§ 8.17 p.m.
§ THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE)
My Lords, I beg to move that this Bill be read a second time. The Bill does two things. First, it provides for a general increase of benefits (and of contributions to pay for them) on lines similar to the usual pattern of periodic upratings. Second, it continues the policy initiated by the 1970 Act of identifying groups in special need and providing selective improvements for them.
To take the main uprating first, Clause 2(1), with Schedule 2, provides for the 117 increases in National Insurance benefits. The standard single rate of benefit goes up from £5 to £6, and the married rate from £8.10 to £9.70. The attendance allowance, provided for in the 1970 Act at the rate of £4, will be payable at £4.80 when it starts in December. The old person's pension goes up from £3 to £3.60 single and from £4.85 to £5.80 married. Increases for children, inclusive of family allowances, go up from £2.45 to £2.95 for widows, and from £1.55 to £2.95 for invalidity and retirement pensioners. Increases for children of other beneficiaries go up from £1.55 to £1.85. In the remainder of Clause 2 we provide for the implementation of two of our Election pledges. The amount of earnings free of any adjustment of retirement pension is increased from £7.50 to £9.50, and increments for deferred retirement are increased from 5p to 6p for 9 contributions paid.
Clause 6 makes changes in the earnings-related supplement payable for the first six months of unemployment, sickness and widowhood, and imposes the 85 per cent. earnings ceiling on the supplement when it is payable with injury benefit, in line with sickness benefit. The changes in earnings-related supplement are linked with the changes in the contribution structure, where the upper limit is to be raised from earnings of £30 to £42 per week. The rate of earnings-related supplement is related to the earnings in the previous tax year. It is at present 33⅓ per cent. on earnings from £9 to £30. It is to be changed to 331 per cent. on earnings from £10 to £30, and to 15 per cent. on earnings from £30 to £42, this to take effect from the beginning of the benefit year, which is related to the 1972–73 tax year, the first full year in which the new contributions will be paid. We are increasing the lower level from earnings of £9, set at that level in 1966 when it was about half average earnings, to £10, to pay some, though not full, regard to subsequent increases in earnings.
Clause 8(1) with Schedule 4 provides for increases in Industrial Injury benefit. Injury benefit goes up from £7.75 to £8.75, disablement benefit for 100 per cent. assessment from £8.40 to £10.00 and widow's pension from £5.55 to £6.55. Increases for wives and children go up in line with National Insurance benefits. Clauses 8(3) and 9 provide that those who 118 qualify for Industrial Injuries unemployability supplement will be eligible for the improved dependency benefits available to invalidity pensioners and for an increase corresponding to the new invalidity allowance. Clause 10 gives power to make regulations to adjust Industrial Injuries benefit payable to hospital inpatients, in line with National Insurance practice. Clause 11 provides similar changes, including increases in the rates of the allowances payable from the Industrial Injuries Fund to those suffering from industrial injury or disease due to employment before the Industrial Injuries Scheme came into effect on July 5, 1948.
Changes in National Insurance and Industrial Injuries contributions are provided for in Clause 1 with Schedule 1 and Clause 7 with Schedule 3 respectively. The contribution structure is noteworthy, in that it makes no increase in the flat-rate National Insurance contribution payable by employed persons, and no increase in graduated contributions payable on earnings of between £9 and £18. This standstill is designed to avoid increasing the burden on low earners. On earnings between £18 and £30 contributions will be increased from 3.25 to 4.35 per cent., and contributions of 4.35 per cent. will be levied on a new band of earnings from £30 to £42, thus bringing the contribution ceiling up to about one and a half times average earnings.
Self-employed and non-employed persons pay flat-rate contributions and these are to be increased to ensure that they pay their fair share of the cost of improved benefits. Flat-rate contributions automatically attract a Treasury supplement, but graduated contributions do not. To match the projected increase in graduated contributions provision is made in Clause 1(6) for additional supplements so that the total supplement will be about 18 per cent. of contribution income.
We are making two easments in contribution liability. For employed persons contributions will not be payable where weekly earnings are £5 or less, instead of £4 or less. For self-employed and non-employed persons the limit of income for exception to pay contributions on grounds of small income is being raised from £312 to £468 a year.
Now I come to the selective improvements that are embodied in the Bill. 119 First, for the chronic sick, Clause 3 introduces a new benefit, invalidity benefit. This provides that after six months of sickness benefit a beneficiary shall become entitled to an invalidity pension. The pension itself will be at the same rate as sickness benefit, £6, but it brings with it an invalidity allowance for people whose incapacity began more than five years before minimum pension age (65 for men, 60 for women). The allowance will be payable at three rates, depending on the age of the pensioner at the onset of his incapacity. If incapacity began before the age of 35 the allowance will be £1; if between 35 and 45, 60p; if between 45 and 60 for men or 45 and 55 for women, 30p. The allowance continues at the same rate so long as incapacity continues, and if incapacity runs on to pension age an equivalent addition to retirement pension will be made. All those who qualify for invalidity pension and who are under minimum pension age when the uprating takes place will automatically get any invalidity allowance to which they are entitled, based on the age when their current incapacity began. Where incapacity has been continuous since July 5, 1948, the £1 allowance will be payable. The invalidity allowance is arranged in this way because in our view the man who falls chronically sick young will have had less chance to accumulate resources (such as an occupational pension) and is more likely to have heavy family commitments.
