HL Deb 27 March 1961 vol 230 cc3-22

2.40 p.m.

Order of the Day for the Second Reading read.


My Lords, the proposed adjustments in the finance of the National Health Service, which were put forward by my right honourable friend the Minister of Health last month, and which were discussed by your Lordships on a vote of censure in the middle of last month, require two legislative measures to bring them into effect. This Bill is concerned with the raising of contributions. In another place it was introduced by those Ministers who speak for the Treasury, since it was allocated to that Department, and as the Treasury is one of those Departments for which I have the duty of speaking in your Lordships' House I am therefore in charge of that Bill here. The other measure, which is, I understand, to be before your Lordships immediately after Easter, is that which increases the prescription and other charges; that was moved in another place by the Minister of Health, and it will be dealt with here by my noble friend who speaks for the Ministry of Health in this House.

This is a Money Bill which we cannot amend—or, at least, in practice we cannot amend it. Apart from one or two minor administrative provisions, such as the transference from the two Health Ministers to the Treasury of the duty of making regulations about the payment of contributions by foreign seamen, the only thing which this short Bill does is to increase the contributions payable to the National Health Service by 1s. in the case of an employed man, and correspondingly lower figures in the case of employed women and juveniles. The increase provided for is from 2s. 4d. to 3s. 4d. a week, of which 10d. falls upon the employed person and 2d. upon the employer. The present position is that the employed man pays 1s. 10½d. and the employer the balance of the 2s. 4d. Under this Bill he will pay 10d. more and the employer will pay the balance of the 3s. 4d. It has always been an accepted principle that a proportion of the expense of the Health Service, since it was first brought in in 1948, shall be paid in the form of contributions, but by far the greater part is paid by the Exchequer.

I shall not trouble your Lordships with a great many figures, but if I may I will mention what are perhaps the salient ones. When the scheme began in 1948 the total cost was £336 million, of which £41 million was met by contributions, £50 million odd by other revenue, and £243 million by the Exchequer. In 1958–59, when the most substantial increase in contributions was made, as your Lordships may remember, the total cost of the Service was £675 million, of which £105 million was met by contributions and £500 million by the Exchequer. This year the gross cost has gone up from £336 million in 1949–50 to £773 million, of which £111 million was met by contributions and £583 million by the Exchequer. The balance, with which I will not trouble your Lordships, was again met from other revenue. The estimated cost for next year is £850 million, of which, on the present basis, £113 million would be met from contributions and £649 million from the Exchequer.

The effect of the change proposed by this Bill, raising the contributions by 10d. from the employed person and 2d. from the employer, would be that, instead of £113 million £148 million would be met by contributions, while the burden upon the Exchequer—that is, the estimated burden next year—would be reduced from £649 million to £601 million. If we look upon the change in the contributions in relation to the insurance payment as a whole, as your Lordships know until recently the total insurance contribution, which is all collected in one lump is 9s. 11d., of which 2s. 4d. (the worker's share of that being 1s. 10d.) is allocated after collection to the National Health Service.

As a result of two successive National Insurance Acts concerned with old-age pensions, which we discussed at great length, the contribution was first of all to go down and then to rise again to very nearly 9s. 11d.—to be exact, to 9s. 9d. The total contribution will in future be 10s. 7d. a week, instead of 9s. 11d. as it is now. The proportion of the total expense of the Health Service which is met by part of that contribution will be £148 million, compared with £601 million paid by the Exchequer.

Of course, when we talk about economies in public expenditure, particularly in the social services, we never mean reducing expenditure. Nor do we even mean keeping it as it is and preventing it from increasing. There was a time (I think it was in 1949 or 1950) when the Chancellor of the Exchequer tried to put a ceiling on the Exchequer expense of the National Health Service. But the expansion and automatic increase in the cost of all social services is in our time much too rapid—and in fact is almost automatic—for any kind of ceiling to be maintained. When we talk of making economies we accept the inevitability of an increase. All we can do is to make the increase slightly less rapid than it would otherwise have been. The purpose of this change is to try to bring about, or maintain, a reasonable balance between the cost met by the contributor and the cost met by the Exchequer.

