§ 3.30 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.—(Lord Mitchison.) On Question, Motion agreed to. House in Committee accordingly.
§ [The LORD MERTHYR in the Chair.]
§ Clause 1 [Amendments as to contributions and benefits under Insurance Act]:
§
LORD DRUMALBYN moved, after subsection (3), to insert:
( ) The National Insurance Act 1946 shall have effect as if in subsection (2) of section 17 there were inserted:
(d) in the case of a widow's continuing allowance, any period during which she is under pensionable age and for which she is not entitled to a widow's allowance, a widowed mother's allowance or a mother's pension'".
§ The noble Lord said: I beg to move Amendment No. 1 which goes with Amendment No. 4. The purpose of these Amendments taken together is to provide a continuing payment of £1 for all widows from the time when they cease to receive a widow's allowance, unless they are also receiving a widowed mother's allowance, a widow's pension or a retirement pension. When I was closely concerned with the Ministry of Pensions, my colleagues and I there spent a very great deal of time considering this baffling problem of fairness and doing justice to all widows. I am not moving this Amendment in any spirit of complaint at what the Government are doing. Obviously, they are 371 carrying out what they said they were going to do and, equally obviously, by doing so they raise other questions. I have always felt that when widows are to be treated as a class, they must be given some kind of equality of treatment. But the difficulty about the Bill is that, on the one hand, it removes the earnings rule for widows who are entitled to National Insurance widow's pension; and increases the old 10s. widow's pension under the Widows', Orphans' and Old Age Pensions Act to 30s. On the other hand it does nothing at all for all the other widows.
§ I do not wish to detain the Committee long on this change, but I should just like to show its effect in two respects. First, let us take three women of 45, say, all widowed this month, all with roughly the same insurance experience through their husbands; one married before (I think the date was) July 4, 1948, to a man insured under the old Acts, the second married after that date, also to a man so insured, the third married before 1948 to a man who happened not to be so insured—and, of course, for many the insurance was not compulsory at that time. There one gets a distinct disparity of treatment. Only the first would receive the 10s. pension, now to be increased to 30s.
§ Let us then take the other case of two women, one widowed just under, and the other widowed just over, 50. I am taking the simplest example for the sake of clarity. In the one case the woman who is widowed at just under 50 will get no pension at all, and she will have to pay contributions. The woman widowed at just over 50 will receive full benefit without any application of an earnings rule, and will be exempt from contributions. This is the disparity. How far is it possible to go in mitigating that disparity?—because I quite see that as things are it is impossible in this Bill to do anything more than mitigate.
§ I have chosen the figure of 20s. because I think it will be generally felt that those who are entitled to a benefit under the pre-1946 Act should receive some recognition of the contributions that were paid under that old Act. By giving all widows without any title to any other benefit a 20s. pension, the person receiving a 30s. pension would be 10s. 372 better off. Of course, this is not all in the Bill because, as the noble Lord knows very well, the question of the raising of the 10s. benefit for widows to 30s. is not in the Bill. But I should expect, of course, if this Amendment is accepted, that when the order is introduced to give effect to the increase for the so-called "10s. widow", it would not be made possible for the "10s. widow" to enjoy a 30s. benefit as well as this 20s. benefit.
§
Perhaps I might refer to what the noble Lord himself said on Second Reading. He said—and I quote what in my view are the relevant words—
The main point about widows is … the fact that they have lost the benefit of the husband's earnings in the household."—[Official Report, Vol. 262 (No. 20), col. 257, December 10, 1964.]
That clearly goes for all widows; not merely for widows over 50. So it would seem that there should be some benefit for all widows as such. This seems to me to be the logical conclusion to draw from what the noble Lord said. But I have no knowledge of what this proposal will cost and, quite obviously, a proposal of this kind has to be exploratory in that sense. Perhaps the noble Lord, in replying, will be able to say what such a benefit would cost. It may be objected that the late husbands of the widows in question have not made any contribution towards such a pension. Of course, that is true. But under the National Insurance Scheme benefits are, after all, not related strictly to contributions. If they had been, then beneficiaries would be very much worse off than they are to-day.
