Sitting of 3 February 1956

Preamble
The House met at Eleven o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER (COLNE VALLEY SEWERAGE BOARD) (No. 2) BILL
  Read a Second time and committed.
BILL PRESENTED
  PENSIONS (INCREASE)
  Bill to provide for increases in certain pensions; and to amend the Pensions (Increase) Acts, 1920 and 1924, the Pensions (Increase) Acts 1944 and 1947, the Pensions (Increase) Act, 1952, and the Second Schedule to the Pensions (India, Pakistan and Burma) Act, 1955, presented by the Chancellor of the Exchequer; supported by Major Lloyd-George, Mr. James Stuart, Sir David Eccles, and Mr. Henry Brooke; read the First time; to be read a Second time upon Monday next and to be printed. [Bill 92.]
ORDERS OF THE DAY

  NATIONAL INSURANCE BILL
  Order for Second Reading read.
  11.6 a.m.
  Mr. E. H. C. Leather: I beg to move, That the Bill be now read a Second time.
  I may say at once that I and all my hon. Friends who are associated with this Bill are saddened by the absence of that colleague of ours who really wrote the Bill, and who has done all the initial work, for which I take no credit—my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan). He, as Chairman of the Conservative Party Social Services Committee, has been an expert on and a student of the subject for a very long time, and we greatly deplore the illness that keeps him from the House today.
  Next, I hasten to say that I do not pretend to be a technical expert on the subject of National Insurance. There are many hon. Members on both sides who know all the details about all the Acts of Parliament that have ever been passed, the exact figures, and how many "bobs" it was in 1928 or 1937 or whenever it was. I am not well versed in such technicalities, nor am I concerned with them today.
  We are concerned in this Bill with a human problem, a problem that we now consider has become a social injustice to several hundred thousand old people. This Measure seeks to do something in a very small way to try to right that injustice. We believe, and I am quite sure that public opinion in the country is almost solidly behind us—and in the course of the day we shall see what the opinion of the House is—that there is a real case not merely for putting right the ravages of time, but for taking a small step forward in improving the condition of so many elderly people.
  We do not regard this Bill as any great reform, but only as a very small step forward, but it is, we believe, the largest step we are likely to get under the aegis of a Private Member's Bill. Therefore, after much thought and study, we have brought in a Bill to ask that earnings under the earnings rule be raised from £2 to £3.

  1217
  I propose now to deal very briefly with the Clauses of the Bill, and to take, first, the easy ones, on which I am sure there will be no argument. Clause 2 alters the procedure under the National Insurance Acts, and gives the Minister power to make changes in rates or systems from time to time by regulation rather than by Bill, and Clause 4 lays down the affirmative procedure. We believe that the Government welcome this change, and we hope that there will be no dispute—and certainly no party difference—on this. The present procedure requires that for any such change there shall be a new Act of Parliament, which is a long and cumbersome business and frequently difficult to fit into what is, as far as I can see, an always overcrowded Parliamentary timetable.
  Therefore, by giving the Minister power to do this by Order, after affirmative Resolutions of both Houses, we are making the procedure more flexible and we shall bring about a situation where there does not need to be such a great time lag before something can be done. Under the Bill procedure, even after everybody is completely agreed that something must be done, it might take anything up to a year to do it. Under the affirmative Resolution procedure it would take, perhaps, a couple of months. I hope that that will be regarded as helpful.
  I am afraid that Clause 3 raises some difficulty, and I think that it would be right for me to say at the outset, in order to put anybody who is concerned out of his misery, that we propose to withdraw Clause 3 during the Committee stage if the Bill gets a Second Reading. The reason is not that any of us—myself or my supporters—have changed our minds about it, but that we realise that the Clause raises quite different issues and subjects which it is extremely difficult to fit in under the general heading of the Bill.
  However, I want to say to the Joint Parliamentary Secretary that while that relieves us of the necessity of having any argument or difficulty about the principles involved in Clause 3, I hope that she may be able to give an assurance that the subject is receiving attention. There is no doubt whatever that the existing law relating to dependants under the National Insurance Scheme is anomalous and that
  1218
  in some ways it causes real hardship. First, there is no real reason why the National Insurance Act should impose much stiffer, tougher regulations than those of the Board of Inland Revenue. This is a most odd state of affairs.
  I suppose that, like most hon. Members, outside this House in private life I regard the Board of Inland Revenue as probably the roughest, toughest, most cold-blooded body of men in the world. But we have the strange situation on this issue that the Ministry of National Insurance is even tougher and even more coldblooded.
  Mr. Douglas Houghton: The Inland Revenue is only tough with tough people.
  Mr. Leather: I should be happy to employ the hon. Gentleman as my Income Tax consultant from now on—at a fee, of course, and tax free.
  I now come to the main Clause, which is Clause 2. I have already said that in my view and that of my hon. Friends this is the absolute minimum which, with any grace at all, this House can now give, or do for these elderly people. I think that "do" is the right word: it is not "give." All these people have contributed. This is supposed to be an insurance scheme, not a national lottery. In an insurance scheme the principle is supposed to be, "You pay your premiums and you make your claims, "not," You get your claims, provided your mother-in-law happened to be born on a certain date and your wife has now got four children" or whatever condition may be imposed that one does not really know about. It is supposed to be an insurance scheme. It may not be working very well, but that is quite another matter.
  There is at present the real difficulty that the previous Minister of Pensions and National Insurance submitted this issue to the National Insurance Advisory Committee. Therefore, the Government say, "This issue is now—purely by coincidence—before the National Advisory Committee and it would be grossly discourteous of us to agree with you and to adopt this Measure without even bothering to wait to hear what the Committee has to say." Of course, we accept that argument. Any Government, in relation to any advisory committee and

  1219
  any Ministry, would be in that situation, and we fully understand it.
  That being so, we consulted the authorities of the House and we have taken a step which we hope will relieve us of that problem. We are informed on good authority that the Minister hopes very much to be able to have the Report of the Advisory Committee by the end of April. We have also ascertained that it is possible for us to postpone the Committee stage of the Bill until early in May. Then, however—and I hope that my hon. Friend the Parliamentary Secretary is quite clear about this—everything will depend on that Report and on the action which the Minister takes.
  Again, I think that I can speak for all my supporters—and I think for the majority of my party; and I should be very interested to hear the views of the party opposite—when I say that provided that the Advisory Committee produces a Report which is a reform, a step forward at least as good as ours, then we are prepared to support it. On the other hand, if it produces a mean, niggardly Report, or if it suggests the 50s. of the T.U.C., then we will not support it. If that should happen at that stage, I should not withdraw this Bill. That is all in the lap of the future.
  The crux of the matter is whether there is a case at all for an earnings rule. Once one agrees that there should be such a rule, then the argument is only whether it should be at a certain figure or drawn in a certain way. I believe that the earnings rule originates from the wartime Report of Lord Beveridge; but now, after ten years' experience of it, I am not at all sure that Lord Beveridge was right. I am not saying that I have come to the conclusion that the earnings rule is wrong and should be abolished, but that it is wrong to regard it as absolutely untouchable, laid down in tablets of stone.
  I suggest that the matter merits second thoughts and I hope that during the debate some of that thinking may be revealed. We start by saying that the pension is a retirement pension based on the retirement principle. Then every single one of us, including my friends in the T.U.C., starts talking about old-age pensioners. We never hear anybody in a speech talking about retirement pensioners. It is a standard phrase, and even
  1220
  the organisation is called the National Federation of Old Age Pensions Associations. A phrase constantly used in the House is "old-age pensions." If people are so wedded to this idea of retirement pensions, it would be helpful if they would refer to them as such instead of referring to old-age pensions. It is a small point, but it indicates what is in people's minds.
  Whatever may be said in this House, most members of the public regard this as an old-age pension. I may be wrong but I feel certain that a Gallup poll in any constituency would show that at least 75 per cent. of the constituents would say that it was an old-age pension and if we asked about a retirement pension many would not even have heard of it.
  Mr. Houghton: Most people have heard of the retirement condition.
  Mr. Leather: That is perfectly fair. They may have. I do not want to press the point too far, but I want to emphasise the fact that there is a wide misunderstanding and that even those who are most wedded to the principle contribute to the misunderstanding by continually using the phrase "old-age pensions."
  If we really are wedded to the principle of the retirement pension, I cannot see how one can logically reverse the principle five years later. If one was really wedded to the principle and thought that it was so vitally important it should go on "till death us do part", but we applied it for only five years and then, when we thought it was not quite so convenient—let us be frank—we relaxed it. I put it to the House that it was no more than a question of convenience and cost. If we are prepared to justify the earnings rule on those grounds, by all means let us do so, but let us not try to justify it on some larger ground of principle which, in my humble view, is no longer applicable.
  Secondly, it is supposed to be an inducement to go on working. We are told time and time again—indeed, I think it was in the original Beveridge Report— that unless there is some limitation it will pay people to retire and they will all stop working; and as we want more people in industry, that would be a bad thing. But is it true? It may be true in a few cases, but mostly, in my experience, the reverse is true. I would say without

  1221
  hesitation that the reverse is certainly true in the case of every agricultural worker over 60 I have ever come across.
  As opposed to the ivory tower of the theorists and the documents of the clever people who work all this out, day-to-day experience of human beings in our constituencies shows that this argument is not true, and I do not believe that it is any longer a valid argument. Fact does not confirm theory. Human nature, and certainly human nature in a period of full employment, reacts in quite a different way from that suggested by the theory.
  I must refer to the statement of the Trades Union Congress and the 50s. I know that my hon. Friend—and I will call him that if I may—the Member for Sowerby (Mr. Houghton) is concerned with this principle, but I urge my friends of the T.U.C. to think again. We are reaching an extraordinary position now in which a high percentage of the public opinion of the country wants a great social step taken in the interests of our old people and the only reactionary body in the country which says "No" is the T.U.C. That is a fact, and a fact which I personally deplore.
  The T.U.C. says, "This is all very well at the moment, when we have full employment and wages are high, but suppose we have a depression and a lot of unemployment; the situation would then be very different." If I may say so to my friends of the General Council, they are carrying their conservatism much further than I should ever be prepared to carry mine. Because of a fear of something hypothetical, something which might occur in five or ten or fifteen years' time, we are deliberately creating social injustice for hundreds of thousands of old people now. I say that is wrong.
  What about the 50s.? The 50s. is no reform at all; it barely restores the figure to what it was supposed to be in the first place—no more. Even when we raised the old-age pensions last time—the retirement pensions I should have said, and I apologise—we did go a little further than just restoring the balance. There was an odd 2s. 6d. or 3s. 6d., or something like that. But the 50s. would not be a penny improvement and I therefore regard it as niggardly and unworthy, and I implore my friends in the T.U.C. to consider the matter again.
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  The only other argument on which they can justify their attitude is that if we allow people unlimited earnings that will enable unscrupulous employers to undermine the wages structure. Is that a valid argument in 1956? Does anybody believe that would happen? Let me say this quite frankly: if there is any trade union leader who feels that he and his union are so weak that some employer will do that, then he had better get out of the business and let somebody else take it over.
  That attitude of fear of the employer is based on the philosophy of the weak and tender young trade union plant of twenty, thirty or fifty years ago and it is hopelessly out of date. We cannot continue to base everything on that antediluvian depression mentality. Indeed, it is the one thing which will bring about a depression again. This is a different world. The trade union movement today is the strongest economic bloc in the country. Let them be proud of their power. They are very responsible people. Many of them are friends of mine and I admire them. But let them not base arguments on the assumption that they are weak and tender, and that any small employer in any backwood will undermine their whole structure just because we grant a little social justice to a couple of hundred thousand retirement pensioners. I just do not believe it.
  We in the House, the trade union movement and bodies such as this Advisory Committee have done fairly well since the war by the broad mass of the wage-earning people of this country. Those of us in industry—and the majority of us are in industry in one way or another, on whichever side of the table we sit; and I have sat on both sides— have had a pretty good deal. The standard of living of both those in management and those on the shop floor has risen enormously since 1945.
  The old people, the retired people living on small pensions, have fallen further and further behind. No one knows that better than the right hon. Member for Llanelly (Mr. J. Griffiths), who has been sympathetic about this. I am sure he will agree with me about it. Time and again in industry we have taken steps forward. We are taking

  1223
  them now in wage advances which help all of us in industry—workers, management and shareholders. But nothing has been done for the old people. The pension increases which have been granted have constantly, under both our Governments, been eaten away by inflation.
  We are asking for a very small step forward today to help a couple of hundred thousand elderly people who are in real need—the new poor, the real poor, the forgotten souls. I am sure that the House, the Advisory Committee, the T.U.C. and anyone else interested cannot do less than grant them an increase in their own earnings. After all, we should not be giving them the money; it is a question of their own earnings which they are to be allowed to earn by our grace—a measly £1 a week. I do not think that is asking too much. I commend the Bill to the House and I hope it will have an unopposed Second Reading.
  Mrs. Eirene White: What is the hon. Gentleman's attitude towards the widowed mother who is allowed to earn up to 60s. per week? She ought to be allowed to earn as much as she likes with no earning bar at all, because she should work to get as much as she can in the shortest time in order to obtain money for her children.
  Mr. Leather: I am grateful to the hon. Lady. I entirely agree with her, but the point is not covered in the Bill. It is covered, I believe, in the Government White Paper which has been published this morning. I entirely agree with her and if she proposes to bring in a Bill to do something about that situation, I will be happy to support her.
  11.27 a.m.
  Captain F. V. Corfield: I beg to second the Motion.
  I do not propose to make a speech on the Bill because my hon. Friend the Member for Somerset, North (Mr. Leather) has already explained it. I do not pretend to be an expert on the technicalities but I am very much interested in the Bill from the human angle, which my hon. Friend has put very much better than I can. I will therefore content myself by seconding the Motion.
  11.28 a.m.
  Mr. James Simmons: Proposals from the Conservative side of the House affecting the workers are naturally, and in the light of history justifiably, viewed with suspicion on this side of the House. Too often the Tories give with one hand and with the other take away more than they have given. That has been our experience in the past. The intentions of the hon. Member for Somerset, North (Mr. Leather) and his hon. Friends sponsoring the Bill are no doubt impeccable, but there is a quotation which mentions something about the way to hell being paved with good intentions—and that may be an excuse for our caution.
  The Tory Party is justly famed as a party of undoers and destroyers; steel, road transport, the attacks on the Health Service—repelled by Guillebaud—are monuments to their fame—or should it be shame? We have heard from the hon. Member that he is not concerned about technicalities, although he spent a lot of his speech in dealing with technicalities. We must be wary of anything which would undermine the basic principles of the scheme for adequate subsistence on retirement as a right. Those basic principles are pensions providing adequate subsistence; the condition of retirement and increments for postponed retirement; employment after retirement to be inconsiderable and remuneration in proportion.
  The fact that some pensioners are finding it hard to make both ends meet is an argument for increased pensions rather than increased earnings for retired pensioners. Pensioners of the First World War, of which I am one, will be alive to the danger of pensions being regarded as a substitute for wages. We who were active in the ex-Service organisations immediately after World War I recall some of the very bitter fights we had to put up for the ex-Service men, whose pensions were taken into account when their wages were fixed.
  At that time I was a member of Birmingham City Council and took up the case of ex-Service night-watchmen, who were getting miserably inadequate wages and were fighting for an improvement in their conditions. They were taking the fight to the floor of the council chamber. The Tory chairman of the committee, in replying to the debate,

