HL Deb 15 April 1958 vol 208 cc733-50

Order of the Day for the Second Reading read.

4.25 p.m.

THE EARL OF ONSLOW

My Lords, as your Lordships will see from the Explanatory Memorandum, the object of this Bill is to raise the weekly National Health Service contribution payable by an adult male by 6d. to a total of 1s. 10½d., with smaller increases for other classes of insured persons, and to raise the employer's contribution by 2d. to 5½d. When asking your Lordships to give this Bill a Second Reading I am doing so on behalf of my right honourable friend the Minister of Health and also my right honourable friend the Secretary of State for Scotland, as the Bill will affect England and Wales and Scotland equally.

if your Lordships will allow me, I will explain some of the reasons why Her Majesty's Government feel it necessary to put forward these proposals, and will also give the present arrangements for the payment of contributions to the National Health Service. I will start by drawing your Lordships' attention to the continued increases in the cost of the National Health Service and I would remind the House of what my noble friend Lord Strathclyde told your Lordships on the Second Reading of the National Health Service Contributions Bill, 1957, when he stressed how the cost of the Service had been steadily increasing every year since it was first introduced. Perhaps I might illustrate this in a little more detail.

In the year 1949–50 (that is, the first fall accounting year of the Service) the total cost met from all sources was £452 million. The estimated cost for the year 1957–58 (that is, the year just ended) has now risen to £709 million; and for the current year, 1958–59, the estimated cost is £740 million. I agree with noble Lords opposite and others who may say that much of this increase is due to the period of inflation through which we have been passing, resulting in increased rates of pay awarded to National Health Service staff, and the higher prices of foods, drugs and other essentials within the Service. But the fact remains that the cost of the Service has increased in real terms by about £80 million a year, or nearly 20 per cent. of the total, between the first full year of the Service (that is, 1949–50) and the current year (1958–59). This real increase of £80 million is, in fact, a direct result of the steady expansion of the Service which has taken place ever since it was instituted.

I believe the House as a whole would agree with me that a National Health Service must embrace new medicines, new treatments, new techniques, better hospitals et cetera, for I believe I speak for one and all when I say that if we were to restrict the Health Service to a deadline, then, as new treatments and techniques were brought in, its effectiveness could be rapidly reduced. It is my opinion, and I believe t hat of most people, that we can look upon this Service as one that will be likely to expand as science develops. If I may give your Lordships some examples of the expansion of the Service during the years from 1949–50 up to the present date, I should like to draw attention to the substantial sums of money that have been available to hospitals for building work, for instance. In England and Wales the amount estimated to be spent on capital account in the current year, 1958–59, will be about £20 million and in the following year £22 million. It is of interest to note that this compares with about £9 million in the year 1950–51. The same trend of expenditure has occurred in Scotland. In fact, at this very moment work is going ahead with several large schemes throughout the whole of the British Isles.

The daily number of beds occupied in hospitals in Great Britain as a whole on an average during a year has increased from 453,838 in 1950 to 478,484 in 1956. During the same period the number of new out-patients has risen from just under 7,900,000 to nearly 9,100,000, and the number of attendances at out-patient departments has risen from 31 million to just over 35 million. I believe that those illustrations prove what I have already said. In the family doctor service the number of doctors has increased from just under 20,500 in 1951 to just under 22,500 in 1956. The number of dental treatments provided has increased from just under 9½ million in 1953 to 12 million in 1956–2½ million in three years—and I could give many other sets of figures to show the same expanding trend in all other parts of the Service—for instance, hospital staffs, the number of sight tests, visits paid by home nurses, et cetera. All these and many other parts of the Service have increased substantially, and this trend of expansion seems likely to continue.

The costs of the Service—the figures of which I have just quoted—were, of course, the total costs, the greater part of which, as your Lordships know, is borne by the Exchequer, and it is this continuing increase of the drain on the Exchequer that has greatly concerned Her Majesty's Government. I will give the House some figures which will illustrate this fact. In the year 1949–50, which I have already said was the first full accounting year of the Service, the Exchequer's share of the cost was £345 million out of a total cost of £452 million; whereas in the year 1957–58 (the year which has just come to a close) the Exchequer's share is estimated to have been £545 million, out of a total cost of £709 million. For the current year (that is. 1958–59) the Exchequer's share is estimated, under present arrangements—that is, without the present Bill becoming law—to be £555 million, out of a total estimated cost of £740 million.

