Lords Sitting of 18 June 1959

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Viscount Simonds

GERMAN MEMBERS OF KRUPP MIXED COMMITTEE
VISCOUNT ELIBANK: My Lords, I beg to ask Her Majesty's Government the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they can give the names of the three Germans on the Krupp Mixed Committee, and their political, business, economic or other associations.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, the three German members appointed are Dr. Wilhelm Vocke, former President of the Deutscher Länder Bank, and a well-known anti-Nazi; Dr. Rolf Stodter, Judge of the Hamburg Constitutional Court, Professor of International Law at the University of Hamburg, and a partner in a shipping firm; and Herr Ludwig Kattenstroth, an Under-Secretary in the Federal Ministry of Economics, who formerly worked in the economic administration of the combined Western Zones of Germany.
VISCOUNT ELIBANK:My Lords, I thank the noble Marquess for his Answer. May I ask whether the seventh member under the terms of Article X of the Bonn Convention has yet been elected; and can the noble Marquess say whether he has any idea when the meetings of the Mixed Committee are to commence?
THE MARQUESS OF LANSDOWNE: The answer to the first part of the question is that the seventh member has not yet been elected; he will be elected by the other six. In answer to the second part of the question, the Committee are to meet on June 25.
LORD OGMOREMy Lords, may I ask the noble Marquess whether the
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second and third gentlemen he mentioned are also anti-Nazis?
THE MARQUESS OF LANSDOWNE: I have rather more complete biographical information, if your Lordships would care to hear it. Dr. Wilhelm Vocke is known as a fervent Protestant and anti-Nazi; Dr. Rolf Stodter has no known political affiliations, either now or during the Nazi period. As for the third gentleman, Herr Ludwig Kattenstroth, he was not a member of a Nazi Party, and has no known political affiliation.

ESTATE DUTY AND SALE OF RUBENS PICTURE
LORD FARINGDON: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what approaches were made to the Executors of the Westminster Estate to persuade them to sell the picture by Rubens of the Adoration of the Magi to the nation and whether it was pointed out to them that in the event of their agreement to such a sale the price paid would not be liable to estate duty towards the payment of which the money could be applied.]
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT HAILSHAM): My Lords, as my right honourable friend the Chancellor of the Exchequer said in another place on Tuesday, the executors of the estate in question are aware both of the importance of this picture from the point of view of the national art collection and of the various means by which it might be transferred to the nation, including the implications as regards death duty.
LORD FARINGDON:My Lords, arising out of that reply, for which I thank the noble Viscount, I wonder if I could ask him whether further negotiations are going on at the present time; and could we have an assurance that, in any case, this picture will not be allowed to leave the country?
VISCOUNT HAILSHAM:I do not think that I am in a position to say anything about negotiations. I was not aware that I had discussed any. The potential purchasers from abroad have

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been clearly warned by the National Gallery Trustees that the latter will seek to prevent the export of this picture if it is sold abroad; but whether export is or is not stopped after auction is a matter for the Reviewing Committee on the Export of Works of Art, which Committee is also responsible for determining any price which a United Kingdom public gallery would have to offer for the picture if a licence were withheld.
VISCOUNT ELIBANK: My Lords, may I ask the noble and learned Viscount this question? Under the terms of the trust, are the executors not bound to obtain the best possible price that they can for this picture; and how can the best possible price be obtained unless the picture is put up for auction?
VISCOUNT HAILSHAM: I do not think that I can discuss the legal obligations of the trustees of a private estate.
LORD SALTOUN: My Lords, may I ask the noble Viscount whether the announcement that he has just indicated as having been made is not the very thing which prevents the executors from getting a good price at an auction?
VISCOUNT HAILSHAM: I do not think so. I think that the terms of what I said have made it quite clear that the announcement has not only just been made.
LORD WINSTER: My Lords, may I ask the noble Viscount whether, in the event of the nation deciding to purchase this picture at Sotheby's, the amount received by the executors of the estate will be liable to estate duty?
VISCOUNT HAILSHAM: My Lords, these are very difficult questions, and I shall do my best to get the answer right; but the House will forgive me if I make a mistake. I think that when there is a sale by auction, duty is always payable on the proceeds.
LORD FARINGDON: Is the noble Viscount aware that the prices paid by the nation for pictures of national importance which are sold direct to the nation have always been most generous?
VISCOUNT HAILSHAM: I am always glad to hear tributes paid to Her Majesty's Treasury.

CALF SUBSIDIES (ENGLAND AND WALES AND NORTHERN IRELAND) (VARIATION) SCHEME, 1959
3.9 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD(EARL WALDEGRAVE)THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD(EARL WALDEGRAVE) rose to move, That the Calf Subsidies (England and Wales and Northern Ireland) (Variation) Scheme, 1959, be made in the form of the draft laid before this House on the 5th of May last. The noble Earl said; My Lords, if it is convenient to your Lordships, I think it might be well if I were to discuss the England and Wales and Northern Ireland Scheme and the Scottish Scheme at the same time, as my noble friend Lords Forbes is unable to be here this afternoon and has asked me to take this matter for him. We could then discuss these two Schemes together.
The purpose of these Schemes, of course, is to give effect to the decision announced in the White Paper on the Annual Review and Determination of Guarantees, 1959 (Cmnd. 696), paragraph 23, to increase the rate of calf subsidy from £8 10s. to £9 5s. a head for eligible steer calves born on or after April 1, 1959. These Schemes therefore vary the existing ones which apply to calves born up to October 29, 1961, and the new rate, unless again varied, will apply to steer calves born up to that date. The Schemes make no other change.
Your Lordships will be aware that the purpose of the subsidy is to encourage the rearing of calves for beef production. The number of calves so reared has shown a steady rise over the years since the introduction of the subsidy, and it is fair to infer from this that the increase has been materially assisted by the subsidy. It is most important that this trend should not be reversed at the present time, owing to the general shortfall of beef supplies, particularly from the Argentine: but even now an appreciable number of male calves are still slaughtered within a few days of birth which could well be reared as stores. To encourage them to be reared it is proposed to increase the subsidy on steer calves. For several years it has been clear that practically all heifer calves,

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except those not fit for rearing, have been saved for breeding or rearing for mature beef; and it has been the policy since 1956 to limit any increase in the subsidy to steer calves only. But there is still a substantial subsidy of £7 10s. a head on heifer calves.
Your Lordships may wonder why the increase applies to calves born on or after April 1, since this date falls in the middle of the spring calving season and might therefore be thought unfair to owners of calves born in February and March. I agree that April 1 is not an ideal date, and we did give careful thought to possible alternatives. However, we could not justify making the increase retrospective, because its purpose is to provide an incentive to farmers to rear more steer calves in the future, and not to pay a bonus on calves already reared.
In some ways it might have been fairer to start the increase with calves born in July or August, so as to avoid cutting into a calving season. Unfortunately, since calves do not usually qualify until they are eight months old, this would have meant that no calves would have earned the increase during 1959–60 season. This was not acceptable. On balance, therefore, and since April 1 marks the beginning of the livestock year, when changes in guaranteed prices of livestock and livestock products under an Annual Review award take effect, we considered this to be the best date.
During the ten years it has been operating the calf subsidy has made a very valuable contribution to increasing our supplies of home-produced beef, and a further increase in these supplies is very desirable. I confidently expect that the increase in the subsidy will result in more calves being reared for beef, and I commend the Schemes to the House. I beg to move.
Moved, That the Calf Subsidies (England and Wales and Northern Ireland) (Variation) Scheme, 1959, be made in the form of the draft laid before this House on the 5th of May last.—(Earl Waldegrave.)
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, I am grateful to the noble Earl for the explanation he has given. I think on reflection that
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the explanation he gave about fixing April 1 as the date is a reasonable one. It can hardly be said to be quite fair to increase the subsidy for someone who would determine his policy on these calves months before the date given. The thing that strikes me about it is that the trend is satisfactory and it shows that the subsidy has been successful. It is also pretty certain that we shall want to go on increasing the number of animals reared for beef. On the other hand, what the Minister says is perfectly true: that a large number of steer calves are still being slaughtered. One can understand why some of the steer calves from dairy herds are treated as "bobbies" right from their date of birth and got rid of in three or four days, but, surely, if a steer calf of a dairy Shorthorn or Ayrshire can be reared to a state satisfactory to the person who makes certification on behalf of the Ministry, it ought not to be ruled out from the subsidy. Is there any bar remaining to prevent its being kept with a view to certification at a proper age?
EARL WALDEGRAVE: My Lords, with your Lordships' permission, I would say that I am not quite sure what the noble Viscount means. All steer calves, even Jersey steer calves, that reach certification standard are eligible for subsidy.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I am glad to have had that statement specifically made by the Minister, because it is not fully understood by a large number of farmers. In fear that they are not going to get a subsidy, it has become a matter of habit to send off steer calves of dairy herds within three or four days.
On Question, Motion agreed to.

CALF SUBSIDIES (SCOTLAND) (VARIATION) SCHEME, 1959
EARL WALDEGRAVE: My Lords, on behalf of my noble friend Lord Forbes, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the Calf Subsidies (Scotland) (Variation) Scheme, 1959, be made in the form of the draft laid before this House on the 5th of May last.—(Earl Waldegrave.)
On Question, Motion agreed to.