I think from the figures which I have given your Lordships you will see that the proportion of the total cost met by the Exchequer while it has not, of course, remained constant year by year, has over the whole period been round about three quarters of the total. I have the actual percentages here. The Exchequer paid 72 per cent. of the total cost in 1949; in 1956 it had gone up to 82 per cent., in 1959 it was down to 74 per cent., and in 1960 it was 75 per cent. It would next year be 76 per cent. if there were no change. As a result of this change it will be brought down to 70ç7 per cent., according to the best estimates that can be made.

The reason why the Government feel that this ought to be done is that we know that the cost of this and all other social services to the Exchequer whatever happens, is going to continue to increase at a fairly considerable rate, and if the increase becomes too great then it becomes very difficult for any Chancellor of the Exchequer to agree to any extension of our social services, either in relation to health or to any other kind of service. Indeed it makes it more difficult for him to agree to any new action on the part of the Treasury which may be desirable for any social or economic purpose. The Minister of Health in another place laid considerable stress on the development of hospital services, which he pointed out were going to cost us a great deal more, and he felt that this would make it easier for us to be less inhibited by the growing burden on the Exchequer in proceeding with our hospital programme.

But if we prefer to look at our social service expenditure as a whole, if we include local government expenditure of about £400 or £500 million, it is now about £3,750 million, of which about £1,000 million is met by National Insurance contributions, apart from the Health Service, about £150 million by the National Health Service contribution, on the assumption that this Bill passes, and about £2,100-odd million by the Exchequer. This expenditure will, of course, inevitably increase as time goes on. We believe that we can afford it, but we think we ought to maintain, for the sake of balance and for the sake of flexibility, a reasonable proportion between the expense which is laid upon the Exchequer and that which falls upon the contributor; and we believe that the proportion aimed at for the National Health Service in this Bill is, upon balance, that which will contribute most to the efficiency and progress of our social services. I beg to move.

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

2.55 p.m


My Lords, the noble Earl has moved this Bill in plain straightforward terms, as we expect of him, and though I cannot say that I followed all his figures to the full, I will read them more carefully, and no doubt they will be found to be correct. In another place this Bill, in conjunction with the other proposals of the Government regarding Health Service charges, was met with very determined opposition, and my colleagues in the other place kept the Government members up several nights in succession and caused a great deal of trouble. I may as well say at the outset, though it will not be a surprise to noble Lords in any part of the House, that we are not going to follow the same tactics here. For one thing it is a certified Bill, as I understand it, and we could not take the proceedings that they took in the other place; nor should we be entitled to do so. But apart from that it is not our practice in this House to try to make ourselves obnoxious by resisting proposals of which we thoroughly disapprove. We have to accept them. We state our reasons, and let it go at that.

That is why I am going to make a comparatively short speech this afternoon, and why not a great number of my friends on these Benches will follow me in dealing with this Bill. I should be very sorry, however, if the Government were to deduce from that fact that our feelings here are any different from those of our colleagues in another place. They felt very passionately about this Bill, and we feel quite as passionately here as they felt there. If that surprises the Government, I propose to give very shortly our reasons why we, in common with our colleagues in the other place, do take strong exception to this Bill.

The position is that we feel it is a war on the principles of our Party. It is a war in which we have to engage strongly and determinedly on every front. I say that in spite of what appeared to be the moderate and reasonable remarks of the noble Earl who moved this measure, because I want to make clear to this House why we feel so strongly. Our position as Socialists is this: we consider that the people of this country are a community, and we look upon the interest of civilisation here as affecting the community of which we are all part. We do not take the view that the people of this country are a miscellaneous assortment of disparate individuals who can each pursue his own interest to his own liking and that, somehow or other, in that way the general good will be promoted. We are entirely believers in the community character of this country, as we are of the community character of the Commonwealth as a whole.