I think your Lordships will agree that successive Governments of both Parties have sought ways and means of limiting the increasing burden of the National Health Service on the Exchequer. In 1950 the Government of noble Lords opposite made it clear that they could not permit any further increase in the overall expenditure on the Health Service in the circumstances that then prevailed. Again, in 1951 they decided that the Health Service Estimates would have to be brought within a total of £400 million, which for the time being would have to be a ceiling, and to achieve that result they themselves introduced certain charges which, if my memory serves me aright, were not all that popular within their own Party at the time.

In 1957 the present Government came to the conclusion that £550 million, the original estimated cost of the share falling in 1957–58 on the Exchequer—that is, 80 per cent. of the total cost—was more than it was reasonable to expect the Exchequer to bear. They therefore considered it reasonable, in order to reduce this burden, that the weekly contribution towards the Health Service which had been included in the National Insurance contribution in 1948 but had remained unchanged despite large increases in earnings, should be enlarged and at the same time established as a separate contribution.

The original Health contribution for a man was 10d. per week, including 1½d. paid by the employer. The increased contribution fixed by the 1957 Act was double that amount—namely, 1s. 8d., including 3½d. paid by the employer. The double contributions brought in by this Act were at the time expected to produce about £80 million in a full financial year, against the £40 million produced by the then existing contribution. The 1957 Act has, however, failed to achieve the intended result. As I have already tried to explain to your Lordships, the total cost originally expected to fall on the Exchequer in that year, 1957–58, was £550 million; and it was therefore decided to double the contribution, with the expectation that the yield from the contributions in the past year would reduce the Exchequer's share from £550 million to about £530 million. Expenditure in 1957–58, despite the introduction of economies wherever practicable, has considerably exceeded the original forecast, and it is now estimated that about £545 million will have fallen to the Exchequer during that year. For this year, as I have already said, about £555 million would under present arrangements, including payment of National Health Service contributions at existing rates, have to be borne by the Exchequer. This is even higher than the figure of £550 million which was considered more than excessive for the Exchequer last year.

The Government's proposals, therefore, as one of the measures aimed at keeping this year's Estimates as a whole not substantially higher than the last year's expenditure, are to make from early in July a further small increase in the Health contribution, which is estimated to yield about £24 million in the current year, 1958–59, and so reduce the estimated cost of the Health Service to the Exchequer in this year from £555 million to £531 million. This figure, as your Lordships will see, is more in line with the figure the Government had in mind for the Exchequer's share of the cost when the original Bill was introduced last year. In real terms it represents in fact an increase of some £35 million over Exchequer expenditure on the Health Service in 1949–50.

Some noble Lords may say that there are alternatives to this decision to raise the contributions. In the opinion of Her Majesty's Government there are only two. The first would be to cut down the services (and, as I have already said, if you cut development of the Health Service in any way it could just decay), but this would be completely contrary to the principles that now, on anybody's view, underlie the National Health Service, and I think would have been unpopular throughout the country, especially as it would have fallen hardest on those who are sick. The second alternative would have been to increase existing charges, such as prescription charges or charges for dentures and spectacles, or to impose new charges. This would have imposed a new and additional burden upon the sick, and, again I am sure your Lordships would agree, would have been most unwelcome. Therefore Her Majesty's Government have come to the conclusion that the present proposals are by far the most practical.

I will give your Lordships some further reasons why Her Majesty's Government consider it necessary to raise the contribution. First, the increased contributions, which are paid only when National Insurance contributions are also payable, will thus be paid by persons when they are fit and active. No contribution will be paid by sick persons or retirement pensioners. This principle is in accordance with the long tradition of insuring when well against the expenses which arise in times of sickness. Her Majesty's Government are in fact only carrying on the principle embodied in the original National Health Insurance Bill introduced by the Government of noble Lords opposite in 1946, which has provided that insured persons should make a contribution towards the cost of the National Health Service. Secondly, I would remind the House that when the original National Health Service Bill was passed in 1946, it was then thought that contributions from insured people would meet about 20 per cent. of the total cost of the Service, but in fact this expectation, as I hope I have adequately explained to the House, proved wrong, and as the total cost increased the proportion borne by contributions has, of course, become less and less.