FERTILISERS (UNITED KINGDOM) SCHEME, 1959
EARL WALDEGRAVE: My Lords, the Fertilisers Scheme for 1959, like the present one, covers the whole of the United Kingdom. It extends the fertiliser subsidy arrangements for a further year from July 1. It provides for the payment of contributions to occupiers of agricultural land and to associations of farmers, allotment holders, smallholders and the like, who acquire fertilisers in bulk for redistribution to their members, for nitrogenous and phosphatic fertilisers delivered to them during the year ending June 30, 1960. The estimated cost of the subsidy for the year 1959–60 is about £28 million. Since no change was made in the fertiliser subsidy at the Price Review this year, the scheme is substantially the same as the existing one as there are no alterations in the basic rates of contribution. The amount per ton for sulphate of ammonia has, however, been raised by 1s. 6d. to take account of a slight increase in its guaranteed nitrogen content, from 20·8 per cent. to 21 per cent., as from July 1.
The main purpose of this production grant of course is, to encourage farmers to increase their efficiency by using more fertilisers, and I am glad to say that consumption has been rising steadily since the present form of subsidy was introduced in 1952. The use of nitrogen has gone up by about 50 per cent. since 1952–53, while the consumption of phosphates has also risen, although not to the same extent. Potash is not subsidised but its use has also risen at about the same rate as nitrogen. It is of course included in a great many compounds which do receive a subsidy because of their nitrogenous or phosphatic content.
This increased consumption is very satisfactory. But no one, I think, would argue that there is not room for further improvement. The Committee on Grassland Utilisation, under Sir Sidney Caine, looked at this question and pointed out that there is much scope for the greater use of fertilisers on grassland. I am pleased to be able to say that some of the largest manufacturers have recently announced reductions in prices of certain fertilisers. I am sure that the House will welcome these reductions which, taken in conjunction with the assistance given to farmers through the subsidy, should
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lead to greater efficiency on the farm. I hope this scheme will meet with the approval of the House. I beg to move.
Moved, That the Fertilisers (United Kingdom) Scheme, 1959, be made in the form of the draft laid before this House on the 13th of May last.—(Earl Waldegrave.)
On Question, Motion agreed.

AGRICULTURAL LIME SCHEMES (EXTENSION OF PERIOD) ORDER, 1959
EARL WALDEGRAVE: My Lords, It is proposed to make the Agricultural Lime Schemes (Extension of Period) Order, 1959, which extends the operation of the Scheme for the next live years—that is, to July 31, 1964. It applies to the whole of the United Kingdom. This subsidy has been in continuous operation since 1937. The Agriculture Act, 1947, extended the Scheme until August 1, 1954, and the Agriculture (Miscellaneous Provisions) Act, 1954, extended it to July 31, 1959, with provision for extension for further periods of five years.
The subsidy on agricultural lime enables every farmer in the United Kingdom to obtain a refund of 60 per cent. of his costs of liming—increased to 70 per cent. for summer months in recent years to encourage the liming of hill lands and grassland. The annual cost of the subsidy is likely to be about £9 million.
Liming is the foundation of soil fertility. A satisfactory lime status is essential for maximum crop production and to support thrifty stock and milk production. It is an important factor in securing the full value of the nitrogenous and phosphatic fertilisers now being used in increasing quantities. The greatest loss of lime from the soil occurs naturally by leaching, and the latest estimate of the soil chemists of the National Agricultural Advisory Service is that the equivalent of nearly 2 million tons of calcium oxide is lost annually from the soils of the United Kingdom by this and other causes. Our annual lime need is, however, greater than this. We started off in 1937 with very serious and widespread lime deficiency attributed to neglect of liming practice in

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the inter-war years. The 1958 assessment by the National Agricultural Advisory Service soil chemists is that, quite apart from making good annual losses, an additional 15 million tons of calcium oxide is called for over the next six years to make good the overall lime deficiency of United Kingdom soils. Together, the two requirements of making good annual losses and making some inroad on accumulated lime deficiency call for the application of some 4½ million tons of calcium oxide per annum, equivalent to about 9 million tons of product, over the next six years.
Liming is not a short-term investment which the farmer can look to for immediate and spectacular results, and I think there is little doubt that, if the subsidy were to be removed, the consumption of lime would fall considerably short even of the level recommended by the soil chemists for replacement of annual lime losses. This would jeopardise our present high level of agricultural production. The lime subsidy is one of the most useful of the agricultural production grants and one which has stood the test of time. It makes a positive contribution to the improvement of the land; and land in good heart is a national asset. The lime subsidy has been reviewed frequently and the 1937 legislation has been extended by various Acts and by various Governments. I ask your Lordships to approve its extension for a further five years. I beg to move.
Moved, That the Agricultural Lime Schemes (Extension of Period) Order, 1959, be made in the form of the draft laid before this House on the 14th of May last.—(Earl Waldegrave.)
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, we support the action that has been taken by the Government in this matter, but there is one question that I should like to ask about the long-term investment of lime. It seems to be a general impression among farmers that if they lime heavily with lump chalk it may last up to eight, nine or ten years. But in some cases, sometimes after crops have been sold, it is now the practice to carry out lime-spraying in powder form, sometimes by air. Does that have the same long-term effect, or is it likely to be of not more than one or two years' duration?
EARL WALDEGRAVE: My Lords, I should not like to answer that technical question without notice. Quite frankly, without looking up the technical papers, I do not know what is the length of life of the different forms of lime. However, I will certainly communicate with the noble Viscount on that point.
On Question, Motion agreed to.

FIRE SERVICES BILL [H.L.]
3.22 p.m.
Read 3a (according to Order).
Clause 6 [Appointments and promotions]:
LORD MILNER OF LEEDS LORD MILNER OF LEEDS, had given Notice of two Amendments to Clause 6, the first being after "paragraphs" to insert "(a)". The noble Lord said: My Lords, as your Lordships are aware, the purpose of this Bill is to amend the Fire Services Act, 1947, and to do away with the great majority of the powers which the Secretary of State for Home Affairs possesses in regard to the verious fire services. This Bill does, in fact, abolish various requirements whereby the Home Secretary's approval is required to a number of matters, but the Bill insists upon retaining the present power of the Secretary of State to approve appointments to the office of chief fire officer. The purpose of this Amendment is to ensure, if your Lordships approve it, that these appointments of chief fire officer shall now be handed over to the local authorities, as are the appointments of all other officers in the fire brigades, and not left subject to the approval of the Home Secretary. I say this on behalf of the Association of Municipal Corporations, who feel strongly about this matter, supported by the County Councils Association.
Your Lordships may remember that my noble friend Lord Stansgate raised the matter on Second Reading, and the noble and learned Viscount on the Woolsack was good enough to reply to the arguments we then advanced. The Associations, however, are not satisfied with the position, and have pressed that this Amendment might be put down. On Second Reading the noble and learned Viscount indicated that the Government felt that as the fire brigade services were a disciplined organisation it was vital to

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the operation of the service in peace, and unquestionably in war, that every possible care should be taken to secure the appointment of the right men as chief fire officers. For that reason the Government insisted on retaining power of control of these appointments.
The local authority associations do not accept that argument. They say that they are no less capable of making the appointments than the Home Secretary; and they do not accept that, because of the interest of the Secretary of State in the fire services consequent upon wartime responsibilities, it is necessary for him to approve these peace-time appointments. In war time the position is different; but, as your Lordships are aware, it is proposed to nationalise the fire brigade services in the unfortunate event of war. In peace time, however, in the view of the local government associations, there is no necessity for the Home Secretary to approve the appointment of chief fire officers. I might remind your Lordships that in the case of war the Home Secretary has the power to appoint regional fire brigade officers who command the various areas in which the chief fire officers work. So that in this way, in the view of the local government associations, the position is safeguarded.
The chief fire officers are obviously in no different position from other chief officers of local authorities, who are, incidentally, responsible for services no less important than the service rendered by fire brigades. As your Lordships will also appreciate, the freedom to make these appointments is fundamental to important, and indeed to all, local authorities having the right to their own fire brigades. At present local authorities have the right to appoint clerks of county councils, town clerks, treasurers, medical officers, surveyors, engineers, architects, planning officers, welfare officers, land agents and, indeed, civil defence officers, to whom one would have thought the same argument advanced by the noble and learned Viscount the Lord Chancellor would apply. There appears to be no cogent reason why chief fire officers should not similarly be appointed.
I would remind your Lordships that there is no absolute guarantee as to the propriety of appointments approved by the Home Office, as has been evidenced by recent cases affecting chief constables.
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In the case of chief constables the Home Secretary has to give his approval, to an appointment, if he does not actually appoint. Yet his approval has not in recent years ensured the propriety of all those appointments. The noble and learned Viscount mentioned the analogy, though I do not think he drew it too closely, between chief fire officers and the office of chief constable. But chief constables are not the servants of local authorities; they have certain statutory duties outside their local duties, over which the local authorities have no control. Chief fire officers, however, are subject to the control of the local authorities by whom they are appointed. There is the same relationship of master and servant as between local authorities and the other officers whom I have mentioned to your Lordships.
The noble and learned Viscount said that there was no guarantee, if this power were not retained by the Home Office, that the fire authority would consult the Home Secretary. I am instructed that there would be no difficulty in putting some provision in the Bill, if so desired, to ensure that such consultation takes place—indeed, I am told that on all occasions consultation does, in fact, take place, and that the local authority associations will do all they could to encourage that practice. Obviously it is desirable for local authorities, before making these appointments, to have the benefit of the advice of Her Majesty's inspectors of fire brigades. I should have thought that among the powers handed over to local authorities, this power might well be included. I submit that this is not one of those cases where "the man in Whitehall knows best", and that the local authorities, important and autonomous bodies, are fully competent to appoint their chief fire brigade officers. With that purpose in mind, I beg to move my first Amendment.
Amendment moved—
Page 3, line 45, after ("paragraphs") insert ("(a)").—(Lord Milner of Leeds.)
3.31 p.m.
LORD DOUGLAS OF BARLOCH: My Lords, I should like to support the Amendment which has been moved by my noble friend Lord Milner of Leeds. Local authorities are very sensitive about interference with their functions, especially in matters of this kind, where