  1225
  said, "These men are not doing so badly; they have their pensions." I am afraid I was quite un-Parliamentary on that occasion and I believe I let fly a missile at the head of the chairman of the committee who made that disgraceful reply to the debate. It is no use the hon. Member for Somerset, North saying that things are different now. The capitalist leopard does not change his spots. They get fainter or more marked according to the economic conditions prevailing, but the spots are there all the time.
  The Phillips Committee was not unmindful of this when it said:
  "Wages might in certain cases be adjusted …"
  That word "adjusted" is a nice, respectable word. The Committee did not say "reduced," or "slashed," but "adjusted," and added:
  "to take account of the fact that a pension was being received."
  Mr. Richard Fort: Is that in the main Report, or in one of the
  dissenting reports?
  Mr. Simmons: That is in the main Report. I am coming to the exceptions later.
  The Report said that representations for changes in the earnings limit were linked in some quarters with proposals for getting rid of the retirement condition altogether. In his reservation to the Phillips' Report, Professor Cairncross wanted the earnings limit and the retirement provision abolished, and said:
  "If this were done, however, there would be a strong case for paying a lower rate of pension at 65 than at 70 and maintaining a gap between the two rates."
  The Committee also said that if that were done an alternative to differential rates would be an increase in the age at which pensions could be taken.
  Here we have the cloven hoof showing itself. Before we monkey about with retirement pensions we must consider the consequences of our action. The Bill proposes to monkey about with the structure of the general scheme. It is dangerous to do it by a Private Member's Bill rushed before the House for the purpose of gaining applause for boldness when as a matter of fact rashness rather than boldness characterises the Bill.
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  This is not a subject for witty replies with a Canadian accent—
  Mr. Fort: On a point of order, Mr. Speaker. Is it in order to refer to my hon. Friend the Member for Somerset, North (Mr. Leather) in those derogatory terms?
  Mr. Speaker: I did not hear anything out of order.
  Mr. Simmons: I will repeat my remark because I am not ashamed of my accent, which is Black Country and Birmingham. This is not a subject for witty replies with a Canadian accent at an "Any Questions" session of the B.B.C. but for careful consideration by a committee set up for the purpose and having access to all the facts and the right of consultation with interested and affected bodies
  Let us remember that the amount of the pre-war 10s. old-age pension, not conditional on retirement, was substantially below that of the other social insurance benefits and let us beware of uniformed benevolence sabotaging the general level of benefits. We do not want to return to the old patchwork-quilt pattern of benefits that prevailed before the Labour Government gave us a social security scheme based on Beveridge but better than Beveridge.
  In the old days a man was unemployed and received unemployment benefit. He received an allowance in respect of his wife and children. The poor chap, as a result of unemployment, fell sick and his health was undermined through worry, lack of proper nourishment, and care for the future of his family. He went to the employment exchange one morning and was told that as he was sick he could not receive unemployment benefit but must go on to national health benefit. The national health benefit he got was less than when he received unemployment benefit and he received nothing at all for his wife and children just at a time when he needed more help. His physical and mental condition aggravated the illness from which he was suffering.
  That was the old patchwork of social insurance, which created far bigger grievances than we are discussing this morning. We do not want to return to that. It is possible that any tinkering with the basic principles of the present social security schemes might be the thin end of the wedge in getting back to that

  1227
  kind of thing—a scheme under which the benefit had no regard to human need but involved watertight official compartments wherein, if a man was sick, unemployed or old, he was treated differently in each category. The man drawing unemployment benefit went on to a lower scale of allowance when his position became worse.
  Differential rates of old-age pensions might be the thin end of the wedge for a return to something like that old pattern. This Bill, backed by twelve Tory M.P.s, including a Minister, is a condemnation of the Government's treatment of old-age pensioners. So long as National Insurance benefits have to be supplemented by National Assistance some relaxation of the rule to enable pensioners to supplement pensions by part-time earnings may well be necessary.
  In these circumstances, one cannot vote against the principle of the Bill, which is to give aid in distress caused by the inadequacy of the provisions of the Government for old-age retirement. One has to vote with the proviso that radical amendment will be necessary in Committee, as the relaxation of the earnings rule is no substitute for an adequate subsistence or reason for sabotaging or undermining the fundamental structure of social security benefits.
  11.40 a.m.
  Mr. A. C. M. Spearman: I always think that there is quite a number of subjects which can be approached most usefully in this House in a non-party spirit. Unlike the hon. Member for Brierley Hill (Mr. Simmons), who has just spoken, I think that the question of pensioners is one of those subjects. We cannot possibly all agree upon how they can be best and most effectively helped, but I should have thought we could all agree that we all want to see them helped and could discuss the ways and means of doing it.
  The point I want very briefly to raise today is the position of pensioners in seasonal resorts. In places like Scarborough and other, perhaps, lesser but important seaside resorts, it is very difficult indeed for anyone to get part-time work for three-quarters of the year, but it is extremely easy to get well-remunerated work at £5 a week or, perhaps, more for a quarter of the year. This means that if the maximum amount that such
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  people are allowed to earn is £2 a week —or, if the Bill is accepted, £3 a week— then during, say, 13 weeks of the year all they can earn is £26 or, if the Bill is accepted, just under £40 in the year.
  If, however, they were allowed to earn £2 a week, taken over a year—that is to say, if they were allowed to earn £100 a year—I believe that in places like Scarborough and other seasonal resorts there would be easy opportunities for a great many of them to earn about £75 a year. They would still be earning less than an average of £2 a week, but they would have the advantage of being able substantially to supplement their incomes.
  I fully realise that there are great difficulties in carrying out this suggestion. No doubt it would mean that administrative expenses were greater and perhaps some losses involved, but, surely, it is worth while making a great effort to overcome these obstacles because of the very material advantages to be gained. First, there might be quite a number of pensioners throughout the country who would be materially aided by an additional income of something like £75 a year, at no cost to the State. The second advantage is that in places where the hotel industry is the principal industry, it is extremely difficult during the season to obtain labour. In fact, it is often quite impossible to get sufficient labour.
  I think it would be generally agreed that the hotel industry is not one which simply provides luxury services; it is really an essential industry, which brings in a great deal of foreign currency and provides holidays for our workers. Because of the stress and strain of factory work, we are all agreed on the necessity of holidays with pay. The question of how the hotels are to obtain labour, when they are fully occupied for only a short part of the year, becomes, therefore, a quite serious national problem.
  I am delighted to see for the first time sitting on the Front Bench my hon. Friend and nearest neighbour, the Member for Bridlington (Mr. Wood). All of us who come from Yorkshire are particularly pleased with his appointment and give him our very best wishes. I know that he will sympathise with some of the things I have said. I know he is just as anxious as I am to improve the lot of old-age pensioners and that he has experience

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  of the hotel difficulties of which I have spoken. Of course, I do not suggest that the hotel problem is quite so important at Bridlington or Filey as in the queen of seaside resorts! Nevertheless, my hon. Friend will have had experience of the difficulties, and I ask him to bear them sympathetically in mind.
  11.45 a.m.
  Mr. Tom Brown: I compliment the hon. Member for Somerset, North (Mr. Leather) on his good fortune in the Ballot. I also congratulate him on the fact that this is the second or third occasion when he has sought to introduce legislation dealing with a vast human problem. As the hon. Member himself said at the outset of his speech, it is a human problem. I well remember that on a former occasion the hon. Member introduced a Bill dealing with the problem of the unfortunate men in the mining industry suffering from silicosis. Therefore, he is entitled to apply his mind to what are considered to be human problems.
  On this occasion, I find myself in a difficulty. I should like to support the Bill 100 per cent., but, at the same time, I must consider principles. One of the principles dominating my mind at the moment is the fact that on numerous occasions at Question Time we have constantly urged the Minister of National Insurance and Pensions to refer these great human problems to the National Insurance Advisory Committee. That is a principle which we have believed to be right. We think it is right and proper that after a committee has been appointed by the House, when matters of complexity and complications arise it should have an opportunity of discussing and considering them, listening to the evidence of interested parties and, in the end, giving us the considered judgment of its members.
  Unfortunately, we have not had the Report from the National Insurance Advisory Committee. It may be that this debate will be the means of gingering it up. I understand that the last date on which the Committee received evidence was 31st January. Obviously, we cannot expect the Report within three or four days thereafter. In fact, it has leaked out today that we may expect the Report at the end of April. If today's discussion of this very important problem hastens the presentation of the Report, subject, of
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  course, to the Bill receiving a Second Reading, the Committee upstairs will be in a position to examine the recommendations of the National Insurance Advisory Committee.
  Whilst I regard the Bill as an important Measure, it might be suggested that it is premature to consider the raising of the income limit. The promoter of the Bill and his sponsors would have been in a much better position had they been able to incorporate in the Bill the recommendations of the Advisory Committee. On principle, therefore, I think it would have been much better if we could have had the Report before us and considered it in all its aspects. Had that been the position, the promoter of the Bill might have made a much better job of it.
  Mr. Leather: That is a perfectly fair point and I do not disagree with what the hon. Member says. I think, however, I am right in saying that we announced our intention to introduce the Bill before the Minister referred the question to the Advisory Committee. The two matters may not have been unrelated.
  Mr. Brown: I quite agree.
  I told the hon. Member on an earlier occasion that his enthusiasm when he came to the House was such as to command my support. He was over-enthusiastic, if that is possible, to do something to remove what he called social injustices. Sometimes we are inclined to be in a hurry, but my experience is that hon. Members are invariably overcautious in dealing with matters of importance.
  There is another Report I should like to have the opportunity to discuss. I have been anticipating the Government's giving us an opportunity of discussing the Phillips Report. The two Reports go together. When we get the National Insurance Advisory Committee's Report and the recommendations in it, whatever they may be, that Report with the Phillips Report can be considered in their entirety, and then we can bring forward what I am longing to see, and that is comprehensive legislation to deal with the anomalies which have arisen and accumulated during many years.
  I sometimes think that in our enthusiasm to put right some things in our National Insurance scheme, compara-

  1231
  tively little things, perhaps, though, of course, they are important, we forget to look to what the effect of what we propose will be upon the insured person we try to help. I am on this occasion in some difficulty, I confess—but confession is good for the soul, especially on a Friday. I understand—I may be wrong—that if certain things take place between today and the consideration of the Bill in Committee, certain other things will be accepted by the Government.
  Whether that is true or not I do not know, but I think that, in order that we may satisfactorily cope with several problems in our social insurance schemes, we should first have an opportunity of discussing those two Reports, the Phillips Report, which has been on the stocks for some time now, and the other, which will be published in April. Then we shall be able to make a better judgment of the problems and make a better job of overcoming them.
  We are continuously building on the foundations which were laid by my right hon. Friend the Member for Llanelly (Mr. J. Griffiths). We have, as it were, laid a course of bricks but have not yet reached the first floor, and, in building in future, we ought to make doubly sure that we build aright. That is very important. The fact that the structure has grown as it has, the fact that we seek to build it higher and better, shows what a great change has come over the mentality of our people. I remember in 1919, when I was engaged on the industrial side, employers of labour took into consideration the 10s. pension in assessing the wages payable to a man. That was a most despicable thing to do.
  There is a change of mentality now. I welcome the change. It is a sign of that change that we are now discussing a Measure to raise, irrespective of the wage structure and the existing pension arrangements, what a person on pension may be permitted to earn. It is a great change, and we welcome it. I remember going to a colliery office to fix the wages of an old-age pensioner, and how the first thing the manager said to me was, "This man is in receipt of a 10s. pension and, therefore, his wage rate must be lower." All that sort of thing has gone, and we hope it will never come back.
  The hon. Member for Somerset, North made a little play with the terms "old-
  1232
  age pension" and "retirement pension." I think he was only teasing the House a little. We generally use the term "old-age pension." We have grown up with it. The term "retirement pension" came only in 1946. Before that we always referred to it as an old-age pension, and that expression is deeply established in our minds and our language. The National Insurance Act established the new principle of pension conditional on retirement, and we have to explain to the people that the old-age pension is not now, in the strict sense of the term, what it was before 1946, and that it is now a retirement pension. Some people call it the retirement pension and others the old-age pension, but
  "…a rose by any other name would smell as sweet."
  The Bill contains a provision for which we have long fought and argued, and I hope that the Government will be prepared, at least when the National Insurance Advisory Committee's Report is received, to support a Measure which will abolish once for all this despicable income limit and, in the light of the changing circumstances, make it easier for people, whom the Bill is intended to assist, who are in an unfortunate position to obtain a total income commensurate with the cost of a decent standard of life.
  11.57 a.m.
  Mr. W. M. F. Vane: It was pleasant to hear the tones of the hon. Member for Ince (Mr. T. Brown), after the sour words and sneers of the hon. Member for Brierley Hill (Mr. Simmons) sitting beside him, but both those speeches had in common one thing which I do not quite understand and which I do not think many Members will accept. That was the insinuation that the Bill changes the basic principle of the present retirement pension scheme. As I see it, it changes only one condition, and does not change it so very much, and, in so doing, follows the precedents of the changes which have been already made, on two occasions since the scheme was founded at the end of the war. Therefore, I hope that the two hon. Members will not make too much of the argument that the Bill makes a change of principle.
  Mr. T. Brown: I am sorry the hon. Member has misunderstood me. The principle to which I referred was the principle which the House adopts when

