§ 3.41 p.m.
§ THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE)My Lords, before we proceed with the debate I think it would be for your Lordships' convenience if, before I intervene in the debate myself, I were to read the statement which is now being made in another place by my right honourable friend the Minister of Pensions and National Insurance, on National Insurance and war pensions.
My right honourable friend is to-day presenting a Bill to increase benefits and contributions under the National Insurance and Industrial Injuries schemes. The Bill will be available in the Printed Paper 31 Office this afternoon together with an explanatory White Paper and a report by the Government Actuary.
It is proposed that the standard National Insurance rates of unemployment and sickness benefit and flat-rate retirement pensions should be increased by 10s. a week for a single person from 57s. 6d. to 67s. 6d. and by 16s. 6d. for a married couple from 92s. 6d. to £5 9s. Allowances for children will be increased by 2s. 6d. a week. That, of course, is separate from the family allowances. These increases mean that the rate for a man and wife with three children will be £8 11s. including family allowances. The family allowances are not affected by this rate. The standard rate of widow's pension will also be raised to 67s. 6d. a week. The widowed mother will have her personal benefit increased to 67s. 6d. a week and the allowance for each of her children will be raised by 5s., thus providing allowances of 30s. a week for the first child and of 22s. in addition to family allowances for each other child. In other words the preference which in recent years the Government have accorded widowed mothers as a class is being extended.
The Bill also provides that a widowed mother in work will always keep at least 26s. of her personal benefit under the earnings rule. This amount will be the difference between benefit for a single person and that for a dependent wife. Taken together with the regulations which my right honourable friend has submitted to the National Insurance Advisory Committee for raising the earnings limits for widowed mothers from £5 to £6, this represents a substantial improvement for widowed mothers in work.
Under the Industrial Injuries Scheme the standard rate of injury benefit and of the 100 per cent. disablement pension will be increased from 97s. 6d. to £5 15s. a week. The supplementary allowances will also be increased, and the widow's pension of 64s. will become 75s. a week.
As your Lordships know, the raising of pensions is a complex business, but I hope that the new rates will operate from the week beginning the 27th of May. If the Bill is passed into law by the end of February, as I hope with your Lordships' co-operation it will be, it is 32 the Government's aim exceptionally to bring in the new higher rates of unemployment and sickness benefit together with injury benefit as from the 7th of March.
The extra cost in the first full year of the higher rates of pensions and benefits will add about £212 million to expenditure from the two Insurance Funds. In contributory schemes improved benefits involve increased contributions. The minimum total contribution paid by the employed man will be increased from 10s. 7d. to 11s. 8d., and that paid by his employer from 8s. 7d. to 9s. 8d. As to the graduated part of the scheme, the maximum earnings on which contributions are charged will be raised from the present £15 to £18 a week, and the man earning £18 a week or more in the graduated scheme will pay 19s. 4d. a week in all as compared with 15s. 8d. at present, and the employer 17s. 4d. as compared with 13s. 8d. The extra graduated contributions will count for extra graduated pension. The total contribution for the employed man contracted out of the graduated scheme will go up from 12s. 2d. to 14s. 1d. and that for his employer from 9s. 10d. to 12s. 1d. There will be corresponding increases in other contribution rates. The contribution changes will operate from the beginning of June.
As regards National Assistance, although the rates were raised as recently as last September, I am glad to be able to tell the House that the National Assistance Board intend to make proposals for some further increase in them to come into effect at the end of May, at the same time as the increases in National Insurance pensions, so as to improve again the standard of living of the poorest members of the community.
Meantime the Bill my right honourable friend is presenting today includes a temporary provision which will have the effect of ensuring that a person whose unemployment or sickness benefit is supplemented by National Assistance will not get less advantage from the benefit increase in March, than he would if the Board's proposals were in operation at the time.
