HL Deb 28 February 1966 vol 273 cc487-517

4.14 p.m.

Order of the Day for the Second Reading read.

LORD BOWLES

My Lords, I beg to move that this Bill be read a second time. This Bill marks the first stage in the Government's proposals for reshaping the social security schemes of the country. As the House will recall, when the Government came into office they made their first priority the payment of higher retirement pensions and other National Insurance benefits, together with improvements in National Assistance scales. At the same time, the Government announced that they proposed to carry out a general review of social security, and it has been made clear that as progress on it is made, measures will be introduced to carry into effect the decisions reached.

The main purpose of the Bill is therefore to bring into effect the Government's proposals for earnings-related supplements to the existing flat-rate benefits for the early months of unemployment, sickness and widowhood. At the same time, the Government are proposing certain valuable simplifications and rationalisations in other parts of the National Insurance schemes, particularly on unemployment benefit. The Bill also gives a suitable opportunity to bring in quickly the changes in the Industrial Injuries Scheme which are needed to carry out the recommendations made in the Report by the Committee on the Assessment of Disablement, which was so ably chaired by the noble Lord, Lord McCorquodale of Newton. Finally, there are proposals for a few minor changes designed to keep the present National Insurance Scheme in good day-to-day running order.

Having thus briefly sketched in the main features of the Bill, perhaps I may discuss in rather more detail the major points in the Bill. I turn first to the proposals for earnings-related supplements, and the additional contributions needed to pay for them, set out in Clauses 1, 2 and 4 of the Bill. The Government have, of course, been committed from the start to providing earnings - related National Insurance benefits for these contingencies, but I know that there has been some interest in why priority has been given to these proposals. The Government's policy on this was explained inThe National Plan, published last September. The extent to which our social provisions can be improved depends fundamentally on the growth of the economy. One of the factors in this must be the most efficient use of labour in the light of scientific change and development, and this means encouraging the proper mobility of labour. If this is to be done, then adequate economic protection must be provided for workers who have to change their jobs. Considerable help is provided by the system of lump sum payments under the Redundancy Payments Act, which started last December, and further help will be provided by the earnings-related supplements to unemployment benefit proposed in the Bill.

But National Insurance benefits fulfil a social as well as an economic purpose, and the sudden drop in income which unemployment brings can be matched by a similar drop when the breadwinner is sick or dies. In the Government's view, therefore, it was essential to provide similar earnings-related supplements for the early months of sickness and widowhood, too. Indeed, because of the inherently close links between unemployment and sickness, it would have been extremely difficult to distinguish between them without, for example, encouraging some sick people to try to register as unemployed in order to get the higher benefit. I would stress that these proposals relate only to the early periods of loss of earnings. In the Government's view the provision of benefit on a long-term basis for people such as the chronically sick raises different issues, which are being considered as part of the review of social security.

Clause 2 of the Bill provides for supplements to unemployment and sickness benefit payable for up to six months to people over 18 and under pension age, who are entitled to the flat-rate benefit. The clause also contains special provisions to allow supplement to be paid with injury benefit or widow's benefit where these take the place of unemployment and sickness benefit. The supplements will be one-third of average weekly earnings between £9 and £30. They will be paid on top of the present fiat-rate benefits, including increases for dependants, subject to a maximum total benefit of 85 per cent. of earnings. The maximum supplement will therefore be £7 (one-third of £21) for the claimant with average weekly earnings of £30 or more. The 85 per cent. limit is to secure that claimants generally are not better off when sick or unemployed than they would be at work. A maximum of this kind is a natural feature of a scheme in which benefits are related to earnings and is particularly necessary where the personal rate of benefit can be substantially augmented by allowances for dependants. The figure of 85 per cent. is on the basis that when a man is unemployed or sick he does not pay National Insurance contributions and may save on other items, too. For other examples of benefit payable, I would refer your Lordships to the Table at the end of the White Paper on the Bill, Command No. 2887.

In order to get the scheme started as quickly as possible—it is hoped this autumn—and to keep it as simple as possible, supplements will be based on earnings assessable to Schedule E income tax—in general, earnings taxed under P.A.Y.E. Average weekly earnings will be taken as one-fiftieth of the annual figure usually in the last complete tax year. Claimants will be asked to produce the Certificate of Pay and Tax Deducted—the Inland Revenue form P60 or its equivalent—which the employer gives to each employee at the end of the tax year. Where the P60 cannot be used, inquiries will have to be sent to employers, but the Government hope to keep this to a minimum by encouraging employees to retain their P60s. It would, however, be unjustifiably expensive to calculate and pay supplement for the large number of very short spells of unemployment and sickness, and so the clause provides that it shall not be paid for the first twelve days of such spells. These supplements will help many people. The numbers of unemployed and sick vary, but the Government Actuary estimates that on average about a quarter of a million sick people (including 30,000 on injury benefit) and about 110,000 unemployed people (assuming a 2 per cent. level of unemployment) would be receiving the supplement at any one time, and on this basis the cost of the supplement in the first full year is estimated at about £64 million.

Clause 4 provides for two important changes in widow's allowance, the specially high benefit now paid for 13 weeks after the husband's death to women who are under 60 or whose husbands had not retired. First, the allowance will be paid for 26 weeks, instead of 13, for all widows entitled to it on or after the appointed day. Secondly, widows of employed men who have not retired and who die after the appointed day will receive a widow's supplementary allowance, calculated in broadly the same way as the supplement to the husband's unemployment or sickness benefit. The rate of the supplement will be one-third of his average weekly earnings between £9 and £30, giving a maximum supplement of £7 a week on top of the existing widow's allowance of £5 12s. 6d., plus allowances for children. Similar improvements will apply to industrial widows, It is expected that the extended period of widow's allowance will benefit about 85,000 widows a year, and that the new supplement will be paid to about 70,000 widows a year, giving a total cost in a full year of about £9 million.