With the increase in contribution which came about last year, the total amount of the cost falling on the contributors, plus the yield from various existing charges, became about 17 per cent.—a figure still less than the 20 per cent. contemplated in the original Bill of 1946. If the contribution is raised further, as this Bill now proposes, the expected yield from the increased contributions in the current year, 1958–59, will be in the region of £105 million, and from charges about £38 million—a total of £143 million. This sum represents 19.3 per cent. of the total estimated cost of the Service in the year 1958–59, a figure still within the originally contemplated 20 per cent. Even with the increase in the contribution, the share of the cost to fall on the Exchequer will still be approximately 72 per cent. I cannot think that anybody would consider that this is an unfair or unreasonable sharing of the burden between the contributors and the Exchequer.

It has been suggested in another place that the proposed increase in the contribution will cause hardship to the lower-paid wage earners. I think your Lordships will agree that it is important to keep matters in perspective and also not to overlook the substantial increases in earnings, on the one hand, and income tax reliefs, on the other, over the past few years.

May I give the House some examples? For instance, a man earning the national weekly average of £12 11s. 7d.—this is the latest figure available—will by the present proposals have to pay an extra 6d. a week. The percentage of average earnings which this increase represents is 2. The same man will pay, with the 6d. increase, a total National Health Service contribution is 1s. 10½d. The proportion of average earnings which this total Health contribution represents is 75 per cent. Even if one takes the example of a man on a low weekly wage—shall we say, an agricultural worker on the minimum weekly rate of £7 10s. a week—the extra 6d. a week represents 33 per cent. of his earnings, and his total contribution of 1s. 10½d. represents 1½25 per cent. of his earnings. In return, however, he and all his family are entitled to all the benefits of the Health Service—hospital care, the services of a family doctor, dentist, and many other things. I would suggest to your Lordships that there are not many fields in which the public can get such excellent value for money. There is an old saying, "You can get nothing for nothing and something little for a 'bob'." A "bob" was worth a great deal more than it is to-day and perhaps we should say to-day, "You can get little for sixpence, and you cannot get as much for your 6d. anywhere as you can from the National Health Service." I do not think that this is a bad way of investing sixpence.

Before I close, I should like to explain in detail the main provisions of the Bill. Clause 1, subsection (1), substitutes from the appointed day new rates of contribution for the rates contained in the First Schedule to the National Health Service Contributions Act, 1957. The proposed increases are: an adult male employee, 6d.; an adult female employee, 4d.; a boy or girl employee, 2d.; an employer, in all cases, 2d.; self-employed and non-employed persons, 6d., 4d. and 2d., as for employees. The inclusive new rates are set out in the Schedule to the Bill.

It is intended that, if the Bill is approved by Parliament, the new contributions shall be effective from the beginning of July next. As with the existing contribution, the increased contribution will be collected together with the National Insurance contribution, so that where they are paid by stamp a single stamp will continue to be used.

The remainder of Clause 1 deals with various minor and supplementary provisions. As in the original Act, subsection (3) ensures that the provisions of the Bill apply to Crown servants and to members of Her Majesty's Forces; and enables the Government of Northern Ireland to introduce comparable legislation, since without such specific authority the Northern Ireland Parliament is precluded from legislating in respect of Crown servants. Subsection (4) makes provision for any increases in administrative expenses that will be incurred and also enables certain payments to be made to the Governments of Northern Ireland and the Isle of Man respectively in respect of members of Her Majesty's Forces and seamen employed on foreign-going ships who are treated as belonging to these two countries. Clause 2 gives the short title, citation and extent.

I hope that I have made clear the general objects of the Bill and given sufficient indication of its detailed provisions. The increase proposed is a modest one and the proposal will enable the development of the National Health Service to continue. The additional amount which contributors will be asked to bear surely is small in regard to the tremendous value that the developing Health Service would give them. I beg to move that the Bill be now read a second time.

Moved, That the Bill be now read 2a.—(The Earl of Onslow.)

4.48 p.m.

LORD LATHAM

My Lords, the noble Earl has clearly explained this short Bill and its objective, but he has not justified, I think, the policy which infuses the Bill and which is the same policy which led to the introduction of a similar Bill in July of last year. We were opposed to that Bill and we are opposed to this Bill. We regard it as a miserable, piffling Bill, born of a baleful purpose and policy of moving away from a free National Health Service towards, I feel I must say, dismantling one of the cornerstones of our welfare society. Initially, the National Health Service was our pride and the envy of many other countries. I have heard it described, I think, properly, as being the Magna Charta of the nation's health.