I say "community character" deliberately and carefully. The word "communism" has become in our language to-day a dirty word, because the real truth of communism has been obscured and overridden by a number of quite extraneous circumstances. In this country, and still more in the United States, "communism" is a debasing word which means all sorts of evil things. It has got mixed up with the Soviet Government and the idea of general aggression which the present Government of Russia inherited from its predecessors, the Czars of Russia, who in the old days were always thought to be making aggression on their neighbouring countries. Not only that, but at the present time it has got mixed up with anything that is anti-democratic; anything which stands for elections by the people the Soviet system is apparently opposed to, and therefore resists. Finally, and most seriously of all, it has got mixed up with religious matters, and it is thought to be anti-God in a sense in which many other civilisations which are not remarkable for their Christian attitude are supposed to be pro-God. All these consequences have reduced communism, which is in itself a great idea, to, as I say, a dirty word with which no one wants to be in any way associated. But I have tried to keep the word "community" free from that smear, and that is largely what lies behind the attitude of my Party to many questions.

In the past there have been a number of examples, and there are still, of the community attitude of this country. We have free and open parks which it is the right of everyone to use. We have free roads without tolls. Where there were tolls in days gone by the roads are now free to the public. Rivers are free of access; our education is free and our Health Service is free to a certain extent, subject to certain payments which have been made up to now and which this Bill is increasing.

I should be the last to suggest, therefore, that noble Lords on the opposite Benches in this House were all opposed to the community spirit of this country—it would be a serious slander on their attitude; they are neither as a whole opposed to it, nor are they even indifferent to it. And what is true of noble Lords sitting on that side of the House is quite as true of noble Lords sitting on the Benches to my right. But what we do say is that inside the ranks of what is called the Conservative or Tory Party are a number of people with a different mentality. Those people are always anxious to reduce, to stultify and to render of little importance—of less importance than they have been—the benefits of the community attitude of the society in which we live to the mass of the people.

We say here—and I think that noble Lords who are as honest with themselves and their Party as I am with regard to my Party and what I have said about noble Lords opposite as a whole—that noble Lords opposite will be forced to admit that there are quite a number of people in the ranks of their own Party who are anxious to decry the Welfare State, to reduce the community benefits arid to make everything a paying thing. Unfortunately, some of those people are influential people in the Conservative Party, and every now and again they have to be given a sop to keep them loyal to the Party. That is the way I look at it and I do not think that noble Lords who know their own Party and who know its mistakes, as I know the mistakes and difficulties of my own Party, will think that I am making a false statement.

What we are afraid of here is that once you start charging for things that were free, or more free than they are under the new circumstances in this Welfare State, you are putting a wedge into the freedom of the community interests of the Welfare State. I was talking to a lady only the other day, and she said to me, "Don't you really think that it is rather a good thing that they should have to pay for some of the benefits they receive? Otherwise they will not appreciate what they are getting, but if they have to pay more for them they will appreciate them more." When she used the word "they", of course what she meant was the members of the lower orders. There, again, I should not like to suggest that she represented the whole of the Conservative Party. There were many great men in the Conservative Party in the days gone by. Disraeli himself wrote about "two nations". Shaftesbury and a number of other noble Lords in the past were taken up with these views. But, as I say, they have been only a part of the Conservative Party.

We are speaking not from any great superiority at all, but from the fact that our ideology, our Socialism, impels us to look at the interests of the community as a whole as distinct from the interests of private individuals. Of course, it is true that among working people there are a number who are slackers and who are out to gain benefits for themselves and let the community go hang. But that is equally true, as I have learned in the course of my life, of all sections of society. In all sections of society there are those who hope to get something and give as little as they possibly can in return; and the rest of us no doubt take care of our own interests—it is only natural that we should. But the great bulk of us in all classes of society are anxious to do a good clay's work for any remuneration that we can get for our services. So I think it is a most dangerous thing that there are some people who imagine that faults of that kind are all confined to one class of society.

