§ 4.31 p.m.
§ Order of the Day for the Second Reading read.
VISCOUNT COLVILLE OF CULROSS
My Lords, the Bill to which I shall ask you to give a Second Reading in due course concerns a considerable number of old people in this country, some of them very old indeed, who do not receive any State pension at all. I think that until recently very few people knew that such persons existed; but, now that it has come to light, I think also there is considerable public concern that this situation exists. I agree with that public concern and my Bill is an attempt to put it right. The Bill is nearly, although not quite, the same as that which was introduced into another place by my honourable friend the Member for Abingdon, but which came to grief because, I think, of the 206 unusual interest aroused by the Report stage of the Consolidated Fund (No. 2) Bill in that place.
The Bill deals with two main groups of these old people. The first group is dealt with by Clause 1 and the Schedule, and these people are what are called non-pensioners. They were over pensionable age and were not insured on July 5, 1948, when the present National Insurance scheme started. They are described in various classes in the Schedule to the Bill. I am grateful, as was my honourable friend in another place, for the assistance in categorising these people which was given by the Ministry of Pensions and National Insurance. I hope that, with their help, the drafting is correct.
Broadly, these people fall into four classes. First, there are those who had the right but did not choose to become insured voluntarily when they ceased to be insured compulsorily under the old schemes of insurance, starting from 1926. That choice was given them under Section 9 of a measure which is called the Widows', Orphans' and Old Age Contributory Pensions (Voluntary Contributors) Act, 1937—a fine title which, I think, ought to be set to music. The second class are those who chose not to become what are known as special voluntary contributors under Section 1(1) of that 1937 Act. They would have been dealt with, had they so chosen, under the scheme which started in 1938, and in order to qualify they would have had to be under 55 on January 3, 1938, and to have had a total means of less than £400 a year for men and £250 for women. But they did not choose to become special voluntary contributors.
Then there were those—and this is the third class—who could not be insured because they did not fulfil the conditions for either compulsory or voluntary insurance. For instance, you could not be a special voluntary contributor under the 1937 Act if you were in what was known as "excepted employment": that was the sort of employment then thought, by the terms of the employment itself, to give the people concerned benefits as good as or better than those provided under the Act. In fact, many in this class were teachers, policemen and employees of the Crown and local authorities. So we are dealing mainly with 207 professional people and the self-employed. The fourth class are the wives and widows of those people.
It is very complicated and I hope the drafting of the Bill is right. If not, and if the Bill goes to a further stage, we can, of course, deal with it then. When the 1946 Insurance Act was being discussed, the one that set up the scheme that came into effect in 1948 and which is still going to-day, I think it was considered that the people who were excluded from the scheme were in possession of enough private means or annuities or pensions of some sort to be all right, without a pension from the State. In fact, some of them, despite that, asked if they could join the scheme and pay contributions; but the law did not allow them to do so. Of course, people of this sort, those who had that little bit in 1948, are exactly those people who have suffered most from the rise in the cost of living, while their incomes have stayed probably as small as or very little bigger than they were in 1948. I believe that many of them now are very hard-pressed indeed and are in straitened circumstances.
It is very difficult to say how many people there are in these classes, because the records are inadequate and, in some cases, non-existent; but the Minister in a debate in another place estimated the figure at a quarter of a million. And it was said in the same debate—and this was, I think, in reference to (though the debate was not on) my honourable friend's Bill—that to give them the pension provided in that Bill would cost £50 million a year: that is to say, the straight pension. That would have to be reduced, because these same people are already receiving £20 million a year by way of National Assistance; so the net sum under the original Bill would have been £30 million a year. I rather think that, as my Bill provides for a half-pension for them, the sum would now be less.
At any rate, the figure would rapidly reduce because—and this is the real point of my Bill—the average age of the people dealt with under Clause 1 and the Schedule is 84. In fact, some of them are less than that—say, 76 or 77—but letters have been received by those interested in the Bill from people of well 208 over 90 years of age and even, in one case, from a lady of 100 years.
§ LORD BLYTON
My Lords, would the noble Viscount not agree that if that number should diminish as the years go on, new cases would come up to maintain the same expenditure?
§ LORD BLYTON
Would the noble Viscount not agree that, as these figures dwindle over the years, there will be new cases which will maintain the same expenditure?
VISCOUNT COLVILLE OF CULROSS
I can see now the point that the noble Lord is getting at. But I am afraid that we cannot change the age of people. If they were over the retirement age in 1948, I do not think that even Parliament could make them younger than they were at that time. Their age is fixed and therefore, for the purposes of Clause 1, whatever the noble Lord may think, they were beyond the age of retirement then; and that is how they will remain until they die. The numbers cannot be increased and they will, by the course of Nature, rapidly reduce over the next period of years. So it is on account of their age that I think special consideration should be given to them.
In another place, in the same debate to which I have already referred, an objection advanced to my honourable friend's Bill was that in addition to this quarter of a million there were another 200,000 old people who also did not have pensions. These were persons who had retired after 1948, but in some cases only very shortly after that date. Of these, 84,000 (I believe that is the figure now surviving) took advantage of a provision which noble Lords can find in Section 71(3)(c) of the 1946 Act and the regulations made under it. They were people who in July, 1946, were within ten years of retirement and then paid some contributions under the scheme. Had they had paid for ten years, they would have received the full pension; but they were given the option, if they retired before the ten years were up, of withdrawing the contributions they had 209 made and thereafter receiving no pension at all.
These people were described by the Minister in another place as being very badly off and needing help, so I have included them in Clause 2 because I believe that most of them will be nearly as old as those dealt with in Clause I. The youngest would be 75, if a man, or 70, if a woman; and the eldest would be 83, if a man, or 78, if a woman. Your Lordships will realise that to qualify for the special half-pension given under Clause 2 they would have to be 80 years old on the appointed day, or thereafter they would get it when they became 80. So I have put in for this special consideration those who are the oldest and possibly the most deserving of your Lordships' attention.
Of the remaining 120,000 I do not know. I am not aware that any of them are as old as these others. If they are not, perhaps it might be fair to ask them to endure for a little longer; but if there are some in these classes who are already over 80 and in dire straits, I should welcome from noble Lords suggestions as to how to categorise them and deal with them properly. And although the noble Lord, Lord Stonham, has spoilt my joke, I will, of course, listen to what noble Lords have to say.
The rest of the Bill is concerned with machinery only, but I think I ought not to stop there, because there is a reasoned Amendment down in the name of the noble Lord, Lord Peddie—and may I say how grateful I am to him for his courtesy in setting out in full the objections which he has to the Bill. I will try to deal with them very briefly now, because I shall not then have to speak when we come to the Amendment, and we shall probably get on more quickly.
His first point is that my Bill willprovide pensions under a contributory scheme of national insurance, indiscriminately and regardless of their resources, to those who have not paid the necessary contributions …Part of that is certainly true: the fund from which the money will come, if my Bill becomes law, is certainly a contributory fund. But it is by no means solely a contributory fund. There are many people receiving pensions to-day of 80s. per week who perhaps contributed for ten years something like the average 210 rate of 6s. a week. It cannot possibly be said that people who to-day are receiving a pension of that sort have earned it by the contributions that they put in. Moreover, my Bill recognises the contributory nature of the scheme, because I do not provide for a full pension but only for a half-pension.
Again, the contributory theory has suffered a certain number of reverses just recently—although I do not in any way object. After all, the National Insurance Act, 1964, which the Government of noble Lords opposite passed, increased the pensions without any heed to the amount of contributions paid by the people concerned. Nor was the increase in the pension for the "10s. widow" up to 30s. based in any way upon the contributory theory; and, as I said before (although this is perhaps only a little piece of special pleading), many of the people covered by Clause 1 of my Bill asked to contribute but were not allowed by law to do so.
Nor do I think that I am being "indiscriminate". In another place the Minister said one defect was that there were some who were in equal need who were left out. I have now put them in, but I have been very discriminating about it because I have attempted to deal only with the really old ones, who I think deserve urgent attention now—although, of course, I will expand the Bill if noble Lords would like me to—and I will so discriminate by giving the half-pension only. With regard to the question of the recipient's resources, all pensions are paid regardless of the recipient's resources. If the recipient has other income, then the pension paid under this Bill will be subject to income tax, as are all other pensions. Therefore I do not think there is a great deal in this point, so far as the better-off people are concerned, because they will pay tax and some of it will come back.
The noble Lord, Lord Peddie, says that it will impose a burden. I cannot, of course, suggest that we should impose a burden upon the taxpayer. The only thing I can do is to suggest that the money should be paid out of the National Insurance Fund, and that is what I am proposing. I understand that there is, in fact, a surplus of £61 million in the Fund at the moment. If so, I think the Fund 211 could take care of the problem. Therefore, the taxpayer is not involved—and, of course, I am not allowed by the Rules of Parliament to involve him. I do not think the contribution is involved either, unless, of course, in order to meet the cost of my Bill the sum would have to go up. As the people concerned are so old, and in many cases, I am afraid, will probably not last very much longer, there will not be a problem under the Bill for a great length of time, so I do not think there is a case for putting up the standard contribution.
Then, if one talks of a burden, as the noble Lord will no doubt do when he moves his Amendment, the "minimum income guarantee" to which he refers is, I believe, intended to be the answer to my problem. I imagine that that will impose a burden, and it will probably be upon the taxpayer. If that is the way out which the noble Lord advocates, why should he complain that there is a burden under my Bill?
It is also said that the Bill fails to make provision for other groups who have no pensions. But I have chosen very carefully those who I think will be in the greatest need.
The noble Lord's Amendment goes on to say what the Government have already done. I should like to examine this point of the Amendment in a little detail, because I want to see the merits of what the Government have done. I want to be absolutely fair about this, and I hope that if I get facts and figures wrong noble Lords will correct me. I want to deal with this on the merits, because I do not think we ought to play Party politics with people of this age and in these circumstances, The first thing the Government are said to have done is to abolish prescription charges. And, of course, that is quite true. I do not know how many prescriptions it would be reasonable to suppose the old people with whom I am dealing would have had, but if we put it at, say, two every week, it means that they have been saved 4s. a week.
The next point is the claim that there has been the largest increase since 1946 in retirement pensions. This does not help greatly, because the people I am talking about do not have retirement 212 pensions. Then it is said that there has been the greatest increase since 1946 in National Assistance. That is also true—there has been an increase of 12s. 6d., I think. The difficulty here, however, is that although some of the people with whom I am concerned do in fact get their money from National Assistance, quite a number of them are, if I may quote a phrase from one of the many letters I have received, "too proud to apply". My Lords, I do not think we shall change that pride at the age which these people have reached, and in some ways I think it is an admirable pride. Moreover, those who would be entitled to National Assistance but are not taking it would, by that very fact alone, be entitled to some money which they are not now having. Still, it is clear that if they go to the National Assistance they are 12s. 6d. a week better off, as a result of the Government's measures.
