FAMILY ALLOWANCES AND NATIONAL INSURANCE BILL (Hansard, 28 June 1956)

§ THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK)
My Lords, this Bill has two primary purposes: first, it extends the basis on which a family allowance is payable; secondly, it establishes what I would suggest is an improved system of payments of benefits to widows. May I take family allowances first? The Bill provides 2s. a week additional by way of family allowance for the third and younger children in the family, making 10s. in all. In the second place, it raises the qualifying age from fifteen to eighteen in cases where children are undergoing full-time education or full-time training as apprentices—though this word is not taken in any narrow sense. It also raises the age from fifteen to sixteen during which family allowance can continue to be paid for those very unfortunate children who, because of illness of mind or body, have never been to school or are unlikely to be able to work. From the age of sixteen they qualify in their own right for National Assistance. It is important to note that the higher age limit for family allowance applies equally to all National Insurance benefits for children, so that a man on sickness benefit can get an allowance for a son or daughter who is at school.
I know that there are a number of people who question the value of family allowances, and the suggestion is made that they are sometimes misused, though concrete evidence of that is normally absent. The major political Parties agree on the importance of family allowances, and I think it is fair to say that in the Coalition Government it was the noble and learned Earl, Lord Jowitt, who carried out the major departmental work in framing the original scheme. This will he the third Act which has been passed under a Conservative Government (if it is passed) and that is why I should like to say a word about the reasons why we think family allowances are important. In the first place it is obvious that two men may be working side by side in some office or factory and carrying an entirely different burden in their domestic life, 164 according as to whether they have children or have none. In other words, the basis on which their remuneration is paid bears no relation whatsoever to the obvious social value of the family which they bring up.
In the second place, the burden of a large family does not always come in a man's life when he is earning his peak salary. I suppose in the majority of cases the cost of bringing up a family is at about its highest in the early thirties of a man's life, whereas his salary in many cases will go on increasing steadily until he is sixty or over. So in that sense, when his remuneration is at its highest, he is carrying a much smaller burden than when his family were all at home and requiring his full attention and a good deal of expense. Family allowances are intended to be a contribution which will reduce the wide diversity of the burden which has often to be borne at periods of life when it is least convenient to do so. Many of us who have considered this problem have been grateful for the plain, simple logic with which Lord Beveridge expounded the solution which has been adopted.
To these theoretical considerations I would add the practical experience which is generally revealed by the annual food surveys carried out by the Ministry of Agriculture, Fisheries and Food. These tend to confirm that large families particularly are the section of society which are most in need of some assistance at the present time. Family allowances are of course subject to income tax, but they provide assistance in maintaining the standards of the family, thereby making it easier for the larger families to hold together. I do not think any of us doubt how important a part families play as the foundation of our way of living.
I should like to refer to other minor provisions affecting family allowances. Clause 4 enables reciprocal arrangements to be made with foreign countries. We have been able to do this up to the present in National Insurance matters, but we have not been able to provide reciprocity in family allowances, and we hope to make such an arrangement very soon with France and with Belgium, who have been very generous in paying our nationals without any waiting period.
Clause 5 arises from practical experience where a child under seventeen years 165 of age has to be taken away from its family by a court order and committed to the care of a lit person, usually the local authority. A practice has grown up which was not envisaged in the Children's and Young Persons' Act. Local authorities have experimented by allowing children committed to their care to return home for a trial period, and they have done this without revoking the order. There is no express legal authority for the practice, and in any case it cannot carry with it the right of family allowance. This clause regularises the practice and will enable such a child to count for family allowance. This will not, however, affect the power of the local authority to take the child away from its parents, because the court order remains in force and therefore the child is still under the control of the local authority.
Clause 3 somewhat surprised me when I first read it. Its purpose is to allow a marriage, even if potentially polygamous, to be accepted by the statutory authorities who determine the claim for benefit provided it has in fact at all times been a monogamous marriage. I understand this is to meet a situation which might arise in certain British territories overseas where polygamous marriages are permitted, even if to-day they are becoming increasingly rare.
Now let me turn to the other main purpose of this Bill: that is, the provision for widows. I think it is fair to say that over the last thirty years opinions have varied a good deal as to what is the best and fairest way in which provision shall be made for widows. The Contributory Pensions Scheme of 1926 provided a pension for all widows, subject, of course, to their husbands being insured, but at a relatively low rate. The noble Lord, Lord Beveridge, made a comment about the scheme which I think goes to the root of the matter. He said that these pensions were inadequate in many cases and superfluous in other cases and he recommended what I think might be called the selective approach: by that I mean the provision of more substantial benefits in the categories of widows where they were likely to be most needed—that is to say, in cases where there are children, where the widow is incapable of self-support, and where she is over retirement pension age.