Clause 1 provides the extra graduated contributions needed to pay for these earnings-related benefits. In order to get the scheme started quickly, the present machinery for graduated contributions for the graduated retirement pension scheme is used. New ½ per cent. graduated contributions a side will therefore be added on to the existing 4¼ per cent. contributions payable by employer and employee on earnings between £9 and £18 and will also extend to earnings between £18 and £30—the latter being the maximum reckonable earnings for the new supplements. It is not feasible to contract people out of the new earnings-related unemployment and sickness supplements, and so the new ½ per cent. will be paid also by those who are contracted out of the graduated pension part of the scheme. I should like to make it quite clear that the new ½per cent. graduated contribution will in all cases also count towards graduated pension. This is an incidental result of the fact that, to get the new scheme under way as quickly as possible, the new contribution will be calculated and collected as an increase in the existing 4¼ per cent. contribution week by week. For, under the existing scheme, employers are permitted, if they wish, to provide the Ministry only with annual totals of graduated contributions paid by each employee—and most employers do so. By the time the total reaches the Ministry, therefore, it is not feasible to separate out the new ½per cent. contributions, and it would not be possible to change this without completely upsetting employers' arrangements. Accordingly, the ½ per cent. contribution will be included in the total of a person's graduated contributions each "unit" of which—namely £7 10s. for a man and £9 for a woman—produces 6d. a week graduated retirement pension. The present contracting-out arrangements for graduated pension purposes remain undisturbed, and existing contracting-out certificates remain valid. The new contributions will raise £76 million in the first full year. This compares with extra expenditure of £77 million—£64 million for supplements to unemployment and sickness benefit, £9 million for improvements in widows' benefits, and £4 million for administration costs.

Clause 3 provides for certain changes to reduce difficulties and anomalies in unemployment benefit which have been thrown into relief by the introduction of earnings-related supplement. Subsection (1) of the clause deals with the difficult problem of unemployment benefit for the comparatively small number of workers whose employment has not been terminated but who are temporarily suspended from work by the employer. I would emphasise that it does not affect at all the worker whose employment has come to an end and who is looking for a new job. At present workers who are on short time or are temporarily laid off can qualify for unemployment benefit, subject to a complicated set of rules. But these have caused difficulties and anomalies, and in some industries arrangements for short-time working have been manipulated to get round the benefit rule. This has meant that employment exchanges in certain areas have to deal with a mass of benefit claims from workers who already have an employer, at the cost of their constructive work on behalf of the totally unemployed. It can also mean that the general mass of workers—many of whom earn less full-time than others are getting when they are on short-time—are subsidising earnings in certain industries. The introduction of earnings- related supplements would increase both the administrative problems and the anomalies of subsidising certain industries.

In the Government's view, where an employer wants to retain a worker in his employment he should accept responsibility for paying him a guaranteed minimum wage—at least for the initial period. Many employers already do this, and their workers do not claim unemployment benefit. The Bill therefore proposes, in Clause 3(1), that as a permanent long-term measure, the first six days of suspension shall not give title to unemployment benefit, either flat-rate or supplement. Since Sundays are excluded, this means that workers who are suspended will not start to qualify for unemployment benefit until suspension has lasted a week. The Government recognise, however, that to impose the new six-day rule in its entirety from the outset would impose hardship where there are at present no satisfactory guaranteed wage agreements. The Bill therefore provides for a transitional period of three years in which the new six-day rule will apply only to the new earnings-related supplement and in which flat-rate benefit will be payable as at present. This transitional period will give both sides of industry time to negotiate on the provision to be made for short-time working and for the first week of lay-off when this will no longer be covered by the National Insurance Fund. The Government will study the position reached halfway through this transitional period, and if the progress made is not satisfactory will, if necessary, examine the possibility of legislation to make guaranteed week agreements compulsory. This transition should ensure an important long-term improvement in the scheme, without producing the short-term hardship which a sudden, complete, reform might bring.

Clause 3(2) of the Bill sets out another reform, this time in the duration of flat-rate unemployment benefit. At present this is 180 days (7 months' benefit, excluding Sundays), plus up to 312 days (one year) of "added days", depending on a person's contribution and benefit history. But unemployment usually arises through social and economic factors over which the individual has little or no control, and it is unfair to pay benefit for a shorter period to the man who has worked in a less stable industry and has been harder hit by economic factors. The calculation of added days is also a further complication of unemployment benefit. The Government therefore propose again to simplify the arrangements by substituting a straight 312-day maximum duration for flat-rate unemployment benefit. This will give up to twelve months total benefit—six months of which may attract earnings-related supplement. These changes in Clause 3, together with the new earnings-related supplements, the scheme for redundancy payments and further simplifications which are to be made by regulations, will ensure a new deal for people who have unavoidably lost their jobs and are available for re-employment.

I turn now to changes in the industrial injuries scheme in Clauses 5 to 7. Clause 5 is consequential on the proposal, to which I referred on Clause 2, to pay earnings-related sickness benefit supplement under the national insurance scheme on top of injury benefit. At present there are minor differences in title to and payment of injury benefit, as compared with sickness benefit. These are already the cause of considerable administrative difficulty, and the proposal to pay simultaneously sickness supplement and injury benefit made it essential to bring the schemes into line. Clause 5 accordingly alters the conditions for injury benefit. The main change will be that injury benefit will not be payable for the day of the accident in most of the cases where it is now payable; it is probable, however, that in many cases wages (or wages less benefit) are paid for that day. Moreover, in certain other cases the changes will benefit the insured person. In any case, the payment of supplement with injury benefit, which is the main reason for the changes, will provide a considerable measure of extra help to the industrially injured.

Clauses 6 and 7 arise from the Report of the Committee on the Assessment of Disablement, and implement its recommendations so far as the Industrial Injuries Scheme is concerned. Similar changes are being made in the War Pensions Scheme by Royal Warrant. I think the House will agree with me that we owe a great debt to the Committee for its full and careful study of this most important problem of war and industrial disablement, and for its lucid and valuable Report. Again I should like to mention the noble Lord, Lord McCorquodale of Newton, who was the Committee's Chairman and also the noble Lord, Lord Fraser of Lonsdale, who was a member. As I indicated to the House when the Report was published on December 20, the Government were happy to accept in full the proposals which were made and are glad that they are now able to bring legislation forward on them so soon. It is hoped to bring the improvements into effect soon after Royal Assent to the Bill.

Under Clause 6 a new increase of disablement pension is to be provided, as recommended by the Committee, for people who are exceptionally severely disabled and likely to remain so permanently. The new allowance will be at the rate of £3 a week and will be payable in addition to existing benefits, in-chiding constant attendance allowance. The clause ensures that it will go to pensioners in hospital, as well as to those being cared for at home, and that it will also be applied to old workmen's compensation cases. It is estimated that perhaps 1,000 people will benefit. Clause 7 arises from the Committee's consideration of the list of scheduled disablements. They recommended an increase from 60 to 70 per cent. in the scheduled assessment of disablement for certain amputations between mid-thigh and the knee. This change can be made by regulations for new cases but Clause 7 ensures that there is also power to give the benefit of this change to existing cases. The opportunity is also taken in this clause to make a small change which will enable constant attendance allowance under the Industrial Injuries Scheme to be paid to a small number of badly disabled men, injured more than once, whose compensation arises from two or more different sources.

