HL Deb 25 June 1959 vol 217 cc307-18

6.33 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(The Earl of Dundee.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair.]

Clauses 1 to 6 agreed to.

LORD SILKIN moved, after Clause 6, to insert the following new clause:

Provision for cases of permanent incapacity

" . Where a person has paid graduated contributions and before attaining pension-able age has ceased to be in whole-time employment and has become permanently incapacitated therefor, there shall be paid to him, in addition to any sickness benefit or industrial injury benefit to which he may be entitled, the amount of graduated benefit that would have been payable had he reached pensionable age on the date on which he became incapacitated as aforesaid." The noble Lord said: I beg to move the new clause standing in my name. A similar Amendment was moved in another place on the Report stage and was discussed at some length there. Briefly, the clause provides that where a person in full employment has broken down in health and is permanently incapable of such full employment, or of any full employment, he shall be treated as if he had become of pensionable age and received the pension appropriate to the scale on which he had been paid.

I think the terms of the Amendment are perfectly clear, and when it was discussed in another place it was received with a good deal of sympathy on both sides of the House. Certain difficulties were raised by the Government. One was the difficulty of defining "permanent incapacity". I think that was answered, and I do not know whether the noble Earl who is to reply will raise that point again. "Permanent incapacity" is a term which has been used for many years, and defined under the Workmen's Compensation Acts and is perfectly well known. There should be no more difficulty in ascertaining whether a person is permanently incapacitated from the point of view of a pension than from the point of view of compensation under the old Workmen's Compensation Acts. But if further definition is needed, as always I should not stand on the exact wording of the Amendment: and no doubt it would require further revision.

There was also some argument in another place about whether most private schemes contained a provision of this kind. I am not in a position to say whether or not that is so. Those who moved the Amendment thought it did, and those who spoke on behalf of the Government thought it did not. But I think I can say that most good firms, and certainly most of the large firms, do have a provision of that kind. I am personally acquainted with a concern—it is not a large concern—which definitely has a provision of this kind; and if there is a permanent incapacity, a permanent breakdown in health, the person concerned is treated as if he had retired with full pension appropriate to his standing and grade.

Nobody suggested that there is a great deal of money in this. I think the point was made that at the most it might involve an increased pension—that is, anticipation of a pension—of something like (I think the figure was) 22s. a week. It might mean as little as 2s. a week. So it is not as if this were going to involve an intolerable burden on the Fund—it will not. It is an act of generosity if you like—the sort of act of generosity that most of us in our private capacity would feel that we should like to carry out. Unless the Government are prepared to give very strong evidence to the contrary, I should say that the Fund can stand it. I gather that there is a certain amount of elasticity in the Fund, and that the acceptance of the principle of this Amendment would in no way affect its solvency.

It was suggested, "This is all right, but give the present scheme a run and see how we get on: come back again in x years' time." In the meantime, however, a considerable number of people will have been permanently incapacitated and unable to work, and they will have suffered. The purpose of this Amendment is to reduce the suffering. I hope that the Government, having had an opportunity of reconsidering the matter, will see their way to dealing with this Amendment in a favourable and sympathetic manner. I do not think there is any difference of principle between us. Most of the arguments put forward against it were, it seems to me, arguments of expediency, and I think that from the point of view of expediency there is nothing in it. I beg to move.

Amendment moved— After Clause 6 insert the said new clause.—(Lord Silkin.)

THE EARL OF DUNDEE

As the noble Lord said, a similar Amendment was moved on the Report stage in another place, where there was a very full discussion, followed by a Division. The Minister in another place explained the main reason why the Government are not able to accept this new clause, which is that the main purpose of this Bill is to provide pensions for old age, and not to provide pensions for incapacity. We have, of course, at present pensions on a flat rate for people who are disabled, the extent of which compares pretty favourably with what is done in most other countries. But this new improvement which is suggested is that provision for persons who are incapacitated should have a graduated element imposed on top of the flat rate element, similar to the graduated element in the new retirement pensions which are proposed in the Bill.

My right honourable friend the Minister was not at all unsympathetic to this idea. I understand that the Opposition in another place would not have divided if the Minister had been able to give a definite assurance that legislation to this effect would be introduced. The Minister, however, could not give, and I cannot give, that assurance, because we do not think we are yet in a position to say whether, if such legislation were to be introduced, it could be most appropriately built into this Bill or whether it would be better to have a separate piece of legislation altogether; and I do not think it would be right that a Government should give any undertaking of that kind when we are dealing with a Bill which is specifically intended to deal with provision for old age.