  1233
  dealing with such complex questions, the principle of referring those questions to the National Insurance Advisory Committee. Once we have referred matters to the Committee, we should await the Committee's Report.
  Mr. Vane: Of course, I accept the hon. Member's explanation. I understood him beforehand to say that, but I understood that he went further, following the lines of the hon. Member for Brierley Hill, who implied that there was more in the Bill than its backers, I believe, intend.
  All of us know from contacts with our constituents that a change in this earnings rule, apart from any other changes in the retirement pension structure, would be extremely welcome. I, for one, hope that we may see some change sooner or later, and the sooner the better. I hope that when the Joint Parliamentary Secretary replies to the debate she will restate the basic principles of the retirement pension scheme. There is much misunderstanding among many people about what was intended, first, by Lord Beveridge and then by Parliament and the Government of the day when the scheme was set up. One way of looking at it is that the pension is received without condition by men at the age of 70 and by women at 65 but can be drawn five years before if the claimant retires from work—generally on account of ill health or disability. But I do not believe that it was ever intended in the financial and political calculations of the day that everyone would draw the full pension from the age of 65 or 60. Hence we had what is called the earnings rule.
  I for one do not quite understand the main object of the earnings rule. If a person had listened only to speeches already made today he might be excused for leaving the Chamber with the thought that some people considered that the earnings rule was adopted to encourage people to retire whilst others considered that it was adopted to encourage people to stay in work. Already today both ideas have been expressed. I hope that the Joint Parliamentary Secretary will make clear the Government's view of the earnings rule. I hope that it is to encourage people to continue doing useful work beyond the minimum retirement ages if they feel that they can happily do something useful and profitable.
  1234
  As it stands at present, the earnings rule is a direct disincentive to anyone to stay in employment and earn more man the small amount of 40s. The T.U.C. proposal raises a little the point at which that disincentive applies. The Bill raises it a little further, but surely another and better way of meeting this whole question is by a graduated scale. I hope that after receiving the advice of the National Insurance Advisory Committee the Government will consider the advantages of a graduated-scale earnings rule as against those of a fixed sum. It seems to me that under such a rule one lifts the point where complete disincentive comes into operation a good deal higher than it can be lifted by any likely fixed sum.
  I should also like to support my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman) and ask the Government to see whether it is not possible to operate the earnings rule in such a way that people in receipt of retirement pensions can also work in certain forms of seasonal employment such as the hotel industry, which he mentioned. It seems strange that one should be allowed to earn up to £100 a year provided that that sum is spread over every single week in the year; that completely precludes many people from working usefully and, I hope, happily in many seasonal trades in which there is a shortage of labour at present.
  I would ask the Government, when they receive the Report of the National Insurance Advisory Committee, not to adopt its recommendations too slavishly One of the evils of government today is to refer almost everything to an advisory committee and then to take up a defensive position behind the advice given by the committee.
  In a matter like this it is very helpful to have the advice of such a committee, for the reasons which the hon. Member for Ince has given to the House, but I hope that in the end the Government have a mind of their own and will not just accept what the Advisory Committee suggests. I hope that if they feel that something bolder than the Committee's suggestions are appropriate, they will take such a step and ensure that whatever resources are available will be used in the best way to help these people for whom all of us in all parts of the House want to do our best.
  12.5 p.m.
  Mr. Douglas Houghton: If the hon. Member for Westmorland (Mr. Vane) will permit me, I will defer some comment on his remarks until a little later. I want to go back to the beginning and to the genial and somewhat emotional speech of the hon. Member for Somerset, North (Mr. Leather). In the course of his speech, the hon. Member threatened the Minister, intimidated the National Insurance Advisory Committee and defied the T.U.C. I thought that that was a pretty good morning's work, and we now begin to understand why the hon. Member finds the Inland Revenue so tough.
  What the hon. Member said about the probable course of the Bill modified some of the criticisms which I would otherwise have made about proceeding with the Bill at all. We are confronted with the fact that this matter has been referred to the National Insurance Advisory Committee. It is true, as the hon. Member for Somerset, North said, that the present Minister's predecessor made that reference on 22nd November, whereas the Bill was ordered to be printed on 9th November. Therefore, we concede to the sponsors that they were first in the field. Knowing how Ministers react to pressure and backbench difficulty, one can believe that it is very likely that the Minister decided that that was the best course he could take to avoid a head-on clash with an influential body of his supporters.
  The National Insurance Advisory Committee called for evidence from interested parties, and that evidence had to be in by the end of January. The Committee is now proceeding to consider representations made to it and probably will take oral evidence as well as consider written documents. I do not know whether the end of April is, in the circumstances, quite as soon as we could have hoped, but in the knowledge that the House desires the Report at the earliest convenient moment, the Committee will, I am sure, do its best to meet the convenience of the House.
  If the Bill is to have a Second Reading, and I would not dissent from that, it should go forth from the House that the amount of the earnings rule in Clause 1 has received only the provisional approval of the House and may be subject to amendment in the light of the recommendations of the National Insurance Advisory Committee.
  Mr. Leather: I entirely accept that.
  Mr. Ede: It was not in the speech.
  Mr. Houghton: The hon. Member for Somerset, North—we are still on friendly terms—fully accepts it. All that I am anxious to do is to avoid misunderstanding and possible false hopes arising from a Second Reading without a Division today, which seems likely. The newspapers tomorrow may convey to people that there is fresh hope of being able to earn more without deduction from retirement pension. My own anxiety about that is not to prejudge the matter in any way and to make sure that people understand what may happen in the House today.
  I come now to the merits of this subject. It is a matter of opinion whether we are helping or hindering the work of the National Insurance Advisory Committee by ventilating our personal opinions on a subject which has been referred to them, but we have the Bill before us and speeches have been made in support of its proposals. I think that arguments used in support of the Bill can quite properly be met by some which perhaps do not support it.
  Just to clear up any point of misunderstanding, I should like to say that I understand that the earnings rule as it affects widows and widowed mothers is within the reference to the National Insurance Advisory Committee but is not dealt with in the Report which has come into our hands from the Committee this morning on widows' benefits generally. I have here the reference to the National Insurance Advisory Committee, and it covers widows' pensions as well as retirement pensions in regard to the earnings rule. The widowed mother already has an earnings limit of £3. That she gained in the 1951 Act, when the earnings rule for retirement pensioners and widows without children was raised from 20s. to 40s. per week.
  I am by no means satisfied that it is right to encourage widowed mothers to go out to work in order to supplement an inadequate benefit. That is really the crux of the matter which we are discussing this morning, and it comes out more vividly on that example than anywhere else. After all, widowed mothers have children, and they should be looking after them, not forced to go out to

  1237
  work to supplement their widow's benefit under this scheme. Since the report on widows' benefits was only put into our hands at 11 o'clock this morning I have not had time to study its recommendation in that respect.
  I pass now to the question whether the earnings rule is justified and whether it should be lifted beyond its present limit. We have to get back to the principles of the present scheme, and they cannot be repeated too often. I fear that there is much misunderstanding on both sides of the House about the earnings rule, and obviously there is much misunderstanding about the attitude of the General Council of the Trades Union Congress, of which I am a member.
  The principles of the 1946 scheme were radically different from the previous scheme of old-age pensions. It specified for the first time that a condition of receiving a retirement pension should be withdrawal from regular work. That is fundamental to the present scheme. There were also provisions for added benefits for those who postponed retirement. There was also an assumption written into the scheme, which has been only more or less fulfilled, that the pension should be adequate for subsistence without recourse to the National Assistance Board for supplementation to maintain a reasonable standard of life. I am afraid that we have drifted far from the fulfilment of that expectation because, whether the numbers on National Assistance are rising or falling—and I believe at the moment they are falling—there is no doubt that they far exceed the proportion of retirement pensioners needing additional help to make their pensions adequate for subsistence that Beveridge or this House contemplated when the original Measure was passed.
  So one of the important principles of the present scheme—I stress the word "present" because it is the present scheme we are discussing, and the proposals in this Bill have to harmonise with the purposes and conditions of this scheme or else we change it—is retirement from regular employment. The test of retirement is the amount of work done. Section 20 of the National Insurance Act, 1946, provides that to satisfy the retirement condition work done after retirement must be only occasional, inconsiderable, or
  1238
  engaged in in circumstances not inconsistent with retirement. And in applying these conditions it is considered that in general work in excess of twelve hours a week should not be considered as inconsiderable.
  The House must have that clearly in mind in our approach to this Bill: that the supplementary employment after retirement must be occasional, inconsiderable or engaged in in circumstances not inconsistent with retirement. Otherwise we shall get supplementary employment after retirement which is almost indistinguishable from regular employment, and we shall get into serious complications regarding those who remain at work and who postpone retirement and those who do not.
  Those twin conditions of the limit of the amount and the limit of the period of time of employment were intended to safeguard and preserve the retirement principle. When the scheme was first introduced, what did this House do about the earnings rule? It laid down an upper limit of 20s. a week. That was 3s. 4d. a day. That was thought to be the limit of earnings which satisfied the condition that the employment should be occasional and inconsiderable and not inconsistent with retirement.
  In 1951 the Labour Government increased the earnings limit of 20s. to 40s. a week. At that time there was no real explanation as to why the upper earnings limit was being doubled when there was no justification for doubling it by reference to the principles of the original scheme. The hon. Gentleman may say that that is perhaps what we are doing now but that there is a good precedent for it. I hope to satisfy him in the end that there is no justification for doing the same thing again.
  Mr. Leather: Did the hon. Gentleman say that at the General Election?
  Mr. Houghton: I will not pursue that interruption. In any case it is a long time ago and I am not clear as to what we had in mind about this matter at the General Election.
  The House will not overlook the fact that this matter was considered carefully by the Phillips Committee. I will not trouble hon. Members with a lot of quotations, and therefore will merely refer

  1239
  them to paragraphs 194 to 196 of that Report. It is important to note that the Report states that none of the witnesses advocated abolition of the retirement condition. So when that Committee was considering this matter between 1953 and 1954, no witness urged the abolition of the earnings rule. The Report adds:
  "but a number suggested an increase in the earnings limit."
  Paragraph 195 continues:
  "Obviously if the latter were raised sufficiently the effect would be equivalent to the removal of the retirement condition."
  There we have it in a sentence, and that is what we are talking about this morning.
  To clinch the argument the Report states:
  "The abolition of the earnings rule and the retirement condition would mean altering the whole basis of the existing Scheme."
  I say, therefore, that if it is our purpose to alter the whole basis of the existing scheme, we should do it directly and not indirectly. We should not nibble away the conditions and principles of the existing scheme and, perhaps imperceptibly, change its whole course and purpose without considering where we are going and whether we want ultimately a scheme of social benefit without a retirement condition or whether we want a hybrid scheme on the lines of that recommended in a minority Report to the Phillips Committee by Professor Cairncross.
  Whichever way it may be done, if there is no retirement condition attached to the retirement pension then obviously there is no case for making that pension adequate for retirement without doing work or without going to the National Assistance Board, if it can be argued that everybody is free to go on working and adding to their pensions by supplementary earnings without any limit.
  I think that at present the House will wish to keep this matter within the framework of the existing scheme. If we push it outside we shall get into a labyrinth of difficulties and complexities, and the whole purpose of the scheme may be altered. That is not what we should try to do in a short Bill of this kind, and least of all in a Private Member's Bill. This is a question of national social policy which must be debated fully and frankly on both sides of the House so that we can set afresh, if need be, the compass of
  1240
  social objectives. I do not deny—indeed, I am fully conscious of it—the need for a good deal of fresh thinking about that.
  The Bill proposes to lift the earnings rule limit to £3. The hon. Member for Somerset, North implied that if he could have put it higher, and could have got the consent of the House to it, he would have done so. Thus, he is really a whole-hogger. He is going along the path of abolishing the retirement principle and allowing all retirement pensioners to supplement their pensions by any kind of employment without any limit on earnings or time. That is revolutionary; it changes the whole conception of the existing scheme.
  I do not know whether the hon. Gentleman knows it—he is not an unintelligent man—but that path will take him to abandoning the principle of a subsistence pension on retirement. It will destroy any case that he or his constituents may have for an improvement in the present level of standard benefits. There can always be two answers to people who claim an adequate subsistence level of pension under the sort of conditions that the hon. Gentleman foresees. One is "You can earn as much as you like; get on with it." The other is "If you cannot earn anything, there is the National Assistance Board, and you know the way to it." Those are the answers which will be given to people who claim an improvement in the basic standard retirement pension.
  Mr. Leather: I went a long way with the hon. Gentleman until he made his last point. I regard it as a completely invalid argument. While I agree that one might reach figures where that argument might be applied, I am sure that the social conscience of the people and the strength of feeling on these benches would not allow it to be done.
  Mr. Houghton: I am grateful to the hon. Member for that intervention, which helps to put him and his hon. Friends right with the House, but I am entitled to my opinion—I hate to make a party point—that I do not think the Conservative social conscience is as reliable as the hon. Member thinks.
  In any case, there is a widespread demand in the country today for a reduction in public expenditure. Although the frontal attack on the social services is

  1241
  not yet clear, I believe that it has its dangers and there may later be a desire to whittle away the original conceptions of the social schemes and make them less expensive by abolishing the claim to a subsistence pension on the ground that it will be easy to supplement an inadequate one by work, by a vocational superannuation scheme or by going to the National Assistance Board.
  At all events, at present I stand, and the Trades Union Congress stands, for the principles of the original scheme, which are that there shall be an adequate subsistence pension for those who give up work at retirement age, that those who choose to postpone retirement shall be suitably rewarded for doing so, that those who retire shall not be prevented from doing some work, and that no irksome restrictions shall be placed upon that right but that in the exercise of it there must be limits to preserve the main principles of the scheme of which those people, with others, are the beneficiaries.
  Let us look at the matter from the so-called human point of view. A man might say "What is all this nonsense about the earnings rule? I thought this was a free country. I have retired from work, but I am fit and able to do something more. Why cannot I take employment and earn money in addition to my pension?" If we look at his plea from his narrow, personal point of view, it is not easy to give him a convincing answer.
  However, there is a two-fold answer; first, "If we concede this to you, we shall probably destroy the basis of the pension which you are now drawing"; and, second, "If you are allowed to work and earn unlimited earnings in addition to your full retirement pension, when you give up that work you will still turn to us and ask where your adequate subsistence pension is." If licence were given to the man to earn without limit, a right which would be shared by hundreds of thousands of others, we should have destroyed the foundations of the scheme to which he looks for an adequate standard of life when eventually he cannot work or is indisposed to do so.
  We must look at the £3 limit——
  Mr. J. C. Jennings: Would the hon. Gentleman agree to the spreading over of the upper limit instead of it being dealt with week by week, for there
  1242
  is undoubtedly a large body of opinion among old-age pensioners that they should be allowed to earn in excess of the amount at present permitted?
  Mr. Houghton: That is an important point and it needs consideration—not that it has not had some already. I admit that the Phillips' Committee said in its Report that it had not given attention to it. There is no reason why, under the reference given to it, the National Insurance Advisory Committee should not look, first, at the spreading over, and, secondly, at the graduated scale referred to by the hon. Member for Westmorland (Mr. Vane). Those are points of comparative detail, both with some administrative difficulty, and that must be admitted.
  If there were a spreading over, there could be some inconvenience to the pensioner himself if there had to be an end-of-year reckoning up and—almost like Pay As You Earn—he found that he had had an excess of allowance and something had to be taken back. He would squeal if long after he had earned money he was told "We are sorry, but you went over the limit and we now have to take something back." The present arrangements have the advantage of squaring matters up week by week. The deduction from pension is made close upon the time of the earnings themselves, and that is a convenience to the pensioner.
  I want to apply several tests to the earnings rule proposed in the Bill. The hon. Member for Somerset, North said the provision was doing no more than bringing existing conditions up to date. I shall show that it is doing much more than that. We can apply the test of wage rates. In 1946, when the original Measure was first under consideration, the earnings rule was fixed by reference to current wage rates. It was based upon an assumption of earnings within the sort of working time that could be regarded as not inconsistent with retirement.
  Lieut-Commander S. L. C. Maydon: Is not there an inconsistency in that argument? The earnings rule is related to wage rates, not to earnings rates.
  Mr. Houghton: If the hon. and gallant Gentleman will be patient for a few moments, I will come to the question of earnings.