Clauses 8 and 9 make certain technical changes in the machinery under the National Insurance and Industrial Injuries schemes for adjudicating on claims to benefit. Clause 8 arises from the proposal to pay the new earnings-related supplement on top of injury benefit. The adjudication machinery under the two schemes is almost identical, with the same persons operating as insurance officers, local appeal tribunals and Commissioners for both schemes; but the mere existence of two sets of authorities will create special problems. The clause therefore provides for the assimilation of the Industrial Injuries system (other than the special medical adjudication system) into the National Insurance system. I would emphasise that existing rights of appeal will in no way be altered.

Clause 9 is virtually consequential, in that it restyles the present Commissioner and Deputy Commissioners, who are the final appeal authorities under the two schemes, as Chief National Insurance Commissioner and National Insurance Commissioners respectively. This is to remove doubts that have arisen with some appellants about the status of Deputy Commissioners. Again the change is technical and does not affect the way appeals operate. Clauses 10 and 11 contain minor adjustments to the schemes to which I referred at the opening of my speech. Some make minor beneficial modifications in certain benefit conditions; the rest are in the main to make the schemes simpler to administer. The remaining parts of the Bill contain the formal provisions and those needed to bring the substantive provisions into operation, and I do not think I need detain your Lordships by describing them in detail. Fuller details on the finances can, of course, be found in the Government Actuary's Report on the Bill, published as Command Paper No. 2884.

I would now commend the Bill to your Lordships as a useful and beneficial measure. It marks the first major stage in the Government's review of our social security system. The Government are conscious that a very great deal remains to be done. Indeed, the improvements made by the Bill inevitably throw into relief the areas yet to be covered. The Government are, however, pressing on with their review and, as noble Lords will doubtless have seen, my right honourable friend the Minister of Pensions and National Insurance has referred two questions of particular public interest to the National Insurance Advisory Committee for their consideration and advice, in the light of representations made to them. The first is that of unemployment benefit conditions for people who have retired with an occupational pension before the National Insurance retirement pension age. The second is the retirement pension earnings rule. In the meantime, the Bill will provide a new system of earnings- related benefits for the early periods of unemployment, sickness and widowhood; the system of unemployment benefit will, under the Bill and regulations, be rationalised and modernised, and extra benefits will be made to certain severely disabled industrial injury cases. Finally, certain aspects of the administration of the National Insurance schemes will be simplified and improved. In these ways new advances will be made in our social security and the path will be laid for the future developments to which the Government are pledged. My Lords, I beg to move that the Bill be now read a second time.

Moved, That the Bill be now read 2ª.—(Lord Bowles.)

4.38 p.m.

LORD DRUMALBYN

My Lords, may I start by thanking the noble Lord for his patient and careful explanation of the contents of the Bill, and also for giving us some information outside the Bill as well. As the noble Lord said, the Bill introduces for the first time the principle that unemployment and sickness benefit should no longer be at the same rate for all but should be related to past earnings, and that the same should apply to industrial injury benefit. The principle of relating benefits to earnings is not entirely new, since the Guaranteed Pensions Scheme already relates the graduated supplement to the retirement pension to previous earnings. But for unemployment and sickness it is new, and it is on a new basis. All political Parties have accepted and advocated its innovation. Indeed, the Election Manifestos of all three Parties in 1964 contained undertakings to put it into effect.

For my part, I welcome the implementation of the principle. Indeed, I could scarcely do otherwise for, as the right honourable lady the Minister of Pensions and National Insurance indicated on the Committee stage in another place, I was already discussing it with the T.U.C. nearly three years ago. The Minister implied, however, that it was not until the National Economic Development Council recommended it that the Conservative Government started work on it. But, as their reportConditions Favourable to Faster Growthshows, the suggestion did not originate with N.E.D.C. In fact, the Ministry of National Insurance had already been working on it, and Ministers had already discussed its implications and complications. All the same, it was encouraging to have the endorsement of N.E.D.C., and that still stands.

The arguments in favour of applying the principle to unemployment benefit are strong. As the noble Lord said, they are twofold. From the point of view of the individual, which is probably the more important, particularly the individual with earnings above the national average for so-called manual workers, the drop in income when a man loses his job or is prevented by illness from doing it can be very serious. The average wage as at last October was £19 11s. 9d. That means that a man on the average wage, if he has a wife and two children, drops to £8 7s. net a week, while an unmarried man would drop to £4. This obviously involves real hardship. Secondly, from the national point of view, as the noble Lord said, we want to reduce the resistance to change which such a degree of hardship intensifies. That is why I put the individual first—it starts there. If we are to shake out the overmanning and increase mobility in industry, to put into effect the principle that unemployment benefit and sickness benefit should be related to earnings is at least as important—I would say more important—as a national scheme which gives lump sum payments to men and women made redundant by industrial development and change.

My noble friend Lord Blakenham is, I think, entitled to take most of the credit for the redundancy payments scheme which the present Government introduced last year. So, too, the Conservative Government can claim credit for starting the process of working out ways and means of carrying out the principle of relating unemploment benefit and sickness benefits to earnings—a process which had been brought a long way forward before the present Government took over. The noble Lord has said that the number of contributors who will benefit when they become unemployed is estimated to average 110,000. This compares with a total number of 360,000 unemployed last month. We understand the reasons for this, but it shows that the problem does not cease there.

There is one point I should like to mention. The Government Actuary's calculations of the cost of the scheme appear to have been based on a 2 per cent. ratio of unemployment. If there is more mobility, then will not the amount of transitional unemployment be rather higher than that? I wonder whether it was really safe to take that as a basis for the future. For sickness benefit, the arguments are rather different. As a matter of administration it would be possible for unemployment benefit to be related to earnings whilst sickness benefit was not. The two benefits are paid in different ways. The noble Lord mentioned the fact that it might be possible for those who fell sick to register as unemployed, but I should have thought it was less likely now than it was before the war that employees who were off sick would sign on as unemployed in order to get the higher benefit. The introduction of redundancy payments has seen to that. But the fact is that the two benefits are still closely connected.