There are two reasons, in particular, why the Government think that this Amendment would not be a good one. One has already been alluded to by the noble Lord, Lord Silkin, when he spoke about existing occupational schemes, and he seemed to think there was some doubt about what proportion of them contained a provision of this kind. In the survey by the Government Actuary of occupational pension schemes this question is dealt with in paragraph 33 where the Actuary reports that ill-health pensions or other special benefits are available to all members of pension schemes for employees of the public service and nationalised industries. That, I think, is well known. But the principle on which they are awarded is not the same as it would have to be in this Bill. Then he says that a material proportion of non-insured private schemes do not include such benefits; and that the majority of members of insured schemes receive only the normal withdrawal benefit—that is to say, a refund of contributions or its equivalent. There is in one of the Appendices, Appendix I, Section 10, a more detailed breakdown of the figures which the Actuary gives.

One difficulty about accepting this Amendment would be, of course, that it would contain no provision for people who have contracted out and who belonged to one of those schemes which have no provision in them of this kind; and those schemes, as I have said, are in the majority. Of course, the withdrawal of benefit they receive means merely that they get back the graduated elements of what they have paid by way of contributions to these schemes: there is an end of the matter; they have no more rights. Under the State scheme, the disabled person who could no longer work would not receive any withdrawal benefit; he would be entitled merely to the graduated element, which he had earned by his contributions, when he reached retirement age, if he lived as long as that; or, if not, his widow would benefit when she was 60 from the rights he had acquired. If we were to introduce comprehensive legislation of this kind we should have to consider what to do about people who had contracted out.

The other reason why we do not think the principle of this Amendment is a good one in this context is that it is based on the length of time for which the insured person has been contributing and not upon the severity of the incapacity which he has suffered. If in the next few years a young man of 30, with a large family, were to suffer an injury which totally incapacitated him, he would receive a trivial increase in his pension on account of the very small contributions which he had so far paid. Whereas, of course, if a man lived a long time and then shortly before retiring age became incapacitated, he would do very much better. I think it would obviously be right, if we were to introduce legislation dealing with incapacity, that the additional benefit, however the contributions were calculated, should be greater or less in relation to the severity of the injury, or the incapacity suffered by the injured person.

The noble Lord said, I think rightly, that the cost to the scheme of accepting this particular proposal would be very small. So also would the additional benefits that would be paid under it. With regard to considering the matter for several years—a possibility which the noble Lord mentioned—if a scheme were to be introduced after the matter had been fully considered by the Department and everybody else for several yars, anybody who had become incapacitated in the meantime would lose practically nothing. The extra amounts that could be earned in the early stages of the scheme would be very small indeed.

The Minister feels that if a new departure of this kind is to be made it is better to take one step at a time and to take plenty of time to consider all the implications, as was done in the United States of America. There, they introduced a graduated pension scheme a good many years ago, and it was not until twenty years later that they grafted on to it an incapacity pension graduated in relation to earnings. At this time of night I do not think your Lordships would wish me to go into the details of that scheme, but I think in many respects we should not want a British scheme to be arranged in quite the same way. As the noble Lord, Lord Silkin, said, the Minister and his supporters in the other place were by no means unsympathetic to the motive behind this Amendment, but I could not in the circumstances, on a Bill which is so much concerned with finance, advise your Lordships at this stage of the Bill to try to reverse the decision which has already been reached by a Division in the other House.

6.49 p.m.

LORD PETHICK-LAWRENCE

I cannot help being considerably disappointed by the speech of the noble Earl. I had hoped that, considering Government speakers in the other place were really favourable to the idea lying behind the Amendment, the noble Earl—even if he was not willing and able to accept our particular Amendment, or even perhaps to put an Amendment of a similar kind in the Bill—could at least have gone a little further than his colleagues in the other place and given us some confident expectation that some real step forward in this matter would be taken in the early future. However, he has not seen fit to do it.

I cannot help feeling that he made rather heavy weather of several of the points. He said that this is a very small matter. I feel that a man starting to pay contributions on a graduated basis and being incapacitated, it may be only a few years before reaching 65 years of age, will feel greatly aggrieved that lie gets nothing for all the contributions that he has paid, and none for all the contributions that his employer has paid on his behalf. Seeing that in all the more progressive schemes of private enterprise this principle is admitted, and that they are specifically superannuation schemes, I cannot myself see any really great difficulty in including it in a Bill which has for its purpose imitation of the superannuation schemes of private persons. It also purports to give to a man who is brought compulsorily into the Government scheme a hope that if he meets with unfortunate circumstances before the full age of 65 he will benefit. He will be most disappointed at getting nothing in return for his contributions unless and until he reaches the age of 65. I am sorry that the Government have taken this negative attitude in this matter.