166 These principles were generally accepted, subject, however, to modification, and I believe are generally recognised to-day as the soundest basis on which provision should be made to widows by the State. This view has now been endorsed by the National Insurance Advisory Committee. Indeed, the proposals in the Bill are substantially those recommended by the Committee. This is done, first, by increasing the amount payable as a widowed mother's allowance in respect of children. This Bill makes increased payments of a week to all children. If we add this to the existing payments, plus family allowance, we find that a widow now gets 16s. 6d. for the first child, also the second child, and 18s. 6d. for all subsequent children. This is, in respect of the first child, twice as much as she was getting in 1948, and in respect of the third and subsequent children nearly four times as much as she received in 1948. I think it is fair to say that that is a substantial improvement.
Moreover, the widowed mother's allowance will continue to be paid until the youngest child has reached the age of 18, even where the child is working. The object of this provision is to seek, to emphasise the need to keep the family together, at least until the children have grown up. All these improvements for widowed mothers will apply equally to the corresponding benefits under the industrial injuries scheme for women who have lost their husbands in industrial accidents or by prescribed industrial disease.
With regard to women who, for one reason or another, are not eligible for widowed mother's allowance, by Clause 2 (6) we have taken power to make provisions to re-establish such widows in insurance. This will give full and immediate cover for sickness and unemployment benefit, and regulations for this purpose will be covered by Affirmative Resolution procedure. When these regulations are made there will be no further awards of pensions to widows who are incapable of self-support; however, they will be entitled to sickness benefit. If this were not done, a woman would have to be at work for six months to qualify for pension. At the same time, we raise the age at which a permanent pension becomes payable from forty to fifty. This will not apply, however, to women who 167 are already widowed, whose rights will be preserved in Clause 2 (5).
These readjustments are to meet the Advisory Committee's criticism that the present situation results in serious anomalies—indeed, they have called them "gross inequalities"—as between one widow and another. We believe that this will be a very much fairer arrangement. One further point I should mention. Women who are widowed from the age of fifty will get a permanent pension if the marriage has existed for three years, instead of ten years as at present. The benefit of this provision will be given to those widows who fail to get a pension because of the 10-year condition at the present time.
The cost of these proposals will be about £3½? million a year from the National Insurance Funds. This figure will tend to fall, however, in about ten years' time. The increase of 2s. in family allowances for the third and younger children will cost £10 million, and will affect four million children in over one million families. The raising of the age for family allowance will cost £2 million a year. It is hoped to bring the higher age of family allowances into operation on August 1. On October 2, it is hoped that the increase in the amount of family allowances for younger children will be brought into operation, together with the 5s. increase under the widowed mother's allowance.
May I sum up this Bill? It is intended to help where help is most needed and to give support to the family, which I am sure we all regard as the true basis of our civilisation. I beg to move that the Bill be now read a second time.

§ LORD PETHICK-LAWRENCE
My Lords, it is with great pleasure that I rise to tell your Lordships that we on this side of the House give our full support to this measure, which passed through another place not only without opposition but with considerable approval expressed on all sides. As the noble Earl has already told us, the Bill has several objects. I am going to class them under two heads only. First, it goes some way to raising benefits in accordance with the rise of prices which is a result of inflation and 168 other causes. That is one of the necessary changes that have to be made from time to time when we are living in an inflationary state; otherwise, as time goes on, the benefits which Parliament, in its wisdom, has decided should be given become less and less effective, and people are forced to ask for public assistance in order to meet the bill which was supposed to be met by the benefits decided by law.
When the noble Earl tells us that the children's allowances are being put up, we are glad to know that. It is a good thing that they should be put up, and, as a result, they more than meet the rise in prices which has taken place in these years. I was also glad to hear the noble Earl say that there was a prospect of further arrangements between this country and other foreign lands for reciprocal payment of benefits to pensioners. That reciprocity seems to me to be wholly desirable, and any arrangements which the Government can make that are reasonably fair to this country will certainly receive the support of noble Lords on this side of the House.
