HL Deb 26 February 1963 vol 247 cc15-23

3.19 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 and 2 agreed to.

Clause 3 [Graduated contributions]:

BARONESS SUMMERSKILL moved, after subsection (1) to insert: (2) The lower limit on the amount of weekly pay taken into account under section 1 (1) (b) (ii) of the National Insurance Act 1959 (which fixes the graduated contributions payable by employees and employers) shall be increased from £9 to £10".

The noble Lady said: I must confess that I decided to put this Amendment and the following two on the Order Paper after listening to the Minister in another place because I detected, I thought, a note of sympathy in his voice when he was dealing with those aspects of the Bill which I seek to bring before your Lordships this afternoon. I hope that perhaps the noble Earl subsequently will confirm that I did detect a note of sympathy by agreeing to the Amendments.

I do not propose to go into any great detail, because actuarially the matter is very complex; and I am sure the noble Earl has read Hansard carefully and is familiar with the arguments which deal with certain aspects of the Amendment. My object is this. Noble Lords will recall that when it was decided to introduce a graduated insurance scheme the Government felt it was necessary to establish a wage floor and a wage ceiling; and the wage floor is £9. My Amendment seeks to raise the £9 to £10, for this reason. I think all those who have taken an interest in insurance schemes will agree with me that the flat-rate contribution which is made by workers over a number of years finally results in a benefit which is very fairly related to the contribution; and it has been argued on many occasions that it is a good bargain. Nobody will dissent from that. But when it comes to the graduated contribution, it is another matter altogether. No doubt the Government fixed a floor of £9 because they recognised that those in the lowest income brackets are not getting a bargain. Those are the facts, and I think, again actuarially, most people will not dissent from them. The Government, and their wise advisers in this Department, have fixed £9 in order to save the lowest wage earners from a certain hardship.

If we accept that—and I hope the noble Earl will—I want to argue that the £9 should be raised to £10. I am sure that noble Lords know many people, whom we regard as not very well off, earning up to £10 a week. It did appear, therefore, in the first place, that I was seeking to deprive some people of being included in the graduated insurance scheme. On the contrary, I am seeking to protect them. One particular category mentioned in relation to this was the daily worker, the woman who gets £7 a week, say, as an office cleaner, who would certainly not be included in the scheme because she is below the floor of £9. On certain occasions, let me say, when the House is in Recess, she is expected to clean certain offices, perhaps in this building, and more often she will be earning above £9. If she is earning above £9 only on certain occasions she is then compelled to make this contribution to a graduated insurance scheme. All I am asking now, therefore, is that the £9 should be raised to £10 in order to protect more low-paid wage earners than would be included if the floor were kept at £9. I beg to move.

Amendment moved— Page 3, line 19, at end insert the said subsection.—(Baroness Summerskill.)


I must congratulate the noble Lady on her diligence in going to listen to so much of the proceedings in another place on this Bill, which I think is a very commendable thing to do. Whether she has correctly interpreted the sentiments and tone of my right honourable friend the Minister on all these Amendments I should not like to say. On the second of her Amendments, she may be glad to know that, as a result of my right honourable friend's consideration, I am anticipating her by an Amendment of my own. But on the point of this Amendment, so far as I know, my right honourable friend has not entertained any idea of yielding.

As the noble Lady explained, this Amendment is a verbatim repetition of that moved in another place, and to which she listened. I remember, as I am sure all your Lordships and, indeed, the noble Lady will, that when we brought in the 1959 Bill one of the criticisms was that there were 7 million workers earning less than £9 a week who had no chance of getting a higher graduated pension; and one of the arguments brought against the Bill was that it did not do anything to bring them in. Now, on this Bill, the criticism has been the other way round: that it is perhaps hard (and I quite follow the noble Lady's reasoning on this point) that those who are earning between £9 and £10 a week should have to pay up to (I think it would be) 11d. a week on a £10 wage for the "bricks", as they are called. These bricks build up at sixpence a week for every £7 10s. contributed by a male worker. It is arguable—and we did go into this, as your Lordships remember, fairly thoroughly on the earlier Bill—that if you take the graduated contribution out of its context, by itself, although it is a reasonable bargain, it may not be as good as some others which might be obtained with the same money. The Government's answer to that has always been that you cannot separate it from the flat-rate contribution; it is actuarially bound up with it, and we must consider the two together.

If the Government were to accept the proposal to raise the floor from £9 to £10, that would mean that an additional £46 million would have to be raised to meet the resulting deficit in the Fund: because it would not be only the people who are earning between £9 and £10 who would be exempted from this graduated contribution, but everybody earing up to £18 and above would be exempted from that slice which goes from £9 to £10. In order to raise the additional funds necessary to keep the Insurance Fund solvent, it would be necessary to raise the contributions by 9d.—that is to say, 4½d. a side on the flat-rate contribution payable by the insured worker and his employer—and in many cases the worker would suffer a greater loss by the imposition of this additional flat-rate contribution than he would gain by being relieved of the extra graduated contribution, when the benefit is taken into account.