LORD SILKIN

I do not propose to press this matter, but I still hope that the Government will give it further consideration. The noble Earl has given me a lead. After all, if the United States can do this, even after waiting twenty years, I do not see why we should not be able to do it straight away. We can live and learn from their experience. All the arguments the noble Earl has put forward for not doing this—that this is not a Bill which deals with incapacity, but only with pensions—would have applied equally to the American Bill. But they have grafted on this incapacity provision, and I still hope that the Government may take the opportunity between now and the next stage of thinking out some way of helping a person who becomes fully incapacitated. I do not ask the noble Earl to give me any undertaking—I know he is not in a position to do so; but I shall live in hope until the next stage, and in the meantime beg leave to withdraw the Amendment.

THE EARL OF DUNDEE

If I may speak again before the Amendment is withdrawn—although I do not want to suggest that the Amendment should not be withdrawn—I should like to thank the noble Lord, Lord Silkin, for not pressing the Amendment, and to say that what he said will certainly be considered by the Government. As I said before, although the Americans have grafted an incapacity provision on to the old age structure of their scheme, it does not necessarily follow that we should do the same. It might be thought better to have a separate Bill for a separate scheme; but it will certainly be considered.

I wanted to say only one thing to the noble Lord, Lord Pethick-Lawrence. When I said that this was a small matter I did not mean that a long-term scheme of this kind would be a small matter; I was referring only to the effects which could result in the next few years. When the noble Lord said that a man who was nearly 65 might feel aggrieved or disappointed, of course the fact is that these new graduated contributions do not begin to be paid until 1961, and therefore it would not for a great number of years be possible for a man to have built up the right to a very large graduated element in his pension. Whatever his age might be in 1961, he could have acquired the right to only a quite small graduated increase in the four or five years after that. I am grateful to the noble Lord for not pressing the Amendment.

Amendment, by leave, withdrawn.

Clauses 7 to 11 agreed to.

Clause 12 [Special provisions for certain statutory superannuation schemes]:

6.55 p.m.

LORD BURDEN moved to add to the clause: (8) Nothing in this Part of this Act shall prevent an employment of any class to which this section applies from being treated as a non-participating employment by reason only of the fact that women in that employment may not be eligible to retire on pension before reaching an age exceeding sixty but not exceeding sixty-five years.

The noble Lord said: I beg to move the Amendment standing in my name on the Marshalled List. While this may seem a somewhat technical point, the Amendment seeks to rectify an injustice which, in my view, as the Bill is now drafted, will be inflicted on women in the local government and the National Health Services. Briefly, Clause 1 (1)(a) contains some of the provisions which must be satisfied before an employment can be treated as non-participating. In particular, it is provided that the benefits of the occupational pension scheme commence not later than the insured pension age. In the local government service and the National Health Service the normal retiring age, apart from a few special classes, is 65. Your Lordships will be aware that the superannuation provision in both these services may be deemed to be fairly satisfactory. In addition, they encourage the female staff to continue in employment after the age of 60. That may be considered a desirable consequence. But as the Bill now stands, the Minister may wish to issue a certificate that the employment to which I have referred should be treated as a nonparticipating employment. The employers, as well as the staff, may desire the exemption. But on the technical point of 65 in the Superannuation Acts instead of 60, the Minister will have no authority to issue a certificate. In that way I suggest that it is at least defeating the broad intentions of the Bill.

In another place, where this Amendment was also discussed, the Minister said, in effect, "You must get the age in the Superannuation Acts altered to 60." I speak subject to correction, but this appears to imply that either legislation or the issue of regulations will be necessary to alter the date in the Local Government Superannuation Acts. But, in addition, a number of great local authorities have their own private Superannuation Acts. Is the Minister going to tell me that these authorities must go to the trouble and expense, thus taking up Parliamentary time, of promoting a Bill to remedy this, I will not say "injustice" again—shall I say this anomaly in the Bill as it now stands?

Obviously a local authority would wait until they had a sufficient number of matters to justify the submission of a Private Bill, but no one can foresee when that position is likely to arise so far as the local authorities are concerned; and until it does arise—although as I have previously said, the Minister may desire to issue a certificate and the employers and employed may want it—the Minister will be powerless in the matter unless this Amendment is accepted. If I may say so, with due respect, I hope that the plain common sense of my Amendment will appeal to your Lordships, and I trust that the Minister will be able to accept it. I beg to move.