Another provision to which the noble Earl made special reference, and with which, again, I am sure we all agree, is the reduction in the length of time a woman must have been married before, at the death of her husband, she can claim benefit. The period is reduced from ten to three years. I remember well the discussions that took place when these arrangements were originally made. It was felt that a woman might marry a man on his deathbed in order to secure benefits, and that, but for that purpose, the marriage would be entirely fictitious. That would still remain possible, of course, if the period of marriage required were brought down to a matter of hours instead of a matter of years. But I do not think it applies to cases of widows who have lived in married state with their husbands for over three years; and I do not think there is any danger in the amelioration effected by the terms which the Government have introduced in this Bill. With all those proposals in the Bill I thoroughly agree.
I have personal reasons for favouring the proposals to which the noble Earl, Lord Selkirk, referred in the last part of his speech, and, if your Lordships will bear with me, I should like to make a personal reference. Some thirty or forty 169 years ago my wife and I were instrumental in bringing to this country, at a time when there were no provisions for widowed mothers—in fact, there was little compensation or benefit of any kind—a man who had been successful in getting widows' pensions established in a great many States of the United States of America. That man was Judge Neil. As a result of that, I think I can claim to have been one of the earliest promoters of widowed mothers' pensions. The propaganda that I was able to carry out, through the medium of this gentleman from the United States, was some of the earliest propaganda in this country in favour of widowed mothers' pensions. I fully realised at that time that it was an impossible task for a widow who had children to be both the breadwinner and a homekeeper at the same time; and, in fact, in the case of a certain Mrs. Savage, a poor woman who was trying to do both those things, who was sentenced by the court to a term of imprisonment for failure to do so, my wife was instrumental in securing her release when the true facts of her position were made known.
I always felt that the widows' pensions subsequently introduced did not fully meet the case, because they did not provide enough to a widow who had several children to bring up. I will not say that widows were paid too much, but if there was only a limited amount of money going it was the widowed mother, rather than the widow, who was entitled to the benefit of it, because a young widow, after her grief and personal sorrow had been taken into account, was not necessarily in later life in a worse position to earn her living than an unmarried woman. What was true all those years ago is true to-day in these days of full employment. I always took the view at the time that the benefit had slightly gone astray, in that the widowed mother with several children to provide for was not properly looked after by the laws relating to compensation and benefit for persons who were distressed. My maiden speech in another place thirty-two years ago was devoted to the question of widowed mothers' pensions, and I am glad to be here in your Lordships' House to-day speaking in support of the principles that I was advocating so long ago, before any of these benefits had come into being. I support the noble Earl on both the main 170 sections of the Bill: first, in raising benefits fully to meet the rising cost of living and expense, and secondly in readjusting such benefits as are available so that the widowed mother is put into her just position with regard to insurance and benefit under the laws of this country.

§ LORD BURDEN
My Lords, there are just a few words I should like to say in support of what my noble friend Lord Pethick-Lawrence has said. We are indebted to the noble Earl in charge of the Bill for a concise and fair presentation of its clauses. He mentioned, quite rightly, that the major political Parties are fully committed to the principle of family allowances; and he referred to the fact that my noble and learned friend Lord Jowitt had a good deal to do with the piloting of the Bill through during the period of the Coalition Government. Surely, it is not inappropriate, in connection with this, the third Bill, broadening and extending the principle of family allowances, to remember the untiring work clone by a former Independent Member of another place, the late Miss Eleanor Rathbone.
There is one further point that I should like to make. I particularly welcome Clause 5 of the Bill, which gives local authorities who have taken a child into care and protection the right to allow that child to go back into the care of the parent, guardian, relative or friend without revoking the order, and at the same time providing some benefit for the child. I believe that that clause will give a flexibility in the administration of the principal Act which will be of great value; and, what is more, it will enable local authorities to watch carefully what is happening:, so far as a child taken into care is concerned, with a view, if it is humanly possible, to arranging for that child to get back into the normal family atmosphere. It is not often that my friend Lord Pethick-Lawrence makes a personal reference, but I was interested to hear him today. Having said that, I am sure that the noble Earl opposite will be glad to know that we on this side of the House will do all we can to facilitate the passage of the Bill.

§ THE EARL OF SELKIRK
My Lords, it is a great pleasure to bring forward a Bill which is received with such warm 171 welcome by noble Lords who sit opposite. I was glad that the noble Lord, Lord Burden, referred to Miss Rathbone, who undoubtedly played an important part in the early work connected with this type of development. Indeed, we can say that this is an important step in a long evolution to which the noble Lord, Lord Pethick-Lawrence, so properly referred from his experience. We have moved a long way. It is, of course, partly due to inflation, but there is also in this Bill a substantial alteration in emphasis. I do not think there is anything more for me to say, except to thank the noble Lord.