Then we come to the reference in the Amendment to the income tax age exemption. This, of course, does not help, if they do not pay income tax. I know of one doctor who has a pension of £5 8s. 2d. a month plus some small "divvies" from what he has been able to save. I suspect that he does not pay much tax, as he is married and living with his wife, so, in his particular case, there will not be any saving or help there. It would be a little easier to say what would happen to somebody who does pay tax. I take two examples, entirely out of the air—this is not a put up job, because I am not capable of working out this sort of sum myself: of a single person with an income of £10 a week and of a married couple with £15 a week. If those incomes were net. the change in the Budget, to which this part of the noble Lord's Amendment refers, has no effect at all. If, on the other hand, the income were gross, then, in the case of the single man, he is worse off as a result of the Budget, for a most extraordinary reason. As the result of this change, he will in future get another sort of relief which is called old age relief and if he gets that, by virtue of Section 15 of the 1952 Finance Act, he does not get small income relief, which would have been more valuable to him than the relief which he will now get. He will actually be worse off under the Budget than before.
213 The married couple with £15 a week gross will be £8 a year better off—3s. a week—not because of the measures which the noble Lord mentions, but because of the increased personal relief contribution, which the noble Lord does not mention in his Amendment. So the best we can do there is 3s. a week for a married couple with an income of £15 a week gross. The noble Lord says that it has been made possible for local authorities to grant cheap fares. Indeed, it has, but the only people who benefit from this measure and also from fringe benefits, like getting into cinemas and art galleries free, are the people who have old-age pension books. The people with whom this Bill deals do not have old-age pension books. That is precisely why I am bringing forward this Bill. So there is no help from there, either.
On the other hand, the noble Lord says that the Government intend to introduce incomes guarantees applying to all. Again I want to be fair. This will help to balance things, but the difficulty is timing. At the present moment, we are dealing with people of an average age of 84. What we want is urgent and immediate help. It is no use waiting, however good the guarantee may be for them. Did the noble Lord say, "Thirteen years"? I am very interested to hear that and will say something about it in due course. The point I was making is that we must do something about it now, this summer. When it comes to the time of the incomes guarantee, whenever that may be, that will be the time to reconsider the Bill and have it repealed or altered. But it is hardly a good thing that we should suggest to these old people that they should wait until that comes along.
The noble Lord, Lord Shepherd, said, "Thirteen years". I think that this would be a possible argument, if it had not been for the fact that the Government have already missed two opportunities whereby they could have done something for the people with whom I am concerned. This cry of, "Thirteen years!" comes up so often that I think it must be a directive from the Cabinet. In this case, noble Lords opposite could have dealt with these people under the National Insurance Act in 1964. They did not. They could have dealt with one small point under the Travel Concessions 214 Act. They did not. So that noble Lords opposite have missed two chances which they have had in their six months of office, and therefore the cry of, "Thirteen years!" is not so apposite in this case as it might otherwise be.
In conclusion, I believe that Lord Peddie's list amounts to little more than what is described as "a lick and a promise"—4s. on prescriptions, if they have any and 12s. 6d. on the assistance, if they draw it, and apart from these, nothing but a promise of the incomes guarantee. I hope that, in view of what I have said, the noble Lord will not move his Amendment. If he does and the Government assist him, and if there is a Division and the Bill is thrown out, I am afraid that noble Lords opposite may deserve the words of one of my correspondents, who says this—I hope it will not prove so, but this is what the correspondent thinks:The Labour Government is averse,Just like the Tory—you can't say worse—To paying pensions at eighty-oneTo those who all these years have none.Our plea has too long lacked attention.We are too old for the old-age pension.Since Nineteen Hundred and Forty Eight,It has been a long and desperate wait.Some have not stayed to see it through,They are dead, having never had their due.We who remain, long since forlornIn deepest pain, give you our scorn,You members of the Welfare StateWho tell us eighty-ones to wait.I beg to move that the Bill be now read a second time.
§ Moved, That the Bill be now read 2a.—(Viscount Colville of Culross.)
§ 4.57 p.m.
§ LORD PEDDIE rose to move, as an Amendment to the Motion for Second Reading, to leave out all words after "That" and to insert "This House declines to give a Second Reading to a Bill which would provide pensions under a contributory scheme of national insurance, indiscriminately and regardless of their resources, to those who have not paid the necessary contributions to that scheme, and in doing so would impose a burden on the general body of contributors and the taxpayer, while failing to make provision for other groups, who equally have no pensions, bearing in mind that Her Majesty's 215 Government already have helped the elderly by the abolition of prescription charges, by the largest increase since 1946 in retirement pensions and National Assistance, by raising the income limits for income tax age exemption and by making possible for local authorities to grant cheap fares to them, and intend to introduce a minimum income guarantee which will apply to pensioners and non-pensioners alike.". The noble Lord said: My Lords, I rise to move the Amendment that stands in my name on the Order Paper. The noble Viscount, Lord Colville of Culross, in moving his Bill, indicated that it was similar to the Bill moved in another place, except for two minor variations. I was gratified when, in opening his case, he said that he had no intention of playing Party politics on this subject. With that sentiment I heartily agree. In consequence, I deplore the highly politicial comments which he made at the end of his speech, presumably to give misguided support to his Bill.
§ Like many noble Lords, I am a relative newcomer to your Lordships' House. During the period of my membership I have been impressed, on the whole, with the capacity of the House to give a fair assessment of a subject, regardless of Party affiliations. I believe that this is the trait in the character of the House that is likely to sustain it in future. Therefore, in presenting this Amendment, I am going to make my case solely on the basis of what I consider to be equity and logic. My arguments will be completely free from any Party consideration.
§ In introducing his Bill, the noble Viscount laid great stress upon the sentimental approach to this question, upon the existence of need and, possibly, want among some—maybe many—of the 250,000 who are involved. Let me say right at the beginning, because this is important, that the plight of some of these old people is not in dispute at all, and the problem concerning their need is not a problem that has emerged over the past six months. I hesitate to define a period of years, but for a long period of years there has been the problem of poverty in association with old age. Therefore the recognition of the problem, the justifiable demand on the part of any 216 Member of this House that a Government should do something to deal with that need, may be desirable, but it has nothing to do with the question of making claims upon a contributory fund. Therefore we have to examine this question calmly and dispassionately in the light of the real facts that lie behind this Bill, and not be mislead by attitudes of sentimentality into pursuing a policy which is contrary to logic.
§ The noble Viscount, Lord Colville of Culross, has introduced his Bill, and its broad purpose is to make pensions payable out of the National Insurance Fund—and I emphasise that—to people described as "non-pensioners", who do not receive a pension because they were already over minimum pensionable age, which, as your Lordships know, was 65 for a man and 60 for a woman, when the National Insurance Scheme was started in July, 1948, and were not then insured. I contend that this Bill is not the right way to tackle this problem. We are dealing with an insurance fund. Regardless of the financial circumstances of the people involved, the claim that is being made in this Bill is akin to a claim that would be made by a person insured with an insurance company, who sustains a fire loss and demands the full extent of that loss, despite the fact that he himself is underinsured.
§ Or, alternatively, it is akin to the case of a person who has not been accepted for insurance, who later sustains a fire, and then seeks to make a claim upon the insurance company. That is utter nonsense, of course. Yet, at the same time, claims which are made upon an insurance fund by people who, for one reason or another, did not contribute to it—because they were not allowed to be members or they voluntarily decided not to be members of the pension fund—are akin to the illustrations that I have given.
§ I think this Bill is a most unsatisfactory way of dealing with this situation, and it is one that can raise hopes, very unfairly, in the minds of old people. I do not like this way of doing it. I know, as your Lordships have learned from the noble Viscount's remarks, that the subject of insurance, particularly under the old scheme, was highly complex, and I have no intention of going into the details, but it is essential to elaborate on some of the categories which the noble Viscount 217 opposite mentioned, because I believe that, for Members of this House to make a fair assessment of the situation, it is essential to know the categories which are involved.
§ First, it is necessary to describe the different categories of people who do not receive an insurance pension, and to understand the reason why they do not. I am sure that a knowledge of the categories will help to assess the efficacy of the Bill. Some of these categories have been mentioned, but, quite deliberately, I go over them again with a different emphasis. First, there are what are called the "non-pensioners". They were the people who were too old to pay contributions under the existing insurance scheme. Those people fall into four main groups. The first are those who, although they had the right, deliberately did not choose to become insured voluntarily when they ceased to be insured compulsorily under the old pre-1948 schemes of insurance: in other words, they had the chance, and they refused to accept it.
§ Secondly, there are those who chose not to become insured as "special voluntary contributors" under the scheme introduced for certain categories and age groups in 1938—people such as teachers, and the like, who had their own small pension schemes. Thirdly, there are those who were never able to become insured under the old schemes because they did not fulfil the conditions for either compulsory or voluntary insurance. Many of these people had incomes well above the requisite level, and it was estimated by themselves and others at that time that they were quite able to make their own provisions. Finally, there are the wives and widows of these people, although some of these could be more properly considered in another category which I will describe, since some of these people were not over minimum pensionable age in July, 1948.
§ The next main category of old people with no National Insurance pension—and I hope I am not wearying your Lordships with this description, because it is essential to understand the true merits and demerits of this Bill—includes, as I have said, some wives and widows of men over pension age in July, 1948, although they were not themselves over the age of 60, who quite deliberately elected not 218 to become insured. It also includes another group who, although they have paid some contributions, could not have paid sufficient to qualify for pension, and have had their contributions refunded.
§ There is a further group which comes within the compass of this Bill, and that is the "late age entrants". These were people who were within ten years of minimum pensionable age when the National Insurance Scheme started in July, 1948, and who chose deliberately to receive a refund of the pension element of their contributions which they had paid since 1948, rather than continue in insurance to qualify for a pension: in other words, people who ten years prior to July, 1958, started to pay the contributions and, instead of keeping them up, themselves elected to withdraw their own contributions. Yet it is suggested that those same people, regardless of their needs, should now have the right to withdraw money from an insurance fund from which they themselves have taken out their own contributions. Where is the logic, where is the common sense in an action of that kind?—particularly when we come to consider it, as I hope the House will consider it, in terms of the needs of individuals. There may have been a responsibility on the part of this Government and the past Governments to deal with that situation. But this is in terms of dealing with this Insurance Fund.
§ Finally, there is another main category—namely, those people who have paid National Insurance contributions but who, because of deficiencies in their contribution records, have failed to qualify for a pension, or receive it at less than the standard rate.
VISCOUNT COLVILLE OF CULROSS
My Lords, I am following with great interest the noble Lord's argument. I had not realised that my Bill covered these particular people who refused pension. I wonder whether the noble Lord could tell me which provision it is that covers it?
§ LORD PEDDIE
If the noble Viscount will wait until I have completed by argument, he will appreciate that that is the point I am making. He has not covered them, and this indicates one of the serious defects in the Bill. He fails 219 to recognise—although I am sure other noble Lords will recognise—that there are some people who have actually paid contributions regularly, and receive a pension of 22s. 6d. per week. Yet he and his Bill make the suggestion that those who have paid no contribution shall receive £2 a week from the same Insurance Fund. If there is any logic in that I am amazed, and it gives a clear indication to me that this Bill has been prompted by people who wanted to cash in on a certain situation; an indication of need on the part of people, without any recognition of their true responsibilities and responsibilities of Government to this Fund.