We propose two valuable improvements for the families of invalidity and retirement pensioners. Firstly, Clause 4 provides that the working wife of an invalidity or retirement pensioner will be subject to the tapered retirement pensions earnings rule starting at £9.50 (already mentioned), instead of the present all or nothing rule whereby the increase of benefit is wholly withdrawn if her earnings exceed the amount of the increase. Then we propose to pay these pensioners the higher rates of increases for children, at present payable only for the children of widows; they will get £1.10 more per child than they would under the present rules—that is £1.40 more in all, including the 30p increase which the rest of beneficiaries will be getting.
120 For the very elderly, Clause 5(1) provides for the extension of retirement pensions to non-pensioners or pensioners with low rate pensions at the age of 80, now and in the future. The rates will be the same as the pensions provided under the 1970 Act, as increased; that is, £2.20 for a married woman and £3.60 for other people. The pensions will be subject to a residence test. Clause 5(2) provides an age addition to retirement pension of 25p a week for all retirement pensioners over 80, including beneficiaries under Clause 5(1) and the 1970 Act.
Of the remaining clauses and schedules, I need only comment on Clause 12, as the remainder are concerned with the "nuts and bolts" of the uprating. Clause 12 is designed to allow the Secretary of State to take a rather more generous line over polygamous marriages by making regulations.
§ LORD ABERDARE
I am grateful to the noble Lord. The intention is to regulate in "those classes of cases which we want to cover, rather than give blanket cover and" regulate out those whom we do not want to cover for benefit. This is a complex matter, on which we do not propose to move without due consultation, but broadly we mean to confine eligibility for benefit to cases where there is only one lawful wife or widow at the time of claim. This is a lengthy Bill in comparison with most uprating Bills, because it makes a number of selective improvements in addition to providing for the general uprating of National Insurance and Industrial Injuries benefits. These selective improvements are the natural sequel to the 1970 Act, which was entirely devoted to providing for three special groups: the very elderly who had been left out of insurance, women widowed between the ages of 40 and 50, and the very seriously disabled in need of attendance. This Bill extends selective aid to further groups, by improved benefits for the chronic sick, by providing pensions for all non-pensioners over 80, and by giving everyone over 80 an addition to his pension. My Lords, I beg to move that the Bill be now read a second time.
§ Moved, That the Bill be now read 2a.—(Lord Aberdare.)121
§ 8.30 p.m.
§ BARONESS PHILLIPS
My Lords, I should like to thank the Minister for explaining the Bill to us. As he will know, I could not imagine what he would be saying, but I remembered that the Minister here has to make a slightly different statement from the Minister in the Commons; I had therefore to work on the Bill as presented by the noble Lord's right honourable friend in the other place. He said that the Bill breaks new ground in several directions. Here the noble Lord, Lord Aberdare said this in a slightly different way. He mentioned that it was the longest National Insurance Bill since the original measure was piloted through the House in 1948, and then he claimed that it disposes of the largest aggregate sum of money of any National Insurance Bill since then. Then the noble Lord claimed that it introduced a most varied package of improvements. I think we can say at once that there is no particular virtue in introducing a long Bill. It is the quality of the clauses and the advantages that the Bill brings to the average citizen that we are more concerned with.
Looking at the package of improvements, the noble Lord outlined those improvements which we would certainly applaud—increase in retirement pensions, unemployment and sickness benefit, maternity and widowed mothers' allowances, invalidity benefits and so on, But as the Minister himself said in another place, we are enduring a very high rate of price inflation, and those who collect these benefits and pensions have to shop in the same markets as the rest of the community, so that they always suffer much more acutely from the ill-effects of any situation.
I wonder whether I may repeat the appeal which I made during a recent debate on retirement pensions, that these pensions be subject to an annual review. I applaud the extra increase to the over-80s. This is akin to what we did on a previous occasion. Here we must emphasise the need for speedy payment. The Divine Reaper does not wait on the pleasure of the officials of the Department of Health and Social Security. The invalidity allowances for the chronic sick are something we discussed before and which again I applaud, although I noted that the Minister in another place said 122 that some people who are chronically sick will get no benefit at all. The Government regard this as a worthy start to bringing help to these households, and I hope that we shall so regard it—as a worthy start. I applaud the modification of the earnings rule, as applied to wives, where the husband is receiving benefit; but I will return to this point when I discuss the philosophy of the earnings rule, and, of course, the addition to the industrial injuries benefit.
My Lords, may we look a little beyond the uprating and at the fact that this Bill disposes of the largest sum of money since the last Bill. This fact we can see in the Explanatory and Financial Memorandum. I am not quite sure what is the virtue of the boast that it disposes of the largest sum of money, because if costs rise and the value of money changes one has to distribute more money in order to provide the same purchasing power; but if we are going to examine the disposal of these monies in full we should look at paragraph 3 of the Explanatory Memorandum, which says—and this I think is appallingly mean:There will be a small saving to the National Insurance Fund resulting from the restriction on unemployment benefit in occupational pensions. This is about £2 million ".This, of course, links with Clause 7; and this is where we see how these people are dealt with.
I believe there has been quite a lot of criticism of the fact that some people receiving occupational pensions after pensionable age were able to go to employment exchanges and register. Surely nobody should receive unemployment benefit if the test of further work cannot apply. I see now, following a recommendation from the National Insurance Advisory Committee, that pensions over £18 a week are to be reduced and that this will save about £2 million. I do not think this can affect a large number of people.
§ LORD ABERDARE
My Lords, I am not quite sure where the noble Baroness is quoting this from. I think she is quoting something that was altered in the House of Commons. This was amended.