This scheme was tarnished last year, and it is proposed so to do again this year, by the blemishes of the introduction of contributions towards its cost. Twice within the last twelve months have the Government nibbled at the principle of a non-contributory National Health Service. Last September, they took the first step towards abandoning the original principle that the Service should be universal, free, and non-contributory. There is nothing in the National Health Service Act, 1946, requiring or permitting contributions or payment from contributors. The intention was that all should be entitled to the benefits of the Service as a right of citizenship without let or hindrance; a right to use the facilities of a service provided and paid for out of the national product by way of taxes, as regards State expenditure, and as regards local authority expenditure, by rates. Let me quote in support of that submission from paragraph 718 of the Guillebaud Committee's Report. It says: We have been continually reminded in our evidence that a great many people still believe that they pay for the National Health Service through the national insurance contributions. Then (I leave out some immaterial words) the Report goes on: We wish to emphasise strongly that the National Health Service is not an insurance scheme and that its benefits do not depend on the payment of insurance contribution by the users of the Service. It is true that an annual payment, which in 1953–54 amounted to £36 million odd in England and Wales, is made by the National Insurance Fund towards the cost of the National Health Service, but this represents only a small proportion of the gross cost of the Service, over £460 million in England and Wales in 1953–54. Moreover, it should be clearly understood that the services provided under the National Health Service Acts are available to all persons in this country and are not dependent on any insurance qualification. That, I submit, is the basis on which the great scheme for a Health Service was launched in this country. This Bill, like its predecessor of last year, is a flagrant departure from that principle. I should like to emphasise the words of the Guillebaud Report: that the Service is available to all persons in the country. And that applies to visitors from abroad, even though there be no reciprocal arrangements with the country of which they are citizens.

It is true, as the noble Earl who introduced the Bill said, that an annual payment from the National Insurance Fund has been made and could continue to be made until last September. But this was not a contribution; it was an allocation calculated on a quite arbitrary basis of 10d. for men and 8d. for women, of which 1½d. was to be regarded as appropriate or related to the employer. It was not, as I have said, a direct contribution; it was merely an appropriation from the funds in the National Insurance kitty, as it were, to the credit of the National Health Service. In the result it meant that the Exchequer supplement to the National Insurance Fund was increased pro tanto or, alternatively, that the surplus on the Fund was reduced by the amount of the credit, or the deficiency increased. In 1955 the Exchequer supplement to the National Insurance Fund was reduced to about 13 per cent. of the contributions of all three parties to that Fund. It was stated then that it was put upon an actuarial basis. For the year 1956–57 this Exchequer supplement was £93 million, which took account—and I stress this fact—of the £40 million, roughly, which was paid out of the National Insurance Fund towards the cost of the Health Service. That was the position until September, 1957.

Then, for, as we think, no adequate or justifiable reasons, the Government discontinued the payment and put the contribution on the basis of an additional payment by the employee and the employer and doubled the notional amounts of 10d., 8d., and 1½d. Therefore what formerly was an allocation of those relative figures became from September, 1957, a contribution of 1s. 4½d. by men, 1s. 0½d. by women and 3½d. by the employer. By that delicate financial sleight of hand, £80 million was transferred to the shoulders of the contributors in relief of Government liability for supplementary contribution: not £40 million, as was contended by some on the passage of the Bill last September, but the whole £80 million. Thus the National Insurance Fund was relieved of a charge of £40 million, and the contribution to the Health Service was increased by £40 million.

For 1958, as the noble Earl has said, the payment is estimated at £105 million, as against £41 million in 1956—an increase of over £60 million—and there has been no permanent consequential reduction of the contributions to the National Insurance Fund; indeed, in February of this year these contributions were increased (I admit that so also were the benefits) by 2s. a week for men and 1s. 8d. a week for women, excluding in both cases the contribution of 1s. 4½d. per man and 1s. 0½d. per woman; and the amounts of the employer's contribution were also increased by 1s. 11d. and 1s. 6d. respectively. Thus the Government have transferred a charge of £80 million-plus a year from the Exchequer to the contributors other than themselves. And now, if you please, a further charge in a full year of £32 million is to be exacted, which means that a total of £105 million or £112 million is to be exacted in respect of the cost of a Service which was intended to be free.