There is the much broader question of how far employers should be responsible for their employees when they are ill. In 1962 an inquiry was carried out to find out what proportion of employees who fell sick were covered by employers' sick pay schemes. As a result of that it was found—and I give rough figures—that 88 per cent. of the white collar workers were covered; at the other extreme it was 41.4 per cent. of unskilled workers. The overall average was 56.6 per cent. for men and 59.5 per cent. for women. The skilled workers and the semi-skilled workers were, respectively, just above and just below the average.

These figures, of course, do not indicate how much help employees receive. In some schemes the employer makes up the National Insurance sickness benefit to full wages or salary, although presumably not to normal earnings where there is regular overtime. In others he makes it up to a fixed proportion of wages or salary. In each case he generally does so for a fixed maximum period—perhaps not necessarily a fixed maximum period, but sometimes a maximum period related to the length of service. Sometimes it would be full wages for a period followed by a proportion of wages. Some employers, I find, even pay full wages and ignore sickness benefit entirely. There must be many cases where an employee is financially better off when he is sick than when he is working, since sickness benefit is not, I believe, liable to income tax. It is obviously important that the Departments of Health and the Ministry of National Insurance should maintain their vigilance to prevent abuse.

The right honourable lady the Minister said on Second Reading in another place that under the Bill about 250,000 sick would on average be receiving supplement at any one time. Because of private supplementation of National Insurance sickness benefit some may not be any better off as a result of the Bill. We cannot help that. What at least is plain is that the need for earnings-related sickness benefit is less universal than for earnings-related unemployment benefit, because of the existence of private sickness schemes covering to some degree nearly three employees out of five. Nevertheless, for those earning over £9 a week who are over 18 years of age, I am sure the earnings-related supplement will be very welcome, and for that reason I believe it is right to cover in this scheme both the short-term sick as well as the unemployed.

To do so will put an additional burden of £38 million on employers—that is, ultimately on the consumer. Against that has to be set the greater willingness to accept change which it is hoped will result from the introduction of earnings-related unemployment benefit. I believe employers and the community as a whole will gain in the long run from earnings-related unemployment benefit and earnings-related sickness benefit. But it may well be that even greater vigilance will be required on the part of the Ministry and the Departments of Health to ensure that the earnings-related sickness benefit is not abused.

In one respect it seems to me that the Bill does not go far enough. I regret that the problem of the long-term sick is not touched at all. The earnings-related supplement, both for the unemployed and for the sick, is payable from the 13th day after they become sick or unemployed, for six months only. I can see the argument for this as it affects unemployed, and of course to some extent it is tied up with the industrial injuries benefit. It may be said that to go on paying earnings-related unemployment benefit after six months might tempt a man to remain unemployed and not even to look for another job. In fact, the Bill actually cuts down the maximum period of entitlement to flat-rate unemployment benefit, as the noble Lord said, from 82 weeks to one year. That means that a man gets earnings-related supplement for six months, then drops to fiat-rate benefit (plus National Assistance, if necessary) for another six months or so, and after that goes on to National Assistance.

But what is the logic for the long-term sick? Why should he not receive earnings-related sickness benefit? I found, both as a Member of Parliament and as a Minister, that among the most poignant cases that came my way were those of young married employees with families: men earning good money, who were suddenly smitten by some totally incapacitating accident or illness. Would it not have been relatively simple to include them? Their average earnings in the base year could have been adjusted in line with a rise in the cost of living, as is done, for example, I believe, in the Canadian Social Security Scheme.

I know it will be said that this is a Bill to deal with short-term benefits only, but it need not have been, and in my opinion should not have been. Sickness benefit does not at present discriminate between short-term and long-term sickness. Having paid 156 contributions—that is to say, after three years of uninterrupted employment—one is entitled to sickness benefit, I believe, for the rest of the normal working span of one's life, if one needs it. But the Bill discriminates, for the first time under National Insurance, between the short-term and the long-term sick; and, if anything, the needs of the long-term sick are greater, especially of the breadwinners.

Why have the Government done this? I believe it is largely because one could not have a long-term sickness benefit that did not cover the self-employed, and the self-employed are not covered at all by the earnings-related sickness benefit. Do they not earn, too? Are the Party opposite indifferent towards the self-employed? Have they tried to find a way of including the self-employed for earnings-related sickness benefit? Surely it would have been possible to have two or three stages of flat-rate contributions, and to collect them by, for example, an addition to the weekly stamp.

The Minister of National Insurance has described the scheme in this Bill as "an interim scheme". It is not clear whether she was referring to the scheme as a whole or to the method of collecting contributions. At the last Election, "Labour was ready", said the manifesto, "poised to swing its plans into instant operation". Well, my Lords, after fifteen months, and just before the next Election, it swings into operation a plan which was initiated three years ago by the Conservative Government, and which it now describes as "an interim scheme". The plans which they said they had ready at the last Election are now emerging in a torrent of White Papers at the pull of a lever signalling the next General Election. One should perhaps be thankful that in all this cascade of Bills and White Papers we find something to agree with, and I can say that I agree with most of this Bill. It is not what it includes, but what it fails to include that worries me.

I think it was right to apply the same principle to widowhood as to unemployment benefit, and to allow widows to draw earnings-related supplement based on their husband's earnings for the period of widow's allowance. I think it is right to double the period of widow's allowance to six months. I think it is right to double the thirteen-week period of temporary allowance for widows of severely disabled war pensioners—a point which I am not certain that the noble Lord mentioned. Of course, this would not be done by the Bill; it would be done by the Royal Warrant. I am glad that this is being kept in line with the widow's allowance, and I myself take particular pride in having played some part in getting this allowance for widows while I was Minister of Pensions.

I also think it is right to implement the McCorquodale Committee's recommendations in their application to industrial injuries under this Bill, as well as to war pensioners, through the Royal Warrant. I think it is right to amend Section 20 of the National Insurance Act, as the noble Lord explained, in relation to days of suspended employment. I was grateful that he gave that explanation to us. I am not entirely clear why such a long transitional period as three years is necessary, but the noble Lord has said that the matter will be looked at in eighteen months to see if progress has been satisfactory. I think it is also right to fuse the two tribunals—those dealing with National Insurance and Industrial Injuries.

While I warmly support the principles of the Bill, I am not so sure about all the ways in which it is proposed that these principles should be put into effect. I have already referred to the limit of six months for the payment of sickness benefit. There is also the limitation at the start. Neither earnings-related sickness benefit nor earnings-related unemployment benefit is to be paid for the first two weeks. Whatever other justification may be pled for this Bill, the basic reasons are obviously purely administrative. I quite appreciate that, as a matter of administration, it may not be possible to pay the supplement until three weeks after the day when the unemployment or sickness began; but that is no reason in itself for not recognising the entitlement from the day it begins. After all, if the grocer or the coal merchant or the banker knows that earnings-related supplement is going to be received in the end from the day when unemployment or sickness begins, he will be more ready to allow the man who falls sick or loses his job to run up a bill or to get credit.