So much for the Bill. Now war pensions, which are a matter for the Royal Warrants. Increases will be made in the basic rate of pension for 100 per cent. 33 disablement from 97s. 6d. to £5 15s. The standard rate of pension for war widows will be raised from 76s. to 90s., with appropriate increases in the rates for their children. There will also be increases in the allowances for constant attendance, unemployability and lowered standard of occupation and in the maximum rent allowance payable to war widows with children. I will circulate
| PRINCIPAL CHANGES IN WAR PENSIONS | ||
| Present rate | Proposed rate | |
| Disablement pensions (100 per cent, assessment):— | ||
| ex-private or equivalent | 97s. 6d. a week | 115s. a week |
| ex-non-commissioned officers | Increase of 17s. 6d. a week | |
| ex-officers | Increase of £46 a year | |
| ex-regular officers—disablement addition | Increase of £46 a year | |
| The amounts of weekly allowances and terminal gratuities for assessments of less than 20 per cent, will also be increased proportionately. | ||
| Constant attendance allowance | 20s. a week | 25s. a week |
| 30s. a week | 37s. 6d. a week | |
| Normal maximum | 40s. a week | 50s. a week |
| 60s. a week | 75s. a week | |
| Exceptional maximum | 80s. a week | 100s. a week |
| Unemployability supplement | 63s. a week | 74s. a week |
| The allowances payable with this supplement (and with treatment allowances) will also be increased:— | ||
| Allowance for wife or other adult dependant | 35s. a week | 41s. 6d. a week |
| Allowance for first child | 17s. 6d. a week | 20s. a week |
| Allowance for other children | 9s. 6d. a week | 12s. a week |
| Allowance for lowered standard of occupation | Up to 39s. a week | Up to 46s. a week |
| Widows pensions:— | ||
| Widows of ex-privates or equivalent | 76s. a week | 90s. a week |
| Widows of ex-non-commissioned officers | Increase of 14s. a week | |
| Widows of ex-officers | Increase of £37 a year | |
| Allowance for each child:— | ||
| Other ranks | 29s. a week | 34s. a week |
| Officers | £83 10s. a year | £96 10s. a year |
| Rent allowance for widows with children | Up to 29s. a week | Up to 34s. a week |
| Pensions for unmarried dependants who lived as wives of men now deceased:— | ||
| Other ranks | 68s. 6d. a week | 82s. 6d. a week |
| Officers | £203 a year | £240 a year |
| Orphans' pensions:— | ||
| Other ranks:— | ||
| Under 15 years | 34s. 6d. a week | 40s. 6d. a week |
| 15 years or over | 46s. a week | 54s. a week |
| Officers:— | ||
| Up to 18 years | £128 10s. a year | £149 10s. a year |
| Adult orphan incapable of self-support | 57s. 6d. a week | 67s. 6d. a week |
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, I am sure the House is indebted to the noble Earl for the statement, and for the manner in which it has been made. No one who has been studying the conditions of people who are necessarily receiving unemployment, sick benefit, and the like, will think that the proposed increases for these people are not specially needed at the present time—they certainly are. We on this side of the House think that some of these improvements are belated.
§ a list of all the principal changes in the OFFICIAL REPORT. The main new rates will come into operation in the week beginning the 27th of May. The additional cost to the Exchequer on war pensions will be £15 million in the first full year.
§ Following is the list of changes referred to:
§ They have all been urged upon Her Majesty's Government, especially by my Party in another place, for a considerable time back, and from the statement there will still, it seems, be some delay in putting this obviously and necessarily complicated scheme into operation at a very early date. However, in view of the very serious days through which we have been going, and with the various economic measures which have been proposed, like the pay pause, the failure of the pay pause, and similar arguments which have 35 been before the House from time to time, this proposal will require very careful study.
