provisions. The present maternity allowance under the present conditions is to be 23 continued for confinements expected within sixty-five weeks of the date of operation of the new provisions. This ensures that all women who have at that date a record of work which could in any circumstances help to qualify for maternity allowance will not lose by the change, and it secures that before the new allowance becomes the only one available all women will have had time to qualify for it by contributions paid after the new conditions are introduced.

I make no apology for explaining at some length the provisions to which I am privileged to invite your Lordships' attention. This National Insurance Bill will, when it becomes an Act, affect well over 700,000 women in each year of its operation, and is designed to help them at a particularly important time in their lives. My right honourable friend estimates that the cost to the National Insurance Fund of the proposals in the Bill will in a normal year be about £10¾ million, as compared with the present cost of £8¼ million a year. The extra cost of the continuation of the present maternity allowance side by side with the new one during the transitional period, will be at an annual rate of about £500,000. It is not proposed to adjust the rates of contribution to meet the increased cost of maternity benefits, in view of the adjustments made last year under the Family Allowances and National Insurance Act, and because contribution rates as a whole fall to be reviewed in connection with the quinquennial review which is due next year. I have attempted to put before this House the salient features of a measure which is designed to make a significant improvement in the provision now made for family life in this country. The more liberal cash benefits now proposed for motherhood—to use the term favoured in another place by my right honourable friend—together with the welfare schemes for mothers and young children, are, beyond question, not only immediately helpful to the beneficiaries but of inestimable value in ensuring a good start in life for the generations upon whom our future as a nation rests. I am confident, therefore, in commending this Bill to your Lordships that you will readily agree to its being read a second time.

§ LORD SILKIN

My Lords, in the unfortunate absence of my noble friend Lord Kershaw, who is the great authority on this side of the House in these matters, I have been asked to give a general welcome to this Bill. As the noble Earl has said, it will be of immense benefit to women at a particularly difficult period in their lives, and in so far as it carries out the recommendations of the Advisory Committee it is largely an agreed measure. It is most welcome to those of us who have to make contributions to the National Insurance Fund that somehow this additional sum of £3 million a year will be found without any increase in the contributions. The sum of 10s. 9d. a week, which is the joint contribution, is a very high tax on industry, and we are grateful that there is no indication, at any rate for the time being, that it will need to be increased to meet these additional benefits. I do not ask the noble Earl to explain how he has been able to find an extra £3 million without any increased contributions, but it may be a tip worth knowing. There is a very substantial increase in maternity grant from £4 to £9, and that will be a special boon to the women at the time of childbirth.

At this stage I do not wish to go into the details of the Bill. The noble Earl has explained them, but we may have something to say at a later stage. There are just one or two small points that I hope he can explain to-day, though if he cannot I shall not hold it against him, because it is technical and perhaps we can ask him for a reply at a later stage. I should be interested to know why it is that, whereas in the past there has been an automatic payment for, shall I say, "increased production"—that is to say, for twins or a larger number of children the benefit has been automatic—it is now proposed in Clause 1 (6) that it should be subject to regulations. Does that mean that it will not necessarily be the case that a woman giving birth to twins will get twice the amount of benefit which is normal, as is the case at the present time? What kind of regulations has the Minister in mind in introducing this provision? It seems to me at first glance—though I speak with humble ignorance on these matters—that it must 25 mean that some women will not be getting the benefits which they have been getting under the National Insurance Act.

The other small point is this. I fully understand that it is the desire of the Minister to equalise the position as between those women who go into hospital at the public expense to give birth to a child and those who give birth to a child at home. From the point of view of the public advantage, apart from finance, in many cases it is desirable that childbirth should be in hospital and not in the home. There are a great many homes which are not suitable for childbirth, where the accommodation is inadequate and facilities are not available, and so on; and I imagine it is not intended to discourage childbirth in hospital to such an extent as to provide profit to a woman who prefers to give birth to a child at home. But the noble Earl said that it was intended to equalise the position. If that is the intention, regardless of the general advantage to the community, then I would suggest that payment of £3 for home confinement does not achieve the object. Any woman having regard merely to financial considerations would not be tempted by a payment of £3 to give birth to a child at home, as against going to the hospital. I should have thought that a larger sum than £3 was needed.

My last point refers to Clause 6 (2). I understood the noble Lord to say that generally there had been an increase in benefit of something like 25 per cent. But if the noble Earl will look at subsection (2) of Clause 6 he will find that the weekly rate of maternity allowance is to be 32s. 6d., instead of 36s. That does not look like a 25 per cent. increase; it looks to me like a decrease—not perhaps a 25 per cent. decrease, but a decrease. I should be grateful if the noble Earl could explain why there is this decrease and how he reconciles that with the general intention of the Bill, that there should be a 25 per cent. increase in benefits. Having said these things, I still welcome, on behalf of my noble friends, the broad principles of this Bill and the intentions which the noble Earl has stated that the Government have in introducing it. We may have something further to say on Committee stage, but at this stage we gladly welcome the Bill and support the Motion for a Second Reading.