§ BARONESS PHILLIPS
It is dropped. That is splendid. I am sorry I did not follow that matter right through. Perhaps I shall find some other points which have been dealt with. That will be even better.
Clause 4, which I do not think has been changed, relates to the earnings rule in connection with retirement pensions. When I was a spokesman for the Department—and, unlike the present Minister, I did not enjoy the responsibility of being part of the Department—this was one point on which I constantly appealed to the Minister for consideration, so I would like to reiterate my plea. I am aware that there has been an upgrading, and that it is now possible for the wife to earn more before this is taken into account; but when we look at the effect of it we see in Clause 4,…where the beneficiary is residing with his wife, and the earnings of his wife for the calendar week ending last before any week for which he is entitled to benefit under this section exceed £9.50, the weekly rate of benefit under this section shall for the last-mentioned week be reduced—That last paragraph, where you actually extinguish every 5p you receive, surely is something which is not embodied in any other part of our legislation. Even our taxes do not extinguish completely a man's earnings. Even if a man pays the highest rate of tax he is entitled to something; but here we have a principle which is almost exclusive to insurance.
- (a) where the excess is less than £2.00, by 5 new pence for each complete 10 new pence of the excess, and
- (b) where the excess is not less than £2.00, by 5 new pence for each complete 10 new pence of the excess up to £2.00 and by 5 new pence for each complete 5 new pence of any further excess."
My Lords, what is the real virtue of this? Looking at the administrative costs of running the scheme, if one is going to need 225 new workers, and the cost of the scheme is going to be £650,000, it seems to me that this is rather like Parkinson's law: you are going to spend far more to collect back these five new pence. It is a complicated way of doing it, and it seems to tie up with the advice allegedly given to a reporter on a particular paper who worked as a clerk in the Department. Evidently they said, "The more forms you send somebody, the better it looks. If you are going to do anything, make it a rigmarole; go the long way round. This is how Government 124 works". I do make a plea to the noble Lord that, before the next piece of legislation, we should look again at this earnings rule, and I would ask that we consider the abolition of this altogether. It cannot affect a large number of workers; it can create a great deal of hardship, and it is a definite disincentive. Noble Lords may say that perhaps we do not need to feel that retirement workers are employed—or, indeed, their wives—but these are people who so often work at what may be termed the lower end of the scale, in the catering industries—the kind of work which other people do not want to do, so there are several reasons why this should be looked at.
The noble Lord explained how the fiat-rate contribution is to be changed, and we see from the Memorandum to the Bill how the money is to be raised. On a small point. I notice from the explanation of the flat-rate increases, at the end, that they are expressed in a way which is new to me, bearing in mind that we discussed decimal currency in this House. I am looking at Schedule 1 where the amount of the weekly contribution is expressed as £0.672. I believe we agreed that we should refer to so many new pence. Perhaps the noble Lord could give us an explanation as to why these are expressed in three places of decimals. It seems to me that somebody is going to have an extremely difficult calculation to work out. I should like the assurance that every worker who can contribute to a graduated pension receives some part of this.
My Lords, I believe that the time is overdue when the whole principle of National Insurance has to be looked at and some kind of simplification introduced. I carried out a spot check with my own employees and I found that, while most people know what the reduction in tax is, they are very vague about the other deductions. They feel extraordinarily bitter because they do not understand the difference between the graduated deduction and the State insurance deduction and its connection with the National Health contribution. I believe that we could evolve a much simpler system of insurance, one which we could explain. It never seems capable of explanation; it is not actuarial; it does not follow that if you pay in you will draw out, because other reasons are 125 introduced. It is not a scheme in which you pay in in order necessarily to benefit other people less fortunate than yourself. I am making a strong appeal to the Minister, in the position which he occupies in his Department, to let us have, quite soon, a discussion on how we can simplify our system of National Insurance. With those few words, I should like to wish the Bill a speedy passage through this House.
§ 8.42 p.m.
§ BARONESS WHITE
My Lords, this Bill is one of considerable importance to millions of people in this country. I know that we have been discussing something else of great importance, but I wish we had more participants in this debate because we are not only affecting the basic rates of retirement pension, and the contributions required to finance them, but we are also embarking upon some interesting and important measures for the benefit of the long-term sick and the very elderly people who are over 80 years of age. There are a number of considerations in both these fields.
As my noble friend Lady Phillips and the noble Lord, Lord Aberdare, have remarked, so far as the volume of money is concerned it is the improvements in the retirement pension, and other benefits, which loom largest. More than £500 million, even in our inflated days, is a very considerable amount. It would be entirely wrong if we allowed ourselves to be mesmerised by this figure. One speaker in another place, an extremely experienced former Minister, Mr. John Boyd-Carpenter, referred to this increase as being a massive transfer of purchasing power from those now working to those in retirement. But one must bear in mind that in an inflationary situation it is those who are currently in work, whose earnings are going up so rapidly, who are getting more and are improving their standard of living. What we are doing by this Bill—which we naturally welcome, so far as it goes—is probably rather less than keeping relatively in place those who have reached retirement age. Therefore we should not talk as though we are doing them a vast favour. When we look at the massive increases in earnings rates which have been going on (and it would be quite improper on this occasion to go into the reasons for it, for we 126 had a debate as recently as last Wednesday on this) then, relatively speaking, I do not think it is true to suggest, as Mr. Boyd-Carpenter did, that there is this "massive transfer". From various calculations that have been made—and inflation is now going on at such a pace that we can hardly keep up with the calculations—while it is still perfectly correct to say that when the increases come into effect in September they will rather more than make up the value of pensions which were settled last in November, 1969, nevertheless one is entitled to ask how long this marginal advantage is going to remain effective.