I quite realise that a man who has been in his job for two years or more will get at least two weeks' pay on redundancy. But it seems a bit hard to grab back, as it were, the benefit conferred by the redundancy payments scheme in this way. Besides that, under the "last in, first out" rule many men may be made redundant before they have completed two years, and so will get nothing. What about them? As for sickness, I understand that more than half the periods of absence from work on account of sickness are for less than two weeks. Those away for three days or less are already not covered for flat-rate benefit. I wonder whether the noble Lord has considered this.

Would not the right thing to do have been either to make it compulsory for employers to make up National Insurance to normal wages or salary, or at least a high proportion of it, for the first fortnight (there might be marginal difficulties; there might have to be some exemptions in certain trades, but that would be one alternative to cover this fortnight), or, alternatively, to pay earnings-related sickness benefit from the start of the period of sickness, if sickness exceeds three days. It seems to me that these are real alternatives. I am not saying that it can be paid right away. Of course, a period for investigation and the like is needed. The question is: from what point should the entitlement run? This is a mutual insurance scheme to which employers and employees are each to contribute ½ per cent. of their earnings between £9 and £30. The first two weeks—apart from the first three days—of unemployment or sickness are clearly an insurable risk. There is no Exchequer contribution towards this scheme. Even administrative costs, as the noble Lord said, are repayable out of National Insurance funds. That, also, I believe to be right. How much would it cost each side, I wonder, to cover this risk for the first fortnight? I wonder whether the noble Lord has those figures.

The noble Lord referred to one feature of this scheme, which is that nobody is to receive by way of flat-rate benefit, plus earnings-related benefit, more than 85 per cent. of his earnings. The minimum guarantee has been discarded, and is replaced by a maximum income guarantee—the income "stop". I understand the reasons for this, but I hope that the noble Lord will say that this is going to be operated with considerable sympathy and comprehension. I want to ask him whether Clause 2(8)(b) is to be used to give relief in marginal cases. For example, take the man who has been earning much more at the time he falls sick than he earned in the previous year. It may not be just a question of promotion or a higher wage: he may have been sick in the previous year, or unemployed in the previous year, and his average in the relevant income tax year might have been depressed by a period of sickness or unemployment. Yet still he would be subject to the income "stop" related to his earnings in the relevant income year, and he would be subject to it despite his family commitments—and it is really only the men with big family commitments who are likely to encounter this income "stop".

I hope the noble Lord will be able to give me some information about this, because it is important. It is important that we should always be seen to be aiding those who most need it. It is one thing to ease the lot of someone who is earning £30 a week and who drops suddenly to £4 a week—that is in itself a good thing to do—but it is much more important to ease the lot of the man earning relatively low wages, who has a large family, and falls out of employment or becomes sick.

To conclude, my Lords, I welcome this Bill. Apart from the doubt about the average level of unemployment assumed, it seems to be based on sound contributory principles. But I very much regret the failure to provide for the long-term sick. I believe that a great opportunity has been missed to do something for people who are among those most in need. I also regret the way in which this Bill is being rushed through Parliament. It is not a rates Bill; it breaks new ground and should not have been treated as a rates Bill. Of course, it is true that the sooner the Bill becomes law the sooner benefits will become payable; but if the Government wanted benefits to be payable this autumn they ought to have introduced the Bill sooner and given it a longer run in Parliament, so that Parliament could have examined it more closely. I am quite sure that, had we been in power, a Bill to introduce earnings-related benefits would already have been on the Statute Book.

5.2 p.m.

LORD WELLS-PESTELL

My Lords, on the matters which have been before your Lordships' House this afternoon the Government have come in for a fair amount of congratulation and, if I may say so kindly, for some feint praise by the last speaker, the noble Lord, Lord Drumalbyn. It is perhaps invidious for me, bearing in mind where I sit in this Chamber, to congratulate the Government, but, in all sincerity, I do think that they are to be congratulated on introducing such a Bill as this at a time when the country is facing grave financial difficulties—and, I would remind your Lordships, difficulties which were not of the Government's making. The noble Lord, Lord Drumablyn, has said that, had the Party which he represents been in office at the present moment, a Bill such as this would probably have been before your Lordships much sooner. But he did say earlier on that the Conservative Party had similar plans for such a Bill three years ago, which means that they had two years before the last Election.

LORD DRUMALBYN

My Lords, will the noble Lord forgive me for intervening? I am sure that he does not mean to misrepresent me on this. What I said was that we started to consider this three years ago. I do not think the noble Lord should be under any misapprehension as to the time it takes to bring this kind of Bill to completion. All I said was that we would have introduced it sooner. I think we would have introduced it sooner, but one has to take into account that it would probably have taken at least two years to prepare.

LORD WELLS-PESTELL

I am much obliged to the noble Lord. He has made my point for me. If it could not be done within two years, then I think the present Government have done pretty well to do it in sixteen months. However, I feel that this Bill is a further example of promises made in October, 1964, having been honoured by the present Government, although that is not the main matter so far as I am concerned. I think it is further evidence of this Government's determination to make adequate provision, so far as our financial position will allow, for those sections of the community most in need.

If there is one thing that stands out so far as I personally am concerned, it is that this Bill marks the beginning of a new process in social thought—the kind of social thinking which will become more and more essential and more and more important within the foreseeable future. I refer in particular to the scheme for wage-related sickness and unemployment benefits. This Bill, if it is passed, will remedy a really grave social injustice, and one which has been going on for many generations: that people, when they fall sick, become elderly or are widowed, or when society is unable to provide employment, are faced with serious financial crises which not only threaten but in fact make a serious attack upon the standard of living of the individual and the family.

I am sure that many of your Lordships will feel it is quite surprising that in our so-called civilised society this situation has been accepted and allowed to exist for so long. I think that this Bill must be welcomed by all who feel a real sense of responsibility for those in the community who are less fortunately placed than many of us. By associating ourselves with it—and everyone has done so far—I believe that your Lordships' House will be clearly indicating and demonstrating that we are in the vanguard of social thinking, and are really concerned with human welfare. As the noble Lord, Lord Drumalbyn, quite rightly stated, the Bill is not perfect—I doubt whether many Bills, if any, ever are—for there still remains much to be done if we are going to provide adequately for the family in all circumstances.