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they are the responsible authority. They feel, it seems to me quite correctly, that with that responsibility for the general administration of the service should be coupled responsibility for appointing the chief officer of the service. This Bill goes—and they are glad to have it so—a long way towards removing the centralised control of fire services which took place during the war. The fact that it does so is, I think, a recognition that if this country should have the misfortune to be involved in another war it would not he difficult to create such central organisation as was required for the purpose of co-ordinating fire services.
As my noble friend has pointed out, local authorities have the full responsibility, without any central guidance or interference, to appoint other chief officers, such as town clerks, medical officers and surveyors, all of whom, in practice, have very high responsibilities in time of war. If the local authorites can be trusted to make those appointments, it is difficult to see any reason why they should not be trusted to make the appointment of chief officers of fire brigades. I am sure that it would give a great deal of satisfaction to local authorities generally if this Amendment could be accepted, and it is fairly certain that there will be no appreciable damage to any public interest. It is, of course, conceivable that on occasions appointments might be made of persons who turned out to be somewhat unsuitable for the post; but I do not think that the Home Secretary himself can guarantee that that will never take place. It is one of the misfortunes of public affairs generally that such things occasionally happen, but there are generally means of correcting the trouble if it should become of any serious importance. For these reasons I submit that this is a case in which local authorities should be trusted to exercise their duties in a responsible and considered fashion.
LORD MILVERTON: My Lords, I rise to make a brief intervention in support of the noble Lord who has moved this Amendment. I do not propose to weary the House by repeating his arguments, with all of which I entirely agree. But I suggest that as a matter of principle, of administrative efficiency, it is a good principle, especially in a democratic
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country, that the exercise of responsible authority should be pushed down as low as it can efficiently and reliably be exercised. We have in our dealings abroad to-day in the Colonial Empire innumerable instances of responsibility being entrusted to bodies superficially far less able to face them and undertake them than are these local authorities in our country.
I suggest that if we regard county councils and municipal corporations as reliable, responsible, autonomous bodies, then we should not give way to this tendency to wonder whether they can be entrusted with such appointments as these. It is in many ways a remarkable thing that the County Councils Association and the Association of Municipal Corporations, who do not always agree, are unanimous in this matter, and feel that their members are competent to exercise the authority. They are perfectly willing to, and no doubt will, consult the Secretary of State, but it is, I suggest, a good principle that they should have the power to appoint their own chief servants in the fire services as they do in other cases.
VISCOUNT STANSGATE: My Lords, the Lord Chancellor was kind enough, when I raised this point on Second Reading, as to give an interim reply. But a new point has arisen since then—namely, the willingness of the county councils to have it put in the Bill that they should consult the Home Office before they make such appointments. I believe that that undertaking completely overcomes the difficulty which the Lord Chancellor put forward, and I would ask him to consider it.
LORD FARINGDON: My Lords, I venture to hope that Her Majesty's Government will resist this Amendment, and for three reasons. If I may say so with the greatest respect, I do not think that the other positions enumerated by my noble friend Lord Milner of Leeds are parallel positions with that of chief fire officer, because what the noble Lord has overlooked is the fact that chief fire officers operate, on many occasions, over their own borders when bringing reinforcements to other brigades. If only on account of this overlapping of spheres of influence, it is extremely important that there should be a standard form of operation throughout all brigades throughout

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the country, and for this reason again I believe that it is as well that the chief fire officer should be appointed by the Ministry.
I should like to make one other point. Your Lordships will have gathered during the earlier stages of this Bill that I have considerable anxieties as to the efficacy of the Minister's influence over fire authorities which would force them to give additional cover in areas where new risks had grown up. This, again, is important in this connection, because if the chief fire officer is so to speak, appointed by and in the closest relation with the Ministry, then I think he will be far more likely than he would be if he were purely a local authority nominee to press for enlargements of his powers in cases where he deemed it to be necessary, and despite the opposition of a local authority which might not be prepared to incur the expense. I trust that Her Majesty's Government will resist this Amendment.
LORD CHORLEY:My Lords, I should like to support what has just been said by my noble friend Lord Faringdon. I do not want to go over the ground which I went over on the Second Reading of the Bill. While I have a great deal of sympathy with the point made by the noble Lord, Lord Milverton, in regard to the general position of local authorities, I do not think one ought to allow oneself to be too much influenced in regard to this particular matter by a general consideration of that kind, because the fire brigade officer is unique in his position. He is quite different from a town clerk or a city architect or anybody of that kind, and in the event of war he will fill one of the key positions in relation to the defence of this country. Think about the situation which will arise in the event of war with the use of nuclear weapons. It is perfectly clear that what the nuclear weapon does is to cause conflagrations of a tremendously difficult character to control, even by the most efficient fire-fighting organisation.
I do not believe that all local authorities are really capable of exercising this important choice efficiently. I am sorry to have to say that. I made a slight slip in my speech in saying that town clerks and county clerks had to be
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appointed by the Home Secretary. That, of course, is wrong. But during the war—and that is really what my mind was occupied with; I spoke impromptu—arising out of the fact that the town clerk or the county clerk normally fulfilled a very important position in the civil defence organisation, the Regional Commissioners had control over the appointments of these officers. There were a number of cases where, even at the height of the war, a local authority could not be relied upon to appoint the right man and the Regional Commissioner had to prevent the appointment.
If a war breaks out, it is quite obvious that these fire officers are going to be extraordinarily important. The set-up in the fire services before the war was very inferior to the present one, but in the fire-fighting services before the war there were some outstanding brigades which were highly competent. Any survey at the end of the war would have shown that a large proportion of the first-class officers were drawn from a comparatively small number of outstanding brigades. I believe that the only way of getting a corps of officers of real ability is to increase the considerable amount of control at the centre in regard to this matter, which is one of very great importance.
As to the point which the noble Lord, Lord Milner of Leeds, made about chief constables having in a number of cases not proved satisfactory in recent times, surely that cuts against that argument, because if, even with the assistance of the Home Secretary, the local authorities cannot be relied upon to appoint the best men as chief constables, then it is still more so in this particular case. It seems to me that the case for reserving to the Home Secretary this power under this Bill is overwhelming, and I hope that the Government will not give way to this Amendment.
3.43 p.m.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, there are two points which make this Amendment deserving of full consideration. The first is that, as the noble Lord, Lord Milner of Leeds, has said, it is put forward at the instance of the Association of Municipal Corporations, who are supported by the County Councils Association. I

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myself have the happiest recollections of working with the A.M.C. in various matters where central Government meets local government. I have the greatest admiration for their work, and although I disagree with them on this point I hope they will believe that I have given full consideration to it. The second point was the general one put forward by my noble friend Lord Milverton. I again have the greatest sympathy with the general thesis of devolution. I would ask my noble friend to note that the whole purpose of this Bill is to increase devolution, and that the Government have gone a long way on various points, and especially, of course, on the financial point where the Government check has been withdrawn. In fact the noble Lord, Lord Chorley, speaking on the Second Reading, and with all his experience of the work of Regional Commissioners during the war, told your Lordships that in his view we had gone rather too far in the direction of devolution and had not retained sufficient controls.
What I said on the Second Reading was that the principle of the Bill was that we should give as much devolution as possible, subject to the retention of the key controls; and I think that, on reflection, your Lordships will agree with me that the approval of the appointment of a chief fire officer is one of the most essential key controls that we can have. In answer to the noble and gallant Viscount, Lord Stansgate, on the Second Reading I deployed a number of arguments. I have counted them up and there are nine of them, and they are to be found, for those of your Lordships with antiquarian interests, at columns 546 to 548 of the OFFICIAL REPORT for June 2.
Today I want to deal with the points raised by the noble Lord, Lord Milner of Leeds, and also with the point which the noble Viscount, Lord Stansgate, mentioned in his speech. With regard to the first point raised by the noble Lord, Lord Milner of Leeds, I want to emphasise that the purpose of the Secretary of State's power of control is not to secure the appointment of a particular candidate of his choice but to ensure that the candidates who are definitely unsuitable for the post are eliminated. I think that is most important, because this is the way that it
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works in practice. The Home Office indicate, on the basis of a short list, which candidates they consider suitable. The final selection is made by the fire authority within that field, subject, of course, to subsequent confirmation by the Home Office. That is the way the system has worked, and I think that meets an underlying fear of my noble friend Lord Milverton that this is an imposition. It is not that: it is to secure that the person who is appointed will be one of a number who are in the opinion of my right honourable friend qualified for the task.
I did mention on the Second Reading—and your Lordships might at first consider that this cuts both ways—that the power of approval has not had to be used in the last ten years to reject a candidate selected by the fire authority because of the method which I have mentioned to your Lordships. But the fact that none of us—the four of us—has had to reject a candidate at the end of the day is, in my view, an argument for the reasonableness of the scheme and the way that it has been operated. It is certainly my experience and that of my right honourable friend Mr. Butler (and, though I do not know, I should think that our two predecessors would agree) that the existence of the power has influenced fire authorities to take the advice.
But even if, as the noble Viscount suggested, the requirement of consultation were put in the Bill it would be no guarantee that the local authorities would continue to take the advice of the Home Office if the power were abolished, even if their associations supported the consultation. Consultation is one of the most useful and most dangerous words in modern legislation. It is one of the most useful words because it is the easiest piece of paper to plaster in where there is a disagreement. Where the real question is, shall one side or the other have the right to veto? then you blur it over, and say, "No, there shall be consultation." All that consultation means in law is that one party will put forward its suggestion and the other party will consider it. But, of course, the second party is not in the least bound to adopt the suggestion or to go further than consider it. I think it is an argument for the point of view that I put to your Lordships that the existence of the power operated