I listened with some sympathy to the noble Lady's example of the part-time employed person (she took as an example an office cleaner) who might be earning normally just under £9, but in certain weeks might earn £10 or more, so that she would pay irregular graduated contributions. Naturally, in these circumstances, it might take a long time to accumulate the first "brick" which would entitle her to some graduated return when the time came for her to receive her pension. That is true, of course. But the same difficulty would apply wherever you fixed the floor. If it were raised from £9 to £10 you would have the same difficulty with people earning £9 15s, a week, who occasionally, as a result of overtime or some other kind of supplementary employment, had weekly earnings of over £10.

While I understand the reasons for this Amendment being put forward, owing to the fact that it would upset the finances of the Fund there would not be any hope of getting my right honourable friend to accept it in present circumstances. As the noble Lady did not go further I shall not go further either into the contingent considerations arising on the finances of the Fund. I would only say that I regret that my right honourable friend does not see his way to accept this Amendment.

On Question, Amendment negatived.

Clause 3 agreed to.

Clause 4 agreed to.

3.22 p.m.

THE EARL OF DUNDEE moved, after Clause 4 to insert the following new clause:

Allowances in respect of incapacities arising from pre-1948 employment

".—(1) The Workmen's Compensation and Benefit (Supplementation) Act 1956 (which provides for the payment of allowances out of the Industrial Injuries Fund in cases of injury or disease arising out of pre-1948 employment and resulting in total disablement or incapacity for work), as amended by section 1 (1) of the Family Allowances and National Insurance Act 1961, shall have effect with the substitution in section 2 of a rate of allowance of 65 shillings a week for the rate of 32 shillings and 6 pence a week.

(2) The Family Allowances and National Insurance Act 1961 (which among other things provided for the payment of improved allowances in respect of incapacities arising from pre-1948 employment) shall, in relation to the payment of allowances for periods of incapacity for work falling after the coming into force of this subsection, be amended— (a) by the substitution for section 1 (2) (a) (which altered to 66 shillings and to 50 shillings the monetary references in section 2 of the Workmen's Compensation (Supplementation) Act 1951 which operate to limit the maximum weekly rate of allowance which under any scheme under the said Act of 1951 may be paid in cases of injury or disease arising out of pre-1924 employment) of the following paragraph— '(a) shall be amended by the substitution in section 2 (2) and (8) of references to 86 shillings and to 70 shillings for the references to 66 shillings and 50 shillings (which operate to limit the maximum weekly rate of allowance under any scheme); and'; and (b) by the substitution in Section 1 (2) (b) and in paragraph 1(d) of Schedule 1 of references to 30 shillings for the references to 10 shillings (which operate to limit the maximum weekly rate of allowance which under any scheme under the said Act of 1951 may be paid in cases of injury or disease arising out of post-1923 employment).

(3) The Industrial Diseases (Benefit) Acts 1951 and 1954 (which authorise the making of schemes for the payment of allowances out of the Industrial Injuries Fund in cases of disease arising out of pre-1948 employment but not entitling the sufferer to workmen's compensation) shall be amended by the substitution in Section 3 (2) of the Pneumoconiosis and Byssinosis Benefit Act 1951 of the words 'or, if the disablement is not total, 42 shillings and 6 pence' for the words' or, if the disablement is not total, 27 shillings and 6 pence' (which were substituted by Section 1 (3) of the said Act of 1961); and any scheme under those Acts of 1951 and 1954 which is in force at the coming into force of this subsection shall have effect accordingly.

(4) If an allowance under the Workmen's Compensation and Benefit (Supplementation) Act 1956 is awarded to a person who has previously been awarded an allowance under the Workmen's Compensation (Supplementation) Act 1951 or the Industrial Diseases (Benefit) Acts 1951 and 1954, and the conditions for entitlement to the two allowances are inconsistent, the decision awarding the allowance under the Act of 1956 shall direct that any sums paid under the other award to which the beneficiary cannot be entitled in addition to the allowance under the Act of 1956 shall be treated as paid on account of the allowance under the Act of 1956:

Provided that the award shall be subject to the condition that if there is a requirement to repay any sums paid on account of the allowance under the said Act of 1951 or the said Acts of 1951 and 1954 the direction shall not have effect in relation to those sums."

The noble Earl said: This Amendment deals with the very intricate subject of the former Workmen's Compensation Act which ended in 1948, and which was succeeded by the Industrial Injuries Act of that year. Under the Industrial Injuries Act, if a workman gets hurt a medical board has to assess the percentage of disablement which he has suffered: 100 per cent. means total disablement, and the Board may assess it at 90, 80, 70 or 50 per cent., or indeed any percentage, for which he receives a proportionate payment under the Act.