§ LORD DRUMALBYN
My Lords, may I ask the noble Lord a question because I think he is making an important point here? Is he in a position to tell the House what proportion of those who are receiving reduced pensions are receiving less than 50 per cent. of the full pension? My own recollection is that it was a comparatively small one.
§ LORD PEDDIE
I am not in a position to give the noble Lord the exact number, but I can assure him it is a substantial number. To give an indication of the substantial number, for a person to be receiving the minimum pension he would have had to make 156 contributions, and those would have to be averaged over the whole period of his insurable working life. I certainly would not like to guess at the number, because it would be wrong so to do; nevertheless, there is a substantial number. The number does not affect the argument in the slightest degree. It makes no dfference if there are only a couple of hundred. The fact is that there are people who have made regular contributions and are receiving only 22s. 6d. a week, and the suggestion is made under this Bill that others who paid no contributions or, worse still, have withdrawn their contributions, shall receive £2 a week.
I am sorry for this delay in the presentation of my case, but I thought it necessary to go over the points and I must blame noble Lords opposite if I take five minutes longer than I intended to take, so the burden is on their heads. All this which I have tried to describe 220 in the different categories may sound very technical, but it is for this purpose. As the Minister for Pensions and National Insurance stated in a debate on March 26 in another place, all these people have to be considered in relation to any proposal to give a pension to any of these groups, otherwise it is intolerable and indefensible, and unfairness would be the result. In other words, you cannot pick and choose. Some of these would get it. The noble Lord opposite quite proudly rose to his feet to point out that there was one section who would not gain. Therefore, here lies one of the main objections to the Bill. It does not avoid blatant unfairness. It picks and chooses between these categories in a manner which fails to conform with any consistent principle at all.
What is more—and the sponsors of this Bill have been told this—such haphazard selection would be impossible to administer in practice. Let me give one example in dealing with the first category, that is, non-pensioners who were too old to be insured in 1948. This Bill seeks to draw a distinction between those who had the chance to become insured under the old scheme, that is, the pre-1948 scheme, and those who had not. It differentiates between those two classes of people. But, in fact, a distinction of that character cannot in practice be made after the relevant time without records of employment, which are no longer available. In any case, it only extends to men and spinsters. No such distinction is made between wives and widows in this category, despite the fact—and this is terribly important—that they themselves may have had the chance to pay contributions under the old scheme. Indeed, some may even have paid contributions, and yet the distinction is applied to them.
Furthermore, to add to the confusion the Bill makes, it makes no such distinction in its proposal to give a pension to certain "late age entrants". It is difficult to see how it could, because these "late age entrants" not only might have had the chance to pay contributions under the old scheme but also did, in fact, pay some contributions under the new Scheme and had those contributions refunded. So that, after having contributions refunded from a contributory 221 scheme, it is now sought, at a later date, that a pension be given from that same Insurance Fund. I repeat that I am not challenging the fact that a number of these 250,000 people may be in need. I will deal with that in a moment. I am challenging the method of dealing with this situation indiscriminately, and without regard to what one normally calls the sanctity of a true insurance fund. I am not giving too much emphasis to these details. I said that I would try to treat the facts logically and try to prove, without any shadow of doubt, that this Bill is arbitrary and dreadfully loose in the way it proposes to grant pensions.
This piecemeal approach is unsatisfactory and, indeed, is dangerous, particularly as applied to other forms of activity. Let me say this—and I am sure every noble Lord opposite would accept this statement. In practice, there is no doubt at all that the Bill would have to be extended to cover all categories and groups that I have mentioned, all of which, based on the principle of this Bill, could claim the right of inclusion. If you are picking out some to be making calls upon an insurance fund, it would be impossible on the grounds of common justice to reject the claims of any of these groups.
This leads me to the second point, which is that the Bill would provide pensions indiscriminately, and without regard to the recipient's income, and this from a contributory Insurance Fund. Is there any noble Lord opposite who could in honesty accept that principle? In reply to a comment made by the noble Viscount opposite in introducing his Bill, let me say that the contributions that are made by those who are members of the Fund have some influence upon the amount of the pension that can ultimately be paid. Let us keep that in mind. Let us not assume from the specious argument that, because the State makes a contribution, pulling out or absorbing some of this £61 million surplus has no effect upon those who remain in the Fund. He knows that that is not true. He knows very well that the amount of contributions made in the long run affects the pension that is paid to people who, over long years, have made their contributions. Where is the honesty and justice? I am quite sure that noble Lords opposite, in giving con 222 sideration to this really serious matter, will accept the point I have made.
The various categories and groups contain a variety of people at all levels of income, in widely different circumstances. Of course, there are many who are not well off. To confirm this, it is true that nearly half of the 250,000 non-pensioners are receiving payments from the National Assistance Board. Here we come to a very interesting point. I accept the fact that one half of these 250,000 are receiving National Assistance. Those are the people, presumably, who are in most desperate need, and nobody would deny that. But they are just the people who would get nothing at all, because if £2 were paid, half the standard rate pension, it would automatically be taken into account from the moneys they were receiving from the National Assistance Board. That is accepted. Therefore, you are putting forward a plea of impoverishment of people who are in need, and yet at the same time that one can demonstrate that half will get no benefit at all. In fact the effect of the Bill would be to debar those with the greatest need from aid from the Fund but gratuitously to give pensions to those who, on the face of it, are not in such great need—and all this from a Fund which is contributory in character and to which people have paid monies for long years. At the other end of the scale from those in need are the people who, even after account has been taken of depreciation of their savings, may still be comfortably off. It is wrong to assume that all savings automatically depreciate with changes in the value of money; some of these people could conceivably be quite rich.
Many of the people to whom it is suggested gratuitous pensions should be given are people who had the chance of becoming insured and of paying contributions. This applies particularly to the late-age entrants who actually took a refund of contribution rather than qualify for pension. I repeat, where lies the justice? I am sure that this House, in giving fair and honest consideration to this matter, will agree that it is neither right nor financially prudent to give a Second Reading to a Bill that would authorise payment from the National Insurance Fund of large sums of money to help these people, rich and poor alike.
223 I come to the third point, which will be stated briefly, though it is of tremendous importance. That is that the National Insurance Scheme is based, as I have said, on the contributory principle. The benefits are paid only in return for the necessary contributions. The very essence of any insurance scheme is that contributions are paid over a number of years for a contingency which may or may not arise. It is not possible in any such scheme to allow people who have not paid contributions to qualify for benefit if, as an individual, the contingency happens to them.
The basic fact and consideration of this matter is that the non-pensioners have not paid the necessary contributions for pension. To pay them a pension out of the National Insurance Fund built up out of contributors' money would be to act in a way that has no precedent. There is no precedent for such an action. It can be a dangerous and unfair course to pursue. I may say that the previous Administration also recognised the importance of this principle, because on July 16, 1962, Mrs. Margaret Thatcher, Parliamentary Secretary to the Ministry of Pensions and National Insurance, presumably making a statement on behalf of the Government, said in reply to a question on this particular point:I would point out that there is very little point in saying on the one hand, that to get a pension as a right one should contribute to it, and, on the other hand. 'Never mind whether you contribute or not, you will get it in any case'. That seems quite contradictory.That is a sensible and logical point of view; it is consistent with the view I am expressing, and one that was indicated time and again by the previous Administration. To destroy the contributory principle, as this Bill would do, is highly dangerous in the precedent it creates.
A further point which I think must be borne in mind concerns those already in the Fund. Without doubt, if the Fund were raided it would justify and create the strongest protest from the mass of people who have built up their entitlement over the years, and many of whom are paying pension contributions out of modest income.
224 My final point is the cost and the waste of resources which this Bill would mean. There are big sums involved. I am advised that the cost of the noble Lord's Bill as drafted would be about £25 million gross a year immediately, and about £14 million net, after allowing for savings to the National Assistance Board. It would be impossible to limit this Bill in the way proposed. Indeed, the cost of giving half-pension to all the groups I have mentioned which would be entitled would be about £46 million a year gross immediately, and £25 million net. And can we delude ourselves that the amount would remain at the half-pension? If it is just and right to raid the Insurance Fund for half the pension, it is equally just and right to raid it for 100 per cent. payment. It reminds me of the story of the unfortunate girl who had an illegitimate child, and who expressed the point of view that it was "only a little one ". It may have been; but even little ones have a tendency to grow. In this particular case, without any shadow of doubt, the amount would grow; and on the full-rate pension the cost would be £100 million gross a year, and about £60 million net.
In addition to that, if we are concerned with equity, it is the fact that there are 300,000 people receiving less than the standard rate. I was asked how many were on the minimum rate. That I do not know. But what I do know is the number receiving less than the standard pension—which is 300,000; and for some of those the amount received is only 22s. 6d. a week. Would there be any justice in keeping out these people when, at the same time, £2 was paid to a person who had not paid contributions and something less than £2 to a person who had paid regular contributions?
Reference has been made—and I end with this point—to the Government's record. I have been somewhat restricted in the drafting of this Amendment by the Rules imposed by the House, but the intention is not entirely destructive. My Amendment sets out quite legitimately, and indeed proudly, the Government's achievement in aiding old people in the last few months. The abolition of prescription charges has been referred to in almost contemptuous manner. I would say that the abolition of prescription 225 charges is more likely to help the older people than the younger people, because they are more likely than the younger persons to be making calls on the doctor. The Finance Bill now being considered in another place proposes to raise income limits for age exemption of tax. It is not a considerable amount, but it is some indication of the improvement of the situation.
VISCOUNT COLVILLE OF CULROSS
My Lords, I wonder whether the noble Lord would examine (I know that he cannot do it now, because it is a very complicated matter) the facts that I put on this particular point. Because, unless the information I have—and I got it from what I hope is a reliable source—is quite wrong, this particular relief does not help at all; and if it does not help perhaps he would use his endeavours to see that the requisite changes in the Budget are made so that it does help.
VISCOUNT COLVILLE OF CULROSS
Does the noble Lord dispute my facts? The facts I gave were that people paying tax, at any rate at the figure I gave, are not helped at all, and that in one case they are worse off as a result of this change.
§ LORD PEDDIE
I fail to see how anyone could be worse off by the change in the basis indicated. The extent of the benefits might be a matter for personal consideration and assessment, but the position, with the improvement made by this Government, is better than it was twelve months ago.
§ LORD PEDDIE
Take the question of local authorities. True, not everyone benefits in connection with cheaper fares; nevertheless, the concessions are of some advantage to the older people. There are the National Assistance increases in 226 relation to the poorest of the non-pensioners, and if there is any validity in the claims that the noble Lord opposite is making on behalf of the needy surely he should have regard for those most needy. I know that the question of poverty can be relative as well as absolute—noble Lords opposite have made comments upon that—but I would sooner experience relative poverty than absolute poverty. It is the people with an extremely low income, an income insufficient to maintain themselves, who are most deserving of aid.
It is for this very reason that the Government are introducing a minimum income guarantee scheme, comment upon which has been made in the Amendment. I had not intended to make much comment on it, and would not have done so, had it not been for the noble Viscount opposite doing so himself. Those who criticise the Government about the income guarantee scheme in terms of a "means test" and urge the payment of pensions without regard to the recipients' incomes must find it difficult, if not impossible, to reconcile that attitude with the official views of the Conservative Party, expressed in their Election manifesto, for greater selectivity in the distribution of benefits and more concentration on those in need. That is quoted from their own Election manifesto.