  1243
  I shall not trouble the House with the figures; I shall merely state that if the earnings rule today were in line with the rise in wage rates since 1946 it would be 32s. and not 40s., because wage rates have increased by 60 per cent, during that period, whereas the permissible amount under the earnings rule was increased by 100 per cent. in 1951.
  Mr. Norman Pannell: Can the hon. Member give the same comparison with 1951, when the last increase was made?
  Mr. Houghton: The average increase in wage rates between January, 1946, and October, 1951—
  Mr. Pannell: No—between 1951 and 1955.
  Mr. Houghton: I am just coming to that. I have to do it by process of deduction. Wage rates had risen by 30 per cent. from 1946 to 1951. By October, 1955 they had risen approximately 60 per cent. above 1946, so it turns out that there has been a rise of 30 per cent. since 1951.
  Now I come to the test of earnings. If we take the twelve-hour period of work permissible under the existing rule, in 1946, the average earnings for that period of work were 24s. 3d. for all workers—when the permissible amount under the earnings rule was fixed at 20s. In April, 1955, the average earnings for that period of work for all workers was 46s. 7d.—when the earnings rule figure was 40s. If we were to bring the present earnings rule figure into harmony with the ratio between earnings and the earnings rule of 1946 it would not be 40s., but 38s. 4d. If we take the test of price increases since 1951, the permissible amount under the earnings rule today would be 47s. 6d. For that figure, I rely upon Mr. Abel Smith's broadcast, published in the Listener of 8th December. I hope that those figures show that there is no justification for raising the limit to £3.
  Mr. Leather: That is on the assumption that the original £I was right. I do not accept that. I think that it was much too low. The hon. Member is engaged in a purely mathematical exercise, based upon an assumption which we do not accept.
  Mr. Houghton: Then it boils down to a matter of opinion, and hon. Members opposite will have to consider what they regard as the proper limit of earnings. It will have to be within the original definition of retirement, namely, that the amount of work done must be inconsiderable, occasional, and not inconsistent with retirement. In 1946, the correct figure was thought to be 20s. The question now is whether £3 is too much, too little or about right, and upon that basis one can only apply certain mathematical tests. I do not say that they are conclusive, but they are a guide to the answer to the arithmetic of the matter—because we must be guided by some set of principles or line of thought.
  It is not a question merely of thinking of some amount. We cannot say that £3 is a nice round figure, because it is no rounder than £4 or £5. It is not a matter for outright judgment. Originally, the 20s.-earnings rule was based upon the average earnings for twelve hours' work. If we base the earnings rule today upon the average earnings for twelve hours work, I have already shown that it does not even take us to 40s., much less 60s. I can only leave the House with those figures to consider, in this connection.
  The Trades Union Congress has been guided by all these considerations in giving its evidence to the National Insurance Advisory Committee. The T.U.C. cannot afford to look at these problems from an emotional point of view. It has vast responsibilities to its own members and to the country, and must look at its actions or proposals against a background of social policy and future danger to the trade union movement or to pensioners themselves. It is the easiest thing in the world for hon. Members opposite, quite sincerely and with considerable passion and conviction, to ask the trade union movement to forget its own history—because they have not gone through it.
  Although we all want the trade unions to shed their nineteenth century capitalist system thinking—at any rate, I certainly do—nevertheless, they have to have regard to possible dangers if full unemployment is threatened. If large numbers of retirement pensioners were available and willing to take part-time work for low wages in order to supplement their retirement pensions, they could offer a significant threat to wage standards, especially

  1245
  in certain industries. Hon. Members opposite must not overlook danger, which the T.U.C. cannot entirely remove from its mind.
  We do not want the retirement pension to be used as a subsidy to wages, to enable those who are past retirement age to compete with younger workers who still have full family responsibilities and are at the peak of their working lives, by taking jobs and undercutting rates of pay. It is all very well for the hon. Member for Somerset, North to say that trade union leaders should be more conscious of their strength, but he knows as well as I do that 2 million unemployed destroyed all the power of the trade union movement between the wars, and it would destroy it again. We hope and pray that no such calamity will ever befall this land again, and that full employment will be maintained.
  We hope that we shall be able to adjust ourselves to the circumstances of full employment, because we are all novices in our approach to it at the moment. We simply do not know enough about it because we have not had it long enough. There are many industrial and social problems, group attitudes, social and industrial fears, and all the rest, which we have to sort out and get rid of where they are no longer justified in modern social and economic conditions. But this is not the way to begin that task.
  There is a genuine desire on the part of the T.U.C. to facilitate the lifting of the earnings rule to a reasonably higher limit which will not weaken, still less threaten, the fabric of the present scheme. That is what has guided the Congress in the giving of its evidence. None shall say that it has an irresponsible attitude, and none, I hope, will say that it is unduly conservative.
  Three pounds, in the view of the T.U.C, goes too far. Hon. Members on both sides of the House have asked, "What is this niggling improvement which the T.U.C. has recommended in the earnings rule?" Although it looks very mean on the face of it, I hope that what I have said will put the T.U.C. recommendation in a more understandable context, viewed against the background of the scheme as a whole. The Trades Union Congress has in fact recommended that increase with consider-
  1246
  able reluctance because it sees little ground for it by reference to all the tests which it could apply, except perhaps that of public opinion or opinion in this House.
  The T.U.C. is sensible to public opinion and to opinion in this House. It thinks that 10s. above the present limit, though it looks small, is as much as can be recommended to keep the scheme intact and to avoid having a higher earnings rule which, however imperceptibly it is used is a danger and a threat and may possibly lead to a weakening of the structure of the scheme as a whole.
  I trust that my rather long speech has put the matter in a better perspective, and that I have done reasonable justice to the point of view of the T.U.C, which undoubtedly is influential in a matter of this kind and whose actions and the motives for them should be fully understood if we are to avoid unjustified criticism of that body. I hope that the National Insurance Advisory Committee will take note of what I have said and the T.U.C. has said, and also what hon. Gentlemen opposite have said and will say during the remainder of the debate, and eventually, after very careful thought and consideration, and careful examination of all the evidence, bring before the House a report which is a product of the thought and study of people with a very strong sense of responsibility towards the maintenance of our present social scheme and to the public.
  Lieut-Commander Maydon: Can the hon. Gentleman tell us whether the T.U.C. was consulted in July, 1951, or before then, and what was its view on the doubling of the earnings limit at that time?
  Mr. Houghton: I am afraid that I cannot give that answer because I was not then a member of the General Council of the T.U.C. and I had only recently come into the House.
  12.45 p.m.
  Lieut-Commander S. L. C. Maydon: I am very glad to speak after the hon. Member for Sowerby (Mr. Houghton). I hope that he will forgive me if I do not follow his speech too closely, but I want to take him up on one or two points.

  1247
  I think I can relieve his mind straight away by telling him that I am almost but not quite what he describes as a whole-hogger. He said that retirement was fundamental to the whole of the present scheme. We all agree with that and see the reason for it, but are we all entirely convinced that that fundamental principle is the right one? That is a point which requires considerable further examination.
  The other points I wish to raise are referred to in paragraph 195 of the Phillips Committee's Report, page 52, which states:
  "None of the witnesses advocated abolition of the retirement condition.…"
  I do not think that any of us here know —we have never been told—how many of these witnesses actually were pensioners and how many of them were hard-up pensioners entirely dependent on their retirement pension. It would probably have made quite a difference to the opinions which were stated by the witnesses if such people had been called.
  The hon. Gentleman spoke of safeguards to prevent undercutting of wage rates. I entirely agree with what he has in mind, but surely there are today many other safeguards in this matter. It is not necessary to underwrite this scheme with safeguards which can only indirectly have a bearing on wage rates. I feel that the hon. Member for Sowerby, who began his speech in such moderate terms and then, quite rightly, pointed out some of the dangers, gradually built up those dangers into real bogies. That. I think, was unjustifiable.
  It gives me great pleasure to support my hon. Friend the Member for Somerset, North (Mr. Leather) on this Measure, first, because he is an old friend of mine, secondly, because he is a near neighbour, and, thirdly, because he is my M.P. and his constituency is a neighbouring one to mine. He has said that this is a very small step forward. I would say that it is too small a step forward. For some time past I have been thinking that the retirement condition, the earnings rule and the increment system, all part of this scheme, as they stand at present are really an invention of the devil.
  1248
  One has only to read two small extracts from a letter published in The Times on 31st January:
  "If national insurance is 'insurance' in any sense that deserves the name, why should the energy and industry of the assured make any difference to his rights? What would happen to the Prudential if they tried to operate such a system?"
  At the end of the same letter, the writer says:
  "The crowning irony of the situation is that if the old-age pensioner has the pluck and the stamina to survive the ordeal of feeling unwanted and being half-starved during the first five years he is then at liberty at the age of 70 to come back into full employment and earn as much as he likes."
  I should also like to read a letter from one of my constituents who is an old-age pensioner, and whose husband is an old-age pensioner. I can assure the House that I have had a great many letters of this nature in recent months, in fact within the past year or two. I think they started coming in at the time that the Phillips Committee was about to report. The letter says:
  "I trust that Members of Parliament will be able to make way for more earnings; it would be most helpful. It would be better still to give us a free hand, as we know there are many who would earn more …When you get to the age of 70 the free hand given you then perhaps is not much use to you for many are beyond earning a great deal owing to their age and health. To keep you to a certain sum of earnings after paying for the pensions for many years is like keeping a child indoors against its will."
  That letter speaks for itself.
  Another aspect of these limitations is that they bring the whole system into disrepute. I cannot say that I know this, but I have a very strong suspicion that a great many people, both in and out of my constituency, who are in receipt of retirement pension are doing casual work, earning in excess of the limit and saying nothing about it. That brings the whole law on this matter into disrepute. It is impossible to control this without a whole army of snoopers, so let us amend the law so that it can once more be respected. We are told in the Phillips Report that out of one million old-age pensioners about 50,000 receive reduced pensions because of these earnings, and that about 500,000 are over the minimum age and are not retired.
  In the words of a leading article in The Times, there is no doubt that these people are bound to be discouraged if the

  1249
  advantage which accrues to them is negligible. The Phillips Report, in paragraph 196, page 52, says:
  "The abolition of the earnings rule and the retirement condition would mean altering the whole basis of the existing Scheme."
  The hon. Member for Sowerby rightly pointed that out. The Report goes on:
  "There would no longer be any justification for the increments which are at present paid if retirement is deferred."
  Later, in paragraph 201, the Report says:
  "Indeed, there is something to be said in favour of abolishing these increments altogether."
  May I take hon. Members into an exercise upon arithmetic? Let me take the case of a single man who continues work from the age of 65 to 70. He works for a total of 261 weeks during those years. He and his employer contribute between them 12s. 9d. per week and if we multiply that sum by 261 we arrive at £166 7s. 9d. By not drawing his retirement pension at the rate of £2 per week he saves the Exchequer £522. All that money amounts to £688 7s. 9d. When he reaches the age of 70, he ceases to pay contributions and he receives the full increment of his old-age pension amounting to an addition of 15s. a week. If we spread 15s. a week over the time until he makes up the £688 which he has saved for the Exchequer, he has to live 87 years and eight months before he breaks even.
  Here is another case, which is more likely, of a married couple. The wife is not insured and is less than 60 when her husband retires. The husband decides to go on working for 100 weeks after 65, during which time he and his employer contribute between them £63 15s., at the rate of 12s. 9d. per week. As a married man with an uninsured wife he saves the Exchequer £3 5s. a week. The total saving to the Insurance Fund is £388. By the time he retires at 67 his wife is still under the age of 60 and, therefore, not eligible for the additional 1s. increment. He has to go on drawing pension until he reaches the age of 91 years 10 months before he breaks even. Any scheme supposed to encourage people to go on working but based on such unrewarding returns is worthy of complete overhaul and reconsideration straight away.
  1250
  I turn again to the Phillips Report. In page 52, paragraph 198, the Report says:
  "There are grounds for thinking it would be feared that wages might in certain cases be adjusted to take account of the fact that a pension was being received."
  I know of nothing which is left more in the shadow of doubt than phraseology like "grounds for thinking it would be feared." I have already explained that there are ample safeguards throughout industry to prevent such things happening, and, if necessary, further ample safeguards could be included in any future enactment.
  I suggest to the Ministry that the next time pension books are distributed there should be a simple question on a small sheet of paper with provision for its easy return, so that the Ministry can receive replies without great difficulty. The question should be simply this: "If there were no earnings rule how many hours a week do you think you would be able and willing to work?" I am convinced that the Ministry could deduce from the answers without difficulty the benefit to the country if the rule were altered. The gain to the country in man-hours would be considerable. We should have a happier band of pensioners continuing to work and enjoying more money, and we would stop people from making a fool of the law.
  12.59 p.m.
  Mr. John Cronin: Some hon. Members on this side of the House may have reservations and doubts about the Bill, but there can be no question that it has served and will serve a useful purpose. I would extend my congratulations to the hon. Member for Somerset, North (Mr. Leather) and his hon. Friends who are responsible for promoting the Bill. The fact that the Bill has been moved in a Canadian accent does not make it any less welcome on this side of the House. I can assure the hon. Member for Clitheroe (Mr. Fort) that we regard a diversity of accents as a normal and desirable linguistic phenomenon. That is perhaps a fundamental difference between the two sides of the House.
  The Bill deserves congratulation and I would like to give Government supporters congratulations accordingly. Some hon. Members may wonder why a Bill of this nature should have been introduced from the Government side, but social insurance

  1251
  has had a rather chequered history. I would remind hon. Members that social insurance was first introduced by Bismarck, the greatest reactionary of the last century. He introduced his Bill to outwit the Liberals in the Reichstag. I acquit the hon. Member for Somerset, North of any similar ulterior motive. The Bill is a genuine attempt to improve the lot of old-age pensioners.
  In drawing attention to the plight of old-age pensioners the Bill has served a very useful purpose. Anything which draws attention to their present miserable position deserves every commendation. Most of us sitting in some comfort in this air-conditioned Chamber must recoil at the thought of what some old-age pensioners must now be suffering in freezing rooms all over the country. I am, therefore, very grateful to the hon. Member for Somerset, North for raising this very important problem of our economic structure.
  He said that the plight of the old-age pensioners has been greatly worsened by inflation, which is another circumstance requiring very careful consideration. Inflation is at present roaring through our economic life like a prairie fire which the Government are fighting with water pistols—but that is not, of course, any concern of this Bill. There is no doubt that this Measure would improve the position of a limited number of old-age pensioners—and to improve the position even of some of them would be helpful. It has also had the important effect of stirring the Minister into taking some action with regard to these old people——
  Dame Irene Ward: Hear, hear.
  Mr. Cronin: We have heard that we are to receive the report of the National Insurance Advisory Committee early in April. That is good news, especially when, as long ago as 12th March, 1954, the Minister promised that the Report would receive urgent attention. We appear to be moving forward.
  I am glad that Clause 3 is to be withdrawn. It showed a very strong bias in favour of those young persons who were attending schools and universities rather than those who were apprentices. In the Family Allowances Act, 1945, there were specifically included in the definition of
  1252
  children those full-time apprentices up to 16 years of age on 1st August. Had Clause 3 been left in the Bill they would have been excluded—very much to the detriment of the country's economic welfare. We need all the skilled tradesmen we can get.
  On this side of the House there will be considerable reservations about certain aspects of the Bill. The principal point has been emphasised by my hon. Friends the Members for Sowerby (Mr. Houghton) and Brierley Hill (Mr. Simmons)— the Bill's tendency to draw attention away from the principle of subsistence. I do not wish to repeat their arguments, but the importance of this principle cannot be emphasised too much, and I think that I cannot do better than quote the words used in the Beveridge Report. The Report says:
  "Any Plan of Social Security worthy of its name must ensure that every citizen, fulfilling during his working life the obligation of service according to his powers, can claim as of right, when he is past work an income adequate to maintain him. This means providing, as an essential part of the plan, a pension on retirement from work which is enough for subsistence, even though the pensioner has no other resources whatever."
  That is a principle from which we have been drifting since we started the scheme in 1946, but it is a principle which we must keep firmly before us. Nothing could be more important. The hon. Member for Somerset, North suggested that most people think of the scheme more as an old-age pension than a retirement scheme—in other words, a supplementary source of income. He instanced, as an argument, the use of the words "old age" instead of "retirement." The obvious explanation is that both "old" and "age" are monosyllabic words, while the word "retirement" has four syllables. It is for that reason more convenient to say "old-age pension."
  He also emphasised the insurance aspect. There is a lot of danger in thinking too much of that. National Insurance is fundamentally different from other insurance schemes in that it depends for fulfilment on the future taxation capacity of the country. The ordinary insurance scheme depends on premiums having been paid and invested in the past; and, of course, insurance companies have to bear in mind the danger there is to those investments and of not being able