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in that reasonable way, of putting forward a short list of approved persons for the choice of the fire authority, is immensely valuable in securing the right choices.
I think that really meets the point that the noble and gallant Viscount has put forward. In the majority of cases I concede that there would be agreement by the fire authority. But the difficulty is the case where, for some reason which might arise in any way, there is a great local feeling to adopt a local man who would not be so good as the other candidates—for example, for the reasons given by the noble Lord, Lord Faringdon, in his speech to-day. It was because of that that I emphasised on Second Reading, and I remind your Lordships to-day, about it being a disciplined service—one that has to be ready to be re-nationalised in time of war and one which has to deal with very serious problems in that regard. Therefore, I think it is just as important that there should be this check which would ensure that the best man is appointed.
There are two other points. One is that I respectfully agree with the noble Lord, Lord Faringdon, that this is a service which does not necessarily operate within the confines of its own borders; and the other is that although it is a great service and one which has already acquired great traditions in our own lifetime, apart from those of long ago, it is nevertheless a service where there are no definite qualifications. It is not like the other posts that have been mentioned, where there is a well-defined standard on qualifications. In the fire service that is not so. Therefore, the process of selection for the key post, the most important job, is one that I think requires very serious consideration. For this reason, in my submission to your Lordships, it comes within the sphere—and this is an answer to my noble friend Lord Milverton, which I should like him to consider, quite apart from the matter before us to-day—where there ought to be an actual partnership between local and national Government.
As has been seen from the various speeches we have heard, this is not at all a Party matter, but it is a most important matter in the science and functioning of Government. The keenest devolutionist must recognise that there
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is a sphere where national Government and local government must work together. In putting forward this Bill—and I would repeat that it is a Bill that has been most forthcoming in freeing the local authorities from control—I have suggested that there is a sphere where the national Government cannot abrogate its responsibilities. I would say to my noble friend that the criterion is the key points of control. Where a disciplined service is concerned, the central Government has a responsibility, which it may be necessary to exercise in time of war—though we hope that will not arise. It would be wrong of the national Government to abrogate its responsibility to keep these key points. And clearly, this is a key point. We have heard the others.
The noble Lord, Lord Faringdon, questioned me at the Committee stage about the powers under the Act of providing schemes if necessary—whether they were enough to ensure sufficient fire cover in expanding localities where conditions change rapidly. That is obviously another example of the key control. I hope that I was able to reassure the noble Lord that we had retained sufficient of that.
It is on these broad questions, and on the broad issue of not only the health of our general administration but the proper balance in the partnership between the national and local Government, that I should ask the associations to think again on this matter. It is not an argument which absolves your Lordships from deciding to-day, and it is a flatter which is worthy of consideration. This Bill is starting in your Lordships' House. It has been well discussed here, and I ask your Lordships to accept my argument that it is not the end of the day if the Amendment is not pressed this afternoon. But I do not put it on that ground, which is a ground which commends itself to me as a general matter: I put it on the broad ground that in this Bill we have achieved a proper partnership between central and local Government which adoption of this Amendment would undoubtedly disturb, and I ask your Lordships not to agree to it.
LORD GREENHILL: My Lords, before my noble friend Lord Milner of Leeds replies to this part of the debate

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may I ask, really for my own information, two questions? I ask them because I have not been in consultation with my local government friends in Scotland, and therefore my recollection is perhaps a little hazy. But am I right in thinking that in Scotland, where, for instance, a city like Glasgow is itself a fire authority, but in which a city like Edinburgh is part of a joint authority, the appointment of a chief fire officer is not in a sense controlled by the fact that the grants available to fire authorities can be used as a kind of sanction where an appointment is not approved by the Secretary of State? The second point is this. Am I right in thinking that this procedure is part of a larger system, as for example in the appointment of a chief constable, where again the central Government or the Secretary of State may intervene in order to say that they do not, or he does not, approve of the appointment of a particular individual, and that the local authority must select a man of whom the central Government or the Secretary of State does approve? Those are my two points. Have I made myself clear?
THE LORD CHANCELLORWould the noble Lord put the second point again? I have not quite followed him.
LORD GREENHILL: My Lords, the second point is whether we are now witnessing a new kind of administrative scheme in which the central Government, or the Secretary of State, more or less determine who will be the chief constable, in spite of what a local authority may decide, by choosing their own man. Is that clear? Is that part of the general scheme or is it something which applies only to chief fire officers?
THE LORD CHANCELLOR: My Lords, on the first point—the question of the grant—I should have thought that the position today was that it was more difficult, but I do not think impossible (there are more checks on it), to use the grant as a method of compulsion. I hope that the noble Lord, Lord Greenhill, will allow me to write to him on that point because I am not so well equipped on it; therefore perhaps he will take my impression, subject to my writing to him to give him the position fully—because I do not think it affects
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very closely the immediate point. It is, however, a very important general point and I should like to inform him fully upon it.
On the second point, of course this Bill is not altering the position. At the moment the Secretary of State is in control. The Amendment would alter the position so as to remove the control of the Secretary of State. It does not affect the police position, which remains in both countries exactly the same as it is to-day. It is not part of a general policy to get a further control; it is an exception to a policy in which a large number of controls are being relaxed on both sides of the Border. The Bill contains all these relaxations and I went through them, and at the instance of my noble friend Lord Colville of Culross I assured the House that they applied, too, to Scotland. So that here we are dealing not with a new policy but with the question are we to retain one of the controls which we believe are key controls?
On the other point, I am sorry that I cannot tell the noble Lord, Lord Greenhill, of the exact position that had been taken up by the three Scottish local authority associations. I believe I once knew, but the noble Lord will have to forgive me for it has gone out of my mind and I cannot find a note in my papers. Those associations have been consulted in the matter, of course, but as to their actual position on this specific problem, unfortunately I cannot inform the noble Lord.
LORD GREENHILL:My Lords, I thank the noble and learned Viscount very much.
LORD MILNER OF LEEDS:My Lords, while the noble and learned Viscount on the Woolsack will not expect me to agree with all the arguments that he has advanced, he has obviously taken great care and has extended the courtesy which he always extends; and in those circumstances, and having regard to the suggestion that the matter may be reconsidered by the local government associations on whose behalf, if necessary, the matter may be raised in another place, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
An Amendment (privilege) made. Bill passed, and sent to the Commons.

NATIONAL INSURANCE BILL
Order of the Day for the Second Reading read.
4.5 p.m.
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, I beg to move that this Bill be now read a second time. On December 3 last the noble Lord, Lord Pethick-Lawrence, initiated a debate on the White Paper Provision for Old Age, which I think was one of the best Parliamentary debates that have taken place on that subject. It contained a great many authoritative contributions not only from the noble Lord, Lord Pethick-Lawrence, himself and from the noble Lord, Lord Beveridge, but from many of your Lordships in all parts of the House who are particularly well qualified to speak about insurance. I have been looking through the OFFICIAL REPORT, and although our debate actually took place before this Bill was printed it seems to me that there is little which your Lordships can say about the Bill, or at least very little which can usefully be said about it, which we have not already said in our debate six months ago.
Apart from one or two very minor alterations, the only change of any consequence which the Bill has made in the original proposals of the White Paper is that the Exchequer contribution, which under the White Paper was to have been a flat rate of £170 million for all time, is now, under the Bill, liable to be increased if and when individual contributions are increased; but that, of course, is not going to happen, anyhow for quite a long time. The purpose of the Bill, as your Lordships know, is, first, to put the Insurance Fund on a sound basis, and, next, to superimpose upon the existing fiat-rate insurance scheme a graduated insurance scheme under which insured people who have an income of between £9 and £15 per week will pay higher contributions in accordance with their income and become entitled to higher retirement pensions.
The flat-rate pension is a very favourable bargain for the insured person. The higher graduated pension—that is, the flat rate plus the additional graduated portion—if it is taken as a whole, is also a good bargain. It has often been
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pointed out that the additional graduated part of the higher pension, taken by itself, is not such a good bargain as one would get through an insurance company. That is because the scheme has a redistributive element in it, and the higher paid workers to some extent carry the lower paid workers, considering the scheme as a whole. The Bill also provides for the right of an industry which has an occupational scheme of its own to contract out of the graduated part of the general scheme (but not the flat rate part) if those who are running the occupational scheme consider that it would be advantageous to do so.
I think that these proposals of the Bill are very well known to your Lordships in detail and in principle. They have been before the country now for fully six months, and many of your Lordships are experts on the subject; and while I am, of course, anxious and ready to give your Lordships to the best of my ability any information you may want and which I am able to give (and so, of course, is my noble friend Lord Bathurst) I think I might better meet your Lordships' wishes if I were to say a very brief word on a point which is perhaps not quite so well understood, and that is the social principles on which the Bill is based. In doing that, I may incidentally be able to meet one or two of the more general criticisms which are commonly brought against this Bill as a whole. But I hope that I shall be able to avoid the acrimony, most of which in my view is quite unnecessary, which has distinguished the passage of this Bill in another place.
In our debate last December I argued that in establishing what is called the Welfare State, of which retirement pensions are such an important part, there may sometimes be some inevitable conflict, which can only be resolved, I think, by common sense, between the principle of adequate subsistence and the principle of personal freedom. If you start off by saying that whatever happens you are going to provide a retirement pension which will satisfy everybody's ideas of what an elderly retired person ought to have to live on, then in order to raise the money to do that you may have to take away so large a proportion of people's incomes in the form of compulsory insurance contributions that you will deprive them of the right to do a