If there are others like the noble Viscount who introduced this Bill who have some concern about the speed of introduction of the income guarantee, and claim that this Bill will solve the problem more quickly, may I draw their attention to the provisions of the Bill for "late age entrants"? They speak of the need for urgency in dealing with this matter. The Bill imposes on these "late age entrants" and their wives an ace limit of 80 before they can get a pension. Apart from the fact that this age limit is apparently to be the same for both men and women, despite the difference in minimum pensionable age for them, it means that some wives and widows would not receive a pension under the Bill for many years. In some cases they would have to wait possibly until well into the next century.
As the Minister of Pensions and National Insurance has clearly indicated, the Government have a definite policy for 227 the old, both pensioners and non-pensioners, in their plans for an income guarantee. This will introduce a new and progressive concept in social security in this country. Obviously, I cannot indicate when these plans will be produced before Parliament, but I do know that they are the subject of active study at the moment, and I know that the Government have given a positive declaration of their intention to introduce a Bill to deal with this serious situation. One can hardly criticise a Government for lack of Teed when one recognises the substantial improvement in social welfare that has been made in the past few months, compared with the speed that has been exercised over the last few years.
Frankly, one hopes that this House will consider this Bill solely on the merits of the case, and not seek merely to secure some fleeting political advantage. That would not be to the credit of the House. I believe, quite honestly, that we have as much concern for the old people as noble Lords opposite. This Bill stands condemned because it is inequitable; it fails to alleviate hardship where the need is greatest it is chock-full of anomalies—so many that it would be impossible to apply it. And I believe it is dangerous, because it seeks to destroy the contributory principle. In consequence, I hope that your Lordships will consider this matter in all fairness, and I am sure that on the consideration that I know you will give it, you will reject the Bill. I beg to move.
§ Moved, as an Amendment to the original Motion, To leave out all the words after ("That") and insert the said new words.—(Lord Peddie.)
§ 5.34 p.m.
§ LORD WADE
My Lords, I think it is a matter for regret that the pleas on behalf of the elderly "non-pensioners" have fallen on deaf ears during the last fourteen years. But to point this out does not solve the problem, and the issue before the House this afternoon is whether this Bill should receive a Second Reading. I personally hope that your Lordships will give it a Second Reading, in order that it may be considered further in Committee.
As the noble Viscount, Lord Colville of Culross, has pointed out, the Bill is intended to benefit those elderly people 228 over retirement age, who are at present not entitled to any pension at all. I have listened carefully to the noble Lord, Lord Peddie. I thought he made a most convincing case for studying this Bill in detail in Committee, but he did not convince me that it should be rejected. The object of the Amendment, if you consider it carefully, is to strangle this Bill at birth. If I may say so, that would seem to be a singularly inappropriate way of dealing with a Bill concerned with the welfare of elderly people, most of whom are over the age of 80. But I want to take the points made by the noble Lord, Lord Peddie, seriously.
The Amendment refers to the existing National Insurance Scheme as a contributory scheme of national insurance. It suggests that those who have not paid the necessary contributions to the scheme should not be allowed any benefit. But I think it has been clear for a long time that retirement pensions are not based on a genuine insurance principle. Payments can no longer be related directly to contributions, and there are few pensioners who can claim to have earned their pensions by the actual amount of their contributions.
§ LORD PEDDIE
My Lords, I sincerely apologise for interrupting, but this is the whole kernel of the situation. It is quite wrong to argue that, merely because the contributions do not balance the amount received, this scheme stands condemned. In every contributory scheme there is no direct relationship between the amount that is contributed and the amount paid out.
§ LORD WADE
My Lords, I do not think that this is a case of relationship. I am not suggesting that the amount of the contributions in total from the contributors would balance the funds that are actually paid. What I am suggesting is that there is no longer a real insurance principle. I should like to refer to that matter in a few moments. But I would urge your Lordships not to be too logical in dealing with this point.
§ LORD BOWLES
My Lords, may I interrupt the noble Lord on this point, to say that the Treasury as well as the employers contribute a great deal of money; so it is not only the pensioners themselves on retirement who have to be counted in this matter.
§ LORD WADE
My Lords, I think we must be careful not to be too logical. Take, for example—and this is only an example—the "10s. widow" If the Government had been completely logical, I think they would not have increased the payment to the "10s. widow"; they would have taken the 10s. away altogether. I am not advocating that, but merely pointing out what happens if you try to be too logical.
§ LORD LINDGREN
Why? Would the noble Lord tell us why it should be taken away? The husband of the widow contributed prior to 1948.
§ LORD LINDGREN
The noble Lord is entirely wrong. Under the National Insurance Acts prior to 1948 the widows' pension was 10s. The "10s. widow" was not entitled to benefit under the 1948 Act, but earned her pension as a right from the Acts arising from 1912 to 1948.
§ LORD WADE
My Lords, I would repeat the statement. If one is too logical, one will find a number of cases where the beneficiary under the 1948 Act does not receive a pension that can be related to the actual contributions. There are certain exceptional cases, such as the "10s. widow". One has to be careful not to be too logical. The argument that we must keep to the insurance principle is no longer valid; that is the point I am trying to make. I see that the noble Lord, Lord Peddie, does not agree with me. But whether we like it or not we are operating a pay-as-you-go system.
230 The question the country has to decide is how much should be paid out of the current earnings of the working population to help those who have reached retirement age. I would make it clear that I do not believe that the State should bear the whole burden of superannuation payments for all those members of the community who have retired; I do not believe the State should pay all pensions or superannuation. Quite apart from political considerations, there is the practical objection that if the State were to accept complete responsibility for providing an adequate income for all those members of society who have retired, the amount which the Chancellor would have to raise would be overwhelming. There must in future be a partnership between the State scheme, private insurance schemes and pension arrangements provided by firms and industries. I believe that in this the insurance companies and the life offices have a very important role to play.
So much for the future. But we are dealing with the hardships of to-day and, in particular, with a body of people who have had little opportunity to save for retirement; and who, for various reasons, were excepted from the National Insurance Scheme when it was introduced in 1948. Some of these people had small savings, but the value of those savings has been eroded by inflation. I remember an elderly lady telling me that she had a small amount of savings, not very much, all in 3½ per cent. War Loan. She had invested in that at a time when one had to pay par value—it was regarded as a mater of loyalty to buy War Savings. But because it had gone down in value she was finding it impossible to make ends meet. The question she asked me was what she should do: should she cut her losses and sell? She was not entitled to National Assistance because of the existence of those small savings. That is the problem, and it is difficult to find an answer. That is only one of many cases.
It is true that there are some who are entitled to National Assistance. The number on National Assistance has been quoted. Many are reluctant to apply. Perhaps it is a pity that they are reluctant to seek assistance, but it is a fact of life that we must face. It is a very human problem. We are dealing with 231 old ladies behind lace curtains, some of whom would rather starve than apply for assistance. For years they have been the forgotten people of our welfare society. Over the year the pensions under the 1948 scheme have been increased; benefits have been granted much in excess of the actual contribution—I do not think that has been disputed. The people we are considering to-day, who are outside the scheme, have received nothing at all. Moreover, they have not even been entitled to some of the concessions which have been granted to old-age pensioners. They do not get the cheap bus fares and other special terms. It may be that some of them are too old to travel by bus, but the fact is that they do not get these concessionary fares. I think I am right in saying that.
§ LORD BOWLES
My Lords, if I may interrupt the noble Lord for one moment, the possession of a pension book is not necessary to obtain these concessionary fares.
§ LORD WADE
I hope that the noble Lord will clear up this point when he replies. I understand that those who cannot produce evidence of their being entitled to pension do not get the benefit of these concessionary fares. I recognise that some are too old to use them. The point is that in relation to the National Insurance Scheme, 1948, their existence is not recognised. There is a strong case for ensuring that they should receive some benefit as of right.
In all these questions of providing better welfare services one has to consider priorities. If that is so, priority should be given to those with only a few years to live. The proposal to introduce a guaranteed minimum income in some future legislation, possibly next Session—we do not know—may benefit some of those old people. But how many of them will still be living? For years the cause of these old people with no pensions at all has been largely ignored. Little has been heard of them. I find that many members of the general public are surprised that there are old people who are entitled to no pension at all. Many old people have suffered in silence.
§ LORD LINDGREN
My Lords, if the noble Lord will excuse me, there is not 232 a single one of these persons who, had they so desired, could not have made contributions and become entitled to benefit had they joined the scheme in 1948 or subsequently—not one of them.
§ LORD WADE
I hope the noble Lord, when he replies, will deal with that point. I am sure the noble Lord is aware that there are old people who could not come into the 1948 scheme. That is one of the bad points. I would emphasise that it is not fair to say that these people are in this plight simply because they did not choose to join under the 1948 scheme.
§ LORD LINDGREN
But every person over the age of 65 in 1948 could have been a voluntary contributor under the previous Insurance Acts, if he had wanted to.
§ LORD LINDGREN
In regard to voluntary contributors, all persons, irrespective of income, could join—whether they were in excepted employment or whether their income was own-the limit. That is why there were voluntary contributors under the previous Acts.
§ LORD WADE
There were those who were over the £420 limit who could not come into the pre-war scheme; there were those who could have contributed voluntarily but, for various reasons did not do so, and there are those—and this is the most serious point of all—who are too old to benefit under the 1948 scheme. I am pleading for some relief for these old people. It may well be that there are details on this Bill which need to be carefully examined. It may be that we could improve the Bill in Committee, but it provides some opportunity for granting relief to a body of people who well deserve our thought and our legislation to grant them some pension as of right.
§ 5.48 p.m.
My Lords, before the shock of two people on these Benches getting up and speaking immediately after each other reduces your Lordships to complete insensibility, or at any rate lowers the temperature (which perhaps might not be a bad thing), I ought to declare an interest—not in the sense that I am (though I might appear to be) one of the people of the average age of 84, who owing to excessive old age are denied a pension, but because I am a Back Bench Member of the only Party of the House which has not actually got a Back Bench, and I sit here only by hereditary right. I do not claim to have any political acumen or sense, but I have a feeling that in the very near future to be either a Back-Bench Member who speaks out of order or to be a hereditary Peer may be asking for trouble with both hands; and to be both at the same time will be asking for it with all four feet. So while I have only two feet, I should like to say the few things which I have to say.
I think that this is a perfectly simple issue. The issue is whether or not the Bill which the noble Viscount, Lord Colville of Culross, has extremely ably put forward should get a Second Reading. I do not think that this is the moment, and I should certainly not be the person to do it, to take part in such technicalities as we have had. A number of statements have been made by noble Lords opposite, who are in a much better position to know, but they have been contradicted in my hearing by other noble Lords. There is the question of whether a number of these people could possibly have contributed, which is a very vital point. I am told that they could not, but I do not think that this is the moment to go into that.