I was interested to see that when asked about this in another place the Minister responsible made no reply. It was suggested, when this Bill went first before another place, that at the present rate of inflation the additional benefits will be wiped out in March or April of next year. With the increases in the price of food, in particular, which affect elderly people considerably, that calculation should be January or February, instead of March or April. It would be helpful if the Minister to-day could give us the Government's current calculations as to the enduring value of these proposed increases. We are perfectly willing to accept that when they come into effect they will enable retirement and other pensioners to do slightly more than keep pace with the increase in the cost of living. But when we are faced with a situation that, in the couple of months for which we have had the most recent figures, the cost of food has gone up, 1 think I am right in saying, by nearly 3 per cent., and the cost of other necessities has also increased (and I know that my rates have certainly gone up) then we should not be unduly complacent.
What I am trying to put before your Lordships is that we shall hardly be maintaining the existing relative position of pensioners. We are certainly not embarking on something which is going to make this massive transference in favour of the retired as compared with those still at work. That is something on which we should be perfectly clear. This, if we wanted to pursue it (and tonight I suppose we do not) leads to the very much bigger question of how far we as a society with an increasing proportion of older people, are prepared 127 genuinely to transfer a larger proportion of the current earnings of our society to those who no longer directly add to our economic increases. It is still true, in spite of the improvements which have been made by the present Government and the last Government, that one can fairly say that to be old is to be poorer. For many people it is still to be poor. We should not delude ourselves about that.
There have been considerable discussions, upon which the Minister hardly touched, as to the proposed changes on the other side. We have been speaking of the increases in benefits, but there are also the increases in contributions. It is the manner in which these increases have been decided upon that has caused a good deal of controversy. I would have supposed that in introducing the Bill the Minister might have said a little more about that. As I understand it, what the Government are really doing is to say that those below a certain level (I think the figure is £18 a week; there has been some slight increase in the exemption limit) will not be paying the extra. A group earning above £30 a week will be brought in where they were not contributing before—at least, that extra income was not calculated in the determination of the contributions.
The main burden is going to fall on those earning between £18 and £30 a week. I think I am right in saying that the average earnings now in this country, for men at any rate, are in the neighbourhood of £28 a week. Perhaps the Minister will correct me on this point if I am not accurate in that, but I think I am right. If this is so, it means that a considerable extra burden will be placed on those who are going to be affected by the various other measures which the Government have taken in relation to charges for school meals, milk, medical provision and so on, which have been discussed at other times. This particular band of wage earners who are likely in any case to feel particularly hard done by in other respects, will now also have to face these increases in contribution. That is what I might call the social effects of these proposals.
Then, however, there is a matter of principle which I know has caused considerable discussion and anxieties on the part of a number of Conservatives in 128 another place. That is the relationship between the flat rate and the graduated contributions, on the one hand, and benefits on the other. This Bill seems to be in breach of the normal insurance principles in the relation between the flat-rate contributions and graduated benefits. I know there have been various breaches in the pure milk of the gospel of insurance. Nevertheless, the basic principle one has tried to preserve is that, by and large, one does not use this sort of National Insurance scheme for considerable redistribution within it itself, but uses the Exchequer contribution to make up the difference. It would be helpful to us in our later discussions on this Bill if at this stage the Minister could make a little clearer the Government's attitude to this change in principle. This time I am rather with Mr. Boyd-Carpenter—and I repeat he is a most experienced person in this field. He was one of those most agitated by what he felt was a change of principle on the part of the Government. So I do not think we should just let this pass as though it did not matter. I think it does, and that we should have further enlightenment on this.
So far as the earnings rule is concerned, I have considerable sympathy with what my noble friend Lady Phillips said about this. I have always felt that the earnings rule introduces a certain unnecessary rigidity into arrangements which people of retirement age and beyond can make for themselves. I am well aware, of course, that there have been very strong expressions of opinion in the past, by the Trades Union Congress, for instance, among others, in favour of an earnings condition for retirement. Their attitude was brought about in the days when there was considerable unemployment and it was felt that jobs should be kept, broadly speaking, for younger people who had family responsibilities, and that older people therefore should not compete in the labour market; nor should employers be encouraged to employ at low wages older people supplementing a pension to the detriment of younger people who were dependent entirely on their earnings to support their families. So one can well understand the insistence upon an earnings provision in retirement.
However, as against that, one should look perhaps with closer attention at the limitations which this earnings rule places 129 upon people who are trying to adjust themselves gradually from a very full, sometimes an over-full, working life to the time when ultimately they may not wish to take regular employment or regular occupation at all. People age at extraordinarily different rates, and their chronological age may have very little to do with their capacity and activities. Therefore, we should look again more carefully in present-day conditions at how far we ought to maintain an earnings rule. My one caveat here, though—one says it with regret, tinged with apprehension—is that if we should be moving once more into a position of excessive unemployment—we have already reached that, but of really frightening unemployment—then one can perfectly understand that the psychology which was the basis of the original insistence upon the earnings rule will return, and one will have once again, very understandably, insistence by people of working age that they really cannot face the possibility of competition or, maybe, undercutting by older people when they themselves desperately need work to support their families.