That brings me to consideration of this Bill in particular. Of course, the cost of public health has gone up greatly in recent years. Since the Welfare State first gave medical health to large sections of the community who did not benefit from medical services in days gone by, the cost has increased enormously. But there are one or two things about that that I would ask your Lordships to bear in mind. In the course of the debates in another place on this Bill and the other Bill connected with the same subject, one Member brought out this interesting point—I have not checked it but I imagine he is correct when he says it is true—namely, that though the cost of the Health Services is very heavy, the cost of working days lost through ill-health of one kind or another is no less than 75 times as great as the cost of working days lost through industrial disputes. Therefore we cannot ignore the great importance of all the Health Services that we render to men and women at the present time, in the interests not only of individuals' happiness and the welfare of the community, but also of industrial and economic advantage. I feel that that is a most important thing.

in the second place, I do not know how many of your Lordships have recently been reading the articles in The Times newspaper—I expect a great many of you have—but I was most struck just under a week ago by an interesting article on the leader page by a Mr. Lees, who was writing about the cost of the Health Services. Instead of asking us whether our Health Services are costing too much, he asks whether we pay enough for them, because he regards it as of the highest value that they should be adequate. Although the cost of the Health Services has increased in recent years—the noble Earl who initiated this measure gave figures to that effect which I do not in the least challenge—Mr. Lees points out that in fact, compared with the gross national product, the actual cost of the Health Services has remained roughly constant over the years. So that the rise is partly due to inflation and partly due to extension, but compared with the national product it has not increased over the period to which the noble Earl was referring.

Then I read, as no doubt some of your Lordships will have read, a most interesting leading article in The Times. In that article cold water was thrown on the idea that money was being thrown away, and that patients were making improper use of the Health Services; and the writer commented on the danger of restricting in any way the use of those services. I am aware that part of that criticism was dealing with another Bill, which is not before us to-day; but I believe that the general remarks apply, to some extent, both to the measure that we have before us and to that which we shall have before us in the future—or which, at any rate, has to be passed through another place.

Those are very important facts which came out in those articles in The Times: that although the cost of the Health Services is going up every year, it is not increasing as fast as costs are increasing in the United States, where, as your Lordships probably know, the bulk of the health charges are paid individually. So that it is not due to some malign action on the part of those who benefit that the cost of medical services have gone up in this country, for the increase is reflected to an even greater extent in what has happened, I understand, in the United States.

It is said that in this Bill the Government are only carrying out a principle that is more or less accepted. That has been said by the noble Earl to-day, and it was well put by the spokesman for the Treasury during the Third Reading of the Bill in another place. That principle is that part of the cost should fall on the insured people, and part on the taxpayer, in the Budget. As the noble Earl, Lord Dundee, has pointed out, this is undoubtedly a finance Bill, and while the right honourable and learned gentleman the Chancellor of the Exchequer is perfectly entitled, when making up his Budget for the year, to say, "These people shall pay this, and those people shall pay that," we rather dislike the way in which this particular Bill has been introduced "off the cuff" as it were, dealing outside the Budget with this method of making a certain section of the community pay.

If it were part of the Budget we might have said that the Chancellor of the Exchequer was making very severe charges and putting additional taxation on certain sections of the population by direct taxation; and perhaps it is not unjustifiable that some part of the additional cost should come by indirect taxation. What we feel is wrong is that this part, which is entirely what might be called, in a sense, indirect taxation, should be brought in under one Bill, leaving the Chancellor of the Exchequer free to make such provisions as he wishes, with this aspect put out of the way. For there is no question that this is a poll tax, and all down time that has been considered as the most regressive taxation which can be used. We therefore take strong exception to a poll tax, which this proposal is and find it contrary to our fundamental principles.

So, my Lords, I come back to what I said at the beginning. We on these Benches take strong exception to this measure. We find that as a poll tax it is regressive in its character and is whittling away, in part, at the principles of the Welfare State. We are nervous lest this step may be followed by other small steps in some other direction which will have the effect of further whittling away some other part of the Welfare State, and the provisions which we and our forefathers have made for the well being of the people of the country as a whole. Therefore we join entirely with our colleagues in another place in being passionately opposed to this Bill; and although we know that we can only make a protest, we express our opinion in the terms I have used to-day.

3.15 p.m.


My Lords, I shall be even shorter and to the point than the noble Lord who has just sat down, to whom we have all listened with such pleasure, and generally, I believe, agreement. As he knows, I cannot object to all that is in this Bill. I believe it is generally accepted that health is worth paying for, and we know that the cost of health, in money terms, is and has been going up ever since the National Insurance Act, 1946, was passed. That cost has been going up for two reasons. The main reason is the fall in the value of money, which has been brought about, affecting so many people in this country, by the raising of wages following the raising of prices—due to those two things going on together. The second cause is the growing proportion of people who are making use of the National Health Services.