I should like to call the attention of my noble friend Lord Bowles to one omission, and, while I am not asking him at this stage—let me be quite fair about this—to give an assurance that it will be put right immediately, because I know it cannot be, I do ask him to indicate, if he would be good enough, that the matter will be considered. I refer to the claim of a comparatively new voluntary organisation known as the Disablement Incomes Group—" D.I.G. ". It is an organisation with which I have no connection and in which I hold no office, and I am not their spokesman. This organisation asks—and here I want to quote: for the provision by the State of a modest basic income with special supplementary allowances for all disabled persons ordinarily resident in the United Kingdom whatever the cause of the disablement and irrespective of previous National Insurance contribution ". In other words, it asks for financial benefit to be available to all severely disabled persons, of either sex, whether they have been State-insured or not.

It is not necessary for me to remind your Lordships, because your Lordships will appreciate the fact, that long-term chronic disablement can be, and is for many people, very expensive. I speak to your Lordships as a sociologist. Much of the poverty revealed in a report calledThe Poor and the Poorest,by Abel-Smith and Townsend, occurs in the homes of disabled persons. The husband with a disabled wife cannot get any financial help in respect of his added financial liability. My information—though it may be wrong—is that the husband can claim income tax relief only if help has to be brought into the home, not to look after the wife but to look after the children. If there are no children, my information is that relief cannot be granted, even though it may still be necessary for him to have someone in the house, probably full-time, to look after his wife when he is at work. Wife disablement is a very serious matter for the ordinary wage earner. I know, and I appreciate the fact, that the Minister is undertaking a review of social security, and I should be content if my noble friend Lord Bowles would undertake to mention this matter to the Minister, pointing out, when he does so, that both Norway and Denmark have made such provision already. I think I am right in saying that Australia has had a simple invalid pension scheme since 1910. Perhaps the schemes of these three countries could be looked at with a view to providing what I am asking for.

5.12 p.m.

LORD BLYTON

My Lords, as I listened to the noble Lord on the Opposite Benches I was wondering whether I was in fairyland. I remember the time when he was a Minister of this Department in the House of Commons. Never once did I hear him argue in the House of Commons for the chronic sick. This matter has been raised by the noble Lord to-day only as a result of this Bill. I remember that for thirteen years we pleaded in the House of Commons for the "ten-shilling widow's" pension to be increased to 30s. but we always got a rejection, and it made me wonder when I heard the noble Lord speak about what his Party would have done if they had been in power.

I should like to congratulate the Government on introducing this Bill, despite the financial difficulties they have faced in the last eighteen months. In our Election Manifesto we outlined plans for social security for a five-year term of office and not for a Government that have been in office for only sixteen months. But in that sixteen months the Government have given the highest increase in old-age pension since 1946. They have given the same increase to sickness and industrial injuries and war disability pension benefits. The National Assistance scales have also been given a high increase. The earnings rule for widows was abolished only two months after the Government came into power. The "ten-shilling widow's" amount was increased to 30s. per week. The workers have been given redundancy payments when they lose their jobs, and thousands of disabled workers under the old Workmen's Compensation Act have all got increases. The physically broken man in industry and the war pensioner will now get, under this Bill, £3 a week extra.

I put it to your Lordships that this is a record of which any Government can be proud: that in the difficulties they have faced they have not forgotten the needy of our society. It was outlined last week in the welfare debate in another place that a general review of the whole field of social security is taking place. As the noble Lord knows, this Bill stems from that review. This is an interim measure. It will be a part, in the future, of the social security scheme that is envisaged by the Government. The Bill is to pay an earnings-related supplement on unemployment, sickness and widows' benefits. The provision for an earnings-related unemployment benefit is complementary to the Redundancy Payments Act and will play a big part in promoting the mobility of labour and the economic and technological changes of the future.

I welcome the earnings-related supplement in sickness cases and in widows' benefits. When a person becomes ill, his standard of life drops considerably, and the same applies when he becomes unemployed. It is tragic also for the widow who loses her husband; because her standard of life takes a very hard knock. In all these cases real hardship is endured and there are great worries for those affected. As the Minister said in another place, we are at the beginning of reshaping in a generous way our social security, and are now taking the first opportunity to make improvements. In my working life in the mines I have seen men trailing to work when they should have been at home in bed. They had to do it because they were afraid of the financial effect on their family of staying away from work.

In the last twenty years this tendency has practically disappeared. I am confident that in time this Bill should eliminate it entirely. There has been an argument in the House of Commons by the Conservatives that this Bill will increase absenteeism and encourage the malingerer. Anxiety has been expressed about the high ceiling for sickness benefit and the danger that absenteeism will be encouraged. But, my Lords, we cannot legislate on such a basis; one cannot judge a field of wheat by one or two bad ears. On the other hand, there is the argument that the 85 per cent. ceiling is too low in the cases of the lower-paid workers. I should like, therefore, to examine these arguments. Absenteeism is caused, in the main, by the person who takes one or two days off work; it means that that person, for no good reason, does not go to work.

How will such a person fare under this Bill? He will not attract the flat rate benefit. He has to serve three waiting days after proving his sickness or unemployment before he is entitled to benefit. Neither will he get the supplement embodied in this Bill, because there are 12 waiting days which are not repayable. Furthermore, before a person can get benefit, evidence of incapacity must be produced by a doctor's certificate or he has to register at an employment exchange if unemployed and be available for work. And benefit can be stopped where a man refuses suitable employment. Again, if a man does not go to work, it would reduce his yearly income; so that when he is sick it will be reflected in any supplementary for the next year.

My Lords, this Bill, instead of encouraging absenteeism, does the reverse. There are systems of controls to check those who are "swinging the lead" in their claim for sickness benefit. The Parliamentary Secretary to the Ministry of Pensions in another place gave us the figures in this respect. In 1965, 818,000 sickness and injury benefit claimants were examined by independent medical practitioners, and 476,000 were visited at their homes. Of 21 million people insured for sickness benefit, 70 per cent. make no claim during the course of the year; 20 per cent. claim only once in the year, and while 10 per cent. claim more than once, only a third of these claim three or more times and most are genuine claims for benefit. Therefore I hope that those who think that the British worker is always looking to take advan- tage of increased social benefits will regard these figures as sufficient criteria to prove that the great majority of workers fulfil their responsibilities and obligations to the industries in which they work and to the nation at large.