Nevertheless, what is being done to increase the level up to £9.50 seems to us to be sensible, if only because, as in most of the provisions of this Bill, what we are really doing is running to keep in the same place in other words, we are adjusting the monetary amounts in our legislation simply in order to keep pace with the change in the value of money; we are not making any absolute change but are making a purely relative one, in order to keep pace with inflation. There was, however, one change in the earnings rule which went well beyond the amount that was necessary just to keep pace with the change in the value of money. That is the provision enabling the wife of a man who is chronically ill now, as I understand it, to be governed by the same condition as other people where the earnings rule is concerned, whereas previously she was at a very much lower level. This change, I must say, I welcome very much, as I am sure we all do, because, after all, if anyone is placed in a situation where she was under tremendous strain (many of us have felt the conflict of loyalties between looking after one's husband or family and earning one's living) it is surely the wife of a man who is chronically sick. Therefore, it seems to 130 me that this provision, which as I say goes much beyond what is needed for purely monetary reasons, is a step in the right direction and one which I personally, at least, very much welcome.
I should like to leave the clauses of the Bill which concern the general run of retirement and other benefits and contributions and turn now to some of the categories which cost less, and perhaps do not look quite so important in the Financial Memorandum, but which, for those concerned, are of very great importance indeed. Before I deal with the details of the provision for the over-80s, perhaps I should say that we recognise that the provisions for the over-80s, and those for the long-term sick and for their families, are selective benefits. We have made a good deal of play about our dislike of selective benefits, but I should make it clear that when we speak in those terms we are of course referring to those which are selective on a means test or incomes basis, and we should certainly have no complaint at all to make about the type of selective benefit which is dealt with in this particular legislation, because here selection is by categories either of need in the physical sense (not in the financial sense) or of age. So we make no complaint at all about this particular type of selectivity.
Where the over-80s. are concerned, again provision is being made for some increase in the weekly allowances for those for whom provision was made in the legislation last year. This, welcome as it is, again is just keeping pace with the change in money values, but in addition there is a first step, I think, by the Government towards recognising that when you are over 80 your needs increase in the sense that you are able to do far less for yourself: you have to ask or employ other people to do things for you to a much greater degree, and your physical needs for warmth, for example, may rapidly increase. Therefore we welcome the age addition which is proposed in the Bill for everyone over 80, as I understand it. I think this applies to everyone, whether they were entitled to pensions under the old scheme or under the new one. I think the 25p per week age addition is universal. This is justified in principle, for the reasons I have given. I only wish, quite frankly, that 131 it were a little more. Let us think how much 25p is in your purse or pocket; how long does it last? Not long; and I think one might at least have gone as far as 50p. Twenty-five pence is really a little miserly, and if we were going to do it at all—and it is justified on social grounds—I think it should have been a little more generous. After all, there are not so many people over 80, and many of them do not live very long; therefore in those circumstances I think we could have stretched it to 50p. Just think how long 25p lasts any of your Lordships, and I am sure you will agree that it is not very long.
There are other provisions which we should certainly welcome. The extra money for the children in the family of a long-term invalid is something which I was very glad indeed to see in the Bill. This is new. There are many provisions in the Bill which I am sure the noble Lord will agree were either contained in the draft National Insurance Bill which Richard Crossman had prepared when he was a Minister, or were originally in the Bill on the chronically sick and disabled brought in by Mr. Alfred Morris and passed in the last Parliament. These provisions were originally in that Bill but were taken out in the belief that they would be included in the legislation of the last Government, but because of the Election that legislation never came about. We should certainly give credit where it is due, because the provision to which I have just referred, the money for children in the family where the head of the household is a chronic invalid, was not, as I understand it, in the proposed earlier legislation. So this is something which I am sure we all very much welcome.
I am rather more doubtful about the differentiation between different groups of chronic sick according to age. It is perhaps desirable that we should have a little more discussion about this, possibly at some later stage. It really smells to me a little of Treasury midnight oil, this idea that the younger chronic sick should have a pound invalidity allowance, then in the next age group it drops to 60p per week, and then in the older group, up to the age of 60 for men and 55 for women, I believe, it drops again to 30p per week. 132 None of these sums is very large. It is welcome, of course, so far as it goes, but I am not personally entirely satisfied that one should drop from 100p to 60p to 30p in that way. The reason given by the noble Lord is that if one's complete incapacity for work arises at a later age one should presumably have been able to accumulate savings, on which one could rely, and one should have done this by the age of 45; and he suggested that those under 35 had greater family responsibilities. With great respect, I am not at all convinced that this is so. I should have thought that the age band between 35 and 45 was where the greater family responsibilities lay, and one might have found it difficult to accumulate very much before becoming a permanent invalid at the age of 45. Also the older one gets, the less able is one's wife to earn.
Although I am certainly strongly disposed to help the really young chronic sick, because they have a much more daunting prospect in life, I am still not convinced that these particular age groups are justified. It may be that at a later stage we could discuss the position a little more thoroughly. I know that those of my friends who are concerned with the problems of the disabled do, of course, welcome very much the extra provisions that are made in this Bill. As one of them said, they are a tentative step towards the provision of a disablement income. But it is also true that those who are concerned are still very anxious for certain further improvements. I know it was said in another place that further measures would be brought in, but I think we should perhaps indicate at least two directions in which we hope that further improvements could be made.