The question is whether this increased cost of health should be met partly by contributions or wholly by taxation, or whether, as I think I have heard suggested, for some reason not yet explained to me, the poll tax imposed by the Labour Government of 1946, in the shape of contributions, should be abolished and replaced wholly by taxation. I do not know the reason for that, and until I am given some reason for the suggestion that that poll tax ought to be abolished, or at least not increased as the value of money falls, I must say that, if I were asked to vote against the Government on this Bill, I could not do so. I am delighted that there will be no question of voting and therefore no question of disagreeing either with the Government or, except verbally, with my friends on the left.

I see no objection to higher contributions from people who are getting higher money wages, and from employers who are getting higher money prices. I do not see at all what is the objection to that, or what hardship that would mean either to employers or to wage-earners. But, as I said when this matter was before the House earlier, there are people who may suffer hardship from an increase in the cost of the Health Service —the non-earners and, above all, the old, who are liable to suffer because the value of any savings or pensions (other than State pensions) with which they have provided themselves is continually shrinking in value, so that they are less able to pay any additional health charges. I feel that the alternative of being able to get National Assistance, subject to a means test, is a denial of the fundamental principle established in 1946, when national insurance and the National Health Service were introduced, and is open to serious objection from practically all people who have suffered from it.

There is just one more thing that I should like to say. As noble Lords who heard me on the last occasion know, I said that I would study the problem of the old and would try to discover whether this National Health Service Contributions Bill was likely to involve hardship and whether everything was being done for the health of the old that ought to be done. I am not going to give to-day the definite answer to that question. So far as I know, I shall give it shortly when we reassemble, after the results of my investigations have been obtained. I can say only this: that I think there is a need for taking some very special care to see that old people do not suffer in health through poverty or ignorance or shyness. There are many people who keep on telling me that the poverty of the old needs investigation to bring it out and so that those who are suffering may be discovered: we cannot sit and wait for them to force themselves on our attention. If that is confirmed by my further inquiries I shall make it clear later.

Meantime, I can only say that I heard with great sympathy what was said by the noble Lord who spoke last. I am glad that he is not asking me to vote with him or against him. I hope that Her Majesty's Government will keep an open mind as to what further steps may ultimately prove to be desirable in the interests of preserving the health of the old people—people even older than myself—if they will kindly do so.

3.23 p.m.


My Lords, after my introduction only a little over a month ago, the first of the Members of your Lordships' House to give me a personal welcome after I left the Chamber was my friend the noble Earl who is presenting this Bill for Second Reading. I am sorry that I should repay his kindness on that occasion by disagreeing, and disagreeing most strongly, with him on this Bill to-day. I have been here on just a few occasions and I have had the pleasure of listening twice to the noble Viscount the Leader of the House, speaking, first, on defence and, secondly, last week on South Africa. It was, I must say, a little disconcerting to me to find that I was in agreement with the greater part of what he said on both occasions. I wondered whether I was very quickly becoming affected by the atmosphere of this Chamber. However, as the second debate proceeded it became obvious to me that probably the noble Viscount had much more occasion for concern than I had, because there were few of the noble Lords who spoke on the other side who were agreeing with him; and it became obvious to me that what the Prime Minister called "the wind of change" was regarded by noble Lords on the other side, not so much as a beneficent breeze but as a damnable draught.

It is obvious, however, that in home policy, particularly in relation to the Welfare State, there is much more agreement among noble Lords opposite, and if there are, in fact, differences among them it is merely over method and not over principle. If some noble Lords opposite had their way, I have no doubt that there would be a much more open attempt to dismantle some of the principles of the Welfare State. But Ministers, at any rate, are more cautious. Some people might say they are more cunning. Their line is, "If people wish to have social services, let them have them, but we will make sure, a the years go by, that those who find it necessary to benefit from this Welfare State shall pay more and more directly out of their own pockets". I would take issue with the noble Lord, Lord Beveridge, and I was very surprised at what he said. He said that health is well worth paying for. It was because the research which he undertook showed that health was beyond the reach of many people in the country, because they could not pay for it, that the Service was introduced.

