HL Deb 01 December 1954 vol 190 cc30-4

My Lords, with your permission I should like to make a statement which is being made by my right honourable friend the Minister of National Insurance and Pensions in another place. I will make it in the words which the Minister is himself using.

"I should like, with permission, to make a statement about benefits and pensions. We have now received the Government Actuary's Report on the first five years' working of the National Insurance Scheme and the Report of the Phillips Committee, and I am consequently in a position to announce the various improvements I have worked out, with the help of my right honourable friend the Chancellor of the Exchequer, in insurance and war pensions and other benefits. The Actuary's report will be in the Vote Office early this evening, and the Report of the Phillips Committee will be available on Friday. I should like to express our gratitude both to the Government Actuary and to Sir Thomas Phillips and the members of his Committee for the way in which they have responded to our requests to let us have their Reports as soon as possible. We are greatly indebted to them.

"As regards war pensions, we intend to raise the basic rate for 100 per cent. disablement pension from 55s. to 67s. 6d. Smaller assessments will be increased proportionately. The standard rate for war widows with children, or for widows over 40 years of age, will be raised from 42s. to 52s. 6d., with appropriate increases in the rates for their children. Orphans' rates will also be increased. There will also be increases in the special allowances paid to seriously disabled men. For example, the constant attendance allowance will be increased from 25s. to 30s., and for the most serious cases from 50s. to 60s. The unemployability supplement payable to men whose war disability prevents them working will be increased from 35s. to 45s. The man who qualifies for this allowance in addition to a 100 per cent. pension will therefore get at least £5 12s. 6d. a week, compared with £4 10s. to-day. These new rates will come into force at the beginning of February and will cost the Exchequer an additional £15 million in a full year. I will circulate a list of all the principal changes in the OFFICIAL REPORT.

"Now, I turn to the National Insurance schemes. The standard rate of industrial injury benefit and of the 100 per cent. industrial disablement pension will be raised from 55s. to 67s. 6d. The widow's rate, now 37s., will be raised to 45s. All the extra allowances payable with industrial disablement pensions will also be increased. The standard rate of retirement pension at minimum pension age under the National Insurance scheme, as well as of unemployment benefit and sickness benefit, will be increased from 32s. 6d., for a single person, to 40s., and from 54s., for a married couple, to 65s. The new rate for widow's pension will be 40s., and the widow's allowance for the first 13 weeks will go up to 55s. There will be appropriate increases under both schemes in the allowances for children and other dependants.

"Now a word about finance, contributions and the timetable. The increases I have described will add about £120 million in the first full year to the amount at present being paid out in National Insurance and industrial injury benefits and pensions. To help finance these higher benefits under the two insurance schemes the contribution payable by the employed person and his employer will each be increased by 1s. The contribution for the self-employed will be increased by the same amount; for the non-employed it will be somewhat less. These increases in contribution will carry with them an increase of over £20 million a year in the supplement from the Exchequer. The Exchequer will also assume a liability to pay into the National Insurance Fund a sum not exceeding £325 million in the aggregate, over the next five years, to meet deficiencies which would in any case have arisen from the increasing number of retirement pensioners; deficiencies which will be increased by the higher rates of pensions and other benefits now proposed.

"As regards the timetable, all the increased rates will be made effective as soon as possible but, in view of the vast number of beneficiaries whose benefits and pensions have to be adjusted, the work will have to be spread if breakdown is to be avoided. The new rates of retirement and widows' pensions will come into operation during the last week in April, and all the other changes will be effected by the end of May. The new rates of contribution will be payable in June.

"Full details of the changes in National Insurance are given in the White Paper on the Bill. Copies of this White Paper, and of the Bill and other documents, will be available in the Vote Office after 5 o'clock to-day. As my right honourable friend the Foreign Secretary announced yesterday, we hope that the Bill will become law before Christmas. If this cannot be done we may find it impossible to keep to the time table I have announced. We do, however, realise that there are important matters of long-term policy arising out of the Phillips Report which we shall all need time to consider. It is accordingly proposed to provide a day after the Christmas recess for a discussion of this Report.