§
This Amendment proposes a modest addition to a widow's earnings to help to replace, as the noble Lord put it, "the husband's earnings" It will at least mitigate the sharpness of the distinction between widows who receive full pensions as well as earnings, and those who receive none. I have not attempted to spell out all the implications, but such a continuing pension should be payable in addition to earnings and to sickness or unemployment benefit, like the 30s. pension, but not, of course, in addition to the 30s. pension. The Amendment would go some way, in my view, to helping widows to continue their previous way of life when their husbands were still with them. I beg to move.
373
Page 2, line 6, at end insert the said subsection.—(Lord Drumalbyn.)
§ LORD MITCHISONI am afraid that I can make no concession either on this or, so far as I know at present, not having yet heard the arguments, of course, on the following Amendments. I am sure that the noble Lord will trust me when I say that we do, indeed, value his experience in these matters, and therefore we do not take his proposals at all lightly. A similar Amendment—not precisely to the same effect but in favour of "no shilling" widows I think even more widely—was discussed in another place. There is, of course, a real problem about these cases. I sometimes feel that this legislation is like a jungle peopled by anomalies: if you cut down one anomaly then half a dozen more spring up in its place. Really, it is a case for a full and proper review; and that is the substance of the answer I must make to-day.
I should just like to add a word or two. I think the noble Lord must recognise that this Amendment certainly does not bring in all "no shillings" widows; it leaves whole groups of them out of account. The reason why the "10s. widows" had special treatment is that they were in a special position. If the noble Lord recollects, Mr. James Griffiths, in introducing the original Act, made this concession—in form it was subsequently made by regulations—because of accrued rights under the old Contributory Pensions Act. You can call them accrued rights or expectations, as you like. That is the reason for the "10s. widows" and they have always been in a very special position, because I think they are the only group of people under this legislation who have had this particular benefit. For good or for ill, it was given them in 1948, and it was actually based on a figure originated some twenty years earlier.
In considering whether it is right or wrong to continue that position, one has to take into account that they have now had 10s.—not the same people, of course, but the same category of people—for a very long time; and 10s. now does not buy what it did in the past. Therefore it is considered by my Party as carrying out the original intentions of the 1946 Act, to put that figure up, quite roughly, to something more like its original value in 374 real terms. That is the reason for the increase for the "10s. widows".
I do not know that there is any more I can say, except just to answer a question which the noble Lord put. The Amendment he proposes would cost about £2 million immediately and the cost would rise to about £6 million. Then there is a further question about contributions. If any exemption from contributions is intended—and we were not quite sure—there would be a further cost of £3 million. I see the noble Lord shaking his head, and therefore we may disregard the figure I gave last.
It may perhaps be useful to give the Committee an idea of the size of this problem. There are at present about 80, 000 "10s. widows" under 60, because once they are 60 they get into another category and these questions do not arise. There are about 40, 000 "no shilling widows" in a whole series of groups: they constitute a much more diverse collection. Lastly, in no frivolous spirit I do sometimes feel that the only satisfactory way of describing these widows is to give some name or another—Jane or Eliza—to a particular group of them; because it becomes so difficult, not only for us—it does not matter so much for us—but for them, too, to know what their rights are. I am sorry I cannot do any more to help the noble Lord. I hope that, in the circumstances, he will not press the Amendment.
§ BARONESS SUMMERSKILLMay I warn my noble friend that, if the noble Lord does that, he will bring the Government down?
§ LORD DRUMALBYNI am grateful to the noble Lord, as I am sure the whole House is, for his explanation and for his clear realisation that there is a real problem here that has to be examined in the course of the review that is being undertaken as a whole. I am sure the noble Baroness, Lady Summerskill, will join with me in saying that the whole House will want special attention to be paid to widows—who, after all, are among the most hard hit, very often having to meet the early and quite unpredictable loss of the husband, which really upsets their whole lives. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 1 agreed to.
§ Clauses 2 and 3 agreed to.
375§ 3.43 p.m.
§ LORD DRUMALBYN moved, after Clause 3, to insert the following new clause:
§ Amendment of Act of 1946
§ ". The Act of 1946 shall have effect as if the following section were inserted:
§ '. Regulations may provide for enabling persons over nineteen years of age to be treated for the purpose of entitlement to benefits as if they had been in employment and as if insured person's and employer's contributions had been duly paid on their behalf for such periods as may be prescribed within any period during which they are engaged in a course of whole-time education, provided that a person's entitlement to benefits shall not arise in such cases until after he has ceased to be so engaged and has commenced or resumed contributions in accordance with this Act'".