  1253
  to meet commitments. National Insurance is wholly and entirely different. It depends on the country's future economic resources, and to confuse it with what might be called ordinary insurance is very dangerous. In fact, there might be some argument in favour of saying that, applied to this scheme, "insurance" is a misnomer.
  There is another serious danger. If old-age pensioners are allowed to supplement their earnings to a large extent and do not receive enough pension for subsistence there might be a hidden subsidy for industry. That is a very real danger. The Phillips Report, to which reference has been made several times today, suggests that old-age pensioners' wages might be modified by the circumstance that they Were receiving a pension. We do not want that. We do not want the old-age pension to be merely a subsidy to cheapen wage costs for industry and commerce. We must think, in terms of returning to the original Beveridge idea of having a retirement or old-age pension sufficient for subsistence.
  Both in this House and in the country we are rather inclined to think of insurance in terms only of mathematics. We leave insurance questions very largely to actuaries—a very skilled class of professional men for whom I have the greatest admiration. Actuaries can juggle with the most intricate mathematical problems with ease. I would emphasise, however, that the problem is not a mathematical one only. It is very important that we should think qualitatively as well as quantitatively. We must not think in terms only of numbers and figures.
  There is a very big difference in quality between the old-age pensioner of today and the pensioner likely to be encountered in twenty or thirty years' time. A large proportion of the old-age pensioners of today have probably spent their childhood in a state of malnutrition and near-poverty. They have grown up to work under the deplorable conditions such as existed before the last war. A large proportion of them have lived in times of soul-destroying unemployment, and many of them have spent most of their lives in conditions which would impair the morale of anyone.
  I therefore venture to suggest that a large proportion of the present old-age
  1254
  pensioners could not take advantage of the terms of Clause 1 of the Bill. Many, as is common knowledge, are unemployable because their lives have been ruined, mentally and physically, by the vicious conditions which existed before the last war. How are those people to take advantage of opportunities to earn additional income? I do not think that there is any hope of that for a large number of them, and we have to keep that in mind.
  The old-age pensioners of thirty years hence will have been well fed as children —and well educated, we hope—and will have lived quite happy industrial lives in conditions of full employment under the protection of powerful and vigorous trade unions. They will be quite different people from the type of old-age pensioner whom we have today. We are concerned with the present old-age pensioners, and they require urgent help.
  Shortly we are to have the Report of the National Insurance Advisory Committee, and we hope that the Minister will take urgent action, but I venture to suggest that nothing could be more important than that the Minister should consider the matter from a qualitative point of view. I want him to bear in mind that it is the old-age pensioners of the present who are in desperate need. I do not think he need worry too much about the country's future. There is a lot of talk to the effect that in the 1970's we shall be carrying a financial burden which is too heavy to bear. I do not think that we shall. If we can each achieve a steady 1½ per cent. increase in production we can bear the burden quite easily.
  Further, I think that in the 1970's we shall find fewer people wanting to take their pensions. They will be fitter and more vigorous old persons, and they will be happy to carry on working; but the present generation of old-age pensioners is composed of very different people. They have lived in most unhappy conditions throughout their lives and they are the people who are now in urgent need. I hope that the Minister, when he considers the Report—and the House for that matter—will bear in mind that the time for action is now. It is the present generation of pensioners who are in desperate circumstances. They are the people who need urgent help.
  1.12 p.m.
  The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Edith Pitt): It may be convenient if I intervene at this stage of the debate to give the view of the Government on the Bill.
  First, it would be useful to remind ourselves of the background to the earnings rule, about which my hon. Friend the Member for Westmorland (Mr. Vane) suggested that we should try to be clear. The Beveridge Report which was the foundation of the present National Insurance Scheme made a new approach to the provisions for old age and, indeed, for widowhood too; but, taking old age for the moment, instead of the small contributory pension of 10s.—a rate, by the way, which had not been altered for nearly 20 years and which was payable at the age of 65 for a man and 60 for a woman—Lord Beveridge recommended that the provision should not be payable on the ground of age alone, but only after a minimum pensionable age had been reached and the man or woman had retired from regular employment.
  This new conception was based on two considerations: first, that the individual is not in need of a pension while working; and, secondly, that it is important from the standpoint of the national economy and the individual himself to encourage him to remain in full-time work while he is still capable of doing so, and the community can still benefit from his services. The minimum age recommended was the same as that already in force—65 for a man and 60 for a woman. The award of increments to those who remained at work after reaching minimum pension age was part of this new conception.
  Here, I should like to reply briefly to my hon. and gallant Friend the Member for Wells (Lieut.-Commander Maydon), who touched upon this question of increments and the long years which, in his estimation, a man would have to continue working before he received back the amount of money he had saved. The question is not quite so simple as he suggested. He, conveniently and understandably, took the example of a married man who had a wife under 60 and who would not, therefore, qualify for an increment for himself and his wife when he later retired, because his wife was still
  1256
  under the age of 60. That is the exception and not the rule. I have no figures to prove the point but, generally speaking, a wife is within pensionable age though in most cases younger than her husband.
  Lieut-Commander Maydon: Surely there must be many men whose wives are approximately ten years younger than them. Among my own friends I can, offhand, think of several.
  Miss Pitt: I do not dispute that. There must be many examples where a wife is ten or even more years younger than her husband, but the vast majority come somewhere within the span of five or seven years. Even in the case that my hon. and gallant Friend quoted, the wife could. Not only that, but there is the fact that even though a man might continue at work after the age of 65, he might fall sick and have to draw sickness and unemployment benefit, both of which would have to come out of this reserve which, in the theory of my hon. and gallant Friend, is being built up.
  Further, it is more than probable that his wife would almost certainly outlive him and continue to draw pension, because women are living longer these days. As I am reminded, if the wife was ten years younger than the husband, this period would be even more indefinite. I realise that my hon. and gallant Friend is concerned about this. Indeed, he was kind enough to tell me in advance that he proposed to raise the question. I have gone into it at some length. If I do not prolong the discussion any further now it is only because I do not want to take private Members' time. I hope that my hon. and gallant Friend will talk to me about it afterwards.
  To come back to the main point, Lord Beveridge also recognised that this retirement condition would break down unless a man really retired from full-time employment. Otherwise, what is to prevent a man officially retiring, drawing a life pension and then going back to full-time work? A limitation on earnings— that is the earnings rule—was, therefore, linked to the retirement condition. I hope that that makes the two points clear. The Beveridge idea of the retirement pension, with its corollary of an earnings rule, was accepted by the Coalition Government and it found general acceptance among all parties

  1257
  when it was embodied in the National Insurance Act, 1946.
  There was, however, a feature which has puzzled some people. It is that the earnings rule does not operate after a man has reached the age of 70 or a woman the age of 65. Again, that was a question raised by my hon. and gallant Friend the Member for Wells. What the Act says is that at these ages a person is to be deemed to have retired whatever work he or she is doing. Therefore, since there is no need for any declaration of retirement, no earnings rule is necessary. Hon. Members may like to know that, of men aged 70, one in five is still in full-time work and that of women aged 65 one insured woman in seven is in full-time work.
  The reason for taking the age of 70 was perhaps in part a concession to the old idea of an unconditional pension at a fixed age, but also to avoid what might have been difficult decisions by the independent authorities who decide claims. We all know men who have continued to work after the age of 70, but most of us would often find it difficult to say whether a man had retired or not after that age, especially perhaps the small farmer or shopkeeper who does less and less work the older he gets.
  I think the House would like to note the figures in the group which we are discussing. At present, less than half the men take their pensions on reaching their 65th birthday and about half the insured women do so on reaching 60. Nearly half-a-million people in this age group have not retired at all and are, therefore, earning increments which will increase their pensions when they do retire. I want to stress this: nearly one-half of those people now starting to draw pensions have them increased by the increments which they have earned.
  It is also important to note that of all the people who are drawing their retirement pensions, only about one million are below the age of 70 for men or 65 for women and are liable to the earnings rule, while above these age limits there are 3½ million people who are not subject to the earnings rule and not affected by it, even if they are able to work.
  Thus, the group with which we are mainly concerned today is this one million who are below the age of 70 for men or 65 for women. Some of them are not
  1258
  interested in working any longer, because of ill-health or because they possess other incomes. About 130,000—that is, 47,000 men and 83,000 women—are believed to be working, and of these about 20,000 men and 15,000 women have their pensions adjusted because their earnings exceed the limit of £2; and that is the group with which we are concerned.
  So much for the background to the earnings rule and the retirement condition, but before leaving the point I might remind the House, as, indeed, it has been reminded by several hon. Members today, that the rule was looked at by the Phillips Committee—the Committee on the Economic and Financial Problems of the Provision for Old Age. That Committee, which was very representative and included both sides of industry, endorsed as recently as December, 1954, the idea of a retirement pension and pointed out that if it were abandoned pensions would be paid from minimum pension age to people who are in full-time work and would, in effect, supplement wages, which might in certain cases be adjusted accordingly.
  If the earnings rule were abolished, the retirement condition and the increments would also be abolished. Pensions would then go to the half-a-million people deferring retirement, and the immediate annual cost to the National Insurance Fund would be very high—£76 million, which is equivalent to the product of about 1s. 5d. on the insurance contribution or nearly 6d. on the standard rate of Income Tax.
  I turn to the amount of the earnings rule itself. The Phillips Committee gave a warning against any change which would bring earnings plus pension near to remuneration for full-time employment. In this connection, perhaps I could make it clear—because I think it is not always understood—that it is net earnings which are concerned. The Act and the regulations allow the deduction of expenses, such as fares, tools, overalls and materials, as well as the employee's National Insurance contribution and P.A.Y.E. We ought to make it clear that we talk about the £2 we are talking about net earnings. A widow with a child can also deduct the cost of having the child looked after while she is at work.
  There has been widespread questioning during the last two months not only about the present limit of £2 of the earnings

  1259
  rule but also its form, which, of course, is to take 1s. off the pension for each 1s. earned over the limit in the preceding week. Some people think—and this Bill is evidence of it—that there should be a substantial increase in the limit. Others are, to say the least, doubtful of the wisdom of introducing a high earnings limit, perhaps bearing in mind the effect which this might have upon the people now deferring their retirement and staying in full-time work.
  It is interesting to note that in the Second Report of the National Advisory Committee on the Employment of Older Men and Women, the chairman of which was my right hon. Friend the present Minister of Transport and Civil Aviation, the members of the Committee underlined the importance of approaching the problem of employment in old age from the point of view of people continuing in normal employment in their own jobs as long as possible. As I have said in the House before, it has been my own experience, which I am sure is shared by other hon. Members, that the majority of men prefer to continue at work on reaching the age of 65, if they are able to do so. My own personal experience in this matter has largely been confined to men, but the figures which I have already given indicate that a large number of women feel the same about this, and I am sure that in this matter we want to give them all the encouragement we can.
  There have been other ideas such as averaging the earnings over, say, a month or a quarter, or even taking earnings over a year; this point has been raised by my hon. Friends the Members for Scarborough and Whitby (Mr. Spearman) and Westmorland. Furthermore, while the Beveridge Report had in mind the strict earnings rule, it suggested the possibility that only part of the earnings over the permitted limit need be deducted. Hon. Members will be aware of the differing views on this subject and how strongly people feel about it. It would, therefore, have been quite irresponsible for any Government to have rushed into a decision on this matter until it had been thoroughly examined.
  This, I think, is the point made by the hon. Member for Sowerby (Mr. Houghton), who said we must take all the considerations into account, and the
  1260
  point made by the hon. Lady the Member for Flint, East (Mrs. White), who intervened to remind us that we must also consider the question of the earnings rule on a widow's pension. The obvious body to make this examination, and indeed the body set up by the National Insurance Act for just such purposes, is the National Insurance Advisory Committee. This Committee represents the contributors to the scheme and it consists of very experienced and able people. Its procedure is designed to ensure, and does ensure, adequate opportunity for the various viewpoints, including those of the trade unions and the employers, to be fully considered.
  The Government want to have the views of this Committee before making their own decision. The reference to the Committee is not a delaying tactic. The Government fully appreciate the difficulties which pensioners feel about the earnings rule but, in the light of the considerations which I have mentioned, the House will understand why it would be impossible for the Government now to accept Clause I, as that Clause appears to prejudge a matter on which the Government have themselves sought the advice of the National Insurance Advisory Committee.
  We are grateful to the promoters of the Bill for agreeing to put off the Committee stage until May, and I am glad that my hon. Friend the Member for Somerset, North made that clear in his opening speech. We realise that is the latest date possible in view of the difficulties of finding Parliamentary time. On the other hand, the Government welcome Clause 2, because it is likely to enable the Minister to give effect more speedily to any changes which may seem appropriate in the light of the advice of the National Insurance Advisory Committee.
  Clause 3 is not acceptable, but, again, my hon. Friend the Member for Somerset, North, has already said that he does not intend to press the point. If I understand correctly the intention of the supporters of the Bill on this point, I think that they will find the recommendations contained in the National Insurance Advisory Committee's Report on widows, published today as a Command Paper and available in the Vote Office, worth their study and their

  1261
  interest. The Report suggests an age of 18.
  The Government find Clause 4 acceptable, but I think I should warn the House that the procedure of the affirmative Resolution suggested in the Clause, while it is a proper safeguard, may entail delay because of the need to find Parliamentary time.
  As to when a Report may be expected from the National Insurance Advisory Committee, the House can be assured that the Committee is well aware of the need for speed and is giving the matter priority over all other business. Any reference at an earlier date would not have produced an earlier Report because the Committee was fully occupied with other questions, particularly that relating to widows, to which I have referred.
  The Committee has cut down from three to two months the normal period it allows for representations to be made to it, and that period expired on 1st February. In the meantime, much material has been collected and I understand that the Committee will begin to consider that material and representations on Wednesday and Thursday next. We have good hopes that the Report may be in our hands by late spring.
  There is ample ground in what has been said already for believing that the Committee will report quickly. Although no Government can commit themselves in advance to the acceptance of a Report, whatever it may contain, the House can be assured that on receipt of the Report the Government will quickly reach and announce decisions in this matter. We all want to help—perhaps "encourage" would be a better word—older people to lead the fullest life possible and in as much comfort as possible. I sympathise with the motives of the promoter and supporters of the Bill, but the House will appreciate the substantial difficulties to which certain parts of it give rise from the point of view of the Government.
  Lieut.-Commander Maydon: Could my hon. Friend tell us whether the Government would consider the suggestion I made for having a census of old-age pensioners, to see how many of them would be able and willing to work longer hours with an improved earnings rule?
  Miss Pitt: I certainly think that we can give that suggestion consideration. The difficulty may be that while the pensioner would be willing to complete the census it would involve much administrative work. However, I will look at that suggestion and see what can be done.
  1.33 p.m.
  Mr. Thomas Steele: May I at once take the opportunity of complimenting the hon. Lady the Member for Edgbaston (Miss Pitt) on her promotion to the Front Bench. Having had some experience in the Ministry of Pensions and National Insurance, to which I am sure she is proud to belong, no doubt she will regard this debate as an indication of one of the problems which will continue to beset her. Her own supporters, it seems, will press her harder and be more difficult than the Opposition. It has been a most interesting experience today, particularly for a new Minister. A private Member has introduced a Bill of which the effective Clause is not being accepted and neither is Clause 3. Out of the five Clauses two important Clauses are not accepted by the Government and two others are accepted, but the Bill still has to go through Committee.
  The hon. Lady gave us a very good account of the history of the retirement conditions, but she did not say whether the Government still believed in the retirement condition and were prepared to see that it was maintained. No doubt we may hear something about that at a later stage. She said that sending this matter to the National Insurance Advisory Committee was not a delaying tactic. Unfortunately, as she said it, she was not able to see the faces of her hon. Friends behind her. Apparently, on that at least they were not prepared to accept her view.
  The hon. Member for Somerset, North (Mr. Leather), who introduced the Bill and who, unfortunately, is not now in his place, said that he was not well versed in the problem. As his speech continued I thought it became clearer that his opening remark was quite correct. Right away, he announced what seemed an entirely new departure for a Member on the benches opposite—in fact, quite a revolution. I should like to know whether that is to be the new policy of the Tory