Amendment moved—

Page 21, line 6, at end insert— ("(8) Nothing in this Part of this Act shall prevent an employment of any class to which this section applies from being treated as a non-participating employment by reason only of the fact that women in that employment may not be eligible to retire on pension before reaching an age exceeding sixty but not exceeding sixty-five years.".—(Lord Burden.)

THE EARL OF DUNDEE

I am grateful to the noble Lord, Lord Burden, for explaining the facts of the problem so clearly, which has saved me a good deal of time and trouble in replying to him. The facts are that there are a certain number of women in Government service who, because they enter that service over the age of 20, are placed in a position which will prevent them, under this Bill, from contracting out of the State graduated scheme. We cannot accept the noble Lord's Amendment, because if we did so those women would be enabled to contract out of the scheme in favour of one whose terms would be less advantageous than those offered by the State graduated scheme. That is absolutely against the principles of this Bill.

One of the principles to which we must keep is that the person who contracts out of the State scheme because he is already a member of an occupational scheme must not lose by doing so. Therefore we cannot accept this Amendment. If we do not accept it, what happens? There are two alternatives. One is that these women will be compelled to go on under both schemes—the occupational scheme and the State graduated scheme—at the same time.

LORD BURDEN

With the graduated contribution.

THE EARL OF DUNDEE

Yes. It is possible that in that event, by regulation, reductions might be made in the amount of contribution to the superannuation scheme and also in the amount of benefit. But perhaps a better alternative may be that which the noble Lord, Lord Burden, has suggested—namely, that the Minister, obviously after consultation with the local authorities and N.A.L.G.O., the local authority employees' representatives, should exercise his power under Clause 15 of the Bill to amend the local government superannuation scheme by regulation in such a way that the employed women would not be worse off than if they were allowed to contract out; so that the noble Lord's Amendment would then be unnecessary.

In any case, the Minister has to have discussions with those representative of the interests of both employers and employees in local government in connection with this Bill, about decisions to be taken on contracting out, which, of course, affect many other people besides this particular group of women we are discussing. If it is desired that women who are local government employees, subject to the local government superannuation scheme, or any group of them, should be contracted out, modification of the scheme to enable this to be done will be one of the matters to be covered by consultation.

The noble Lord, Lord Burden, was good enough to tell me earlier this afternoon that he was not sure whether the Minister's powers to make regulations under Clause 15 of this Bill could apply to the larger local authorities whose pension scheme rests upon an Act of Parliament. He was afraid that the local government superannuation schemes of those authorities could not be amended without new legislation. I am grateful to the noble Lord for giving me an opportunity to confirm that his Amendment is unnecessary in that respect and that Clause 15 of this Bill does cover the larger local authorities. Clause 15 of the Bill in fact extends and applies the provisions of Section 69 (4) of the main Act of 1946, the relevant portion of which enables provision for modifying or winding up in connection with the passing of this Act any scheme for the provision of pensions or other benefits…including any…scheme established by or under any enactment. Powers under Section 69 of the 1946 Act have, in fact, been exercised to modify the Local Government Superannuation Acts and the Civil Service Superannuation Acts so as to abate the pensions and contributions under those Acts to take account of the higher rate of the National Insurance pension introduced in 1946; and there is no reason why these powers, as renewed by Clause 15 of this Bill, should not be used, either for that purpose or for the other kind of modification to the local government superannuation scheme which would be required to enable women employees to be contracted out.

Whether my right honourable friend will use those powers will, of course, depend on the result of conversations with representatives of employers and employees in local government, but I am glad to assure the noble Lord, Lord Burden, that there is no doubt about the ability of my right honourable friend to use Clause 15 to achieve that purpose.

LORD BURDEN

While thanking the noble Earl for his reply, may I ask whether that also covers the staff of the National Health Services?

THE EARL OF DUNDEE

Yes, it does.

LORD BURDEN

Obviously no certificate would be granted if this proposed subsection were in the Bill unless there were the prior consultations. Clearly, those would have to be a condition precendent to the issue of a certificate, even if this subsection were in the Bill. I could not expect the Minister to issue a certificate and make an employer a non-participating employer unless the right honourable gentleman had had those full consultations with both the staff representative and the employers. That would go without saying. If that were in the Bill it would save a lot of Parliamentary time, for otherwise we are faced with the necessity of regulations and so on. But in view of the assurance that there will be these consultations to put the matter right, if that is asked for by both sides and provided the Minister decides it is the right thing to do—for obviously they are conditions in regard to issuing a certificate—I feel that at this late hour it would be quite wrong for me to press this Amendment any further. I am grateful to the noble Earl and beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

Remaining clauses and Schedules agreed to.

House resumed.

Bill reported without amendment.