§ The noble Lord said: This is rather a complicated Amendment, and I am afraid it may take a little time to explain because of its complication. The purpose is quite simple: to give whole-time students at universities and similar institutions entitlement to National Insurance benefits as soon as they start earning instead of their having to wait until they have paid qualifying contributions. The position, as I understand it, is that nobody can get a sickness or unemployment benefit until he has paid 50 contributions; and, until he has paid 156 contributions, that sickness benefit will last for only a year. So if, by any chance, one were to be smitten by a disease that incapacitated one for life, one would have no National Insurance benefit after the first year if one had not paid the appropriate contributions.
§ Another case is that of an insured wife in employment—and, of course, students do get married, and some people get married as soon as they have ceased to be students. An insured wife in employment cannot get full maternity allowance unless she has paid or been credited with 50 contributions, of which 26 have been actually paid in the year ending—and this is important from the point of view of this Amendment—13 weeks before the baby is due. The allowance, I understand, starts at 11 weeks or so before it is due. For maternity grant, either husband or wife must have paid or been credited with 26 contributions in the contribution year before the year in which the baby is due, which latter begins five months after the contribution year. The actual year 376 in which the baby is due starts five months after the year that is taken into account—and there are provisions of similar kinds for the death grant.
§ Now what I submit is wanted is a flying start for university graduates not dissimilar to that allowed to widows under 50, so that they may be entitled to benefits immediately they start contributing to the National Insurance scheme—or, if they have previously contributed, immediately they resume contributing. Notionally, a widow is deemed to be entitled to benefits on the basis of her late husband's contributions until she has earned her own. That is an agreeable fiction which it would be difficult to match, I admit, in the case of university students. But there are, I think, two main considerations here.
§ The first is this: that nowadays the vast majority of students get grants, and these grants supplement contributions from their parents fixed in relation to their income. So if there were any additional expenditure, university or similar expenditure, to be taken into account in arriving at the student's needs so as to determine his grant, that would fall on the grant and not on the parents. It follows that if students were required to pay contributions, those contributions would come out of public funds and not out of the students' or their parents' pockets.
§ The second consideration is this. Students may pay contributions weekly, I believe, as non-employed persons—Class 3 contributions, as they are called—but, as the Bill now stands, that would involve their having to find 14s. 11d. a week, and I do not imagine that many students are able to do that. Or they may pay their contributions in arrears, I understand, after they have started working; but the amount they will have to pay as the contributions now stand is already formidable, and it will be more so after March 29 next. I am afraid I do not remember the amount they will have to pay, but, from a rough calculation that I made, it looks as if under this Bill a four-year student will have to pay something of the order of £150 in back payments. Even at that, I am not quite certain—I do not remember—whether those would be considered as Class 3 contributions, so that they would not be 377 entitled to sickness and unemployment benefit, or whether they would be treated as Class 1 or Class 2 contributions.
§ LORD MITCHISONClass 3.
§ LORD DRUMALBYNClass 3; so they would not be entitled to sickness and unemployment benefit. I submit that what students need when they first start in employment is cover for sickness and for unemployment, as well as maternity cover, death grants and a widowed mother's allowance in the event of death in the months immediately after they start work, if they are married. Cover for pensions seems to me much less important. It has generally been felt that most students will earn pensions of an occupational kind when they get into employment, and if they do not they will probably not need the full pension—in most cases they would not be able to earn the full pension unless they paid back contributions. But it is the months immediately after leaving university that matter, and it is precisely those who need the cover most that are least able to pay the back contributions.
So, if it is at all possible, I hope the noble Lord will be able to say that this Amendment is accepted in principle and that the Government will table an Amendment in the proper form on Report stage, for it seems to me quite wrong to launch young men and women off into the world at 22 or so without any insurance cover at all. It is quite different for those who start contributing at the age of 16 or 18, for by the time they reach the age at which they may take on family responsibilities they will be fully covered. Even for them, there is something to be said for sickness cover from the start; but that is another question and does not enter into this particular Amendment. But, whether students are to receive notional credits or whether Exchequer payments on their behalf are to be made to the National Insurance Fund, I am convinced that they should be covered from the day they start earning and contributing, or very soon afterwards, I beg to move.
§ Amendment moved—
§ After Clause 3, insert the said new clause.—{Lord Drumalbyn.)