Another point, which seems to me an important one, is whether if this Bill went through in any form it is one which would "escalate" I can never understand why "escalate"—as an escalator is a very steady form of transport—should mean "shooting up at a rapid pace". The only accident on an escalator I ever remember hearing about happened when a lady caught her stiletto heel going down and sixty people piled up. I should have thought, in so far as these people are a wedge at all, that they are the thick end of the wedge and not the thin end. But 234 as the noble Viscount, Lord Colville of Culross, said, they are bound in the course of nature to diminish in numbers much too rapidly, I am afraid, for the minimum income guarantee, which is still only an intention but which I very much hope and believe will do all that it is said to do. I asked about this immediately after the Second Reading of the War Damage Bill and the noble Lord, Lord Bowles, said—as I think the noble Lord, Lord Peddle, said—that this would be something quite new in social legislation. My feeling and I think it is the feeling of other noble Lords on this side regardless of Party—is that it will not be anything new in the lives of those old-age pensioners, or non-pensioners, who by that time will be dead. I think that urgency is the important point.
I do not want to keep your Lordships, but there is one point which has not been specifically raised and which is important. Whether this Bill is a good one or a bad one—and that can be discussed in Committee—is it one which ought to be discussed first in this House? In a way, I feel that it is a pity that it could not have been discussed in another place, but unfortunately that did not happen, so the only place to discuss it is here. I cannot quite understand the fact that the Amendment suggests that it should not be discussed, in view of the amount of discussion that has already taken place on a technical basis in which I do not propose to join.
This House is always liable to be under criticism, and has been under criticism for a great many years. The noble and learned Lord the Lord Chancellor said yesterday, with legal understatement, that it is doubted in some quarters whether it is entirely representative. It is certainly not representative in the sense that we do not very much mind being criticised. One of the soundest criticisms of this House ever given, and one which I should take as my text for what I am saying to-night, was made a very long time ago. I was reminded of it when I saw a performance of Iolanthe, and as the noble Viscount, Lord Colville of Culross, has quoted some verse, perhaps I may be allowed to do so. It is as follows:And while the House of Peers withholdsIts legislative hand,And noble statesmen do not itchTo interfere with matters whichThey do not understand,As bright will shine…"—235 there was optimism in those days, and I think to-day it would be, "As bright might shine"—…Great Britain's raysAs in King George's glorious days!On the only other occasion when I intervened in your Lordships' House, in a very indifferent maiden speech, I remarked that there are probably very few subjects which are not at least as well understood by one or two Members of your Lordships' House as by anyone else in the Kingdom. But if one wants to know what this House, as a whole, understands, I was given the clue by two statements to-night. One was given by my noble friend Lord Airedale, who advocated Courtesy. I believe that this House understands courtesy, and I speak with some experience because I have received it from all ages, of both sexes, and in particular from the other side of the House on more occasions than I can mention.
Whether or not courtesy in private life is a virtue is irrelevant, and whether it is a political virtue is disputable, but if it is debatable it can be debated profitably only with courtesy. That is why I think this Bill should be discussed here in technical detail in Committee. It would be a pity to strangle this Bill and to prevent its continuation. From the anonymous conversations I have had with people, varying from pub-keepers and Duchesses to bus conductors, I feel that people are rather dismayed by the way that the Bill similar to this was treated in another place. It would be a great pity if this Bill did not get a fair chance of discussion.
The other thing which this House understands is Equity. There is something rather special about that, because the noble and learned Lord who is normally on the Woolsack is, of course, the keeper of the Queen's conscience. He represents Equity and, in view of the fact that the noble Lord, Lord Peddie, raised this question of equity, I should like to say that I think it would be inequitable not to give this Bill a Second Reading. I am not a lawyer, in the sense that I have never practised Law, and have forgotten any that I knew. But I did once attempt to pass a Law Examination. They were easier in those days than they are now, but they were still difficult enough for me to have to resort to the rather mean trick 236 of learning by heart in doggerel verse certain things which I found difficult to master in other ways.
Some of the things which I believe I remember are the rather cryptic and miscellaneous collection of dicta called the Maxims of Equity. I was told that they all stemmed from the first Maxim of Equity, whoever invented that. If I remember correctly the poem went—Equity will not suffer a wrongTo be without a remedy.That is the burden of my songAnd the mainspring of my melody.There were other Maxims of Equity.For example:Equity follows the Law. To themThat the Law gives bread she gives jam:The aim of the law is to act in rem"—that means objectively—But Equity acts in personam"—more personally. As my noble friend Lord Wade said, we should not be too logical about these things; we should consider personalities.Equity will not suffer a wrongTo be without a remedy.That is why England has been strongAnd that is why England still could beIt can be strong only if this House fulfils the functions which it is right to fulfil.
The House has a limited function, and it is right that that should be so. It is not allowed to hold up legislation indefinitely; but it is allowed to delay what it considers, rightly or wrongly, by a majority, to be ill-considered or hasty legislation. I believe that the question has never arisen as to whether that would also apply to delaying what might, rightly or wrongly, be called hasty or ill-considered obstruction. Personally, I feel that that question has now arisen, and I think that this is the moment to show that everything that has been said about Party has been said in the normal, political tradition. And I speak as a member of a Party, the general view about which, though I do not share it, has become slightly corrupted in the process of time. It is that
Every boy and every girl,That's born into this world alive,Is either a little LiberalOr else a little ExecutiveI am not quite certain that that may not prove to be a temporary phenomenon; but, leaving the Liberal Party out of it altogether for the moment, 237 leaving (if my noble friend Lord Colville of Culross does not mind) the Tory Party out of it for the moment, and leaving the Party opposite out of it for the moment, I would say that these two things, Courtesy and Equity, both demand that this Bill should be given a Second Reading.
It is only courteous to people of this age, whether or not they are oldfashioned in rejecting National Assistance, even to the point of death. It has been said that that is not necessarily a very disgraceful thing to do; and I must say that those who do it have perhaps not been taught better ways (if they are better ways) by some of the pamphlets issued by the Government Party before the Election, which pointed out that it was a stigma to which no human being ought to submit, and that it was a disgrace to our kingdom that so many people should be drawing National Assistance. That is not a Party point, because I am quite sure that if the Liberal Party were ever in power we should have found it just as convenient to vote against the Amendment set down by my noble friend Lord McNair to the War Damage Bill, which was a Front Bench Bill, as noble Lords on the opposite side will find it convenient to vote for this Amendment, which is a Back-Bench Bill and, therefore, is embarrassing to the Government.
My Lords, I have gone on longer than I meant, saying much too little about much too much in much too much time, but I would emphasise—and this, I think, is the only thing, we need consider—that this House has a certain duty. The old expression "Noblesse oblige",even if it is pronounced in a modern way, "Nob-less", means that, even without Nobs, this House has certain obligations. I would say thatCourtesy should not suffer a wrongTo go without a remedyIn evening dress or in a sarongIn a brassière or in a brasserie.But Equity will not—and that of course does not mean that it does not: because there are certain wrongs (without medical knowledge, I should suggest disembowelment) which it is very difficult to remedy; but Equity does not willingly—suffer a wrong.To go without a remedyIn Westminster, Waterloo, Hong Kong,West Ham, Space-time or Eternity.
§ 6.4 p.m.
§ LORD BLYTON
My Lords, the noble Viscount, in opening his case upon this Bill, said that until recently there were not many who knew that this problem existed. He may not have followed the proceedings of the House of Commons during the last five years, but I will give credit to his honourable friend the Member for Abingdon, who did raise it with his own Government and who always received the answer that this was not possible because the whole of the Insurance Scheme was a contributory scheme. That was the Conservative position right up to the last Election. Then we had it again, and we claimed an increase for the "l0s widow". We were always told that they could not give it because the Insurance Fund was not able to bear it. For years in the House of Commons we were told, "You cannot give an increase to the '10s. widow' because of the financial burden it would place on the Fund".
I do not intend to claim to be impartial. I am a political animal; I support the Party that I was sent here to support. I also want to put my point of view as one who was a contributor to the National Insurance Fund for nearly 50 years as a working man. During all my insurable life, all Governments, even Liberal Governments, laid it down that the basis of this insurance should be contributory, depending upon the number of stamps a man had each year on his card; so that, at the end of his days, he could claim a pension. That basis was laid by Lloyd George many years ago, but the Liberal Party seems to be running from it to-day.
§ LORD WADE
My Lords, what the noble Lord has said about the insurance stamps is quite true, but if he were to press me I would say I think we can advance beyond that now. Personally, I would scrap the insurance stamps altogether, but it would take another speech to indicate how I would do that. But we must progress.
§ LORD BLYTON
We have advanced since then. A man got only 5s. a week then. It is much better now. After the 1926 Strike, the lock-out of 1926, as a married man with two children, I was faced, as a contributor, with a 239 bill for arrears of National Insurance stamps. I knew that if I did not pay it it would mean only half sick pay if I was taken ill during the next twelve months. It also had an effect on my credits over my insurable life; because the Act laid down that a man had to have an average of about 50 stamps a year. Then, again, when I became an M.P., from 1945 to 1948, I had to pay the full cost of the stamps as a voluntary contributor, in order to keep a continuity in my insurance if I wanted a pension. Yet this Bill asks that, from that same National Insurance Fund, pensions should be paid to persons who had the chance in 1948 to be voluntary contributors when they ceased to become compulsorily insured but who refused to do so.
Then there are those whose income was so high that they were not insurable. There are those, such as the noble Lord talked about—the teachers and the policemen—who, in 1938, when they had good wages according to the value of money at that time, refused to become voluntary contributors to the Insurance Fund, and who have thereby enjoyed not paying contributions during all those years. Now some noble Lords want to give them a pension out of the Fund that everybody else has paid into.
Finally, there are the widows of these people. What we are asked to do by this Bill is to raid the contributory Insurance Fund to pay pensions to people, many of whom could have done the same as I did in their younger days, when they could have paid as voluntary contributors, but did not do so. One basic principle of the Act has always been that contributions had to be paid regularly, and, as I have said, the whole basis of the National Insurance Act to-day is being challenged by the Bill that we now have before us. This Bill breaches that important principle; and there is no doubt that, if this Bill were to be carried, there would be strong protests from the trade unions and the people of this country.
It is a breach of the contributory principle to which the Trades Union Congress has subscribed over the years in the operation of the National Insurance Act. The Bill takes no account of the burden that the contributors to the 240 Fund have had to carry to get their pensions. The stamp in 1951 for employers and men cost 9s. 5d.; it went up in 1952 to 10s. 9d.; in 1957 to 13s. 7d., in 1958 to 17s. 6d.; in July, 1958, it went up to 18s. 2d.; in 1961 to 21s. 0d.; in 1963 to 26s. 2d. To-day it is 31s. 5d. You are asking in this Bill that young men in the lower wage scale who are paying these high contributions to get a pension in the years that lie ahead should have their Fund raided to give pensions to people who when they had the chance to contribute refused to take the opportunity.
There are young men to-day paying into the Graduated Scheme for very little return. The maximum graduated pension is £6. You are asking that out of their contributions we should give £2 a week to these people referred to in the Bill, although they have never subscribed a penny for it. On the other hand, the Act that we operate to-day is straightforward. It lays down that the Fund should be contributed to by the Government, the employer and the employee. The Exchequer grant jumped from £170 million in 1960–61 to £219 million last year; next year it is to jump to £289 million to meet the requirements of the Government, as contributors by agreement under the National Insurance Act of 1948.