§ The noble Earl was good enough to make clear what is the estimated cost to the two Insurance Funds dealing with that side of the matters contained in the statement, and he said that it is going to cost them over £200 million. But we did not get an estimate—I daresay he will be able to tell me whether we can find it in the White Paper or the Bill—of what will be the total yield in the first year, say, of the increased contributions by the workers, on the one hand and, on the other hand, by the employers; and whether in fact the actual increases of benefit are going to amount to less or to more than the increases in the contributions in those two directions. We must get information like this if we can, because I should say that in some industries, at any rate—and I daresay that noble Lords in the House with employing experience would know—these rates of increased contribution, especially at some of the higher levels, will probably more than wipe out the very arguable rates of increase in wages which have been given in the last twelve months. If the noble Earl would help me in that direction I should be much obliged.
§ THE EARL OF DUNDEEI am greatly obliged to the noble Viscount for his observations. I hope we shall have an opportunity of discussing this subject with fuller knowledge at an early date. I think the noble Viscount will find all the detailed information he alluded to in either the White Paper or the Report of the Government Actuary, which will be in the Printed Paper Office this afternoon. I am sure your Lordships would like to have the opportunity of digesting these figures before we discuss them. And may I take the opportunity of congratulating the noble Viscount on his promotion to an Earldom?
§ VISCOUNT ALEXANDER OF HILLSBOROUGHI am much obliged to the noble Earl. May I take it, then, that we shall be certain to discover, either from the Bill itself or the Financial Resolution, of which we shall obviously get a copy, whether this new announcement will involve an actual increased charge on the general taxpayer?
§ THE EARL OF DUNDEEI do not know whether that will be specifically in the Bill, but it will certainly be plain from the White Paper and the Report of the Government Actuary.
§ BARONESS SUMMERSKILLMy Lords, of course both sides of the House will welcome this announcement by the Government, and the Opposition will feel considerable satisfaction that the Government have done as they have frequently been requested to do. In this short time, it is a little difficult to analyse these figures, but does the noble Earl realise that what his announcement means, in fact, is that we are increasing the allowance in respect of children by 4½d. a day, and that we are increasing the flat rate to the unemployed and the sick by 1s. 6d. a day? Although he says that this, with all the other increases, will mean that an unemployed man with a wife and three children will have £8 and a certain number of shillings, do not let us forget that from that the rent has to be subtracted before these five people are fed and clothed and the rooms are heated. I think it would not be wrong to assume that the rent might easily be £2 or £3 a week, so let us subtract the £2 or £3 a week from the £8. We then find that there is something approximating £5 on which these people have to live—five people in this weather, in the winter months, with the extra demand for fuel and the extra demand for food. And let us bear in mind that this subsistence level—and it can only be a subsistence level—does not allow for any savings. When these men are in work, they are able to save and thereby, of course, replace necessities in the household. There can be no savings if there is only £5 or £6 a week on which to feed a family. Therefore, the position deteriorates—and that is why I attach so much importance to increases.
The other point I have to make before the Bill comes before us is this: why, oh, why, do we not abolish the earnings rule, if only for widowed mothers? Every noble Lord here will agree with me that women are wanted for domestic work, they are wanted as auxiliaries in hospitals, and they are wanted to care for the old folk or whoever it may be. In these days, those who in the past may have considered themselves privileged and able to get this help find it 37 is denied them. And still we penalise the widowed mother, of all people. We are told the rate has gone up to £6. In a hospital, working full-time, she could earn more than that, and she would be enabled, of course, to pay to have her children cared for. But we still allow these women to limit their earnings, although the need for their work and for an extra pair of hands in households throughout the country is desperate. I do wish the noble Earl would answer that question first, and then tell me why the increase in respect of the children of 4½.d. a day is so niggardly.
§ VISCOUNT STUART OF FINDHORNMy Lords, before the noble Earl replies, may I ask which subject we are debating this afternoon?
§ THE EARL OF DUNDEEMy Lords, I was going to mention, with respect to the noble Baroness, that it is not usual to debate a statement of this kind. Your Lordships generally prefer to have one or two supplementary questions; and I am sure that at an early date we shall have an opportunity of debating this subject as fully as any of your Lordships wish. I do not think your Lordships would wish me to prolong it into anything in the nature of a debate.