§ LORD MITCHISONThis is another group of people for whom we have every sympathy. I hope that, like the other 378 group to which the noble Lord referred, they will have a flying start. But I am not sure that this is the right way to do it. The present position is that up to the age of 18—and not up to the age of 19, as one might think from the Amendment—they are treated as young people and are not bound to pay contributions. There is no complaint about that. It is the position after 18, and, particularly, immediately after 18, that the noble Lord has in mind. One must remember what one is doing here.
If this Amendment were carried, students, including apprentices I believe, would in fact get better treatment than any other starting contributors. While there is a good deal to be said for that, I cannot think it is right to do it at the expense of the National Insurance Fund, for what it really amounts to is this. If these students are going to get their flying start out of the fund, then in some form or another it is the other contributors to the fund who have to pay for it. Those other contributors are, of course the employers, the employees and the Exchequer supplement. This would be a very considerable payment. I expect the noble Lord realised that. It would be about £20 million, ten times as costly as the last proposal, and the cost would increase.
It seems to me that at the end of the day the question here is, Who is going to pay for these contributions? Is it the student or is it, in some form or another, the public purse? The student is told in very clear language in the little leaflet which he gets—I am holding it up and the Committee can see it is quite a simple and short document, although the language may be slightly official—that it is to his distinct advantage to pay contributions voluntarily if he can; and I, too, should have thought that that was so. If it is said that he cannot afford to pay contributions (and I quite recognise that possibility), then is the right body to make up the deficiency some education authority or another or is it the National Insurance fund? When that question is put, I come down on the side of the education authority having to pay, if payment is required, largely because the circumstances will be so very different in different cases and only the education authority—I am using the phrase very 379 broadly—will be in a position to know precisely what is needed.
I think that every noble Lord must feel that students in modern times—and again I include apprentices—are entitled to every help. I think the tendency in modern times—and I make no Party point about this—is to increase the help given to students. But I do not think this is the right way to do it. When you come down to brass tacks there is only one real question in this Amendment, "Who is going to pay the voluntary contribution, immediately after the age of 18?" I do not think the fund ought to do it. Therefore, I am afraid I do not think I can hold out any hope for the noble Lord. Of course, education in this country, particularly for the people who would be affected by this Amendment, is quite obviously something that any Government would wish to encourage, and particularly the present Government as I think noble Lords will agree from what has been said in public.
§ LORD DRUMALBYNAgain I am grateful to the noble Lord. He has expressed the difficulties involved in this Amendment clearly and I do not think I would dissent from what he has said. The fact is that some kind of contribution ought to be paid into the National Insurance Fund in respect of this, and the fact equally is that at the present time a National Insurance contribution is not taken into account when calculating the needs of a student at university. This is the core of the problem. I have put down this Amendment in order to ventilate the problem and, while I did not have any great hope that it would be accepted, I am glad to see that the noble Lord, Lord Snow, is present and I hope that he will be able to give it some further consideration.
§ Amendment, by leave, withdrawn.
§ 3.55 p.m.
§ LORD DRUMALBYN moved, after Clause 3, to insert the following new clause
§ Special Provisions as to Payment in Time-Expired Claims
§ "The Insurance Act shall have effect as if there were inserted at the end of paragraph (b) of subsection (2) of section 46 the following:
§ 'Provided that no right to any sum shall be so extinguished in any case where it 380 appears to the Minister that there was good cause for the failure to obtain payment within the period prescribed."
§ The noble Lord said: I beg to move the Amendment standing in my name. The purpose of the Amendment is somewhat similar to that of an Amendment moved in another place, but it deals with the problem in a different way. Its purpose is to ease the extreme rigidity of the rule under which benefits are forfeited if not, as we say in Scotland, uplifted within six months; and to do so by giving the Minister the power to waive the rule when he is satisfied that there was a good reason for the beneficiary not to have uplifted it. It may come as news, and perhaps disagreeable news, to some noble Lords that the person who has established a claim to benefits loses his right to them if he does not cash his document of title within six months. One might have thought that if the State chooses to send scraps of paper to be presented to the Post Office rather than cash, the Post Office should honour these pieces of paper whenever presented. But time limits in insurance legislation are as old as time itself.