While it may or may not have been a reasonable thing (and there are obviously two opinions about it) for the then Government to have introduced the element of poll tax, at least the Government might have been content to let it rest where it was. The figures which the noble Earl gave in resenting this measure to us indicated that when consideration of the Service was first before the House the cost was £336 million, of which £41 million was paid in contributions. I have worked that out, as a percentage of contributions to the total, as being 12.2 per cent. The noble Earl did it another way: he worked out the Exchequer's percentage of contribution. But what is under consideration to-day is what the contributors are to pay, and I prefer, therefore, to direct your Lord-ships' attention to the former percentage. When the cost had risen to £850 million, the estimate for this present year, the contributions were estimated to be £113 million. By the same method, £113 million is 13.3 per cent. of £850 million; so the poll tax, even without any alteration in contribution, is already slightly higher than it was when it was originally fixed.

What does the Government's proposal turn this into? It increases the poll tax element from 13.3 per cent. to 17.4 per cent., by far the highest percentage for contributions that we have ever had. It is argued, or it was argued in another place, that it is necessary to do this because there must be a budgetary limit to what is being spent on the social services. Quite frankly, I do not understand this. Many times, as a member of a local authority, when I sought to have powers to do things in my own little area I was told, when we were willing to do the things ourselves, that it did not matter whether we were spending our own capital or seeking to get a Government grant: the most important thing was the overall expenditure, because the economy of the country required a firm check on the overall expenditure.

On this Bill, the noble Earl has stated, quite frankly, that when we are told there are to be economies we do not mean a cutting down of the Service, nor do we mean the imposition of a ceiling. If, therefore, it is accepted that the money which has to be spent is a desirable expenditure in itself, by the arguments which the Government advance in other directions it can matter little out of which of the national pockets this money comes. The result of the methods by which the Government are doing this is that the increases of direct contributions are to place the largest share of the burden on the shoulders of those who are least able to bear it.

I should like your Lordships to bear with me for a minute or two while I translate the charges proposed in this Bill into an equivalent in income tax. At the present time, the man who earns £12 a week, pays on the taxable part of his income at the rate of 1s. 9d. in the £. This increase of 10d. a week, added to his income tax, if it were all income tax, would be the equivalent of an increase of 11d. in the £ in income tax, and would take his contribution up to 2s. 8d. in the £. The man with £15 a week is presently paying on his taxable income at the rate of 3s. 4¼d. in the £. The effect of this 10d. increase is to increase his rate of taxation by 3d. in the £. The man with £2,000 a year is presently paying on his taxable income at the rate of 6s. 8¾d. The effect of the increase of 10d. per week is to increase his rate of tax by ½d. in the £. The man who earns £5,000 a year is presently paying at the rate of 9s. 11.14d. in the £. I am sorry to have to go into decimals, but it is the only way I can show the difference that this 10d. will make to him. It will take him up to 9s. 11.29d.; so his tax will go up one-seventh of 1d. in the £.

Now that is bad enough, but we have to remember that this is not the first time that the Government have done this. In ten years of alterations in pensions and alterations in insurance benefits and health benefits, the contribution has gone up and up. When the Government inherited it, it was 4s. 11d. that the adult male worker paid. To-day, as the noble Earl has said, it is 9s. 11d., with another 10d. to come. The effects of the total transference to direct contributions during the Government's ten years of manipulations are staggering. The £12 a week man, when he adds to his income tax the amount that he is paying in direct contributions, is paying on the increase—not his total, but just the increased share that the Government have placed on him—not at 1s. 9d. in the £ but at 8s. 2½d. in the £ on his taxable income; the £15 a week man is paying at 5s. 2d.; the £2,000 a year man is paying at 7s.0¼.; and the £5,000 a year man at 10s. 0.16d. The equivalent increases in rates are: for the £12 a week man, 6s. 5½d. in the £; for the £15 a week man, 1s. 9¾d. in the £; for the £2,000 a year man 3½d. in the £; and, for the £5,000 a year man, 1d. in the £. I did not take it up to the £24,000 a year man, because that coin has been made illegal tender.