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great many other things which they may want to do with their own money and which in a free country they ought to have. On the other hand, if you legislate for a retirement pension which is palpably below most people's ideas of even the minimum subsistence, you will then always be subject to continual pressure to increase the pension.
I do not think that any politician has ever tried to give a definition in terms of pounds, shillings and pence of what constitutes either a minimum or a reasonable standard of subsistence, and if he did so I think he would be a very foolish politician. But your Lordships will remember that the Beveridge Report—one of the most important documents in connection with our social policy in Great Britain—endeavoured to lay down minimum standards of subsistence in terms of money, and that Report recommended that retirement pensions should aim at making it unnecessary for a pensioner to apply for National Assistance.
I think the history of pensions in this country since the Beveridge Report illustrates the difficulties which you get into if you try to begin with some fixed standard of subsistence on which to base your legislation. Many people have different ideas of what constitutes either a minimum or a reasonable standard of subsistence. Our ideas on the subject as a whole very often change from time to time, and even at the same moment people may use these terms in different senses when one man may be thinking of an adequate standard of nutrition and no more, while another man may be thinking of an income which will provide certain comforts which everybody would like old people to have, and so on.
The truth of the matter is that "subsistence" is a vague and shifting notion. People's needs vary a great deal and different people have different ideas on what constitutes "subsistence". It may be worth mentioning that the Phillips Committee do not take the same view as the Beveridge Report. What they say is:
"The concept of what constitutes decent and tolerable subsistence changes—generally upwards—with time."
And they further say:
"A contributory scheme cannot in our view be expected to provide a rate of benefit which
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would enable everybody, whatever their circumstances, to live without other resources either of their own providing or by way of national assistance."
They further state that
"there cannot be any stereotyped formula for fixing the level of benefit",
and the level of benefit must depend on the balance of a number of considerations including the amount of contributions required and the charge on the Exchequer.
If you were to take the original retirement pension provided for after the war, based on the recommendations of the Beveridge Report, as a sufficient standard of subsistence, it would, of course, then follow that the present rate of retirement pensions provides a very much better standard of subsistence, because the rate of pension has increased since 1946 by 90 per cent. on 100, while the cost of living has gone up by only 68 per cent., and the result is that the present pension for a married couple of 80s. is worth in terms of real purchasing power about 11s. more than the pension of 42s. which we started off with after the war.
But one of the criticisms of this Bill is that under the fiat-rate retirement pensions which it continues, nearly one million old age pensioners are in receipt of National Assistance. The National Assistance Board, of course, are put where they are for the purpose of finding out what is a reasonable standard of subsistence, not for people in general but for each individual case; they have to examine each case in particular. If the person who is in receipt of a retirement pension applies to the National Assistance Board and is given an allowance, that implies that the flat rate pension which he is receiving is not as much as is regarded by the National Assistance Board as a reasonable standard of subsistence. I would say that I do not think it is a good or reasonable criticism of the Bill to say that we have not provided under it a large enough pension to make it either impossible or very unlikely that any pensioner will apply successfully for National Assistance.
Of course, I do not mean for a moment to argue that it would be a bad thing if you found, having regard to the rate of contribution which you could reasonably impose on the wage-earner, that the

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pension which would result from it was large enough to make it unlikely that anybody would apply for National Assistance. It would be ridiculous to fix a pension lower than National Assistance rates merely in order give the National Assistance Board something to do. What I mean is that you ought to begin rather by considering how much money you can reasonably take away from the wage-earner in order to pay a pension; and, in fixing the optimum retirement pension in any given set of circumstances, you must have regard to that as well as having regard to your ideas on subsistence.
I think your Lordships would all agree on this, at least: that it is quite wrong now to hold the view that there is anything discreditable or derogatory to human dignity in applying to the National Assistance Board for an allowance. I think that it is now generally agreed that the old idea of the stigma of the Poor Law does not apply, and ought not to apply, and that we should emphatically discourage anybody from thinking that it does apply, to the National Assistance Board. But in present circumstances what we believe is that if we were to legislate for a flat rate retirement pension of a size which would make it certain that no pensioner would be able to have his application entertained by the National Assistance Board, the result would be, first, that you would have to take away more money in the way of contributions from the lower-paid workers than they could really afford; and from the higher-paid workers you would have to take money in the way of contributions which they could perhaps afford but which many of them would much rather spend on some other kind of provision for their old age, or on some other investment which they thought would bring them better results. We think that if you did that you would be going too far in the direction of interfering with the liberty of a man to spend his own money as he thinks best. Therefore, while we certainly do not think it is a bad object to hope that, in different economic circumstances, the flat rate retirement pension might become sufficient to enable all pensioners to live without applying at all to the National Assistance Board, we do not think that the fact that, in present circumstances,
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a considerable number of them do so is a valid argument against this scheme.
What is perhaps an argument with more substance in it is that the limit of £15 for the graduated part of the pensions scheme is too low. Wages, I hope, are going to continue gradually to rise; and there are many people with incomes greatly in excess of £15 a week who may want much more ambitious provision to be made for their old age. I would, in reply to that, make two suggestions to your Lordships. The first is that this graduated scheme is an entirely new departure in our social legislation. We do not yet know how it is going to work, and I think it is probably better to begin in a modest way and not try to be too ambitious. The other suggestion I would make is that we want to encourage greater freedom and variety of saving. It is not only a question of these occupational schemes which are run by many industrial firms and which we want to encourage: we want also to encourage the wage-earner to invest his money according to his own judgment, either in an insurance policy or in some ordinary kind of investment which he thinks will do better. We want to encourage greater freedom; we do not want to nationalise savings.
I think it is a question of degree rather than principle that divides Members of both Houses on this Bill. Some people may think that one ought to go a little further in taking more money by way of compulsory contributions in order to give a more satisfactory pension which the man can have as of right; other people may put the emphasis rather on the right of a man to spend his money in his own way. We all agree that you should take from wage-earners by way of contributions a certain percentage of wages. In this Bill the percentage is 8½ per cent., which is a fairly high proportion; and I think we must be very careful. You cannot, of course, lay down any fixed, magic percentage which is a dividing line between a reasonable compulsory contribution for this purpose and an undue interference with liberty. I think you must be careful not to put the amount too high.
I do not think it is necessary to remind your Lordships that, as is made plain in paragraph 34 of the White Paper, the

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whole insurance scheme under this Bill will be subject to review from time to time. The present scheme has been altered five or six times in the last ten years; and it is not perhaps an altogether foolish assumption that this power of review will be exercised, possibly with as much frequency, in the future, although in what manner we cannot foresee at the moment. I would remind your Lordships that there are two assumptions made by the Government Actuary in drawing up the tables concerning the future of this pensions scheme. One is that there will be an average unemployment rate of 3 per cent.; the other is that there will be an average annual wage increase over the country as a whole of about 2 per cent. With regard to the unemployment percentage, one does not want, of course, to be unduly optimistic, but even at the peak of the recent depression unemployment did not reach 3 per cent. It was only 2·8 per cent.; and it is now, I think, just a little over 2 per cent. Of course, while the Government Actuary is entirely right to be cautious and prudent in making an estimate of this kind, it is perhaps not unreasonable to hope that the average rate of unemployment may be considerably less than 3 per cent., and your Lordships will easily be able to calculate, much more quickly than I can, what difference that may make to the estimated finances of this scheme.
Similarly with regard to the estimated 2 per cent. increase in wages, it has often been pointed out in connection with this Bill that if that increase takes place, the time is not far distant when nearly everybody will be outside the flat rate and coming up to £15 a week and even going beyond it. Therefore, it may be necessary to review the scheme for that reason. Even now the figure of the number of insured workers earning £9 a week and less is 7 million, and of that over 4 million are women and juveniles. The 3 million men includes all those who are unemployed, a number of part-time workers and, of course, a large number of young workers who are not classed as juveniles because they are over 18 and are soon going to earn much more than they are earning now. Apart from agriculture, the number of mature, fully-employed men earning £9 a week, even
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at the present time, is not a very large proportion of all wage-earners.
LORD LATHAM: My Lords, surely other young people will come along to take the place of those who have passed to the higher category.
THE EARL OF DUNDEE: Certainly, my Lords. I am grateful to the noble Lord for pointing that out. But if wages are going up 2 per cent., presumably the wages of the new young people will be a little higher, too, and, of course, young persons starting off on a flat rate scheme can come into the higher scheme as soon as their wages rise to the necessary sum.
But, as the noble Lord, Lord Pethick-Lawrence, so rightly pointed out in our debate last December, while we may build up a right to retirement pension at fifty years by our contributions, the actual pensions which are paid out every year have to be earned in that year by the country in economic reality. Obviously, what is going to happen in future to our retirement pension scheme must depend to a very great degree on what is going to happen to the general economic prosperity of the country. Meanwhile, I would commend this Bill to your Lordships as a modest but useful advance in our social legislation, which all Parties have been working on for about fifty years now and on which I hope we shall all continue to work in future. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Dundee.)
4.34 p.m.
LORD PETHICK-LAWRENCE: My Lords, we have listened with attention and interest to the defence of this Bill which has been given by the noble Earl, Lord Dundee. He has spoken to us with his usual charm and his usual fairness. There is nothing he has said of fact that I would venture to dispute in any way whatever. I could not help feeling that his heart was not altogether in the defence of the Bill. If he will allow me to say so, he seemed to me as if he were damning the Bill with faint praise. He recommended it to us as a useful step, something which no doubt would be improved in days to come, and suggested that if we did not altogether like it there was no reason why we should not amend it in due course. In fact, he rather took