§ In my experience I came across many really hard cases where a person entitled to benefit has had the right extinguished because more than six months had elapsed before she claimed. I am aware that the periods vary in different cases. Her reasons (it is more often "her" than "his"), in the cases which came to my attention, were excellent ones. Some people often believed that the money was safer with the Post Office than with themselves, only to find that the money was not, after all, there when they went to claim it. Sometimes the reason for the delay was that the beneficiary was in indifferent health, or was anxious over her child's health; sometimes it was pure error or ignorance about the entitlement and the lapse of entitlement. But, however good the reason, nobody can do anything about it; neither the insurance officer, nor the local appeals tribunal, nor the commissioner, nor the Minister. And in some cases where a disgruntled beneficiary has taken her case to the local tribunal, the local tribunal has commented on the fact that it can do nothing about it.
§ One solution would be to extend the period to, say, twelve months; but that, 381 I recognise, might cause administrative difficulties. I am being as short as possible, and I will not go into these. The other solution would be to allow somebody discretion to waive the rule where there were good reasons. I hope that I may be forgiven if I say that I always thought my advisers were a little too worried about the effect on the Minister, if he should be given this discretion, and about the bombardment to which he would be; submitted. I do not think it would be practicable to give the tribunal this discretion, because they do not work in that way; they work in accordance with the regulations. My conclusion is that this discretion should be exercised by, or on behalf of, the Minister. In my experience it seems to me that there are cases in which it appeared that justice and fairness were being sacrificed to administrative convenience in this way; and it seems to me it is well worth considering giving the Minister discretion in a matter of this kind.
§
Amendment moved—
After Clause 3 insert the said new clause.—(Lord Drumalbyn.)
§ LORD MITCHISONThere used to be provisions about what I might call remission for "good cause", which were removed in 1952 both from the National Insurance and from the Industrial Injuries provisions, as a consequence of the findings of two Committees (the Report of one I have here, Cmd. 8483) which considered this very question whether there would be hardship if there were any fixed time limit. That problem has been met to a considerable extent by special provisions; in the case of mental incapacity, but subject to that, and some rather parallel provisions, there has now been a fixed time limit since just after those two Reports. It is since then that the noble Lord was disturbed—and rightly so; I am not making any mockery of it—by the cases which were brought to his attention. Both he and I have sat in another place for constituencies and know how real, if not very common, this kind of case can be. But as a matter of working it, the Advisory Committee came to the conclusion, I think rightly, that it was better to extend the period, which used to be three months, to six months and to get rid of the "good cause" extension, which 382 had been used, or was attempted to be used, previously.
There were two reasons for this conclusion. One was the very practical reason that one often has to deal with people whose understanding of these things is by no means as great as the noble Lord's; and it might have been very difficult to get them with perfect honesty to reconstruct the past and find out why it was that this, that or the other was not done quite a long time back. One encounters people who are convinced, as I often am myself, that something or other has not been done, and then find that, in place of that, something has been lost. That is the kind of practical difficulty that occurs.
The second reason is a more theoretical one. These benefits are intended, after all, to meet current needs and we ought to be slow to open the door, as this new clause would, to a quite indefinite extension of time if there is "good cause" for it. Therefore, on both theoretical and practical grounds, and having regard to the Report of the Advisory Committee, I could not advise the Committee to accept this Amendment. And I hope that the noble Lord will not think me in any way unkind or unduly critical if I remind him that these Reports came in and this change was made in 1952; and after that there were eleven or twelve years of Tory Pension Ministers, none of whom thought it right to disregard those Reports on this particular problem. I think that for once they were right.
§ BARONESS SUMMERSKILLMay I support my noble friend? The noble Lord comes here rather late in the day to ask for this change. He has served in another place, just as I have done, and in the same Ministry, and I am sure that we could both say that we cannot recall cases of this kind, even with the the three months' limit. I cannot recall any Member of another place coming to me in this connection and saying that there was a case of great hardship. I cannot help but agree with my noble friend that, now that the limit is extended to six months, it would not be in the interests of a scheme, which must have some hard and fast rules and regulations, to change it in response to the noble Lord's Amendment.
§ LORD DRUMALBYNI am bound to say that my own experience has not coincided with the noble Lady's in this matter. I recall cases coming to my attention, both as a Member of another place and during the period when I was Minister. However, there does not seem to be any strong feeling in the Committee on this matter. I have ventilated something which I should like to see changed, but, as I have not received support, I will, as graciously as I can, withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Remaining clauses and Schedules agreed to.
§ House resumed.
§ Bill reported, without amendment.