There was one other point that the noble Lord, Lord Beveridge, made to which I wish to refer. He said that he did not see why a higher-paid worker, or an employer who was gaining higher profits, should not pay more for the services. I agree with him entirely: there is no reason why such people should not pay more. But it seems to me that the obvious and the most equitable way that each should be required to pay should be according to his means, and that a tax which says that, from 1951 to 1961, each individual, whether he is getting £9 a week or whether he is getting £900 a week, should pay the sum of £15 3s. 4d. in additional contributions is wrong; and there is nothing which can be said either from the Government or from the Liberal Benches which will persuade my colleagues on these Benches that there is either equity or even a pretence of justice in these proposals.


My Lords, I wonder whether the noble Lord, as he has referred to the Liberal Benches, would allow me to say that the poll tax —that is to say, the system of contributions for the National Health Service —was not proposed by me in the Beveridge Report at all. I left it absolutely open. The poll tax—contributions to the Health Service—was invented by the Labour Party when they brought in the Health Service. I am very glad they did bring the Health Service in, but they invented the poll tax, and I have no responsibility at all for the idea of contributions to the Health Service.


I am quite willing to agree that the noble Lord, Lord Beveridge, had no responsibility for that poll tax. It would therefore be surprising if he did not find it much easier to agree with the arguments that I have advanced to-day: that the poll tax, whether introduced by a Labour Government or increased by a Conservative Government, is by itself a bad thing.


My Lords, may I ask whether I must agree to the things that the Labour Party do, not on my advice?


Perhaps there will be an opportunity to pursue the argument with the noble Lord, Lord Beveridge, on another occasion. The important thing is not what he wishes to do or what I wish to do: the important thing is what Her Majesty's Government are determined to do. I should not like to carry the figures any further, except to say this: I have not referred to the poorest section of the community, but perhaps £9 a week is a fair figure to take because it is the figure at which the Government have pitched the beginning of payment for graduated pensions —the minimum rates are payable at that wage and less. Now because that man does not pay any income tax at all, it is impossible to follow the analogy that I have made in relation to higher-paid wage-earners, but it is possible to follow an income tax comparison in another way.

The fact that this man has to pay an extra 10d. a week has exactly the same effect on him as if the allowance for his wife were abolished. So far as the £9 a week man is concerned, the total effect of the 5s. 10d. (or the 5s. 8d., as it will become in a day or two) is to wipe out £181 of his allowances. For a man with £10 a week, the total effect of all that the Government have done is to wipe out £140 of his allowances—in other words, to say to him, "You will not be entitled to any personal allowance before you pay tax". One can imagine the reactions both inside and outside the Houses of Parliament if the Government announced changes of that kind in the system of income tax allowances: but because it has been done in small sums of a shilling or a few pence per week in five, six or seven different Bills, the Government have accomplished exactly the same thing as if they had made this radical alteration in taxation. It seems to me, my Lords, that, whatever may be the policy of the Conservative Party on foreign and colonial affairs, their doctrines in relation to home policy remain quite unchanged; and if it were my business to write their next Election Manifesto (which I have do doubt I shall not be invited to contribute to), I would suggest that under "Home Policy" all that they need write is: "St. Matthew, Chapter 25, Verse 29".

3.40 p.m.


My Lords, I think we all appreciate the depth of feeling with which the noble Lord, Lord Pethick-Lawrence, and his colleagues look upon community service, including the Health Service and social services of all kinds, which, in the noble Lord's opinion (though not in ours), will be adversely affected by this Bill. We also appreciate the reasons why the noble Lord did not wish to press his dislike of the Bill more strongly than he felt right to do. He will not, I think, expect me to pursue the argument now, but it would be wrong if I did not acknowledge both the sincerity and the moderation of the noble Lord, virtues which we do not always find in political speeches. Perhaps we should also express our gratitude to the noble Lord for his sensible decision not to keep your Lordships up every night for some time to come.