By imposing these contributions the Government are departing again from the original conception of a free National Health Service. It is contended, in extenuation of this change of front, that the Government will be paying 72 per cent. of the net cost. What is wrong with that? In truth, why should not the Government—that is to say, the nation as a whole—pay 100 per cent. of the cost of this service? That was what was intended. It is not the Government but the community which pays, and it is the community, every one of us, for whom the service is available. This is the case with expenditure on defence, police, education, sewerage and other social services. There is no poll-tax in respect of them, because upon them depends the life and work of society that can only be collectively provided. But is not society equally dependent upon the good health of the people of the country? Is it the case that, because the Health Service is available for everyone but is individually used as and when need arises, it is less necessary than the other services to which I have referred? Clearly, the answer must be that it is not less necessary. It is an essential service.

Moreover, the beneficiaries, actual or potential, are not the only ones to benefit from this Service and the expenditure involved in its maintenance. The nation as a whole benefits enormously in the better and improving health of its people, and especially of its children who will be the nation of to-morrow. Can it be questioned that the health of the nation has greatly improved since the Health Service came into being? There is less infantile mortality; there are fewer deaths at childbirth, and the death rate is falling, to mention only a few of the aspects of benefits which have flowed from this great Service. Let us look at the improved health and condition of our children—clear-eyed, clean-limbed, bonny children who are a pride and satisfaction to all of us. In the matter of the health and appearance of our children, I think it can be said that a veritable transformation has taken place in these latter years.

Moreover, good and better health is, as I have said, a national benefit, as well as a personal one. For sickness, bad health, poor eyesight and other infirmities lead to an immense loss of working days and, therefore, a great loss of production and of national income. Between June, 1954, and June, 1955, 277 million days of work were lost through sickness, much of which was preventable. Good and expanding production is bound up with good health; and good health depends, among other things, upon a good and expanding Health Service. The health of the individual is the concern of the nation, and the cost of the Health Service should be properly borne by the nation out of the income of the nation and not as a poll tax, such as these contributions are. A proper proportion of the national product should be devoted to the provision of such a Service.

What is the proportion? The noble Earl was good enough to give the actual figures and to trace the movement in growth of expenditure from 1949–50 to the present day. But the important consideration, the real basis of the adequacy or the excess of contribution to a Service of this kind, is: What is the percentage of its cost in relation to the national product? In the first completed year, 1949–50, the net cost of the Service was 3.80 per cent. of the national income. In 1956, it was 3.56 per cent.—it had gone down. I believe that if the latest figures were available they would show that the proportion to-day is probably about equal to what it was in 1949–50; and I submit that that is the test. After all, the net cost of the Service, £550 million, is less than one-third of our expenditure on defence. I do not complain about this, though with others I keenly and deeply deplore the necessity for that expenditure. But is defence against the internal enemy of disease and sickness less necessary than defence against external potential enemies? We do not have a poll-tax for defence or, indeed, one could almost say, for any of the other collectively provided national services.

I reiterate that we on these Benches cannot approve this further departure from a free, universal National Health Service. The noble Earl was good enough to refer to the effect of these increases of contribution upon the lower paid workers; and he seemed to me to dispose of the question a little cavalierly. These cumulative increases in contribution, in deduction from pay, of 2s. 6d. for men and 2s. 1d. for women from September, 1957, including those now proposed, will in fact bear hardly on many workers. It is idle to talk of a man's average earnings as being £12 10s. a week. Averages are always dangerous. In any case, there are hundreds of men getting less than £10 a week, and there are as many more getting less than £8 a week. This average figure of £12 10s. is swollen by the earnings in selected favoured industries, such as the motor industry at the present time; the aircraft industry—perhaps not so much now as it was nine months ago; work in the docks; the chemical industry, and quite a number of the luxury industries. The average, as I say, is swollen by the quite exceptional, and in some respects temporary large earnings within those special trades.

As the noble Earl said, the statutory wage of an agricultural labourer is £7 10s. I am informed that at the present time the average wage of a shop assistant is £9 a week in London, and £8 10s. in the provinces. The agricultural labourer and the shop assistant will have a deduction, if this Bill goes through, of 9s. 11d. a week for insurance of one kind and another. Moreover, there are thousands of women in domestic work earning less than £5 a week; and they will have a deduction of 8s. 1d. a week. Then there are apprentices, many of whom, either at or soon after the commencement of their apprenticeship, are over the age of 18 and pay on the adult basis. Very few of these get other than a proportion of the normal wage, and probably few of them earn £5 a week. Yet they will have to pay 9s. 11d. a week insurance contributions. They are therefore discouraged from entering into apprenticeships, although at this very moment the Ministry of Labour are, I think, officially running a campaign for the recruitment in various industries of more apprentices.