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the line of the woman with the baby who said that it must be accepted because it was "such a little one".
I am afraid that I cannot follow the noble Earl in taking that view. The situation has changed very little since we had our debate on the White Paper on December 3 of last year, in which I pointed out the difficulties that my Party and I saw in the scheme which the Government indicated in that White Paper. The noble Earl himself said that there has been practically no change of any substance in the scheme as it now comes to us in this Bill from another place. I think that there has been one change: Exchequer grants have been increased, and we have had the report of the Government Actuary. Otherwise, we are still where we were, and I am afraid that I must tell the noble Earl that, so far as I can see, nothing has happened since October 3 of last year which has made me change my opinion that the Bill is not a sound one and that in our view the Government have failed to meet the situation which the noble Earl laid before us.
I will come to these points as I proceed, but I should like to say this at the outset. This whole scheme is very complicated. I am not disagreeing with it on that account, but it is very complicated and I do not pretend for one moment that I understand all its ramifications. I doubt whether a small handful of people in either House really comprehend the Bill in anything like its entirety; and as for the general public outside Parliament, I have no doubt whatever that most of them are in profound ignorance about what the Bill does and what it does not do, where it succeeds and where it fails. Having said that, I want to come to our case against the Bill. Our first point is that the 13ill sets up a vast machinery and what it grinds out at the end of the sausage machine is not commensurate with the immensity of the machine set up. Only in one particular—and I shall come to that later—does it really meet the problems it sets out to face.
The first point I want to make is that the benefits are inadequate. The noble Earl devoted a considerable part of his speech to arguing that the benefits could not be said to be inadequate because in considering what are the necessities of
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life in old age everybody has a different standard. The position is this. Do the benefits really give to a person who is retiring such a proportion of his former income that they represent anything but dire poverty to him? I venture to think that the Bill fails in what I should have thought would have been its prime purpose. In other words, the benefits are too low. It may be said that that is just the view of my Party, but I am going to read to your Lordships extracts from the report of an important person—namely, Mr. Jackson, the leading Pensions Officer of Unilevers. Your Lordships will remember that in the debate on December 3 I quoted him with regard to the question of contracting out of the scheme. I am now going to quote him on the point I am at present making. This is what he says:
"The level of benefits is too low. In forty years from now the £12 man will get only £5 pension—and he must never earn less than the full £12 in that period."
I would make this comment: that even that £5 assumes that he is a married man. If he is a single man, adding the basic pension and the graduated pension together, he will not get anything like £5.
Mr. Jackson goes on to say:
"People of that level of earnings need more than half pay, merely for the purpose of keeping body and soul together, and a roof over the lot. Accordingly the Government scheme as now proposed"—
and he wrote this before the Bill came into being, although the position is still the same—
"will require some augmentation from the private fund even for this level of employee. What a waste of manpower and effort that means! Duplicate records for two sets of benefits, whereas the State would not add one penny to its administration costs if it pitched the benefits at an adequate level for the lowest paid in its scheme."
He goes on to meet the point which the noble Earl, Lord Dundee, argued in the course of his speech this afternoon. The noble Earl pointed out that if the contributions were to be much higher than they are a large number of people might not be able to pay them. This is what. Mr. Jackson says about that:
"I have the impression that the inadequacy of the scheme stems partly from an understandable fear of charging higher contributions. My experience is that it is greatly exaggerated. Employees will pay—and expect to pay—a proper price for the proper benefit,

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so long as it is fair between one and another. Other people share this view. In Holland workers pay 6¾ per cent. of earnings. In West Germany workers pay 7 per cent. of earnings, and the employers the same; a joint contribution which provides them with an adequate retirement and death benefit, on the slice of earnings covered."
That statement does not stand alone. I therefore contend that it is not only a Party point of view, but one that is shared by men who know what they are talking about, that the benefits that this Bill provides are too low.
I am now going to proceed to put a point—I want to be quite frank about this—where I should not carry Mr. Jackson with me. I think the £15 line is pitched much too low. If you are going to have this scheme, in my view you have to take into account the proportion of people earning over £15 today and also the proportion of people who will be doing so as time goes on. I have here the Report of the Government Actuary, and he estimates that in the year 1961–62 5 million men will be earning over £15 a week. It is true that the proportion of women is lower, but I think that is because, as the noble Earl, Lord Dundee, said, many of them are part-time workers. That figure of 5 million men is out of a total of 15 million employed. Therefore, one-third of the men will be earning over £15 a week. It seems to me, in view of that fact, that there is nothing to recommend stopping at £15. If we take into account, and assume what the noble Earl assumed, a 2 per cent. per annum rise before a very few years are out, and before the scheme has got fully going, the proportion of those earning over £15 a week will be not far short of, and may even exceed, half the total number of males employed. So I take the view that the benefits are too low; that the line drawn when the graduation ceases is pitched too low, and that the scheme ought to have taken a much higher figure in both cases.
Closely allied to that question is the question whether the benefits provided are commensurate with the contributions paid. There is no doubt at all that the graduated contributions, if they were invested in public assurance companies, would, in fact, give a much greater yield of benefit than those provided in the Bill. Perhaps that sounds
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outrageous, but there is a perfectly good reason for it. One of the main objects of the Government in introducing this Bill was to deal with the deficit which is expected to arise in the course of the next few decades of this century; and because that was one of the objects, it was necessary that the additional graduated contributions should produce the money, unless there was to be a large increase in the Exchequer contributions. That is why it would be possible to get much better terms than those people who are paying these graduated contributions will get for their money under this Bill. I do not think there is any doubt about that whatever. That is the one point on which the Bill achieves the purpose it sets out to achieve; and I admit that.
I will go even further, and say this. All well-informed people, in both Parties, recognise that this question of the deficit in future decades has got to be dealt with, and that some share of it must fall on the persons in the higher income ranges who pay National Insurance contributions. The Labour Party recognise that just as well as the Government. We say, however, that the failure of the Government, and the reason the benefits derived from these contributions fall so far below what people could obtain in the open market, is due to the fact that the whole scheme is based on too low a scale; and in particular, that the gradations stop at £15 a week. I see no reason whatever why you should stop at that figure. I have shown that one-third of the men in work will be earning over £15 a week by 1961–62, and that the proportion is steadily increasing. I should have thought that a figure of at least £24 was far more realistic; and speaking for myself, I see no objection to putting it higher than that—up to as much as £40 a week. We feel that that is a grave defect in the scheme.
The noble Earl talked about the actuarial position of the Bill. I venture to suggest to the noble Earl that the whole actuarial principle has gone, and that for it there has been substituted a pay-as-you-go scheme. I am supported in that by a document coming from a very high authority. It is issued by the Councils of the Institute of Actuaries and the Faculty of Actuaries in Scotland.

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This is what the document says on page 5. The heading is:
"Meeting the Cost: the Government Proposals."
It says:
"Under the Government proposals the cost is to be met—as in the present scheme—by what is known as the 'pay-as-you-go' system. Income is raised each year to meet the costs of the benefits for that year. No fund is built up to be invested and earn interest as happens in most private pension schemes."
A little later on the document says:
"Contributions paid by one person are used immediately to pay current benefits to some other person, and nothing is left to be carried forward. Thus the eventual payment of the graduated benefits is an additional obligation placed directly upon future generations. We are promising ourselves, now, that our children will pay us larger pensions in the future than we are willing to pay now to our parents."
That is not my statement; that is the statement of this very expert body of people. Personally, I am not opposed to putting aside the actuarial basis, though I think it may be, and to a large extent must be, the only genuine factual basis on which any pension can be based. At the same time, I do not think the Government can appeal to actuarial figures when the whole actuarial basis—which was the basis on which the old original Beveridge Scheme was founded—requires, I think, the application of entirely different standards. That does not mean, of course—I am not suggesting this for one moment, and I hope the noble Earl who is to reply will not assume it—that I think we can throw caution to the winds. I think we have to make our scheme with great care and with due attention to what the country can afford and is likely to be able to afford in the years to come. I suggest that there can be a modest scheme which not only is not something to be proud of, but, indeed, is something which is in itself a danger, just because it is too small to carry on its back the real requirements and to be worthy of the vast machinery which this scheme is bringing into operation.
Those are not the only objections we have to the Bill. There remain the other objections with which I dealt in the debate on December 3. There is the exclusion of the self-employed, which I have never felt was justified. A large proportion of persons are self-employed at the present time, and they ought not to be
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left out of any scheme of this kind. I do not in the least see why they should be left out, and I consider that a grave blot on the Bill. Then there is the question of contracting-out. Nothing has happened since the scheme was originally put forward to make the contracting-out position more acceptable. I do not propose to go into that aspect to-day, because to some extent it concerns detail, but it is a difficult matter to know what should be done.
All employers who have a contracting-out scheme—I mean an industrial superannuation scheme—of their own have this problem to face: whether they shall contract out or whether they shall not. It may well be that the scheme which they have is better to-day than this scheme of the Government. But the noble Earl himself has hinted that probably in the next ten years there will be frequent changes in this scheme, and I suppose we all, including the noble Earl, hope that they will be changes for the better and not for the worse. If that is so, it may well be that, while an employer has an industrial superannuation scheme which comes within the Government's proposals to-day, in days to come the situation will change and there will be a great deal of trouble. The employer will be placed in great difficulties in knowing whether he can keep his scheme up to the level which he should, and upon which the Government will insist, in order to remain outside the Government scheme.
Those are the main criticisms we have of this Bill. There are considerable minor criticisms which also apply. Anybody who has made any attempt to follow the path which the Bill pursued in another place will realise that there were constant Divisions, both in the Committee upstairs and on the Report stage of the Bill. The Government did not see their way to meet any of the substantial Amendments. Perhaps the most prominent one was the refusal of the Government to deal adequately, as my Party considered it, with the question of widows contracting out. My Party desired to ensure that one of the conditions which would decide whether or not a private scheme was acceptable, was that it should provide a pension for the widow. The Government resisted the Amendment