"Finally, I come to National Assistance. The increased benefits and pensions which I have announced will, of course, have to be taken into account in calculating assistance grants to those who are drawing supplementary assistance. I have, however, received proposals from the National Assistance Board for increases in the assistance scale. These are 2s. 6d. for a single adult and 4s. for a married couple, with appropriate increases in the other rates. These proposals have been accepted, and the necessary draft regulations have already been laid. If the regulations are approved, payment of assistance at the higher rates will start on the first Monday in February.

"The proposals which I have mentioned in this statement will cost the Exchequer, in all, about £25 millions in the first full year, and the cost will increase rapidly year by year. I trust that the whole House will rejoice that it has been found possible to announce these increased payments of pension, benefit and assistance, which will bring additional comfort to some seven or eight million of our fellow-citizens."

Following is the List referred to in the statement:

Present rate Proposed rate
Disablement pensions* (100 per cent. assessment):
ex-private or equivalent 55s.a week 67s. 6d. a week
ex-non-commissioned officers Increase of 12s. 6d. a week
ex-officers Increase of £34 a year
ex-Regular Officers—disablement addition Increase of £34 a year
Constant Attendance Allowance:
Normal maximum 25s. a week 30s. a week
Exceptional maximum 50s. a week 60s. a week
Allowance for wear and tear of clothing £5 and £8 a year £6 and £10 a year
Unemployability supplement † 35s. a week 45s. a week
Allowance for Lowered Standard of Occupation up to 20s. a week up to 27s. 6d. a week
Widows' pensions: ‡
Widow of ex-private or equivalent 42s. a week 52s. 6d. a week
Widows of ex-non-commissioned officers Increase of 10s. 6d. a week
Widows of ex-officers increase of £28 a year
Allowance for each child:
Other ranks 11s. a week 16s. 6d. a week
Officers £36 a year £50 10s. a year
Pensions for unmarried dependants who have been living as wives of men deceased:
Other ranks 34s. 6d. a week 45s. a week
Officers £113 a year £141 a year
Orphans' pensions:
Other ranks:
under 15 years 15s. a week 20s. a week
15 years or over 21s. 6d. a week 30s. a week
up to 18 years £64 a year £86 10s. a year
Adult orphan incapable of self-support 32s. 6d. a week 40s. a week


* It is also proposed to increase proportionately the amounts of weekly allowances and terminal gratuities for assessments of less than 20 per cent.

† It is also proposed to increase the special additional allowances for wife or other adult dependant and first child payable with this supplement (and with treatment allowances)from 21s. 6d. and 10s. 6d. a week to 25s. and 11s. 6d. respectively. It is also proposed to increase the additional treatment allowance payable to a war pensioner who is not eligible for sickness benefit from 32s. 6d. to 40s. a week. These changes are in line with impending changes in the corresponding National Insurance benefits and will come into operation by the end of May, 1955.

‡ The opportunity is being taken to provide broadly that the widow of an officer or soldier shall retain her higher scale award and not be transferred to the lower rate of pension when the allowance for her only or youngest child ceases because the child reaches the age limit before the widow becomes 40 years of age. Widows in this class receiving the lower rate of pension on 31st January, 1955, will have the higher pension restored automatically from that date.


My Lords, I am grateful to the noble Earl for making this important statement. He will not expect me to comment upon it at the present moment, beyond saying this. I certainly rejoice, as he anticipated, in the fact that it has been possible to make these increases. The noble Earl will understand, of course, that the other matters that arise must obviously be left for further consideration. I should not like to express any opinion upon them on the spur of the moment.


My Lords, I should like to ask one question—I do not know whether the noble Earl can answer it now. He said, as I understood him, that the increase in the rates of contribution would be 1s. from the employee and 1s. from the employer, and that in the case of self-employed persons the increase would be the same amount. Does that mean they will pay 1s. or 2s. more? Perhaps if the noble Earl cannot answer now, he will let me know the answer later.


My Lords. I hesitate to answer points of that sort without knowing definitely what the facts are, but I have here a paper on which it says that self-employed persons will pay 8s. 5d. a week. I am afraid that I cannot give the noble Lord an answer as to what the amount of the increase is.