As the noble Lord indicated, there are some differences between this House and the other place. I think one of them is that members of the Party opposite in your Lordships' House are all very fond of each other. It is not always necessary for them to conceal their antagonisms, perhaps, by talking for two and a half hours each at three o'clock in the morning.

I am grateful to the noble Lord, Lord Beveridge, for his intervention and for the balanced nature of his criticisms. It is nice to feel that if there could be a Division on this Bill, on balance the noble Lord would probably vote for it. We always look with particular respect at what the noble Lord says on these matters, since he was the author of the Report on which our Health Service is based. I hope he will pursue his inquiries and representations concerning old people, and particularly, as he said, the possibility that some of them may be deterred, by shyness or other reasons, from taking advantage of various services to which they are entitled. Of course, so far as this Bill is concerned, the noble Lord will agree that National Health contributions are not payable by retired persons—men over 65, or women over 60—and this Bill is concerned only with those particular contributions.

It was a matter of great regret to me that when my noble friend Lord Hughes made his maiden speech to your Lordships he chose to do so on a Monday when I had to fulfil an engagement in Dundee, where I got a very different kind of "damnable draught" from that to which the noble Lord referred in his speech just now. But I am delighted to have heard him now, to have the opportunity of congratulating him on his performance in this House, and to say that I hope we shall hear him again very often. The noble Lord, as your Lordships know, fulfilled for six years the office of Lord Provost of Dundee, performing signal and outstanding services during that period for his native city. I think it is a very good thing that he should have come into your Lordships' House. He said something about being affected by its atmosphere, but it is very satisfactory to me to see that he has not been affected in any way in the vigour and ability with which he speaks, either in his grasp of the subject, in the power of 'his expression, or in his love of accurate mathematical analyses. I am sure your Lordships heard him with great appreciation.

As he said, he did not want to give us too many figures, but if he had given us a few more he might also have mentioned that while National Insurance contributions have, as he said, gone up from 4s. 11d. to 10s. 7d., benefits and pensions in the same period have gone up from 26s. to 57s. 6d., which is quite an appreciable difference. I hope the noble Lord will speak again very often, both on Scottish and on other subjects; and I am glad to have the opportunity, which I missed on an earlier occasion, of congratulating him and welcoming him to your Lordships' House.

On Question, Bill read 2a: Committee negatived.

Then, Standing Order Number 41 having been suspended (pursuant to the Resolution of March 23):


My Lords, in moving that the Bill be read a third time, I have it in command from Her Majesty to signify to the House that Her Majesty having been informed of the purport of the National Health Service Contributions Bill, has consented to place Her Majesty's interest, so far as it is concerned on behalf of the Crown, at the disposal of Parliament for the purpose of the Bill. I beg to move.

Moved, That the Bill be now read 3a. —(The Earl of Dundee.)


My Lords, I should like to say, just before the Bill passes the third time, that I very much liked the tribute which the noble Earl paid to my noble friend Lord Hughes, but I felt that perhaps he might, as we had been so reasonable on the matter, have put a little more detailed argument in reply to those extraordinary deductions which my noble friend Lord Hughes was able to prove from the studies he had made. I do not wish to say any more. Perhaps on some future occasion, when the noble Earl is answering on an economics debate, he may have some details to put forward on those two angles, and which can be criticised from those two angles, and then perhaps we may get a proper assessment of our fairness in this particular matter.

In the meantime, I am sorry that the noble Lord, Lord Beveridge, went so far as to say that he might, in certain circumstances, if he had been challenged to vote, have voted for the Bill; but seeing that we hardly ever vote on any Government measure on Second Reading from a point of view which is convenient to both sides of the House, he would never be called upon to do that in any case. After all, this is a Money Bill, and it would be useless to do so.


My Lords, as I have been referred to again, may I say something which may possibly correct a statement of the noble Earl, when he was speaking for Her Majesty's Government? On the occasion when this question was before this House on a Motion by the Labour Party, the Liberals in your Lordships' House did not vote for the Government or against the Government: they did not vote at all. I want to make that possible correction of the expectation that was raised—that they would on this occasion have voted with the Government. I think we should not have voted at all.


My Lords, could I ask whether that created a precedent for the Liberals?

On Question, Bill read 3a, and passed.