I was rather sorry that we could not have included in the legislation which has recently gone through the House, or covered by Amendment to this Bill, the question of the attendance allowance for those who need constant attendance. It seems to me that the criteria for this allowance are very hard indeed when all the circumstances are considered, because one has to be able to prove that constant attendance is required not only by day but also by night. Those of us who have had some nursing experience know that it can be a very great strain on the family if there is someone who needs constant attendance by day; and 133 this is a situation, particularly when there are other members of the family, young children and so on, which places an almost intolerable strain on the mother (it is generally the mother, but it can sometimes be the father) unless the family can afford to have some help, some relief in waking hours and not just at night. I do not pretend for a minute that it is not worse if it is necessary to have constant attendance at night—of course it is. But I am told that the calculation is that if it is restricted to those who will qualify under the present legislation it will mean that only about 25,000 persons will be covered, whereas if it were extended to allow for day-time care as well as day-and-night care—and obviously there will be some care at night for anyone as sick as that—this would extend the total qualifying to around 150,000. This is a point that many people feel should be looked at again.
Another category which is not covered—because normally she does not have her own insurance and therefore does not qualify—is the disabled housewife. Here again, although with the aid of modern inventions it is quite astonishing what a disabled housewife can accomplish in the home, it is inevitably more expensive to housekeep if a woman is in that condition, and again she may well need some extra assistance one way or another. Neither of these categories is dealt with in this Bill. I am just putting it to your Lordships that these are two categories of persons to whom I think, if we are in earnest about helping the disabled, we should turn our attention in the fairly near future.
I should like also to ask the noble Lord, because he and I share an interest in South Wales, whether he could tell us when we are likely to have the report of the Industrial Injuries Advisory Council which is engaged on a major review of pneumoconiosis. This point was raised in another place, and I am not expecting that the Government are prepared at the moment to make any changes in the legislation affecting these particular people. But those of us who have had long experience in the mining areas, more particularly in South Wales, know the deep distress which can be caused when someone is believed to have pneumoconiosis and then at the post-mortem it is discovered he had emphysema and his 134 widow loses entitlement to various benefits to which she was expecting to be entitled. This is a very longstanding difficulty. There are other parts of the world where emphysema is an industrial disease for the purpose of benefit under the legislation, and I hope that we can have some indication at least as to when we are likely to have the results of this particular review.
There are a number of other interesting points in this Bill.
§ LORD FRASER OF LONSDALE
My Lords, will the noble Baroness allow me perhaps to give her some little comfort about constant attendance allowance? The matter has been familiar to me for 40 years. The officials in the Ministries of all Parties are quite extraordinarily kind about this, and they do not insist that a separate person, say a servant, must be in the house; they recognise that a member of the family can do it, and they do do it, and no very real difficulty has arisen.
§ BARONESS WHITE
My Lords, I am sure we are most grateful to the noble Lord for that intervention. The point I was making was not quite the one to which he was referring. It is not so much whether it is somebody in the house, or a member of the family, but, as I understand the criterion as to whether any benefit should be payable at all, it is that the sick person requires constant attendance by night as well as by day, and if this is strictly applied it can diminish the number of those who are entitled to that particular benefit. I do not speak with any wide knowledge of this myself, but I know that this is something which very much concerns the organisations which are particularly dealing with the problems of the long-term disabled.
I was about to say that there are many other interesting points in the Bill before us which I hope we shall have an opportunity of discussing at greater length at the later stages. It is a Bill which does many things that we are happy to welcome. On the other hand it has, as I have endeavoured to indicate, certain deficiencies, and it also raises certain matters of principle on which I think we should have, perhaps to-night, a slightly fuller explanation from the noble Lord who presented the Bill to us.
§ 9.16 p.m.
§ LORD DAVIES OF LEEK
My Lords, I would not have intervened but for having served as a junior Minister in this Ministry. First of all, may I say how lucky the noble Lord is to introduce at this juncture a Bill against which none of us wants to vote, and which is giving some increases. Nevertheless, I hope he will take some of the criticisms that I make as criticisms that can be levelled at any Administration because of certain functional difficulties that have always existed in the Ministry of Social Insurance and Pensions, as it now is. In view of what was said by the noble Lord who spoke about constant attendance allowance, and as one who spent a long time dealing with the British Legion and all their problems regarding pensions, I should like to say that we are delighted to see in this explanatory memorandum that, relative to all the other social insurance schemes, the war pensions have been kept as was promised. The principal benefits under the war pensions scheme will be increased by broadly the same percentage as Nationl Insurance benefits; and, in addition, there will be substantial improvements in most of the preferential allowances which are peculiar to the war pensions scheme. I am delighted to see that a new provision is to be introduced to enable a war widows' pension and allowances to be paid to a widow whose war disabled husband was receiving constant attendance allowance at the normal maximum or higher rate, irrespective of the cause of death. Some of us, as well as the British Legion and other organisations, have been struggling to get something like that for years. In addition, war widows over 80 will receive the age addition.
May I now come to the Bill and the points that are relevant to its introduction in this House. One of the difficulties that all Governments find in the period after the promise, or whatever they said on the election platform—and we will disregard that so far as Party politics are concerned—is the large number of people, the millions, who have to be dealt with. As was said by the French—and there was a "Beveridge" in France before the Beveridge here, and the French were trying to introduce a social insurance scheme way back in the 1900s—no new 136 social insurance scheme can be introduced unless you have the machinery to do the arithmetic and the difficult calculations. I want to know how far we have got with the introduction of the computer systems in Reading, which were to help the Newcastle area. I need not have these answers this evening. If the noble Lord thinks it worth while, I should be glad to receive the information later by letter rather than delay the House now. Are we in the position now that these promises of increases in insurance can be implemented much more quickly than hitherto, whatever Government may be in power?