Therefore, it is clear that over the years a great burden has been carried on the wage packet of the weekly lower-wage contributor to give him some right of pension when he reaches the age of 65. This Bill asks that all categories should be taken in and that the Fund be raided of at least £25 million a year. The figure for the first clause is £14 million; but, by and large, the figures I have been given indicate that this will represent a cost of £25 million a year. For what? The noble Viscount spoke about the poor and the needy, and before I finish I shall deal with that problem. The noble Viscount should have said that in the categories he mentioned are also the former professional men, the rich ex-businessmen and the landowners, who would get this pension by right. Therefore, when he pleads for the needy—and, in my own way, I go with him in this—I do not think we can afford to raid the Insurance Fund for those who are well-off and to give them a pension 241 by right when they have never contributed to the Fund.
My other point is this. Are we to say to those men who fell on evil days, who have a deficiency in their payments and have not got a full credit in their stamps, "While you did contribute and did not withdraw your contributions, you will still have to continue on a reduced pension because you did not fulfil the conditions of the Act"? And are we then, on the other hand, to say, "But we will give a pension to those who never paid a penny to the Fund, to those who could have been in the Fund and could have got a pension but who refused to continue. We now give them a pension by right"? Do you think for one moment that the public and the insurance contributors will tolerate that on the basis of the equity that the noble Viscount spoke about just now? Take it from me—and I know the trade unions and I know the working-class people—they will not stand for that argument!
Another argument in support of the Bill is that we could take the money from the Exchequer grant. That has been argued in this case in another place. But, if you took it from the Exchequer grant you would have to increase the cost of the stamp and put a further burden on the men in employment or be in breach of the agreement made between the Government, the contributor and the employer by taking £25 million in grant that ought to go into the Fund. Therefore, I feel that it is definitely wrong in principle; that it is a Bill that could never be justified, and that there is no insurance director on the other side of the House who would ever pay a pension to any of his members who did not maintain payments up to the day of their retirement. What would not be done in the world of insurance we are asked to do in this Bill.
I believe that the way to solve this problem—instead of there being a raid upon the Insurance Fund—is for these people who need help to be given it through the Exchequer, and that should be made a national charge on the Exchequer and not on the Fund. That is why the Government are pledged to their minimum income guarantee. I believe the minimum income guarantee, when it comes before us, will lay the 242 basis of a national minimum income so that people who are below the minimum level will be brought up to it and given a decent standard of living. That will mean a sacrifice for the people of Britain—for a nation who can spend millions on gambling, millions on alcohol, millions on racing! Surely, in a just society it is right to use some of that money to ensure that the needy, of whom the noble Viscount spoke, have an existence far better than they have to-day.
§ 6.18 p.m.
My Lords, I do not want to intervene at any length, but I feel that two things the noble Lord said need some small amendment. Having served as a Parliamentary Secretary in the Department concerned, I think I can say to the noble Lord that the reason why the ten-shilling widows' pension was not raised on the lines he suggested had nothing to do with the burden on the Exchequer. It was in order to try to be fair as between that class of widows and others similarly placed who received nothing and who still receive nothing. Secondly, when he spoke of the Insurance Fund and of the rights that current retired pensioners have in the Fund, he did not inform the House, as I think he should have done, that in fact the actual amount of pension that the pensioner and his wife have, as it were, purchased through their contributions during the course of their working years is only a very small fraction of what is drawn. That is in no way condemning the scheme, but it is putting what the noble Lord said in the correct light.
Thirdly, I think it is a pity, when dealing with this class of persons, which obviously includes those who are better off and those who are worse off, to try to suggest that this is simply a scheme whereby those who are well-off are trying to get something else at the expense of others. That was the tone of the concluding paragraph of the noble Lord's speech and I think it unworthy of him. I have known him for many years and I have heard him discuss these things in a more charitable vein.
§ 6.9 p.m.
§ BARONESS PHILLIPS
My Lords, being a woman, what I have to say will be brief; but I should like to intervene because I have a great respect for the noble Viscount who introduced the Bill 243 and I should like him to know why I am supporting the Amendment. As somebody who has worked in voluntary social service for many years, I feel that my motives could not be suspect. I have worked hard to help old people, and I have also, in my capacity as secretary of a women's organisation, made many representations to the Government on various issues. Over the years, we have gone many times to speak of questions of pension increases for the old persons and for the widows. I have in this connection attended deputations which have waited on Ministers, and have gone to that admirable Committee on which Ministers seem to lean, the National Insurance Advisory Committee. I find that if Ministers have anything they do not particularly like saying, they usually suggest that the National Insurance Advisory Committee has given them this piece of advice.
I think it would be wrong if we were to end this debate without realising that there are people who have, by reason of contribution, still not received anything from the scheme. These were the people I was mainly concerned about when I went to meet the Minister. There are in this country many thousands of widows under the age of 50 who do not receive any pension as all. Each time we went to see the Minister we were told that the scheme was actuarial and that need could not enter into this question. Perhaps I may quote what a Minister of the previous Government actually said.
He said that National Assistance, the long-stop of the social services, was always available for the widow where need was established. No contributions of any sort were required to draw National Assistance, nor was there any stigma attached to doing so. Officers of the Board had wide discretionary powers to supplement the scale rate laid down by Parliament in a case of special need, and they exercised those powers freely. Widows should not be any less free than anybody else to apply for a supplement from the National Assistance Board. If this is good enough for the widow of a man who has contributed to the scheme, I feel it is reasonable to say that for those who are in need, for whatever reason, the National Assistance Board is there for them also.
244 I believe there is some slight suspicion attaching to these excellent officers of the National Assistance Board. They do a very difficult job with great tact and skill, and many of the old people who do not see them would be benefited considerably if they had a visit from them. When working for elderly people we realise that some of the people who need help are not necessarily short of this world's goods; they need help in another direction; and the National Assistance Board could give it to them.
I would therefore suggest that the answer to this problem does not lie in a Bill of this kind. I have complete faith in the present Minister of Pensions. This is not to say that I had any lack of it in previous Ministers of Pensions, but they did not produce the results so far as my widows were concerned. The present Minister has told us that the whole scheme is under revision, and because of the speed with which the Government have acted in other directions, notably the prescriptions charge and the earnings rule for widows, I have every confidence that they will act with the same speed in this matter, rather than dealing with it piecemeal. It is very difficult to patch up legislation—several noble Lords have made this point—and there are anomalies which I could mention which have arisen from the removal of the earnings rule from the widow, as opposed to the single woman. This arises because of piecemeal administration or patching up of existing Acts, and I believe that the Amendment has the right tone, inasmuch as it asks that the whole thing should be revised.
I should not like noble Lords merely to take my word for it. I will quote from the Annual Report of the National Old People's Welfare Council. In their Report ended March, 1964, they say:Following the representations to the Minister of Pensions and National Insurance referred to in last year's Report the Chairman / Secretary had an interview with the new Minister."—This was still the late Government:Opportunity was taken to reiterate the Council's view that the time has been reached when there should be a complete reappraisal of the whole structure of the system of pensions and other State payments. The Minister was sympathetic but to the Council's regret he did not feel that the time was opportune for such a re-examination.245 My Lords, the Amendment suggests that this time is not only opportune but is in fact going to take place, and on that account I would certainly support it.
§ 6.26 p.m.
§ LORD MOLSON
My Lords, as I am unable to support my noble friend's Bill I should like to explain my reasons. It has been the consistent policy of the Conservative Party in the past to maintain the Insurance Fund on a sound actuarial basis. I have fought a number of General Elections in which we have defended that principle. We have said that pensions are not based upon need but are obtained as a matter of right by those who contribute to the Pension Scheme. I feel, therefore, that it would he quite wrong now to depart from what is a long-standing and, I believe, entirely sound principle by making the exception provided for in this Bill, merely on grounds of compassion.
That does not mean that I have no compassion. It is obvious that the proper way in which this problem should be dealt with is by a scheme like the National Assistance Scheme, which takes into account the needs of all those who apply. The effect of making available a flat rate of pension to all who fall into these particular categories would mean that the amount of money would not be adequate in the case of those in great need and might be excessive in the case of those with private means. And, as the noble Lord, Lord Peddie, has pointed out, the effect would be that those in receipt of assistance would find their grants diminished by the amount of the pension while those who were not in receipt of assistance, and therefore presumably not in need, would find that they obtained a gratuitous payment from the Insurance Scheme, to which they did not belong, to which they had not contributed, and from which quite possibly they might have withdrawn.
I think there is a strong case for making provision for aged people, and that can perfectly well be clone by revising the scales administered by the National Assistance Board. I believe that the Board is enlightened in its policy, and I know that the officers of the Board are humane in their administration, and it might well be the case that there is a need for a further revision of the scales in order that those who are in need and extremely 246 old should receive additional assistance. That would not be provided for under this Bill, and this would involve a departure from principles which have been supported by both political Parties for a very long time. I cannot believe that it would be wise, merely in order to attempt, I think ineffectually, to deal with compassionate cases, to depart from a long-standing and, I believe, sound principle.
§ 6.28 p.m.
§ LORD DRUMALBYN
My Lords, I am sure we are all grateful to the noble Viscount, Lord Colville of Culross—and we can all agree on this, at least—for giving us the opportunity of discussing the position of those of the very old who, for one reason or another, have no State pension. One can take the view, as the noble Lord, Lord Peddie, did, and as my noble friend has just taken, that the sanctity of the contributory principle enshrined in the 1946 Act is inviolate. One can argue whether or not it has already been violated. One can argue that the inviolability is so vital that it must override all other considerations. Or one can take the view that here is an injustice which ought to be remedied. This is the difference between the two sides. It is rather like two philosophers with different systems of philosophy and the minds are really not meeting. I have noticed this during the debate to-day.
I believe that the contributory principle is important but, after all, National Insurance is not comparable to a commercial insurance scheme. In Government one is always apt to resist all exceptions. I am sure that this is right and proper. But there are cases when it might be wise to admit exceptions, particularly in circumstances which are extremely unlikely to arise again. When we are dealing with over-eighties in a scheme which was started nineteen years ago, I should have thought this was possibly such a case.
I agree with the noble Lord, Lord Peddie, that this Bill and the whole subject with which it deals should be considered calmly, if not dispassionately, for it is difficult not to feel strongly where the treatment of the old is concerned, especially where the treatment varies as between one old person and another so greatly as it does at present. At least, 247 we can discuss it objectively. The object is to mitigate, without further delay, hardship which arises from something done nineteen years ago. Of course, it is true that the Party in power at that time can be reproached for not having foreseen what would happen, and the Party in power later can be reproached for not doing something to mitigate the hardship since; but I do not propose to spend my time on reproaches, if only because obviously I am more than usually vulnerable in this matter.
The stark fact is that when the National Insurance Act was introduced in 1946 it was made universal, some would say indiscriminate, except that those over pensionable age at the time were excluded. It was considered to be a universal scheme. It was indiscriminate in the sense that everyone was to get the same benefit, irrespective of their means and of whether they had contributed for only ten years, or since the start of the 1926 scheme, or for the whole of their working lives, or whether they had ever contributed at all but had married a man who had contributed for the last ten years.