Your Lordships will see in Schedule 3 of the Bill a table of figures which gives the new rates payable under the Industrial Injuries Act, as amended by this Bill. Under the old Workmen's Compensation Act, the principle of compensation was quite different. No contributions were payable by the worker. The compensation was payable by the employer who, of course, usually took out an insurance policy to cover it. The payment depended not on the extent of the injury, but on the amount of earnings which the injured worker was found to have lost as a result of his injury. That was a matter not for medical ascertainment but, if necessary, for legal ascertainment in the courts. He was entitled to obtain, subject to a certain maximum, two-thirds of the difference between the wage which he was actually earning and the wage which he would have been earning if it had not been for his injury. That is still the position, but it has been improved by various pieces of legislation since 1948. There was the Workmen's Compensation and Benefit (Supplementation) Act, 1956, and then the amending measure of 1961. But these did not have the effect of putting the wholly or partially disabled worker, whose injury was suffered before 1948, in such a favourable position as the worker who was injured since the Industrial Injuries Act, 1948, was placed on the Statute Book.

In another place a new clause was moved, again identical in wording to the next new clause which the noble Baroness, Lady Summerskill, has put on the Paper. It was debated at considerable length. I think I am right in saying that it was supported or commended by speakers in another place from both sides, and my right honourable friend the Minister said that although he could not promise to do anything in this Bill he would consider urgently what he could do to meet the wishes of Members of another place who had spoken. On that undertaking, the new clause was withdrawn. My right honourable friend has given urgent consideration to the subject, and he has drafted this Amendment which I am now moving.

I will not trouble your Lordships by going through each subsection in consecutive order, but I will indicate as briefly as I can what it does, first, for totally disabled men who are now receiving benefits under the Workmen's Compensation Act, and then for partially disabled men. There are two divisions of each class; that is, people receiving benefits under workmen's compensation, and the time-barred men, who are in a different category. They are the people suffering from slowly developing malignant diseases, mostly byssinosis and pneumoconiosis, which develop so slowly that they may not have been detected in time to earn a right to compensation under the old Workmen's Compensation Act. They were provided for under a new Act—I think it was in the noble Lady's time in 1951.

First, as to the totally disabled men on workmen's compensation. If they are totally disabled they are getting now, if single, 40s. and if married 50s. by way of workmen's compensation alone, together with the allowance payable under the Workmen's Compensation and Benefit (Supplementation) Act, 1956. The present rate of that allowance is 32s. 6d., which means that the total amount being received by a totally disabled man would now be 72s. 6d. if unmarried and 82s. 6d. if married respectively. This Amendment will put their new rate of allowance up from 32s. 6d. to 65s., precisely double, bringing the man's total receipts up to 115s. if he is married and 105s. if he is not, the married rate being equal to that under the new scale for industrial injuries. With regard to the totally disabled time-barred men suffering from these slowly developing diseases, they at present receive a 40s. allowance, whether they are married or single, under the Industrial Diseases (Benefit) Act, 1951, and they get, in addition, the 32s. 6d. payable under the 1956 Act. This Amendment increases the latter to 65s., bringing the aggregate benefit up to 105s. Subject to the qualifying conditions of the insurance schemes, these men can also get the usual dependency increases, if they are otherwise entitled to them, in addition to an insurance benefit. Those are the two classes of what are called "totals"—wholly disabled men.

Now for the "partials". The partially disabled men in receipt of the maximum rate of workmen's compensation, namely, 40s. if they are single and 50s. if they are married, who are at present in receipt of a supplement up to 10s. under the 1961 Act, are now being compensated to the extent of two-thirds of their loss of earnings, subject to this limit of 50s. if they are single and 60s. if they are married. That is the present position. These limits will be raised by this Amendment to 70s. and 80s. respectively. That is the effect of this Amendment, as regards the limits on what a partially disabled man can receive under the Workmen's Compensation Act. As for the partially disabled time-barred men, they are provided for now by way of an allowance first introduced in 1954 under another Industrial Diseases (Benefit) Act. It is now payable at the rate of 27s. 6d. It was originally 20s. before being put up to 27s. 6d. Under this Amendment it will go up to 42s. 6d., an increase of 15s. We also regularise in this Amendment the position of the pre-1924 men.

I do not think I need go further into detail. I think I have given your Lordships a broad and, I hope, reasonably clear outline of what my right honourable friend the Minister has sought to do by producing this Amendment. I hope it will be acceptable both to your Lordships and to those Members of another place who pressed for it and whose wishes my right honourable friend has endeavoured to meet. I beg to move.

Amendment moved— After Clause 4 insert the said new clause.—(The Earl of Dundee.)


I should like to thank the noble Earl for introducing the Amendment. As the one who was responsible for introducing the original Act in 1951, it has given me considerable satisfaction to know that the unfortunate men suffering from dust diseases, byssinosis and pneumoconiosis, will be relieved in this way. Nobody, I think, can say that we are being overgenerous or extravagant in this matter, because, after all, the expectation of life of these men is necessarily limited. The noble Earl's Amendment has been framed in an erudite manner, which makes the Amendment standing in my name on the Order Paper look rather simple, but I shall have the greatest pleasure in withdrawing my Amendment.

On Question, Amendment agreed to.


Before we go on to the next Amendment perhaps it would be convenient to your Lordships now to have the statement on the Yemen. Therefore I beg to move that the House do now resume.

Moved, That the House do now resume.—(The Earl of Dundee.)

On Question, Motion agreed to.

House resumed accordingly.