I was glad that my noble friend Lady White referred to the old cases. I had the privilege in the other place of discussing and introducing some benefits for the old cases. They were old colliers and old quarry men who were injured in industry before 1948 and received no benefits whatsoever. I am glad to see that some improvement has now been made for this category, whose number is dwindling, and the expenses of which will taper off. I am worried about the constant attendance allowance in so far as industrial injuries are concerned. Will that allowance be lost when a person goes into hospital? That seems to be implied in the Bill. But I may be completely wrong in thinking that, and I am not being dogmatic about it.
I should like to press one other point. For years I and others have tried to improve the law in regard to insurance benefits for pneumoconiosis. This disease attacks men who work in the pits, especially in the anthracite areas. I have seen magnificent Rugby players who, after five years, were unable to walk along the touchline because their lungs had been affected by working among the anthracite. Their Rugby was finished because of that. This disease also attacks others, such as men who work in the quarries. I gather that we shall be getting another report. I have had the privilege of visiting the pneumoconiosis centre at Cardiff; and by Euston station we also have some dedicated civil servants and medical men who have made a great contribution to the study of this disease.
I sincerely hope that we shall try to get rid of the plethora of tribunals. I have had a lot of experience over the 137 years of men and women who have been timid, worried and afraid about having to go before tribunals. It is time that both Houses looked into the number of tribunals. Furthermore, the layman appearing before a lawyer and a doctor is often unable to put a coherent case in regard to his illness—and he feels that justice has not been done. I am not saying that justice has not really been done, but that is what the layman feels because of the environment of the tribunal. Cannot the system of free legal aid be made available to these people who have to go before a tribunal?
There is to be an increase in the gratuity of £110, or 20 per cent., and I wonder whether the lump sum of £660 will be the finish. I should like to know what will be the position after next September in regard to this £660. I gather that the entire cost of what is proposed will be about £650 million. That may look a great sum, but it is nothing, really and truly, if you look at the mass of industrial know-how and the increase in productivity that we could get if, together with our social insurance and other schemes, we increased the opportunities for safety in factories and increased the opportunities for the maximum of prevention of industrial disease that is possible.
Before I sit down I will mention that tragic industrial disease which is one of the most difficult and which will grow in its incidence because of the increased use of asbestos in modern society. In building, asbestos is now becoming a common thing. People are building their greenhouses and their huts in their gardens with asbestos, sawing it up, little knowing that asbestos dust is one of the most deadly dusts that can get into a man's lungs. During my period as a Minister in this Ministry we had the case of a docker's wife who died of asbestosis although all she was doing was cleaning her husband's clothes after he had been unloading ships carrying asbestos. She had been doing this for eighteen months, and the result was that she caught this disease. The point I want to make is that there is still need for vigilance and a thorough-going observance of the provisions of the Factory Acts, and also a need for whatever Government is in power to carry out a courageous exploration of all the possibilities 138 concerning industrial disease. The greatest treasure that a nation can have is its investment in men—and skilled manpower is precious for a nation's economic, social and other health.
§ 9.27 p.m.
§ BARONESS SEEAR
My Lords, the Liberal Party has for years pressed for the total abolition of the earnings rule, and this is the policy which we would advocate. If, however, as I expect to be the case, the Government are not prepared to abolish the earnings rule, I wonder whether they would consider a variation in the way in which it is interpreted. It is quite clear that among many of the early retired the great desire is to keep a limited contact with employment, and that gradual retirement is what most of us would choose if we had our way. It is also clear that the recently retired can fulfil an extremely useful position in industry if they can be regarded as a pool of people on whom employers could call in times of emergency or when there is need for additional employees. For example, during the holiday period, when a good many of the regular staff are away, it would be very desirable to be able to bring back into employment, let us say for a period of ten weeks, during the height of the holiday period, people who have recently retired.
If people recently retired returned and worked for 20 weeks for, shall we say (to make the sum easy), £20 a week, their aggregate earnings for the year would be £400. This would average only about £8 a week, and therefore, on average, would be below the figure they are now allowed to earn under the earnings rule. But, of course, if they were earning £20 a week this would be above the total they are allowed to earn, and would eliminate their pension for the weeks in which they were employed. If such a variation in interpretation were possible, it would be a valuable addition to the pensioner's earnings; it would provide an extremely useful source of labour for dealing with emergency situations; and it would make it unnecessary to carry so much regular labour because it would be apparent that there would be a source of supply to meet these emergency situations. In this way it would also help the old-age pensioners to keep that continuing contact with their place of work which it is quite clear many of them wish 139 to do when they have passed the stage at which they wish to continue in full-time employment. I very much hope that the Government will consider this. I am sure that there will be administrative difficulties, but I think it is an aim well worth pursuing.
§ 9.30 p.m.
§ LORD ABERDARE
My Lords, I am grateful to all who have taken part in this debate even though some of the speakers were rather a surprise to me. I had seen the names of Baroness Summerskill and Baroness Wootton of Abinger on the list and I found speaking instead the noble Baroness, Lady Seen, the noble Baroness, Lady Bacon, and the noble Lord, Lord Davies of Leek.