Then these further increases will discourage the employment of part-time workers. It is not a question only of 2d. a week, although that can be very burdensome, as I will indicate in a moment from some figures I have; but the employers will be increasingly unwilling to pay the extra contribution for part-time employees. It is the case, my Lords, that the employers made representations to the Government early this year about the effect that the increase of contributions operating from February of this year would have on the employment of part-time workers. Those representations were made by the British Employers' Federation. As I have said, the matter is not disposed of by referring to the smallness of the additional contributions.

I have some figures here copied from the Financial Times, which has not yet become a Socialist paper. It gives the following figures of the cost to various large employers of this extra 2d. In the case of the Transport Commission the cost will be £350,000 a year, of which £250,000 will be payable by British Railways and £38,000 by London Transport. The Transport Commission has been told that it must not raise its charges, whether for passengers or for freight. It has been told that it cannot have any further loans to cover its deficits. Where is it to get the money for this additional liability, this additional charge? London Transport has been told that even if the busmen accept the 8s. 6d. award they will not be permitted to increase fares. In the case of the Coal Board, the increase will cost £330,000. For the electricity industry the cost will be £78,000; for the gas industry, £60,000; for London County Council, £30,000; Unilever, Limited, £22,000; Imperial Chemical Industries, Limited, £50,000. The last-named two, of course, are in a better position than the earlier instances I read out, because they are free to increase prices; but none of the nationalised industries is free so to do, except by and with the leave of the Government, which it seems is to be withheld.

Therefore, I think, my Lords, that it will be agreed that one need not wonder that there are claims for increased wages. First we had increases in other charges for the various social services: we had increased charges for school milk and for school meals. There has been recently an increase in the price of bread. There are increases permitted, if indeed not encouraged, in rents. Suggestions are being made as an effort towards economy that the fees for further education should be increased, and now there are these further increases in contributions, those of February of this year and the ones now proposed under this Bill. It is little wonder that the people have no faith in the pretensions and protestations that the Government seek to arrest inflation and reduce the cost of living. Almost everything they do has the contrary result. This lack of faith and belief is being demonstrated with every successive by-election. As I said at the outset, in our opinion, this is a bad Bill, reflecting a bad policy and an unworthy purpose, a retreat from the principle of a free National Health Service; and we on this side of the House must offer it our opposition.

5.20 p.m.

LORD HADEN-GUEST

My Lords, I find myself in the position of sympathising profoundly with the speech which has just been made by my noble friend and disagreeing with him as to the facts of the case, because I do not think that we are going to get out of the difficulties in which we are certainly enmeshed at present without a considerable change of mind, of thought and of methods of action. Of course, it is most unfortunate that we are in this position. It is certainly not due to our iniquities; it is due to changes in the world situation. It is not by any means an easy thing to get out of. I believe that we must face the situation as it is and not invent something to make a cockshy of and throw things at. We must see what the facts really are. Anyone who cares to wade through the reports about the present industrial conditions in this country will soon realise that we are in a serious position. But we are not in a desperate position; we are not in a position from which we cannot escape. We are in a position in regard to which we must look the facts in the face and take new decisions with regard to action. It is no use merely saying, "This is unjust, that is unjust, this is very evil" and so on. We must propose definite remedies and methods of escaping from our present situation.

I do not believe that the situation in this country is one about which anybody can be completely happy. Unless the whole economic situation in the country is amended it may well bring us to great distress. I believe it will be necessary for us to grapple with the situation in a much firmer and far-reaching way than we are doing at present. The whole world is now moving towards a new situation—some may call it an equalitarian state; others may say it is destruction. This country is now moving towards conditions which are of the gravest and serious importance to everyone in Parliament, to everyone concerned in any way with either local or national government, and to everyone in the country. We must find a way out of our difficulties. I believe we can. It is no use abusing each other on one side or the other. It is no use saying that we ought to do this or that we ought to do that; we must make a decision to do something most definite. I suggest that we should decide to come together and discuss these matters without rancour and without pretending that we can abolish the difficulties of the capitalist and of the industrialist merely by a wave of the hand or a full speech. We must come to decisions which will have the effect of creating possibilities of action in this country which will, to a large extent, although of course not immediately, restore the wealth, the prosperity and the happy method of living here.