In those circumstances, let us at least start by getting rid of colourful words like the rather loaded word "indiscriminate". There were unexceptionable reasons at the time for excluding those over pensionable age in 1946. Broadly speaking, these were people not covered by the previous scheme, who were in income groups which were expected to provide adequately for themselves in their old age. In passing, let me say that it was not open to everybody to join these schemes. There was an upper income limit. For those who, for one reason or another, had not done so, the National Assistance Act of that time was intended to apply.
As the noble Lord, Lord Peddie, pointed out, it is natural enough to consider excluding from a contributory scheme those who have not contributed to it. But the basic reason—and this is what I think the House ought to face—for their exclusion was not that they had not contributed to the previous scheme and did not contribute to the new one, but that they were thought to have adequate resources on which to live and which were expected to retain their pur 248 chasing power. That is the vital point. Let me remind your Lordships of what the then Minister said in introducing the Bill. He said:The House will be aware that the Chancellor of the Exchequer has expressed the Government's intention to hold the cost of living at about 31 per cent. over the September, 1939, level.This was the whole basis on which that exclusion was planned. If not, there was no reason why it should not have been a completely universal scheme, as it is in some other countries—for instance, Canada—on a non-contributory basis. At that time the Government announced their intention, I am sure, in the belief that that intention could be implemented.
The justification for looking at the whole matter again now is simply that that has not proved possible. For those still active and earning, the standard of living has risen. In broad terms, as we know, the average earnings in manufacturing industry have gone up threefold, while the cost of living has about doubled, and for those who have had retirement pensions ever since 1946 the value of their pensions has been periodically increased, so that not only has their purchasing power but also their relation to average earnings been maintained; and that without any contribution of any kind from themselves since 1946. Nobody grudges them these increases. On the contrary, we are all anxious to help them as much as we possibly can. But their treatment contrasts strongly with the lot of those who were excluded at the time.
I have made a rough calculation of the total amount contributed by both the contributor and the employer, and for the ten years they had contributed less than the sum of the benefits received by a married couple in one year at the present time. Surely that underlines the starkness of the contrast between those who were excluded through no fault of their own, because they were just over the age level, and those who could be included in the scheme. Every Member of Parliament has had elderly constituents come to him and plead for something to be done.
The typical case is that of the widow or elderly maiden lady whose entire in, come is derived from an annuity, the real 249 value of which has been halved over the past two decades. I am not making a political point about this, but I am bound to point this fact out. In some cases their incomes may come from Treasury Bonds or Consols, which stand at less than two-fifths of their face value, so that the holder, if she or he has to sell them in order to live, will get only half the amount saved, less than a quarter of its purchasing power. Can it be right that of two people of the same age, one should have had a pension towards which she had contributed nothing and the husband only a very small proportion, and that pension should have been tripled, whereas the other should not only have received no pension but have had her resources cut by at least half? That is the stark contrast.
That may not have happened in every case. The noble Lord, Lord Blyton, called attention to the richer people. But it is extremely difficult, and I do not blame my noble friend Lord Colville of Culross for not having put in a provision for an upper limit of payment. We had difficulty enough over this point with National Assistance. But if the noble Lord were to suggest a practical upper limit for the administration of this scheme, I am sure my noble friend would willingly consider it. But introducing the wealthy is really not an issue here, because, after all, the wealthy get the National Insurance pension just the same as anybody else. We are considering the question of universality and the exclusion of certain categories.
I do not want to disparage in any way the assistance that the present Government have sought to give to old people, but I am bound to agree with my noble friend that it seems to have no great deal of relevance to the particular old people we are discussing. They seem to have been excluded from this assistance because they were excluded from National Insurance. The intention to introduce an income guarantee is all very well, but when will the Government undertake to bring that into effect? The people we are talking about are, in the main, over 80, and once their need is recognised, every month, every week, matters.
I congratulate my noble friend for having the courage and boldness to bring forward this scheme. It is bound to have 250 defects in it—it is not possible for a Back Bencher to draft in a completely foolproof manner a scheme of this sort. But I hope that this scheme will be given the opportunity of consideration in Committee.
I do not want to detain your Lordships any longer. I feel it is necessary to bear in mind this very stark contrast. Perhaps I should mention, also, the 200,000 who retired from active life after 1948 and so, in general, were liable for a time to contribute to the National Insurance scheme, because this is something about which a good deal has been said. When these people reached retirement age they could "elect" (I put the word in inverted commas) to cease to contribute, in which case the contributions they had paid were returned to them. But if they did not so "elect" they remained liable to contribute for the remainder of the ten years, and then could receive the full pension. In so many cases one says "elect", but really there was no choice. This is the difficulty. These people came to the age of retirement at 65 and automatically, according to their terms of employment, ceased to be employed, and could not find further employment. These people were retired. They had no option. They were not able to continue to make contributions if they had no savings from which to pay. This choice in so many cases is illusory. That is why I think my noble friend Lord Colville of Culross was right to include this category.
I am not certain that it is comprehensive enough. We have been told that it is not comprehensive enough. We are told at one moment that it does not discriminate, and at another moment that it does discriminate. I am sure that my noble friend is prepared to put this right in Committee. Attention has been drawn to the cost; and you can make a good deal more of the cost than is really necessary. We are told that the net cost is £25 million. That is not an inconsiderable figure.
§ LORD DRUMALBYN
If you calculate this, it is about one-seventieth of the total expenditure from the National Insurance Fund; and it can be seen that if a further contribution were necessary 251 to make that good it would involve about 2½d. a week. Are we to be told by the noble Lord, Lord Blyton (who is not in his place), that those who have contributed to a scheme of this kind are going to be outraged by contributing 2½d. more in order to meet the special needs of these old people who have been so excluded? I confess that I find it difficult to believe that.
§ LORD SHEPHERD
My Lords, may I ask the noble Lord one question? He was Minister of Pensions not long ago. Can he tell us why he, and other previous Ministers, did not do it?
§ LORD DRUMALBYN
I have been challenged on a perfectly straight point. I cannot answer for anybody else; I can only answer for myself. For my part, I was Minister for a little over one Session, but really for only one effective Session. During that period the rates were raised.
§ LORD DRUMALBYN
The rates in general were raised. We had National Insurance legislation in that year. We started many other inquiries at that time, of which noble Lords opposite are getting the benefit at the present time. But I agree absolutely with what has been said, that naturally one did not have one's attention drawn to the position of these particular people. This is the point.
§ LORD DRUMALBYN
I have been asked a frank question. Please let me answer the question. I am giving a perfectly frank answer on this. I recognise fully the force of the contributory principle, and I myself have very often defended it. But, at the same time, I would say to noble Lords that in that job you are continually meeting people who are receiving benefits and who want their benefits changed and so forth. You do not meet the people we are now considering, largely because they are not organised. You do not meet the people who were excluded at that time and who, as my noble friend has said, are always very chary about coming forward to put their case, or even about coming to get National Assistance. I did not expect that this would be a satisfactory answer, but I have given it as frankly as I possibly can, and this is the case.
252 I would, further, say only this. It just so happened that my eyes were most opened on this particular case on the very day that I relinquished office, because I happened to meet these people.
VISCOUNT COLVILLE OF CULROSS
My Lords, is it in order for the noble Lord, Lord Lindgren, to go on interrupting this debate while sitting down on the Front Bench. I wish to hear the speeches in this debate, and I am sure it would be appreciated by the House if the noble Lord's interventions were made in the normal manner by his standing up.
§ LORD LINDGREN
I apologise to your Lordships. I am afraid it is a habit that one acquires in the other place. It is a bad habit, but, unfortunately, I still carry it on.
§ LORD PEDDIE
My Lords, I previously made the request that there should be an absence of heat in discussing this important matter. I have hesitated to interrupt, but I feel that I must intervene on the noble Lord's speech, because he made the statement a few moments ago that this important matter was not brought to his notice. On February 11, 1963, in the other place, the noble Lord, Lord Wade, who now sits in this Chamber, raised a question with the noble Lord, Lord Drumalbyn, relative to this matter and the noble Lord, Lord Drumalbyn, said that he had no proposals to make.
§ LORD DRUMALBYN
When one is answering a question of this kind one gives the best answer one possibly can. What I was trying to convey to the House was that one's attention, naturally, was directed mainly to the solution of problems affecting those who have pensions or were claiming pensions at that time, and not to those who were excluded from the start.
Let me conclude by saying this—because I feel that this is largely a matter 253 of feeling. I say again to your Lordships that, where the contrast is so very sharp between those who happened to be covered by National Insurance and those who were not, there really is a very strong case for doing something about it. I am sure my noble friend would not claim that he has done exactly the right thing, but, at any rate, he has taken an early opportunity of bringing the matter to your Lordships' House so that we may have an opportunity of doing something as quickly as possible. If noble Lords opposite want to do something better later, let them. But why should we not do this now?
§ 6.48 p.m.
§ LORD BOWLES
My Lords, this is the third debate on this subject. It was raised by the noble Viscount, Lord Barrington, on March 25; there was a debate in the other place on the same day, or early the next morning; and now we have had this third debate to-day. I cannot believe that noble Lords who have spoken in this debate in support of the Bill would have said what they did say if they had read the earlier debates, because the position was set out clearly by my right honourable friend the Minister on March 26. Let me first of all say to the noble Lord, Lord Drumalbyn, that he was the Minister until he was relieved of his office as Minister of Pensions and raised to your Lordships' House. Maybe it was because he was not doing the right thing, and not doing the job properly. The noble Lord, as my noble friend Lord Peddie has just said, was asked in the other place on February 11, 1963, a Question by Lord Wade about non-pensioners, and he said:I have no proposals to make on this matter.It was not many months after that he came to your Lordships' House, and we can leave it there.
The important thing is what has been said in this debate. I am not very concerned whether there is a Division or not. What I think is important is that the people of this country should understand the facts and arguments both against and in favour of this Bill. I think every noble Lord who was in the House must have been impressed by the speech of my noble friend Lord Peddie. It was a masterly performance and, to my mind, conclusive. There has been no answer to it. I should 254 also like to congratulate my noble friend Lord Blyton on his approach to the subject from a practical worker's point of view.
In this connection, I would say that it has been well understood by the trade union movement, in discussion with Government after Government, that this National Insurance Fund is sacrosanct, in the sense that the ordinary working person says to himself, and his trade union leaders: "We want to contribute to a Fund, because then we are quite sure we shall get the benefits which are due to us out of that Fund". They do not like leaving these things to the whim of a Minister or a Government. They feel, and rightly, that by paying their contributions they are ensuring for certain that in the future they will get the benefits which are due to them.
I have been talking to a good number of my honourable friends in another place about this. Labour M.P.'s have had no difficulty in explaining this matter to their constituents. I warn the Conservative Party: if they go on like this—and I hope they do—they will lose themselves thousands and thousands of votes at the next Election. People know perfectly well what the situation is. I received a letter from a lady from Whitstable two days ago which said:Dear Lord Bowles. I read in my Guardian that you are to reply for the Government when Lord Colville's Pensions Bill is debated on Thursday. I do hope that you will make it quite clear that a lot of people feel very strongly about this matter. The Conservatives had years in which to do something about these old people, neither they or the House of Lords bothered. It is sheer hypocrisy for either of these groups to show their concern at this juncture.I will come back to some more of that letter in a little while: I do not want to read it all now.