  1263
  Party. In effect, he said that Clause 2 would enable the Minister to bring in regulations to do something quickly. When we recall the arguments we had in this House from 1945 to 1951, and the criticism of our Government on the question of the delegated legislation, it was an eye-opener to have that practice so much sponsored by the hon. Member for Somerset, North. The present Minister of Pensions and National Insurance used to complain about the practice.
  The hon. Member for Somerset, North said that this was a matter which he knew little or nothing about. He then said that he would wait on the advice of the National Insurance Advisory Committee and, having got it, if it did not accord with his ideas he would not be prepared to accept it. I agree with my hon. Friend the Member for Sowerby (Mr. Houghton) that the hon. Member threatened the Minister most deliberately as to the action he and his hon. Friends proposed to take. However, that was modified a little in the hon. Member's intervention during the speech of my hon. Friend and it may not be so bad.
  The comment that old people did not know the difference between a retirement pension and an old-age pension and the confusion which exists is due, I think, to tradition, as my hon. Friend the Member for Ince (Mr. T. Brown) said. When I was Parliamentary Secretary to the Ministry of National Insurance I made many speeches at meetings and was introduced in many ways, though never the correct one, by the chairmen of those meetings. As my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand) has reminded me, many people today still refer to "National Health Insurance," whereas that title was changed in 1948. The whole thing is traditional and I do not think there is anything in the argument.
  In his peroration, the hon. Member for Somerset, North illustrated the great difficulties and problems which old people now have to face. The argument should not be concerned with the earnings rule but with the need for an increase in the basic pension. The hon. Member for Scarborough and Whitby (Mr. Spearman) suggested that the Minister should consider averaging earnings over a period. The Beveridge Report said something about that, but it was not accepted by the
  1264
  Coalition Government. It has cropped up from time to time and the Phillips Committee Report said that was something which the National Insurance Advisory Committee might consider.
  There are, however, some problems concerning it. While averaging might suit some people, others might be adversely affected if it were taken over a 13-week period. If they had the whole earnings taken off in one week, they would be all right, but if their earnings were averaged out over a period their pension could be affected accordingly and they might be worse off. This is a matter that the National Insurance Advisory Committee could certainly consider.
  The hon. Member for Westmorland (Mr. Vane) said that we ought not to make too much of the Bill and that it did not represent a change in principle. My hon. Friend the Member for Sowerby dealt effectively with that suggestion and I do not propose to say more about it. The hon. Member proceeded to put two propositions as to the earnings rule and asked whether its purpose was to stop people from working or to encourage them to continue at work. Frankly, it was designed for neither of those purposes. In effect, it was in line with the existing practice in connection with unemployment benefit. We did not wish to deny to anybody the opportunity of doing a little work or to make people feel that they were altogether useless. At the same time, however, it was not envisaged that they would be undertaking any considerable employment.
  As I have already pointed out, the hon. Member for Somerset, North, in introducing the Bill, said he did not know anything about the technicalities of the subject. This deficiency was overcome by the speech of my hon. Friend the Member for Sowerby, from whom we had a very good speech which explained in detail exactly the history and the dangers. My hon. Friend's explanation has made my task today very much easier.
  I agree entirely with what my hon. Friend said. Social policy and social security have, in fact, been matters which have concerned both sides of the House. I have happy recollections of the Standing Committee in 1946 which helped to bring the present Act into operation. The present Leader of the House was a member of that Standing

  1265
  Committee and made many useful contributions. We were, indeed, a happy Committee.
  The right hon. Gentleman, however, is no longer Chancellor of the Exchequer and his colleague the former Minister of Pensions and National Insurance has now gone to another place. An entirely new team is associated with these problems. We have a new Prime Minister. I could not be sure what would be the classification of the right hon. Member for Woodford (Sir W. Churchill), for example, and whether he would be said to be in inconsiderable employment or retired if these principles were applied to him. He did, however, take considerable credit for some of the social services in the past.
  Now we have a new Prime Minister, a new Chancellor of the Exchequer and a new team at the Ministry of Pensions and National Insurance. Therefore, we must be a little careful about what will happen in the future. We have a number of "whole hoggers," as the hon. and gallant Member for Wells (Lieut.-Commander Maydon) described himself, in these matters. There are dangers in this that we in the Opposition must watch very carefully.
  When the hon. and gallant Member for Wells described Lord Beveridge as "the devil," I wondered just what going to the other place now meant; but we could hardly agree with the hon. Member in that. He suggested that the Minister might consider circulating a questionnaire. I do not believe that that is necessary. We have had a considerable number of reports on this matter. We have had the report of the Phillips Committee, the very good Annual Reports of the Ministry of Pensions and National Insurance, and the reports about employment in old age. If they are studied carefully, we can get all the information we need.
  The first thing that reveals itself is that when a man reaches the age of 65, his decision as to whether he should continue working is not determined by the application of the National Insurance Scheme. His decision is governed, first, by the condition of his health, and secondly, whether his employer permits him to continue in his employment; and then follow the other reasons. From page 27 of the Report of the Ministry
  1266
  of National Insurance for 1955, one of the disturbing features is that of every 100 men who retire at the age of 65, one-quarter of them have been ill for the previous six months and another 25 per cent. have retired for health reasons or strain.
  That accounts for 50 per cent. of those who retire at that age. A number retire because of the age limit imposed by their employers. The interesting feature is that between the ages of 65 and 70, the same proportion seems to apply throughout. Therefore, in considering the earnings rule, we must bear in mind the large number of people who cannot, in fact, take advantage of it and who, because of sickness, strain or health reasons, are quite unable to continue working at the age of 65.
  The Minister had the Report of the Phillips Committee in 1954. It has been referred to on numerous occasions today and I hesitate to refer to it again. The previous Minister, however, hurried the Phillips Committee in issuing its Report, for reasons into which I need not go now. The Phillips Committee was a body of some standing. Sir Thomas Phillips, whom I know well, had long experience both in unemployment problems and in social security and the social services. The Phillips Committee having reported, we ought to take some account of what it said.
  On the question of conditions for retirement, the Phillips Committee was emphatic. The Report was not as clear on the question of the amount of earnings, although the summary of the Report states that the Committee recommended no change. At the same time, however, it was made absolutely clear that the earnings rule would be ineffective if the pension, when added to the amount that could be earned without suffering reduction, approached the amount of wage which could be earned by regular full-time work. This was a matter which was gone into very carefully by the Phillips Committee, for it was in 1948 that an entirely new conception of, and a new condition for, retirement had been introduced.
  This is a matter which has been before the Ministry all this time, and yet, although the Phillips Committee considered it and has reported on it and although the Minister himself has made

  1267
  no comment on the Committee's Report upon it, has not indicated whether he accepts the Report or not, and without our having had any opportunity of discussing it in the House, the Minister suddenly refers it to the National Insurance Advisory Committee. That is not treating either the Phillips Committee or the National Insurance Advisory Committee with the respect to which both Committees are entitled.
  Moreover, it is not a good thing for the National Insurance Advisory Committee that the Minister should in this way refer sticky problems to it; and that he should have done so, so soon after receiving the Report of the Phillips Committee, justifies the reluctance of hon. Gentlemen opposite to take it from the Minister that he did not refer this matter to the National Insurance Advisory Committee merely as a tactic in avoiding his responsibilities.
  Much has been said today in support of the argument that the amount under the earnings rule should be increased or that the earnings rule should be abolished. The whole hoggers wish to see it abolished, and one of their reasons for its abolition is the financial need of the individual. In the Ministry's Annual Report there is a finding on the proportion of men on retirement pension who continue at work and their reasons for doing so, and there is a chart which shows that 26·7 per cent. of the men on retirement pension go on working because of financial need. That is an argument we on this side of the House appreciate. After all, the Financial Secretary to the Treasury only yesterday told the House that the purchasing power of the £had depreciated by 1s. since May last year. The cost of living has steadily gone up.
  The Beveridge Report dealt with the question of the subsistence level, and Lord Beveridge said that pensions must be adequate. We of this party also said so in 1946. The Phillips Committee seems to have thrown that principle overboard. However, there is a complexity in this matter, for our conception of what is adequate for subsistence has altered since 1946; our conception of what the subsistence level is, of what people are entitled to have, has altered. Then, of course, there is, as there always has been, that gap between the income of a man when he is earning his living and
  1268
  the level of the pension he receives when he retires. The gap is there now when people are earning high wages and the present pension is what it is.
  All this, however, is not, I think, an argument in connection with the earnings rule. It is an argument for reconsidering yet again the whole question of social security and of our approach to it. That is one of the things which, I am proud to say, our party is in course of considering at the present time.
  Miss Pitt: I wonder whether the hon. Member would be prepared to tell us in what way he thinks that the 26s. in 1948 was inadequate by present-day standards of what should be due to the pensioner?
  Mr. Steele: I gather that the hon. Lady wants to know why I think 26s. was adequate——
  Miss Pitt: No, in what way it was inadequate, compared with what is now considered to be necessary.
  Mr. Steele: What I was saying was— and I think that this can be accepted in all parts of the House—that as society progresses, as we improve year by year our standard of life, there is a moral obligation upon us to share out the benefits of that advance as equally and fairly as we can. It is not a question of figures. It is a question of understanding that the standard of pension, or the standard of life, to which people are entitled is higher than in previous years we expected it to be. For instance, the old 10s. pension was well below society benefits, well below unemployment benefits, and so on. What we did in 1946 was to increase that pension so that there was equality. However, this is a question not only of pensions but of other things as well.
  The argument we have heard today, from the whole hoggers in particular, is that there is something wrong with the basic pension itself. That is a matter we have to consider. If we tamper too much with the earnings rule we shall, I am convinced, endanger the possibility of having a proper and satisfactory basic pension. I agree that in 1951 the earnings rule for married women with children was increased to £3. I thought that, perhaps, the Minister would be able to give us some information about how that provision operated, and to tell us whether it was satisfactory and carried

  1269
  out the wishes of the people who sponsored it at the time. We are, instead, told that that also has been remitted to the National Insurance Advisory Committee.
  I agree with my hon. Friend the Member for Sowerby, and I cannot emphasise this too strongly, that for the widows with children the alteration of the earnings rule seems entirely wrong, and that we are not facing our moral obligations if a widow with children is not getting sufficient to maintain her, so that she must go out to work. That is a shame upon us. It is a responsibility we have, and we ought to give her an adequate pension.
  During the time that I have been in the House, I have always felt unable to justify the Beveridge conception of equality of benefits in this respect. We need only look at the figures to see how unjustifiable they are. For example, an old couple at present receive a pension of 65s. a week, but a widow with two children receives a total of 63s. a week. I claim that the responsibilities and the expenses of a widow with two children are greater than those of two old people, who receive more money than she does.
  How can we compare an old couple who are retired and have had opportunities throughout their lives to have other resources and do not require the same amount of clothing and other things with a widow with children? I think that the House has never made proper provision for these women, and to ask the National Insurance Advisory Committee to increase the amount which these women can earn is a wrong approach to the subject. In effect, we are saying to this widow with children, "We are not prepared to give you an adequate amount to live on. There is what we are prepared to give, and you can go out and work for the rest." That is utterly wrong.
  Miss Pitt: The hon. Member has obviously not had time to read the Report of the National Insurance Advisory Committee on the Question of Widows' Benefits, issued this morning, but he will find recommendations there which will interest him. It is perfectly true that the question of earnings is still with the Committee, but it has obviously given considerable study to the position of widowed mothers with children and the
  1270
  Report contains several important recommendations.
  Mr. Steele: I agree that I have not had the opportunity to study the Report. I shall do so with interest. The hon. Lady will correct me if I am wrong, but I believe that when the Minister referred the question to the National Insurance Advisory Committee he made the proviso that it must not consider benefits. Therefore, anything that can be reported upon cannot increase the amount. It can only alter the age limit perhaps. The question whether these women should be entitled to some extra amount, over and above other groups, was not something which the Committee had to consider.
  We shall have an opportunity in Committee to deal with the matters which are the subject of the Bill. We on this side of the House have no objection to the Bill going to Committee. We appreciate the Minister's difficulty in the matter. We think that we must have the National Insurance Advisory Committee's Report to study before we can make any alterations. We have no objection to Clause 2 in respect of regulations, and we appreciate what the Minister has said about Clause 3.
  This has been a very good debate, but the House should heed the warnings from some of my hon. Friends that this is a matter which must not be dealt with in a piecemeal fashion but must be given the careful consideration which it merits before we take any positive action.
  2.5 p.m.
  Dame Irene Ward: I am very glad to give my support to the Bill, not only because of its intrinsic value but because I regard it as one step in the direction of trying to do something for the small fixed-income groups. It is from that point of view that I am concerned with its provisions. I am glad that, on the whole, the Bill has had the blessing of the Government and Opposition Front Benches, though I regarded the speeches of the hon. Member for Dunbartonshire, West (Mr. Steele) and of my hon. Friend the Joint Parliamentary Secretary as somewhat in the nature of shadow boxing. Neither side was very willing to come out fully in favour of an increase in the permitted earnings.
  I accept the reasons for the shadow boxing, and to some extent I am in agreement with them. I attach very great

  1271
  importance to preserving the wage position of those who are earning their livelihood before they come to retirement age. I naturally feel that because I have represented for a long time in the House a highly industrialised area, and I still remember the period when the emphasis was on trying to get the elderly to retire in order that employment could be found for the young. Neither do I forget my own history, which to some extent colours all my observations and contributions in the House.
  I was intensely interested in all the references which have been made to the Phillips Committee, but I always deprecate the reading out of one or two sentences from that important Report, mostly out of their context. Ever since the Phillips Committee reported, I have been endeavouring to get the Government to find time to debate it. I have also been trying to stimulate the Opposition to stimulate the Government, or to use such opportunities as come the way of the Opposition itself to ask for a debate on this very important Report. My own efforts in the House necessarily must be very small, but I want to see adequate provision made for pensions for all sections of the community. That is vitally important.
  I noticed that the hon. Member for Dunbartonshire, West made great play with the fact that it was only after the Bill was introduced by my hon. Friend the Member for Somerset, North (Mr. Leather) that the matter was referred by the Minister to the National Insurance Advisory Committee. The hon. Member made some reference to the expressions on some faces in the House when my hon. Friend the Joint Parliamentary Secretary said that that was not a delaying tactic. I accept the Joint Parliamentary Secretary's view. She was bound to make that statement.
  I realise that when the previous Minister of Pensions and National Insurance understood that the country was becoming desperately interested in the question of permitted earnings he referred the matter to the Committee. But I cannot entirely let the hon. Member for Dunbartonshire, West get away with it, because I also noticed that it was only quite recently that the Trades Union Congress was persuaded to come forward
  1272
  with any statement of its own on the subject. It also has been extremely cagey on this matter.
  In listening with great interest to the hon. Member for Sowerby (Mr. Houghton), I wondered what the Trades Union Congress really feels about this matter. I cannot believe that the difference between permitted earnings of £2 10s. and permitted earnings of £3 in our present economic set-up can engender some of the rather strong remarks that fell from his lips. In the financial setting of today 10s. is a very small matter.
  Mr. Houghton: Will the hon. Lady permit me to say that it is always difficult to distinguish between one stage and another on a slippery slope?
  Dame Irene Ward: I accept that intervention, but while I would need much more evidence about the future before I said that the earnings rule should be swept away, I think that too much emphasis on the danger of 10s. is going a little far.
  The hon. Gentleman pointed out clearly and helpfully, if I may say so, the original provisions in the first Act. In listening to him I wondered whether the 20s. was not related to the basis of 8 per cent. unemployment, which was the basis on which the original National Insurance Bill was introduced, and I was interested that nobody mentioned that point.
  As no one else has mentioned it, may I say that I would welcome an increase in increments because in that way we could get the basis of a suitable retirement pension. That is one reason why I regret so much that we have had no frank, full and all-party discussion on the Phillips Report. In trying to stimulate my own Government, I believe in going from one Minister to another. On every possible occasion the plight of those living on small fixed incomes must be raised, because I want to get action from several Ministers.
  May I offer my congratulations to the Joint Parliamentary Secretary on the occasion of her maiden speech at the Box? I am delighted that my hon. Friend is there, and I wish her all success. I hope she will forgive me if I make one observation which I should have made even if her predecessor had been there today. The hon. Lady rightly, and with great pride, emphasised her in-