I think that many things that have been done recently have not been things upon which we should congratulate ourselves. I do not think we have yet faced the full difficulties of the immediate problems. But I do think that we can face them and that we can grapple with them, and I hope and trust that this debate, which has already given rise to some considerable plain speaking, will, before it terminates, give rise to more plain speaking, and that as a result of this meeting of the House we can decide on some definite decisions which will be of help to the country as a whole and not merely demonstrate our weakness, the impossibility of action and so on, which is not true. We are a strong people and we always have been. So far as a large part of the population is concerned we are a wealthy people, and we have the possibility of doing great things. Now is a time of emergency. We must try to deal with the emergency by bringing new concepts of action in national affairs to this national Assembly. Here we must draw up a plan—I hope we shall be able to do so in a very short time—to make better proposals in the immediate future than those we have dreamed about hitherto.

5.27 p.m.

THE EARL OF ONSLOW

My Lords, I am most grateful to the noble Lord, Lord Haden-Guest, for his forthright speech which, in essence, really supported my proposals. As I expected, the noble Lord, Lord Latham, opened up with some pretty rough gunfire. As I say, I expected it because, after all, from a purely political point of view any measure that proposes to put an extra charge or an increase of taxation or something in that line on the public from the Government of the day or from the Party in Opposition is always good, fine fun for the hustings. I would suggest that really we are discussing something more important—something that needs more thought than is required by just throwing brickbats about the place. But I do not mind, if that is what the noble Lord likes.

He did not make one feel that his argument was a very strong one because he was hairsplitting when he said that originally in 1946 there was an allocation from the National Health Insurance Fund to the National Health Service. When you come down to brass tacks, according to the recommendations made in his Report by the noble Lord, Lord Beveridge, the National Health Insurance Fund was conceived specifically to carry a certain figure to be allocated at that time to the National Health Service. To put it in simple language, it would be just the same if I gave the noble Lord 1s. a day and he were to give me a cup of tea and a couple of biscuits, and in his own private ledger he put down the tea as being 7d. and the biscuits as being 5d. Then, if he came along a little later and said to me that he found the 1s. was not sufficient to buy these things and he wanted 1s. 1d., I might say to him, "Well, where is the penny going?" He might reply, "The tea costs more as well as the biscuits"; and he would enter in his ledger that extra 1d. under one item or the other. That is really what is happening in practice.

The Insurance Fund, if you like to think of it in this way, is going up in total, with a bigger increase in the allowance going to the National Health Service. The Health Service, as I said earlier—and I think everybody agrees with me—is likely to expand. Indeed, if it is to be of any use, it probably must expand, and therefore must cost more; with the result that we must pay more for it.

The noble Lord said—it seemed a rare thing for a Socialist to say—that it is not the Government's money, that the Government have not got any money, and that it is the nation's money. That is exactly what the present Government think; and it is in order that they may keep down Government expenditure—that is, the taxpayers' expenditure—to the limit, or somewhere near the limit, of last year that they are proposing to put on this very modest extra contribution. In 1946, when the Party of the noble Lord initiated this Service they reckoned that they would get an allocation from the contribution of 20 per cent. of the total cost. With an expanding Service we are still running, even with these changes, at under 20 per cent. In a different way the Party of the noble Lord when in power made similar arrangements. They did not raise the charge but put charges on certain services instead of adding to the contribution. At one time they also put a ceiling on the Health Service which obviously—

LORD LATHAM

My Lords, I am sure that the noble Earl will admit that the charges which the Labour Government put on were temporary and were intended to come to an end in 1954. The present Government have imposed additional charges by way of multiplying the charge for prescriptions; and these charges are not temporary. In that sense what the Labour Government did in a time of crisis is quite different from what the present Government have done at a time when, according to the Prime Minister, "it was never so good."

THE EARL OF ONSLOW

My Lords, I would remind the noble Lord that the Labour Government which imposed these charges, in 1951, went out so quickly that they did not have much time to see how they would work or whether they would have to be made permanent. That was left for this Government to see. I think that I have answered all the points raised by noble Lords, and I hope that I have explained the Bill as adequately as your Lordships would wish. I hope that you will now give the Bill a Second Reading.

On Question, Bill read 2a: Committee negatived.