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which we put forward in another place. That is one of the minor objections we have to the Bill.
In conclusion, my Lords, I should like to say this. The Government claim—and it was particularly prominent in the speech of the noble Earl to-day—that though this is an imperfect Bill, and though it does not meet the full desires of large numbers of people, it is nevertheless a modest Bill which is capable of amendment; that although from our point of view it may be only half a loaf, half a loaf is better than no bread. My Party do not take that view. They think this Bill in many respects a bad Bill, and that when it comes to proving it it will be a matter of recasting it. That recasting process will involve a great deal of waste, a great deal of unnecessary argument and a great deal of money in setting the scheme on a right basis. Therefore, in another place, as your Lordships probably know, the Labour Party divided against the Third Reading, which is not a common thing for them to do. The Opposition in this House at the present time do not take the view in general that they would wish to divide against the Second Reading of Bills. In any case, the powers of this House on these quasi-Money Bills are, at the best, limited, and we realise that it is not for us to attempt to make any major change in a Bill of this kind. Therefore, though we do not differ from our colleagues in another place in our criticism and in our feeling of dislike of the Bill, we do not propose to go to a Division against the Second Reading.
5.0 p.m.
LORD AMWELL: My Lords, I do not propose to take up very much time in what I should like to say in this debate on the Second Reading of the Bill. But I would point a moral, perhaps more than one moral, even if I am not able to adorn a tale. The noble Earl made play with the term "social principles". I rather think that when he spoke of social principles he was really referring to actuarial principles, which are not necessarily the same thing. I know, of course, that if you are going to base the whole case for pensions upon finance and upon an actuarial scheme, then you have all the difficulties that have been indicated by the noble Earl and in another place
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by the Government in respect of the finance of the measure.
But I want to put this: it may be a very idealistic point, but I think it is an important point and one that should be put. This question of dealing with old age, the question of pensions and superannuation, is not really a matter of generosity or even of duty, even of the duty of the nation to the older people who have served in the battle of life in industry and so forth. It is not a question of that kind at all. It is a question of the prosperity of the country. We hear a great deal about the prosperity of the country and about the possible increase of that prosperity in the near future. I think a great deal of nonsense has been talked about it and a large number of plain facts which can be found if they are looked for are completely overlooked.
We will take it, however, that at present, at any rate, we are living in a prosperous period and one that has the promise of still greater prosperity. The argument from this side—my argument, at any rate—is that that prosperity justifies not generosity but something else in regard to the treatment of the old people of this country by the nation. I want to put this point—and I used the term idealistic, and it may look like it for a moment, but it is a genuine point, I think. You know, that prosperity we talk about, the industrial progress of this nation and every other nation, is not merely a question of current ability, labour and power: it belongs to history; it is the result of a historical process; it is the result of the fact, among other things, that we have had ages upon ages of invention and discovery in the history of mankind. This being the case, every man, woman and child in the country is entitled to share in that national heritage. It is a national heritage. They are entitled to share in it, at any rate up to the point of a reasonable insurance scheme for the treatment of old age.
I know, of course, that we have to deal with the question of morale and whether it is altogether desirable to make a State payment without also an individual payment and without also encouraging a sense of responsibility. Those are minor points. Primarily the

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fact is that it is not a question of duty; it is a question of right. I cannot at this time speak for the Labour Party as a rule, but I think I do upon this occasion. We stand upon the principle that people who have helped to make the prosperity of the nation ought to be treated as human beings, not upon an actuarial basis necessarily or not altogether, but upon a basis of humanity, a basis of the recognition of their right to their share in what is really a national heritage. That is one point I wish to make.
The other point is this, and with this I will conclude, because there will be plenty of opportunities to get closer down to the detail in the course of the progress of this measure. The other point is this question of who is to pay and where is the money to come from. It beats me. We boast in election addresses and election speeches and all the rest of it about the tremendous advance there is in the prosperity of the nation. I do not deny that there is that advance. There ought to be. Why should there not be? The ingenuity and the power of the people of this country has increased, and should increase, and must increase. When the trade unionist says: "We must have our share of that", I, as a Socialist, say that the share should first go to the whole of the people; it does not belong to any section at all. The trade unionist and the actual operative Workers should join in with the rest, if there is anything in the principles of Socialism at all. I will not digress; that thought just occurs to me at the moment.
I want to put a practical suggestion to the noble Earl, and to the Government if it gets as far, with regard to this question of raising money. Let us have a real superannuation scheme, one that will not mean just a perpetuation of something a little bit above depressing poverty. After all when we come to these figures about the people who apply for National Assistance, let us get those figures right. There are 1,640,000 people who apply for National Assistance, and they are not all old people—not by any means. I do not think it would be unreasonable to presume that there are at least as many again who really are living upon a very narrow margin but who would not apply for public assistance,
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because just as miners and shipwrights object to a means test they, too, object to a means test.
I think the point which the noble Earl raised in this afternoon's debate is of very great importance indeed. I think the idea that public assistance is not the old Poor Law and ought not to be regarded in any such light is an idea that ought to be encouraged and expressed in everything that is said in propaganda upon this subject. You have a vast number of people who are living upon the edge of poverty. You have artificial prosperity, very largely; a lot of it is artificial. You have over 3½ million married women going out to work. I am not raising any question of the rights of women as against the rights of men, but I do say this: that married women at work are not looking after their homes and families properly; they cannot do it. I know what running a home means; I know that something has to go if married women go out to work. That has to be taken into account when you are talking about prosperity. Then you have these artificial wages where men are able to talk about striking for £40 a week and that kind of nonsense. It is purely artificial; it will not last. In any event, it applies just to key industry men, to a limited section, although a large section, of the wage-earning class of the country.
But behind all that there is a vast community which is living in a state of desperate poverty in relation to any standard of decent private existence. They are not taken into account, and they do not come into the Bill. You talk about wages and about wage workers and the rest. The trade unionist talks in those terms. But there are other people besides wage workers who are to-day living upon a far lower scale than ever they have lived in past history. So when you are talking about progress and when you are talking about prosperity, at least take those facts into account. That is what I meant when I said that we should look at the thing socially rather than from the point of view of groups and particular interests.
There was raised the question of where the money is to come from. I put forward this suggestion very briefly. I know that my facts are right because I have taken the trouble to confirm

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them. If for the twopenny stamp duty that we pay when we draw a cheque there were to be substituted a halfpenny poundage, your Lordships would find that on the number of cheques that go through the clearing houses of this country there would be realised an income of between £400 million and £500 million. That is a remarkable figure; but the number of cheques which go through the banks is a remarkable figure. I doubt whether a halfpenny poundage would interfere very much with the enjoyment of private incomes or would injure industry to any large degree. In any case where we have prosperous industry we can afford that amount of extra expense if we are to guarantee what we all want—namely, decent living conditions for people who have borne the burden of life. I suppose I speak with some kind of interest for I am an octogenarian myself.
If there is to be a decent standard, do not let us talk so much in actuarial terms. Let us realise that we can afford to deal properly with these people. Let us cut out all this deadwood of talk, talk and more talk about where the money is to come from. It will come from the industry, the work and the sacrifices of the community, and we are entitled to expect that it should come from them. For the reason that I have given—that is why I said at first that my first point was an idealistic one—it has a real, practical bearing. The wealth of nations is a historic process. It is not a mere question of people who are working now or people who are contributing in any practical form to the production of goods. It is the result of the history of the progress, the invention and the discovery of hundreds of thousands of people in the past. Those things constitute a national heritage which, at any rate, ought to be big enough to provide decent treatment for the other people of this country.
5.14 p.m.
LORD GRANTCHESTER: My Lords, I need trouble your Lordships about only one matter, particularly as in dealing with insurance I must declare my interest. We on these Benches have taken exception to the principle of graduation. We can see no sufficient reason for discrimination in a payment
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which is designed to ensure that no one falls below a certain minimum. I am not going to deal to-day with the question as to what should be the minimum subsistence allowance.
We are aware, as the noble Lord, Lord Pethick-Lawrence, has pointed out, that graduation is introduced as a measure of redistribution of the burden to meet the mounting deficit on the basic pension. But as we have pointed out, we believe that this is a very slippery and dangerous slope and for this reason I should like to draw your Lordships' attention to the pamphlet to which the noble Lord, Lord Pethick-Lawrence, has already referred in part, issued last month by the Institute of Actuaries, and ask that it should receive special consideration from Her Majesty's Government. In effect, the proposal which the Institute of Actuaries has made is that there should be set up an independent expert advisory committee on a high level to keep both Government and people informed of the likely consequences of any suggestions which may be made, as from time to time it is certain they will be made, for an expansion of the present proposals. In his opening speech, the noble Earl referred to the possibility of review from time to time, and as it is likely that suggestions will be made from time to time to alter the provisions of this Bill, I should like to commend the suggestion made in the booklet published last month, and ask the noble Earl to see that it is studied.
5.17 p.m.
EARL BATHURST: My Lords, it is with some diffidence that I stand before your Lordships to answer on behalf of my right honourable friend, because I suppose that to-day, at any rate, I must be the youngest Member of your Lordships' House here present, and I should like to remind your Lordships that by the time all your Lordships here have reached the age of sixty and are drawing your pensions, or even by the time your Lordships have reached the age of seventy and are drawing your maximum increment, probably I shall still be paying my graduated contribution. Whether or not that will be. I do not know. It is disappointing, in a way, that there are not more noble Lords able to take part in this debate; yet, on the other hand, I think it is encouraging and reflects