§ LORD ABERDARE
My Lords, I know perfectly well that it was the noble Baroness, Lady White, who spoke; it was a slip of the tongue. It has been very valuable and interesting to hear your Lordships' remarks about this Bill. At the risk of parting company with my honourable friend in another place I would rather agree with the noble Baroness, Lady Phillips, that the Bill has no merit in being simply long. But I think the fact that it does add a large aggregate sum of money to the pensions and other benefits paid is significant. Taking the rate of pension which was introduced by the Government of noble Lords opposite in March, 1965 as a base—because at the time this was, as they rightly claim, a high peak in the level of pensions—the £6 pension to be introduced in September will set a new high peak. It is a real improvement over all previous upratings since the scheme began in 1948. Of course, how much higher it will be will depend on the movement of prices between now and September. We cannot forecast that. How long the new pension will thereafter hold its value will also depend on the rate of inflation. I would suggest that the true comparisons can only be made with the value of pensions at the same point in the previous upratings. There are some interesting graphs which can be studied showing that these reach peaks when pension rates increase and how they gradually fall away as the price index rises. But 140 what I would say to the noble Baroness is that while we are, as her Government were, committed to reviewing these rates every two years, we do and will keep the matter constantly under review. I think that all Governments would do the same.
§ BARONESS PHILLIPS
My Lords, I am sorry to interrupt, but I am not quite clear about what the noble Lord means by "committed". Is it written in legislation that there must be a review every two years?
§ LORD ABERDARE
My Lords, I am not sure whether it is in legislation, but we are committed to review every two years. A Bill of the previous Government which fell at the Election laid down that the matter would be legislatively reviewed every two years. What I am saying is that we are committed to reviewing every two years, but that we shall keep it under constant review in the meantime.
I take the noble Baroness's point about the over-80 payment being urgent. It will be put into payment immediately in September, and I know that local offices will do their best to get it paid swiftly. The noble Baronesses, Lady White and Lady Phillips, and later Lady Seear, mentioned the earnings rule. The earnings rule has existed for a very long time. All that we can boast of doing is to have made a very large jump in it by adding £2 to the point at which there is exemption from losing any benefit. After that it tapers away, until I think I am right in saying that at £11.50 all benefit is lost. We all of us have great sympathy with the idea of abolishing the earnings rule altogether. Perhaps one day we may get that far; but for the moment this is as far as we can move. I should like to thank the noble Baroness, Lady Seear, for her suggestion which I will see is carefully considered.
The noble Baroness, Lady White, asked me about the different contributions set up. What we have tried to achieve in the Bill is to leave those earning less—£18 a week and under—without any increase in contribution and to lay on the extra for the graduated contributions of those earning more than that. I must confirm what she said, that the average earnings in October, 1970, were about £28 a week; and I take the point that 141 some of this extra burden will fall on those earning less than that. May I suggest that we do not have a particularly long discussion on that now, as we shall have an opportunity to debate it on Wednesday week when there is to be a debate on these matters.
The noble Baroness raised the question of invalidity allowances and the reasons why we were giving more to the younger, those under 35, and graduating less thereafter. As I tried to indicate in my opening speech, this was done because we genuinely believe that the younger a person is the less chance he has to build up any resources of his own. The point we had in mind about his family was that a younger person would have a younger family, and probably the mother would not be able to go out to work; therefore, again there would be a heavier burden. This was the only point about trying to build up his resources by giving more to the younger chronically sick person.
The noble Baroness also mentioned the question of constant attendance allowances and the need here to widen the scope, and the problem of the disabled housewife. We are very conscious of those problems. I do not know whether the noble Baroness read my right honourable friend's speech to the Disablement Income Group on June 23, when he tried to cover those points. Not that we have been able to do very much more at present than we are doing with the attendance allowance and other benefits for invalidity, but we are conscious of the need to do so as and when money becomes possible.
§ BARONESS WHITE
My Lords, if we might pursue this a little further (I must confess that I have not read the speech to which the noble Lord referred, but I will make it my duty immediately to do so), does he hold out no possibility at all that we may include, not perhaps both, but one or other of those in the current Bill? Would that not be possible? Here we do not have control over the Money Resolution, but presumably we might suggest to another place that they might amend the Money Resolution.
§ LORD ABERDARE
My Lords, I do not think that we could go any further 142 with the attendance allowance than we have done. That was introduced in another Act already on the Statute Book, the 1970 Act. I was trying to say that whereas, as the noble Baroness said, the present attendance allowance is confined to those who need attendance by day and by night, one would hope that if, at a later date, money became available, it could be extended to those requiring a lesser degree of attendance. But there are difficulties of definition, and major difficulties about finding the money at the moment. I am only trying to say that we have every sympathy with the direction in which the noble Baroness wishes to move. If I may I will write to the noble Baroness about the Industrial Injuries Advisory Panel on pneumoconiosis, but I am afraid that I have not the answer immediately available.
I was very grateful to the noble Lord, Lord Davies of Leek, for mentioning the position of war pensioners. I can confirm that the benefits are correspondingly raised, and also that there are increases in preferential allowances. I should like to write to the noble Lord further about computer development. My impression is that we are ironing out the creases and that in future it will be easier to make upratings rather more quickly. As to the special attendance allowance for those in hospital, there is a special problem. At present, under the proviso to Section 16(2) of the Industrial Injuries Act, these cannot be paid for any period while the person concerned is in hospital. It is proposed to remove this proviso and to rely on regulations made under Clause 10(1). The intention is to bring provisions for payment of attendance allowance for people in hospital into line with the new attendance allowance in respect of other persons for the first four weeks in hospital.
I have already said to the noble Baroness, Lady Seear, that I will look at the point which she raised, and if there are any other points which I have not answered I hope to write to noble Lords about them.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.