VISCOUNT COLVILLE OF CULROSS
My Lords, is the noble Lord saying that I have introduced this Bill out of hypocrisy? So far as I am aware, I have not previously been interested in this subject, because, to be perfectly truthful, I did not know about it. Is the noble Lord really suggesting that my motives are entirely hypocritical?
§ LORD BOWLES
I have not said that the noble Lord is hypocritical, but it will be interesting to see how he behaves. I would point out to noble Lords 255 opposite that this is not a new matter at all. On April 16, 1962, the then Minister of Pensions was Mr. Boyd-Carpenter, and he replied to a question by Sir Barnett Janner about the provision for non-pensioners over seventy. He said:As regards the last two parts of the Question, Parliament has already made financial provision for all persons in need through the National Assistance Scheme."—[OFFICIAL REPORT, Commons, Vol. 658, col. 7, April 16, 1962.]
I do not suppose the noble Viscount has this in mind, but he might look up some of the history. Mr. Thorpe also asked a question on the same subject and a supplementary question was asked to which the reply was given:I cannot, therefore, see why one should make a distinction in the help given to them and a distinction in the help given to other unfortunate people in need through the National Assistance Board."— [Col. 8.]I am going to quote again, this time from Mrs. Margaret Thatcher, who was then the Parliamentary Secretary. On July 16, 1962, she said—and this is really the whole point:… I would point out that there is very little point in saying, on the one hand, that to get the pension as of right one should contribute to it and, on the other hand, 'Never mind whether you contributed or not, you will get it in any case.' That seems quite contradictory."—[OFFICIAL REPORT, Commons, Vol. 663, col. 5, July 16, 1962.] Of course it does.
The noble Lord, Lord Wade, who was in the House of Commons for a long time, made the most extraordinary suggestion. He said we ought to let this Bill have a Second Reading, and then discuss the principle on Committee stage. The Second Reading of a Bill is where the principle is decided. If the House of Lords decides that the contributory pension principle is to be breached in this way, if we are going to say that people who have never contributed a penny to the Fund, or people who have elected to take their contributions out at the age of 65 having paid for three or four years only, should be helped by this Bill to get a pension out of a contributory fund, then that seems to me a most extraordinary proposal. This is the issue of principle which we are deciding tonight. It would be the details, such as that referred to by the noble Lord, Lord Drumalbyn, about the 256 wealth of the recipients, which would fall to be decided on the Committee stage.
§ LORD WADE
My Lords, I think if the noble Lord reads Hansard he will find that I said I hoped the Bill would receive a Second Reading, so that it might be discussed in detail on Committee. This is surely a normal practice in our Parliamentary procedure, that we should leave a Bill to be discussed in detail in Committee.
§ LORD BOWLES
I will certainly read my speech and the noble Lord's speech in Hansardtomorrow, but I am fairly sure that he said: "Let us pass this Bill, and then discuss the principle in Committee".
The noble Viscount, Lord Barrington, said that I had referred on March 25 to a proposal for letting people who had not contributed touch the contributory fund in another way. I did not say anything of the kind. What I was referring to was the Government's proposed guaranteed minimum income scheme. I said it will cover pensioners and non-pensioners alike, and that it will introduce something new into the history of social security in this country.
My Lords, I am sorry if I was inaudible. What the noble Lord now mentions is what I thought I referred to, because I went on to say that I wished it every success. I added that it would not give anything new to the old pensioners, who by the time it came in, would no longer be alive.
§ LORD BOWLES
The position is that this is a fundamental matter of judgment and equity. The noble Viscount, Lord Barrington, referred to various uses of the word "equity". I should say, first of all, that, apart from all these other quotations from the learned Judges of Courts of Chancery and of Equity throughout history, there is one which I remember which he did not quote:He who comes to equity must come with clean hands.I suggest that it is quite wrong to try to change a principle of this kind when there have always been these almost sacrosanct arrangements adhered to by successive Ministers of Pensions that people should pay their contributions in order to ensure their right to get the 257 benefits to which they are entitled when they are entitled to them. Therefore, I cannot understand why we should be asked on this occasion to do something quite wrong. I am certain that a large number of people will, as I said earlier, resent this attack on the contributory principle by the Conservative Party, or even by its Back-Benchers, some of whom have been extremely ignorant about this subject throughout the years. Perhaps that is one of the characteristics.
This lady from Whitstable went on to say—and this an idea with which I think we all agree—most of the really deserving of these old people could presumably, apply for and get National Assistance. Some are too proud to do so, and this is understandable. Although, for obvious reasons, one does not want to put over the idea that National Assistance should be 'a way of life', I think that if it were explained that all sorts of things were, in reality, National Assistance—grants to Peers and others for the upkeep of their stately homes' (not always deserved, and often, if their estates were properly and fairly run, not necessary!), subsidies to farmers, etc., some of these old people might be persuaded to seek help.That is a very good letter from this lady. I shall write to her, although she asked me not to bother.
The public is greatly against the noble Lord in his proposals. I think my noble friend Lord Peddie, in his brilliant speech, has covered all the technical arguments, and all I want to do is to refer to two things.
The noble Viscount, Lord Colville of Culross, suggested these old people could not take advantage of cheap bus fares and so on because they could not produce pension books. But I ought to say that the noble Viscount's contention that fringe benefits in kind, such as concessionary fares, depend on having pension books is not generally correct. It is the fact of old age which counts.
I will try to answer another point which was raised. In the time available it has not been possible to make much more than a rough estimate of the number of people receiving a rate of pension of less than £2 a week. The number may be of the order of 30,000. But whether the number is larger or smaller than this does not affect the principle that it is wrong to give a pension of £2 to people who have paid no contribution, 258 whereas people who have paid some contributions can get, as a minimum, a pension of no more than 22s. 6d.
§ LORD AIREDALE
My Lords, it was not the noble Viscount, Lord Colville of Culross, who mentioned this as an argument for bringing people in; it was the noble Lord, Lord Peddie, who brought it in as an argument for throwing the Bill out. It is in the Amendment.
§ LORD BOWLES
With great respect, the noble Lord either was not here or did not understand. The noble Viscount, Lord Colville of Culross, was going through the reasons set out in the Amendment, and one was concessionary fares. I cannot believe that the noble Lord did not hear, so he must have misunderstood. The noble Viscount said that one of the reasons for bringing in the Bill was that people who now do not have old-age pension books will not have them to show the bus conductor. I have just explained that it is not generally necessary to have a pension book to get the concessionary fares, and therefore I have settled that.
There has been an argument put by some noble Lords that, as these people are dying fairly rapidly, this liability on the Fund, if it ever came on, would cease again quite quickly. There are people who all the time are coming on to the Fund. Supposing a man has been earning his living in India until the age of 55 and has not been paying contributions. It is only people resident in this country who have to pay contributions. People working abroad do not pay contributions, but they pay as soon as they get back to this country. Perhaps they get back at the age of 50 and pay up to 65, for 15 years; they do not get the full pension. There have always been people who have been away a good deal of their lives and come back. There are those, mainly women, who give up part of their working life to look after ageing parents. They do not have to pay because they are not working. Therefore, their contributions do not add up to the right amount and they will not get the full pension.
VISCOUNT COLVILLE OF CULROSS
My Lords, will the people the noble Lord is now describing be covered by my Bill, because if they are I was not aware of it, and I should be very grateful 259 if he would explain where they are covered.
§ LORD BOWLES
It is very difficult to understand the noble Viscount's Bill. Even the Department had difficulty in determining whether a married couple was intended to get £4 or £3 5s. What are they going to get? The noble Viscount does not know that himself. He has been quite tough himself, and I am going to be quite tough in this House as well as anywhere else. This is a very important matter. It is a matter that affects not only 250,000 people; there are another 200,000 people who are also not getting any pension, and another 300,000 with reduced rate pensions. This adds up to 750,000 people not receiving full retirement pensions. Therefore, as my noble friend Lord Peddie said, the ultimate cost, if this were to be done properly, would be very substantial.
The noble Viscount's argument was that it was very unfortunate that some people should be left out. But he has not bothered to bring everybody in; he has left out over half a million people. The Government authorise me to say that they object to trying to deal with this matter piecemeal. To do so would upset all the contributors to the Fund, which number about 23 million people, and I wonder how successful at the next General Election the Party of noble Lords opposite would be if they did that?
§ 7.6 p.m.
§ LORD PEDDIE
My Lords, I promise to be extremely brief in replying on the Amendment. I made the appeal originally that this matter should be considered logically and impartially and freely.
§ LORD PEDDIE
I am glad noble Lords endorse my comments. It is a pity the actions have not given support to the voice. I am indeed sorry that there has been an emergence of a little political bias, which I think does not do credit to this House. But I think the speech that was made from the opposite Benches by the noble Lord, Lord Molson, was extremely effective, and I hope that noble Lords opposite will give thought to the comments the 260 noble Lord made. He indicated, I am glad to say in support of the comment I had made originally, that this matter should not be judged entirely on the basis of compassion. I felt sorry for the noble Lord, Lord Drumalbyn. He was speaking quite frankly and he had to admit that he recognised that he was extremely vulnerable; and I appreciate the degree of vulnerability to which he was exposed. Nevertheless, I am certain that he himself recognised the utterly fallacious arguments that have been expressed.
The matter before the House is not a debate as to whether there are in this country a lot of needy old persons. That is accepted by both sides of this House; we all recognise it. Therefore, I hope that no one will cast his vote, if vote there be, merely because of the measure of need within the community of the old. We all accept it. But I believe that a vote passed for the Bill and against my Amendment would be grossly misleading to the old community and would lead them to believe, quite falsely, that here was a legitimate claim upon an insurance fund. This is an Insurance Fund, but some noble Lords opposite have tried to argue that because it is not on a strictly actuarial basis it cannot truly be considered an insurance fund. That is not so. If we bring into the Fund people who have made no proper contribution, it will mean that the Fund will be raided, and the present contributors who expect a pension to be drawn from that Fund will be adversely affected by the fact that non-contributors have drawn from it. That is the real point at issue.
Therefore, without developing the argument and to fulfil the promise I made to be brief, I express the hope that noble Lords opposite will seriously carry in mind the points that I have made. So far as I can see, they are based on logic and a full recognition of the responsibility of this House to appreciate the fact that if we have a contributory insurance fund, it must be operated and administered as such. It would be wrong—indeed, it would be almost dishonest—to attempt to indicate to people that, merely because there is a need (and there is no clear definition of this need, because a total of 250,000 people has been mentioned, and we do not know to what extent there is real need) those people can now make a 261 claim upon an insurance fund without any prior payment.
I hope that noble Lords opposite will recognise their responsibilities in this regard, and will realise that the fact of voting for the Amendment is not an indication of any lack of sympathy for the older folk. We are all at one with regard to that. I hope that noble Lords opposite will recognise that the last Administration indicated, again and
§ Resolved in the affirmative, and Amendment agreed to accordingly.