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great credit upon my right honourable friend and my noble friend that they bring before your Lordships this Bill, especially when one considers the hours which it occupied in another place and the considerable amount of time which was spent in your Lordships' House when the subject was last discussed.
I imagine that many of the points raised by those who contributed to the last debate in your Lordships' House must by now have been answered in the speeches of my noble friend. Indeed, I know that my right honourable friend and my noble friend would like to thank the noble Lord, Lord Pethick-Lawrence, for intervening in this debate and for all the time and trouble that he has put into all affairs to do with pensions, which all your Lordships know is his greatest interest. The noble Lord, Lord Pethick-Lawrence, did say something about producing a baby, but that it was "only a small one." Your Lordships have been discussing legitimate or illegitimate babies at great length in recent debates, and no doubt in the near future we shall be having still further discussions. The noble Lord may care to call this baby which my right honourable friend has brought forth, a small one, but I think it is a good one. I should like to point to the example of my noble friend, and to compare his size at the Dispatch Box to-day with the size of a very small baby.
The noble Lord, Lord Pethick-Lawrence, said that the benefits are too low. He even mentioned the words "dire poverty". All of us, including the noble Lord, Lord Amwell, who also made this point, would like to see pensions rise to almost any limit; but we must consider what is practicable and what is possible. My noble friend gave us a recommendation that we should keep pensions out of politics. By that he means, of course, Party politics, because the subject cannot be kept away from politics. By the ancient Greek usage the root word of "politics" means "the art of the possible", and Her Majesty's Government are trying to find a way that is possible and practicable. We believe that the scheme which my noble friend has described is a possible and a practical one, for reasons which I hope to put forward.
The noble Lord, Lord Pethick-Lawrence, suggested that the graduated
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pension at the £15-a-week rate was somewhat niggardly when compared with the actuarial basis—a term for which the noble Lord, Lord Amwell does not care.
LORD AMWELL: My Lords, I said "social".
EARL BATHURST: My Lords, the graduated portion of the pension should not be considered alone; it is a question of the basic pension taken with the graduated pension. I have here some figures which I hope will show that it is not such a bad bargain, even for the young worker, for whom, we must admit, it is a worse bargain. The noble Lord, Lord Pethick-Lawrence, mentioned the figure of £12 a week but he did not give the age at which that particular worker would enter into this scheme. If he should enter at a fairly late age, say at the age of 50, his maximum pension if he is a married man, would be 86s. 6d.; and the total contribution would be 16s. 7d. weekly, of which his personal share would be 8s. 3½d.—leaving out contributions in respect of industrial accidents and National Health Insurance.
We must look at the question of what it would cost, on an actuarial basis, for him to get that pension of 86s. 6d. I am afraid there can be no other way of obtaining a pension than by putting down so much in small amounts and expecting to get back in the future some other amount in return for the contributions paid. The man entering the scheme at 50 would have had to pay 51s. 3d. in order to get a pension of 86s. 6d. Going back to the worst end of the scale, and taking a young man of 18, earning £12 a week, he would expect to get, if he is married, 100s. 6d., and he will pay a total of 16s. 7d. per week, of which his share, again, is 8s. 3½d. On an actuarial basis his pension would cost him 15s. 8d. weekly, so that it could be shown that his return is not quite so good. It must not be taken, however, that he is necessarily going to earn £12 per week all his life.
Equally, the noble Lord, Lord Grantchester, mentioned that there was in the Bill provision whereby there might be all kinds of variations. We heard reference to the prosperity of the nation. Who can tell what may be the position

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of the £12-per-week man entering the scheme at the age of 18, in the year 1990? I do not think, therefore, that we need to take that argument of the noble Lord, Lord Pethick-Lawrence, too far. Nor is it true to say that the actuarial basis has been lost. I can assure the noble Lord, as I believe he knows well, that actuarial assessments are relevant to the basic pension and benefits right through the scheme.
Then the noble Lord, Lord Pethick-Lawrence, having suggested that this was a bad bargain, said that people who are already in an occupational scheme should not have the right to contract out. If, by the noble Lord's assessment, the scheme which Her Majesty's Government are putting before the country is a bad bargain surely those people with their own occupational schemes should have the right to contract out.
LORD PETHICK-LAWRENCE: My Lords, I am sorry to interrupt the interesting and informative speech of the noble Earl, but I do not think I ever said they should not have the right to contract out. What I said was that a noble Lord had already pointed out—and I agreed with him—that it was very difficult for an employer to contract out because as times, and schemes, change, an employer, having contracted out at the beginning, might want to come in afterwards. I do not think I ever said there should not be the right to contract out.
EARL BATHURST: My Lords, I believe the noble Lord said that they should not be denied the advantages of a national graduated pension. I think that was what the noble Lord meant, was it not? Therefore a man with an occupational scheme should not have to contract-out, as undoubtedly he would have to do should his firm decide that contracting-out gave the best bargain to all the men in his particular pay group or age group in that factory or possibly in the industry. As to whether the Government scheme may possibly improve in course of time, as the noble Lord, Lord Amwell, has shown us, it is prosperity and savings, profit—in other words, the country's profit—which will make it possible to improve the scheme. And I have no doubt that as savings and profits improve—
LORD AMWELL: My Lords, I take it that the noble Earl means "prophet" in the Biblical sense, not in the economic sense.
EARL BATHURST: My Lords, I hope it will be in both the Biblical and the economic sense, and I feel that that is the main object of Her Majesty's Government—to secure the prosperity of the country. When that is achieved, as it is being achieved, I suspect that the noble Lord, Lord Grantchester, and his friends may be able to devise certain ways and means of competition or ought to be able to provide some manner of competing with the Government scheme.
The noble Lord, Lord Amwell, has already referred to the prosperity of the country, and I think it must be right to refer to the point raised by my noble friend—that since pensions were introduced on this scale in 1946 the increase in the real value of the pension has been 11s. in the case of the married couple. The National Assistance benefits arc being increased up to 85s., and that, again, comes from taxation, from the profits that the country has made. My right honourable friend the Chancellor of the Exchequer has decided that so much more can be put to one side, and it has been decided—and I believe the country will commend the decision—that this little extra (though, taken all over the country, it is really quite a considerable extra) should be given to those who deserve it most and whose case is direst, as the noble Lord, Lord Amwell, suggested.
The noble Lord did not like the means test for the National Assistance grant, and there is no doubt that what he says is true. But my noble friend made it quite clear that it is the intention of my right honourable friend that we should try to break down this resistance to securing benefits which can be received under the National Assistance scheme. It is, however, public money which is being handled, money which has been saved—the money of the taxpayer; and it is being dispensed. I do not believe, my Lords, human nature being what it is, that one can "dish out" money "ad lib.", if your Lordships will excuse such a term in your Lordships' House; it cannot be done. There must be some test to find out who is

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deserving of such assistance and also who is not deserving of such assistance but trying to make a fraud.
LORD AMWELL: My Lords, my point was not whether I agreed with the means test or not in regard to public assistance, but the sheer fact that a large number of people—I put it at about as many again as apply for National Assistance—so much object to the means test that they do not apply. It had nothing to do with my own views on the matter.
EARL BATHURST: My Lords, that is what I had in mind. I thoroughly appreciate that that is not the noble Lord's view; it is the view of these people who will not apply. That is one of the reasons why my noble friend begged such people not to consider National Assistance in such a light. Nevertheless, we must have some control, some inspection, as to what happens with the public's money.
With regard to the noble Lord's interesting idea of a halfpenny poundage, I seem to have read somewhere or another in an economic textbook or something like that, which I did not understand very well, something of such an idea, and I think that that idea has probably been considered also by economists of far greater standing than myself or even my noble friend. But possibly the noble Lord, Lord Grantchester, would be able to put forward reasons why such an idea is, unfortunately, a little too simple.
LORD AMWELL: I will wipe out all taxation for that matter, quite easily.
EARL BATHURST: The noble Lord, Lord Grantchester, welcomed the fact that there are enabling clauses in this Bill which allow my right honourable friend at any time to vary or alter provisions in the Bill to meet the consequences of the time. I do not intend to go over the point in detail, but I maintain that the first objective of this Bill, of my right honourable friend's scheme, is to make the scheme financially stable. The present scheme is losing each year, and would have lost £144 million in 1961–62. It is estimated that the deficit would have come to over £400 million in the year 1981–82, twenty years forward. That state of affairs cannot go on. The scheme is designed to give as much as is practicable to the old person who has retired and who is in need, yet at the same time it is designed to be as small an incubus as possible upon the subscriber—that is, both the employer and the employee—and also the taxpayer. Finally, it is the intention to provide a graduated pension, related to the earnings of the worker concerned.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BUCKS WATER BOARD BILL
The Queen's consent signified and Bill reported from the Select Committee, with Amendments.
House adjourned at twenty-six minutes before six o'clock.