  1273
  dustrial knowledge, which is great, as she comes from Birmingham. I approach the problem from the point of view of a heavy industrial area. The industrial problems of Birmingham are very different from those of a heavy industrial area. Indeed, I am delighted at the appointment of the new Chancellor of the Exchequer, coming as he does, from Stockton——
  Mr. Frederick Willey: The right hon. Gentleman deserted it, as the hon. Lady deserted Wallsend.
  Dame Irene Ward: I am delighted, because in the old days we used to say that there were no Ministers north of the Trent.
  Statistics have been produced about the number of old-age pensioners who retire, the reason for their retirement and the numbers of men and women who continue in work. Could those statistics be broken down region by region so that we can see the problem from the point of view of the mining, iron and steel, shipbuilding and engineering areas compared with other areas which, for the most part, are not dependent on heavy industry?
  I ask for this information because the point arises in my area whether we ought to expect miners or railwaymen in the more responsible jobs of engineering and driving, footplate men, signalmen and others working in the blast furnaces, to continue to work after the age of 65. I have never seen that problem faced by hon. Gentlemen opposite, by the trade unions, who give their advice very freely, or by my hon. Friends on this side of the House. I apologise for the fact that my contributions are coloured by the needs of my own area. I am not impressed by what goes on in Birmingham. I want to know what goes on in Tyneside, Tees-side and Weirside. It is difficult to see into the future and how we are to provide employment by increments for people in heavy industry who work after the age of 65. Indeed, from the point of view of safety in industry, it is not always appropriate that people should be encouraged to do so.
  Another human aspect of this problem is that people who have taken a real pride in their work, and have made a great contribution to the general econo-
  1274
  mic work of the country, dislike suddenly to find themselves without employment. Also people often deteriorate in health and lose interest in life because they have not been able to keep themselves interestingly and properly occupied. So although I am wholeheartedly behind my hon. Friend the Member for Somerset, North and indeed am one of the supporters of his Bill, there is a much wider and greater interest to be considered. I am surprised that this House of Commons has not insisted on discussing the complete problem, so that we could have a little more evidence on which to base our future policy.
  Mr. Willey: Before the hon. Lady leaves that important point, my recollection is that in coal mining and in the heavy industries men tend to retire much later, so that the hon. Lady has revealed a real problem which affects us in the North-East. Has she any proposal to make about this problem? I agree that the industries she mentioned are the very ones in which socially we should try to advise an earlier and not a later retirement age.
  Dame Irene Ward: I am very much obliged to the hon. Member for co-operating over the problems of the North-East Coast, which are very important indeed.
  Often when we debate the mining industry the remarkable work which is being done by the older miners is pointed out. I should not like to be dogmatic about what the answer is, but the problem is a very real and serious one. Many problems have to be considered alongside the main anxiety of all sides of the House to provide a satisfactory and happy way of life for those who have aided the national economy. I cannot be dogmatic on this point because I do not know enough about it. I should like to hear from those who are experienced in these matters. That is why I so much regret that we have never been able to have a full, free and frank discussion of the problems raised in the Phillips Report.
  I hope that hon. Gentlemen opposite will forgive me if I say one or two critical things about the apparent attitude of the trade unions towards the matter of married women who work. Incidentally, in my part of the world there is very little work for women. I always understood that part of the reason why the trade unions were critical of any increase

  1275
  in the earnings rule was that they thought that women reaching the age of 60 might, if there was an increase in the permitted earnings, retire from full-time employment and seek part-time employment. If that is the view, I suggest to those who come from areas where women find employment that the women's wage scales should be looked at.
  In the heavy industrial areas there is relatively very little employment for women. I cannot let my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman) get away with it altogether. I have such very distinguished coastal resorts as Whitley Bay and Tyne-mouth in my constituency, and we should find it very helpful if there could be an increase in the permitted earnings.
  I would point out that married women, with their husbands, have had substantial benefits from the Inland Revenue which are not given to spinsters or widows. The trade unions have assented to this and it has been allowed to go on for a very long time, and I am not against it in one sense. I am very glad that some emphasis has been placed on the position of widows. Exactly the same applies to widowers and single men. The married man has relief in respect of his wife, and the married woman has her own personal relief. They both get the benefit of graded Income Tax bands. On the whole, such a person is much better off than a married man with not such a high wage whose wife stays at home and looks after the family.
  I merely mention this because one would have imagined from the observations of the trade unions about the earnings problem that they were springing to the defence of their movement as against the elderly people. If the trade unions talked to the miners, the shipyard workers or the blast-furnace men, I do not think they would get as much support for their rather niggardly proposals as perhaps the leaders of the unions, who are often out of touch with the rank and file, think they would.
  There is another very important point which I have raised on several occasions but absolutely without success. Those who pay Income Tax obtain their social insurance benefit at a cheaper rate than those who do not pay it. I have tried to obtain the reaction of some of my trade union friends to this. I believe that
  1276
  the cost to the Treasury is about £34 million a year. Those who pay Income Tax—this goes for many late entrants into the National Insurance Scheme—are getting a most wonderful return for their capital outlay. Many have only to pay into the Insurance Fund for ten years, and then they get a very large dividend on their capital. I am always very surprised when those who complain about dividends do not say anything about that.
  There are plenty of people to defend the Income Tax payers and plenty of people to defend the big wage earners, but there are very few to defend those who do not pay Income Tax. The fact that those who do not pay Income Tax are really paying more than the others for their retirement pensions is a burning injustice. The Trades Union Congress has made no observations on that. All it can do when it is forced to do something is to deliver a nasty little stab at the grand elderly men and women who would prefer to do a little extra work and earn a little extra money for themselves. That is not cricket. I like justice to be justice.
  Mr. Houghton: I offered the Chancellor a solution to the problem long ago. It is that the contribution should not qualify for tax relief and, in return, the benefit should not be subject to Income Tax. It is as simple as that.
  Dame Irene Ward: I am very interested to hear that because I have sought an alteration in the same direction. The hon. Gentleman and I must get together and see what we can do about it.
  Mr. Deputy-Speaker (Sir Rhys Hopkin Morris): I think we might come a little closer to the Second Reading, too.
  Dame Irene Ward: I have come to the end of what I had to say, Mr. Deputy-Speaker. I am very glad that the Bill has, on the whole, had a reasonably good reception. It makes a beginning. I can assure my hon. Friend the Joint Parliamentary Secretary and all other Ministers, if they bother to read HANSARD, that until something is achieved which is satisfactory for the small fixed income groups, I shall continue to talk about them until such time as my constituency dismisses me. I am very glad indeed to have had the opportunity to support the Bill.
  2.30 p.m.
  Mr. Norman Pannell: I wish to intervene very briefly in the debate in support of the Bill. It has been said that if the earnings limit is raised by too great an amount it will vitiate the retirement principle. I quite agree, and I also agree that it will deter employees from continuing in employment in order to increase their pensions. But I do not think that an increase from £2 to £3 will have that effect. I think that it strikes exactly the right balance. A married man who now receives a pension of £3 5s., on account of himself and his wife, can raise his total income to £5 5s. by part-time work, and under the provisions of the Bill such a man would be able to earn a total income of £6 5s. a week. In relation to present earning rates that would not deter him from carrying on work if he wished to do so.
  I would remind the House that there are certain industries in which the opportunity to continue in employment does not exist. That applies to some nationalised industries, and certainly to municipal corporations. In those cases the employees are automatically retired at the age of 65, and they find it very difficult to obtain alternative employment of a full-time nature, thus being compelled to seek part-time employment. Those people are now suffering very great hardship by reason of the limitation of £2 which is placed upon their earnings.
  Another point I wish to raise concerns widows' pensions. It has been said that a widow with dependent children has an earnings limitation of £3. She receives a higher pension than a widow without dependent children, but the latter is subject to an earnings limitation of £2. That is an anomaly which has caused very great hardship. It has been said that the Bill does not deal with that question. I am open to correction on this point, but it seems to me that by amending Section 20 (5) of the National Insurance Act, 1946, the provisions of the Bill apply equally to the earnings of widows without dependent children as to those of old-age pensioners, and in that case, if the Bill is passed, the limitation with regard to those widows will also be increased from £2 to £3. I sincerely hope that that is so, and that it will not be necessary to introduce a further Bill as a result of a study of the Report of the National
  1278
  Insurance Advisory Committee, which has been placed in our hands today but which we have not yet had an opportunity of reading.
  2.32 p.m.
  Mr. Richard Fort: In winding up the debate on behalf of the proposers of the Bill, I ask the House to forgive me for being merely a substitute for the originator—my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan) who is away convalescing from severe illness. He has, of course, worked so closely with my hon. Friend the Member for Somerset, North (Mr. Leather), who was successful in the Ballot.
  We have had a very wide debate. My hon. Friend the Member for Somerset, North, who introduced the Bill, adopted a rather sceptical attitude towards the retirement principle. There was then a downright condemnation of the principle by my hon. and gallant Friend the Member for Wells (Lieut.-Commander Maydon) and, later, a lucid defence of the principle by the hon. Member for Sowerby (Mr. Houghton), followed by the hon. Member for Dunbartonshire, West (Mr. Steele), who wound up for the other side of the House. I was delighted to hear someone else on my side speak on the wider aspects, namely, my hon. Friend the Member for Tynemouth (Dame Irene Ward).
  Listening to the debate, I could not help feeling that, in introducing the Bill, we had not only given the chance to change the existing earnings limits, but had given the House an opportunity to debate what many of us have long wanted to debate, namely, the whole subject of the retirement principle and pensions and the support of the elderly. Although these matters were discussed in the Phillips Report, neither my own Government nor the party opposite on their Supply Days, have given us any time to discuss them.
  From time to time we all have letters from and interviews with constituents who have stories to tell which seem very hard under present circumstances. I do not deny the statistics about the number of pensioners whose pensions are being reduced by the size of their earnings. But in industrial towns everywhere there is a feeling among the people that the present earnings limit is too low. There is some statistical support for this point of view.

  1279
  I was struck by one of the tables in the Phillips Report. No one has yet referred to it, but it is interesting. It sets out the weekly income and expenditure of a small sample of elderly households in 1953. The fact which stands out so impressively is that even those few households all show that the difference between income—from pensions and earnings of one kind and another—and expenditure was about £1 a week. The rise which the Bill proposes would help to meet that gap. It was £I per week and is probably no smaller at the present time. I would not press the argument too far, but that table struck me as an important if not overwhelming confirmation of the views of the promoters of the Bill.
  The hon. Member for Sowerby turned upon us, with a great wealth of statistical information, to show that the percentage rise in earnings and also in wage rates was a great deal smaller than the rise which the Bill proposes, comparing 1946 and 1956. It seems to me that both parties have neglected the full logic of these statistical arguments—not only the promoters of this Bill but also the Labour Government when they gave a similar rise in 1951.
  I was glad when, in an intervention, the hon. Member for Somerset, North cleared up his position about the retirement principle. He made it clear that we all firmly support it. It is easy to exaggerate how the suggested increase departs widely from that principle. I greatly regret that we have not had a debate upon the Phillips Report, because this matter is something which we should be thinking about and discussing continually and publicly. I am rather doubtful whether the arrangements based upon the great social survey of Lord Beveridge in 1942—which survey itself was based upon pre-war statistics—are completely in keeping with the present situation of nearly twenty years later.
  With the qualification that one must be prepared to discuss what might be best in the future, all the supporters of the Bill are in favour of the retirement principle. I do not think that the increase in earnings limit which we propose indicates in any way that we wish to depart from it. There is one feature about increasing the earnings which can be argued either way on this matter. That is whether increasing the amount which can be
  1280
  earned before deductions from a pension starts will encourage most people to stay at at least part-time work, or discourage them.
  In that connection there is one interesting quotation which I should like to give from the Report of the Committee of which my right hon. Friend the present Minister of Transport was Chairman, in which he said that the provision of part-time work for men should be encouraged as an alternative to retirement. Yet in discussing what effect the earnings rule had on employment, the Report said that there was no information put before the Committee about the effect of earnings on part-time employment, although, as hon. Members on the other side of the House have rightly said, in the earlier Phillips Report there is evidence about the effect of earnings on full-time employment. I think that we should do well to have further information on the matter of part-time employment.
  There are one or two points in connection with the Bill to which I should like to draw the attention of the House. We have deliberately inserted a provision that the regulations should be subject to affirmative Resolution, because changes would be made which would greatly affect the lives of many people. Therefore, it seems to us right that there should be an opportunity of discussing the regulations thoroughly in the House, as well as taking advantage of the provisions in the 1946 Act by which the regulations are sent to the National Insurance Advisory Committee before being presented to the House.
  I commend the Bill to the House. Clause I may perhaps be amended after the Advisory Committee has reported. If the Bill is finally passed it will enable the new conditions about the earnings rule to come into force immediately, instead of having to wait for the slower proceedings of the regulations going to the Advisory Committee and then coming back to the House. The next change is one which will be quickly carried through, though subsequent changes would have to be made by affirmative Resolutions.
  I think that we all want to tell our constituents where they stand in regard to the earnings limits by about the summer, because it is often easier to get work then than in the winter. It is one of the advantages of the Bill that the

  1281
  new regulations can come into force by the summer, assuming that the National Insurance Advisory Committee reports in time for that to happen. I was very glad to hear the Joint Parliamentary Secretary, speaking from the Front Bench, say that the Committee was doing all it could to speed up its consideration.
  I now want to refer to Clause 3. I agree entirely with my hon. Friend the Member for Somerset, North that the Clause seems to be rather outside the scope of the Bill as it now stands. We shall withdraw it during the Committee stage, in order to eliminate further discussion which might be necessary if the Clause were left in.
  Other hon. Members have already said much that I feel about the reference to the National Insurance Advisory Committee. Perhaps when we get the Committee's Report we shall see that if the problem was referred to it for not the worthiest of reasons, at least that Committee will have done an extremely good job in examining and reporting to us on what is a complicated if not extensive subject.
  We all know what a thorough and excellent job the National Insurance Advisory Committee does. My hon. Friend the Member for Somerset, North said what he hoped that Committee would report, and I know that he was reflecting the view of many people inside and outside the House. I am, for my part, prepared to bide my time for the next few months until we get the Report and can see what it recommends and whether it fits in with our own ideas. I am sure that in that way we shall be finally passing through this House a Bill which will commend itself widely outside and to most hon. Members inside the House, and passing it quickly in a way which will reflect real credit on the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee, pursuant to Standing Order No. 38 (Committal of Bills).