I do not for one moment believe that there is a problem in this argument of absenteeism. Of malingerers, there are a small number, but there are sufficient checks on them. They are investigated and checked as to their incapacity for work, and it must not be assumed that they all get benefit every time they claim. However, we cannot have penal legislation on the vast majority of decent people simply because of a few "bad eggs" in our society. While the risk of doubtful claims has to be borne in mind, I think it would be wrong to think that the supplement embodied in the Bill, with its twelve waiting-days period and 85 per cent. ceiling, will create a problem for us. Where the spell of unemployment or sickness is less than twelve days, there will usually be other sources of income to add to the flat rate of benefit—earnings for the last week at work, and in many cases an income tax refund. It is when unemployment or sickness has lasted a fortnight that the fall, from earnings to the flat rate of benefit starts to be most important. In fact, by not paying the supplement for the first fortnight it is possible to make it available for up to six months of sickness or unemployment thereafter. It ensures that the additional money being provided through the National Insurance Fund is concentrated on people whose loss of earnings has been appreciable.

What the new supplement will do is to provide benefit in cases of longer-term absences from work than now applies. Clause 2 of the Bill provides that the supplement shall be paid to employed contributors over eighteen years of age and under pensionable age, who are entitled to the flat rate of unemployment or sickness benefit. The figure, which the Minister has stated, is of one-third of the average weekly earnings between £9 and £30. So the maximum supplement on a £30-a-week man will be £7 a week on his flat rate. I think that there can be no objection taken to this, as the object is to ensure that claimants are generally not better off than they would be if they were at work. The 85 per cent. ceiling is based on gross earnings and not on net earnings. It takes into account the fact that gross earnings are subject to deductions for P.A.Y.E., National Insurance, and other deductions from pay.

The other feature about the Bill is that it provides for help also for the early period of widowhood. The widow's allowance at present is a special benefit paid at the rate of £5 12s. 6d. a week for thirteen weeks during the difficult period after her husband's death, provided that the husband had not retired or the widow is under 60 years of age. The provision in this Bill will increase the period to 26 weeks, or six months, and will provide an earnings-related supplement similar to that which would have been provided with the husband's employment or sickness benefit, if he had lived. In this way, both the amount of money and the period for which it can be paid will be greatly increased.

In the field of social security for widows and widowed mothers, the Government have done well. I have good reasons for saying this to my noble friend, in the light of his speech. I have here a booklet,All the Answers,issued to Conservative candidates in the last Election by the Conservative Research Department. There would have been no abolition of the earnings rule for widowed mothers, if the Conservatives had been returned to power in 1964, because this is what they said in that booklet: Difficulties would occur on changing from widowed mother's allowance to widow's pension if the earnings rule was abolished for all widows; a similar difficulty would arise when widows changed from widow's pension to retirement pension at the age of 60. Either course would substitute new problems for existing ones. So there was no intention in the last Election to abolish the earnings rule for widows, and it says much for the Labour Government that all the difficulties the Conservatives saw in this Election booklet vanished in two months, when this Government abolished the earnings rule.

It is also pleasing to note that the Minister has given wide terms of reference to the National Insurance Advisory Committee to have a full examination of the working of the earnings rule as applied to pensioners. This has not been looked at since 1956. The cost of all the earnings-related supplement is to be met by a new ½ per cent. graduated contribution payable by employer and employee. This at least maintains the contributory principle under which insured persons and their employers pay towards the cost of National Insurance benefits.

In the Commons last week, there was great pressure by the Conservative Party for contracting out of the supplement in this Bill on the basis of occupational schemes of sickness pay. I hope that the Government will not accept this for one moment. Great difficulties would ensue from this. Not all those who have contracted out of the graduated pensions scheme have a sick pay scheme. To accept contracting out would mean four different types of people. We should have those who were contracted out for pension and sickness benefit. We should have those contracted in for both. We should have those who contracted out for pension but not for sickness benefit; and we should have those contracted out for sickness benefit but not for pension. This would mean four different rates of contribution and would create problems for the employer, apart from the administrative problems that this would be bound to cause.

An employer could seek to evade his contracted-out obligations by sacking his employee when he was ill or by discharging him when he appeared to be ill. There would be no safeguard at all for the man in a situation like that, if he were contracted out of this scheme. In many industries where there is an occupational sickness scheme they are interested to take into account the National Insurance benefit, and I hope that the Government will see to it in this Bill that at least the employers do not take the supplement for which the man is paying. Since its inauguration, the National Insurance scheme has been based on the pooling of risks. Contracting out of the supplementation scheme would be most attractive to those industries where the incidence of sickness is light, and to allow it would hit at the principle behind this Bill, and also at the basis of National Insurance over its whole lifetime.

The Bill, as I understand it, is to provide extra benefits for people. Therefore, it must be judged as a first major stage of the changes in National Insurance which are likely to be needed in the future. The effect of the Bill in relation to the National Industrial Injuries scheme is one of great importance to men who work in mines and factories, as well as to old people who were disabled fighting for this country. It has long been accepted that there should be special provision for people who suffer from industrial accidents or diseases. At present, the Industrial Injuries scheme provides higher rates of benefit and special forms of provision for these people.

First, there is the provision of short-term benefits. At present, injury benefit payable for up to the first six months of incapacity for work caused by an accident at work, or an industrial disease, is £2 15s. a week higher than the standard rate of sickness benefit of £4 a week, which is payable to a person who is incapable of work through non-industrial causes. Under this Bill, the new earnings-related supplement of sickness benefit will be payable on top of injury benefit to a person who qualifies for injury benefit instead of sickness benefit. This ensures that the measure of preference for the industrially injured still remains part of our social security scheme.

I should like at this stage to support my noble friend on the Front Bench and pay tribute to the noble Lord, Lord McCorquodale of Newton, who was Chairman of the Committee on the assessment of disability, and also the noble Lord, Lord Fraser of Lonsdale, who sat on the Committee. They did valuable work on this Committee, and I am pleased to note that their recommendations as affecting the exceptionally severely disabled men of war and industry are implemented in this Bill. Under the Industrial Injuries Act the highest assessment is 100 per cent. There are, however, many people who not only have an industrial disability which qualifies them for 100 per cent. pension, but also suffer from other industrially caused disability. These people will he entitled to constant attendance allowance under the Industrial Injuries Act, because they require someone to care for their personal needs. There was no way in the previous Acts in which their personal benefit assessment could take account of their exceptionally severe disablement. This Bill now provides, as the McCorquodale Committee recommended, that such exceptionally dis- abled people who need constant attendance will qualify for an additional personal benefit of £3 a week. The number may be small, fortunately, but it is right that attempts should be made, so far as this is at all possible, to take account, in monetary terms, of their terrible injuries. This is also to apply to war pensioners with the same degree of disablement, and this will be done through the Royal Warrants.

There are many matters in the Bill that I have not touched upon, like the three waiting days in sickness, which I hope some day will go. There is also the question of manipulation of short-time working to get around the benefit rules, as is done in certain industries. The Minister, I am pleased to note, has given notice that the short-time working condition of eligibility for unemployment benefit is to go in three years' time. Probably we shall be able to say something in Committee, but I think the Minister is on the right track. All industries who retain their employees on a short-time working basis ought to give their employees a guaranteed week agreement.

Therefore, I welcome the Bill. The fight we face is to eradicate poverty, which still exists for many people, and the hardships experienced by our old people. Not only are Governments involved in this crusade, but the whole nation. It is when the nation as a whole decides that it is their responsibility, that Government will be able to banish poverty from our midst. The Government in sixteen months have most certainly done their best to eradicate much human suffering and poverty, but there is still a lot to be done. I hope that this Bill will be a further step in that direction, and I await the full organised plan for the future security of our people.

5.37 p.m.

LORD BOWLES

My Lords, we have had a most interesting debate, and I thank noble Lords for the kind things they have said about the Bill and the way in which the Government have acted. The noble Lord, Lord Drumalbyn, raised the question of whether the Government Actuary's figure of 2 per cent. was right. The position is, as he will remember, that the Government tell the Actuary to work out certain numbers, figures or facts. So he was instructed to take 2 per cent. as the rate of unemployment, and that is why he worked on that percentage.

LORD DRUMALBYN

My Lords, if the noble Lord will forgive me, the point I was asking was why this had been done. I was wondering why it is that the Government have taken this level of 2 per cent., in view of the fact that, as I said, if the Government's policy of getting more mobility, and so on, is going to work, we may have more transitional unemployment.

LORD BOWLES

I appreciate that, and had it in mind. I thought the noble Lord made himself quite clear about that. I am just saying that this figure was taken. When the Redundancy Payments Act has been in operation for some time, we may give another estimate to the Government Actuary on the percentage of unemployment.

As regards the 12 waiting days, the noble Lord said it is estimated that about half the successful claims for sickness benefit and unemployment benefit last less than 12 days (although in some cases the period may link with an earlier period for benefit purposes). Payment for all or some of these days will therefore mean, when allied to the extra administrative costs, either a significant increase in the proposed contributions or a reduction in supplement paid to longer-term unemployed and sick. It is estimated that the cost of paying earnings-related supplements after three days—that is to say, the same waiting period as the flat-rate benefits—would be about £6 million in a full year for the extra unemployment benefit supplement plus the extra costs of administration. This estimate is based on the assumption of a 2 per cent. level of unemployment, which is used by the Government Actuary, on Government instructions, in estimating future costs of unemployment benefits.

The noble Lord, Lord Drumalbyn, also raised the question of sick pay supplements. The fear has often been expressed that sick pay supplements run by employers may lead to over-compensation when their benefits are added on to those of flat-rate benefit and the new earnings-related supplement to-gather. The Ministry of Pensions and National Insurance reckon that there are some 10½ million people who are en- titled to sickness benefit who will also be in the field for the supplement and to some extent will also be covered by sick pay schemes. The number in sick pay schemes is higher than this because of people not entitled to sickness benefit, in particular married women who have opted not to pay flat-rate contributions. The size and duration of payments made under sick pay schemes vary greatly. In many cases National Insurance benefits are taken into account automatically—. that is, deducted from sick pay. In such cases the new supplements will cause the scheme's benefits to be adjusted so that no problem should arise. In other cases it will be up to the employers to renegotiate the provisions of their schemes with their employees.

My right honourable friend the Minister of Pensions and National Insurance said during the Committee stage of the Bill in another place on this point: … the present sick pay benefit schemesvis-á-visthe provisions made under the Bill will be matters for the usual negotiations between employer and employee."—[OFFICIAL REPORT, Commons, Vol. 724 (No. 49), col. 1343, 16/2/66.] She went on to say: Private employers have already taken into account benefits paid now under the National Insurance Scheme. No doubt employers will want to discuss with their employees what they will do as a result of the provisions of this Bill and this seems to me to be the right way of going about the matter."—[Col. 1351.] Then the noble Lord rather regretted that provision for the long-term sick and chronically sick was not in the Bill. As I explained in my opening speech—I dare say the noble Lord had his notes and was sticking to them, in spite of what I had to say—the Government have in mind the position of the long-term sick as part of the general review of the social security scheme. The problem of the long-term sick is, however, different from that of short-term sickness. In effect, long-term sickness is a form of premature retirement, and it would not be proper or fair to base benefit for the long-term sick on average earnings in the last complete income tax year, as is proposed in the Bill, for the supplement. It would mean that a long-term benefit depended on what a person's earnings happened to be at one particular period.

The noble Lord also asked me about Clause 2(8)(b). The noble Lord said that this enables the 85 per cent. benefit ceiling formula to be varied. The powers will be available for cases where the amount of flat rate benefit in payment is less than the standard rate: for example, where there has been a contribution deficiency, or a claimant is subject to a hospital in-patient deduction. The paragraph does not enable major variations to be made in the 85 per cent. rule, but will ensure that it can be applied to special groups, such as those in hospital, as generously as possible.

My noble friend Lord Wells-Pestell— I thank him for his welcome of the Bill and my speech—referred to the disablement income group, and also mentioned the particular problem of disabled wives. I can assure my noble friend that my right honourable friend the Minister of Pensions and National Insurance has the questions which he has mentioned very much in mind as part of the review of the social services. Then there was the speech of my noble friend Lord Blyton. The Government thank him for his congratulations. I should like to say what an interesting speech he made, as he always does. The only question he put to me was the question of not allowing any further contracting out. The Bill does not allow any contracting out so far as short-term benefits are concerned. I am grateful for the reception which this Bill has received, and I only hope that whatever the news may be—I have not been out of the. Chamber for three or four hours—this Bill may become an Act of Parliament before the next General Election.

On Question, Bill read 2ª, and committed to a Committee of the Whole House.

House adjourned during pleasure and resumed by the LORD CHANCELLOR.