  LOCAL AUTHORITIES (EXPENSES) BILL
  Order for Second Reading read.
  2.48 p.m.
  Mr. John Hay: I beg to move, That the Bill be now read a Second time.
  May I say at once that this Bill is intended to have only a limited application, and that any hon. Member who has noticed in Clause 1 (2) reference to a Scottish Act of Parliament need not imagine that the Bill applies to Scotland. It happens to be one of those technicalities which from time to time we run up against in this House without understanding why it is a technicality. The Bill applies only to England and Wales and to county, county borough, metropolitan borough, urban and rural district councils.
  The Bill enables such councils to make payments for travelling and other expenses which are reasonably incurred by members or officials of the council carrying out official or courtesy visits inside or outside the United Kingdom on behalf of the council. It enables them to pay certain types of visits. It also enables them to receive and entertain distinguished visitors and persons representative of or connected with local government, whether they come from inside or outside this country, and to supply them with information.
  There is a proviso to subsection (1) which limits the amount to be paid for travelling and subsistence allowances in respect of visits inside this country to those which are laid down by Section 113 of the Local Government Act, 1948. The pith of the Bill is in subsection (1) of Clause 1. Subsection (2) deals with the necessary financial matters, and I hope that the Government, in whose hands this matter must lie, will be willing, if the House should give the Bill a Second Reading, to provide the necessary Money Resolution to enable it to make progress. Without that, I am afraid that we cannot go on.
  Having explained what the Bill does, may I now say a word or two about the need for it and why I am introducing it? These or similar powers are possessed already by some of the larger county boroughs, who have obtained them by

  1283
  special Acts of Parliament. Many others have no such powers and, being subject to district audit, may find themselves in difficulties from time to time when they have to entertain distinguished visitors or send representatives of the council on official visits.
  Under Section 228 of the Local Government Act, such visits are not prohibited, but if expense is incurred there is always the risk of the council being surcharged, unless the Minister is prepared to sanction it. It is desirable that councils should have the opportunity of giving reasonable entertainment to visitors from abroad, not only from Europe but from the other side of the Atlantic or from within the British Commonwealth. It is equally highly desirable that municipalities should be in contact with each other; the Bill is a practical way to do something for world peace.
  A resolution was passed by the Council of Europe on 14th October last year. We often hear that the Council, to which some of our colleagues go from time to time, is a sterile body which does a lot of talking but nothing practical. The reason may be that Parliaments—ours is one of the worst offenders—never do anything about the resolutions passed by the Council. This resolution was passed as a result of three years' hard, constructive work by my hon. Friend the Member for Winchester (Mr. Smithers), with a special committee on municipal and regional affairs. They prepared a report which the Council has now adopted, and which has the objective of closer contact between towns and similar districts, and their populations, in Europe. No doubt my hon. Friend will tell us about it if he is able to catch your eye, Mr. Speaker.
  The resolution said that it was desirable
  "to promote and foster exchanges and contacts between members of European local authorities …as an important factor in disseminating among local populations the idea of a European community."
  That is something in which I firmly believe. The Bill, though modest in its scope, can do something to implement the resolution.
  On the question of contact between towns, I would mention the work done by a small organisation with which I am connected, The Bilingual World. It enables relationships to be set up among towns in England and France. Exchanges
  1284
  have been going on between the two countries, but the work has been hampered by the difficulties of local authorities in spending money to send small deputations or to receive representatives from foreign towns. The Bill will promote such contact and lead to better international understanding.
  Two criticisms might be made of the Bill. The first is that it appears to give a blank cheque to local authorities to spend the ratepayers' money on trips abroad. It is highly unlikely that any responsible local authority, particularly in these days of stringent economy, will spend money which cannot be fully justified. An important word in page 1, line 7, of the Bill is "reasonably." My hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government will be familiar with it. It enables a council to defray expenses
  "reasonably incurred by or on behalf of any members or officers of the council."
  That is a fairly good safeguard against extravagance on the part of a local authority. It is unlikely that any such extravagance will take place.
  The Bill is a modest Measure and does not try to set the world completely right. A number of Members in all parts of the House, particularly on the Opposition Front Bench, have been kind enough to express their support, and so have the County Councils' Association and the Urban and Rural District Councils' Associations. The Association of Municipal Corporations has a benevolent interest in the subject and feels that the proposals are in accordance with the policy of the Association of extending discretion to local authorities generally.
  I ask the House to give a Second Reading to the Bill, and thus do something to enable local authorities to carry out a certain amount of reasonable entertainment, to create links between our country and others and to add to international understanding.
  2.58 p.m.
  Mr. Frederick Willey: I beg to second the Motion.
  I do so with very great pleasure, and express the appreciation of the House to the hon. Member for Henley (Mr. Hay), who has used his opportunity so wisely by promoting a Measure which, as he had

  1285
  already indicated, will be very much welcomed by local authorities. Let me emphasise that this is not a party political matter. Both sides of the House are interested in improving our contact with foreign local authorities, and we think that the Bill will help.
  I have always taken every opportunity in the House to emphasise the need for giving the utmost discretion in these matters to the local authorities. I remember that my hon. and learned Friend the Member for Kettering (Mr. Mitchison) also took an opportunity to widen and make more flexible the provision regarding the allowances payable to members of local councils. At that time i received representations from my own local authority, and met—and I mention this to emphasise the non-party political character of this proposal—the all-party Durham County Boroughs Committee. Regardless of political differences, that committee felt that such matters should be left to the wise discretion of the local authorities.
  When the hon. Member speaks of a blank cheque, I feel that we are sometimes more concerned with the machinery for ensuring economy than with the promotion of the virility of local authorities. I do not want to pursue further the issue which the hon. Gentleman has raised by implication—the attitude of the district auditor—but in the North-East, as the hon. Gentleman will know if he has looked at the files, we met with some difficulty in connection with smoke abatement.
  The district auditor is, of course, in a partially-judicial position, and I hesitate to comment, but in the North-East his decision has had an unfortunate effect on the work of smoke abatement which our local authorities wished to pursue. That could, perhaps, be quoted as an example of proper restraint and wise economy, but personally I do not think it is. We were all anxious to do what we could to help smoke abatement, and are very sorry not to have had an opportunity to do more.
  My own local authority has not met with any particular difficulty in regard to the form of activity which this Bill seeks to promote, and because of that is most anxious that equal opportunities should be available to other local authorities which would otherwise have difficulty with the district auditor. By quoting from the municipal diary which
  1286
  records our "notable events" I should like to draw attention to what we have been able to do in Sunderland.
  The last three events recorded are the return visit to Sunderland of H.M.S. "Swiftsure," a visit to Sunderland by a civic delegation from St. Nazaire in France—"a town with which Sunderland has formed a friendly association"—and the visit of the American destroyer, U.S.S. "Lewis Hancock."
  I am sure that were he here, the hon. Member for Sunderland, South (Mr. P. Williams) would agree that such events are very important to the civic life of Sunderland. This association with St. Nazaire is something which has been enjoyed not only by the civic authority but by the town generally, and I would certainly agree with the hon. Member for Henley that such an association is a concrete contribution to a better understanding between European countries.
  It is something not purely in the interests of the town hall alone. We are very happy to have the various mementoes that have been presented, and to know that the visit of our own delegation last year was equally appreciated in France, but we are also very conscious that it is in this sort of way that we shall get a greater feeling of unity and common purpose between the peoples of Britain and France. We should very much like other local authorities to be able to do what we have done.
  We have formed an association not only with France but with the people in West Germany. That was a more difficult job, but political events have shown its wisdom. Just as we had visits in the case of France, so we have had visits in the case of Germany, and those have been a very concrete contribution to a new understanding between the countries. The importance of such associations is not limited to relations between civic heads. Those are not, of course, without importance, but consequential to those visits we have arranged visits of parties of schoolchildren.
  I can think of no better way of getting a real understanding between peoples than an interchange of children. I have no need to emphasise that we on the-North-East Coast are rather insular. These visits of children from Germany to Sunderland and the return visits by children from Sunderland to

  1287
  Germany and also to France have helped considerably to give us a far better understanding of the common purposes of western Europe.
  I mentioned the visit of the American naval vessel to Sunderland. That in itself was not unimportant. We should emphasise that it is not unimportant also that the local authority should feel that it has a wide discretion to entertain. That vessel did not call only at Sunderland; she called elsewhere. Though the people of Sunderland are as careful as anyone else in considering the rates—I have always pointed out that far more important than the rates themselves is the value we get for the rates we pay—we should not like to feel prevented from expressing our generosity. We certainly should not like to feel, in a matter like this, when those being entertained will make comparisons with the reception and cordiality with which they are entertained elsewhere, that our hospitality was in any way less than that of any other port.
  As I said at the beginning, we should all be greatly obliged to the hon. Member for Henley on his initiative in trying to meet a very real need. If we encourage local authorities to take advantage of this Measure when it is on the Statute Book we shall be making a big contribution to better understanding between peoples of different countries, and that will be well worth while.
  3.13 p.m.
  Mr. Peter Smithers: The city which I have the honour to represent in this House is happily married with Versailles. As marriage should be, this has proved both a joyful and a fruitful union. I am not sure that we may not also be bigamously married. We have at least had a flirtation with the town of Beaune as well. However that may be, I think our excursion with Beaune was pre-matrimonial.
  I should like to support the Bill on a number of grounds. I thank my hon. Friend the Member for Henley (Mr. Hay) for having spoken about a project of mine in this connection. At the outset I say that the argument in favour of the Bill, which the hon. Member for Sunderland, North (Mr. Willey) has put in other words, is, first, that the Bill will make a contribution to inter-municipal contacts and, secondly, that inter-municipal contacts can do something effective towards
  1288
  the consolidation of Europe and that, in turn, the consolidation of Europe can make a very powerful contribution towards the cause of peace. All of us here have seen two wars arise in Europe, and anything which, directly or indirectly, can help to prevent another is welcome to us all.
  It is very difficult to get people of diverse European countries and traditions into any kind of a political union, as the various attempts to do so have shown. I myself have little faith in constitutional documents as such; nor have I much faith in the good intentions so generally expressed on this subject. As an Englishman, I incline to think that true union comes about as a process of organic growth—simply the process of a thousand different connections, social, commercial, cultural, growing up in various ways over a period of time; and when there are enough of those contacts, then opportunity may come to place a political structure upon them.
  The reason that I think inter-municipal contacts may play a part of some importance in this field is this. It is no good just getting people together at international conferences on a basis of good will. One must find a common theme. One must find some ground upon which they can meet. I had the privilege of serving for a number of years on my local authority, and anybody who has served on a local authority in this country cannot help but be impressed by the immense amount of enthusiasm which local government in itself generates as a pursuit. In fact, in England I might almost say it is elevated into a sport, such is the enthusiasm with which it is pursued.
  I have noticed that when one goes to the great international conferences dealing with local authority matters—and I had the good fortune to attend one in Rome this summer and another in Venice the previous year—one cannot help observing that this spirit produces a remarkable concentration of minds from different nationalities upon different problems.
  Nor do I think that the benefits are confined simply to the international field. It seems to me that local government also benefits very much. If one studies French local government one soon comes to realise that, though one may prefer the British system, nevertheless there are lessons which we can learn from other

  1289
  people; and I am bound to say that there are some countries which, I think, have a great many lessons to learn from us. When the problems of local administration and politics are discussed in an international forum, a great deal of learning is done by everybody concerned.
  I hope it may be of some service to the House if I say a word about the existing structure, which is quite complicated, for promoting these contacts, because there are a number of organisations for this purpose and some of them are of great power and importance. The first is the International Union of Local Authorities, which is a world-wide organisation. When it calls its conferences they are attended by mayors from great American cities, great European cities, the Far East and all round the world. In Britain, I think, this is our principal organisation in these matters, and I should like, if I may, to pay a tribute to the work of Mr. Hayward, the leader of the L.C.C., who is Chairman of the I.U.L.A. in this country and who, with untiring devotion, has pursued the objects of the I.U.L.A. here with very great effect.
  Next comes the C.E.M.—the Council of European Municipalities. That is an organisation devoted exclusively to Europe, and within Europe it is highly specialised, highly developed and very powerful indeed. The C.E.M. is not active as an organisation in this country, although I believe it has a nucleus here.
  Then comes the organisation of which my hon. Friend the Member for Henley is, I believe, the Chairman here—le Monde Bilingue. This organisation is, again, a little narrower in scope; it deals simply in relationships between municipalities in this country and municipalities in France. While its scope is more concentrated, its work is perhaps extremely effective as a result.
  There are other organisations in the field such as, in Scandinavia, the powerful Foreningen Norden, in which the three Scandinavian countries get together for inter-municipal contacts. There is also the effort of U.N.E.S.C.O. to bring together a number of trade union or other organisations, but on a local and regional basis. Finally, there is my own humble project, which, through the auspices of the Council of Europe and the Municipal Committee of that Council, is endeavour-
  1290
  ing to provide an exchange of hospitality between members of local authorities in different European countries. By that means one might consult a directory and find in the country that one proposes to visit some local authority which would be willing to give a day to instruct one in the way the local authority works and, if desired, to offer simple hospitality to the visitor.
  This is all a quite complicated structure. Nevertheless, I think that as machinery it is enough. I do not want to suggest to the House—nor, I am sure, does my hon Friend—that a very great deal of money is needed here. It certainly is not. It would be quite wrong if we were to envisage extravagant hospitality and waste of ratepayers' money on a scale which I am afraid takes place in some countries. But we all know cases where small local endeavours are hampered for the want of very small amounts of money. I believe that the purpose of this Bill is good. It is to make sure that for want of what my hon. Friend calls reasonable expenditure—using that useful political word—efforts of this kind will not be prejudiced. I very much hope that the House will support the Bill.
  One thing I want to emphasise, in conclusion. It will be a great help if these small amounts of money are available to local authorities which at present cannot obtain them, but it is absolutely indispensable that the international organisations now working in this field should work together. In the past, there has been a lamentable tendency towards rivalry and overlapping. I hope that in the thumbnail sketch I have given the House of their different functions I have made it perfectly clear that they serve different purposes, that their functions are complementary, that all ought to be able to work effectively together in the same field and there is no need for any conflict.
  I am glad to say that relations between the I.U.L.A. and the C.E.M., which, formerly, were none too easy, are now very good, and with the project in which I am interested they are co-operating. I hope that the other organisations in this field will also extend the same spirit of international co-operation, appreciating that they have the common task to perform and that attempts to beat one another in membership and rivalry of that sort can be of really no service to

  1291
  the cause. While expressing that hope of harmonious working among those already mainly concerned to take advantage of these funds when they are available, I wish to congratulate my hon. Friend and to wish success to his Bill.
  3.18 p.m.
  Mr. Ede: I join in the congratulations expressed by the hon. Member for Winchester (Mr. Smithers) to the hon. Member for Henley (Mr. Hay) on having introduced this Bill following his good fortune in the Ballot. With the limitations on expenditure which it has been generally indicated we think should be fixed, this is a matter which is entitled to the unanimous support of the House.
  If I may do so, I should like to thank the hon. Member for Winchester for the clear and concise exposition he has given of the opportunities for appropriate organisation of this form of national and international courtesy that the various bodies now existing can provide for those municipalities and counties which wish to avail themselves of the advantages of this Bill.
  I regretted to hear from my hon. Friend the Member for Sunderland, North (Mr. Willey) that there appears to be some difficulty in depriving Sunderland of its smoke. As one who represents an adjoining constituency, may I say that if any testimonial of mine is needed I am quite willing to say that if there is any place which ought to receive help in that matter it certainly is Sunderland.
  I want to support the Bill in two capacities, first, as the Member for the important seaport which I represent. We have already formed a friendship with the great and historic port in France of La Rochelle. It is undoubtedly of great advantage to great seafaring communities which like to speak as a unit and as a unity that opportunities such as this should be provided.
  We could, of course, form a liaison with practically every port of the world, for one in seven of the seamen of this country originate in the port of South Shields. Therefore, we may very well occasionally have relationships with great seafaring communities in all parts of the world. Already, although our contact with La Rochelle has not been very long sustained, it has undoubtedly led to an
  1292
  understanding both in France and in this country of some of the common problems that face seafaring communities in particular. I hope that the liaison already established will grow and flourish.
  Secondly, as President of the County Councils' Association, I want on behalf of that organisation to express its unanimous and sincere support of this Measure. Probably, in the early days, the use that will be made by county councils of this Measure is not likely to be as great as the use that will be made of it by county boroughs and urban districts. It is more easy to find Continental organisations corresponding to these smaller units than the exact foreign unit that is represented by our county council. It is one of the curious things that in this country the historic units have always been the county and the parish, whereas abroad the form of local government that a county provides is not found in quite the same form, or sometimes in anything like approaching the form, that the English county represents.
  I also hope that this will lead to a better understanding abroad of the exact function that officers play in English local government. When I was Home Secretary, I received fairly frequently burgomasters and other people from Germany and it was quite plain that they could not understand a non-political police force. What we have seen in the first half of this century makes it very necessary that people should understand that it is possible in a democracy to have a police force that owes its allegiance to the community and not to the people who happen to be in power at a particular moment in the municipality.
  I recollect a burgomaster saying to me, "Home Secretary, I am told that the chairmen of standing joint committees and of watch committees which you have been describing to me are, in the main, to be found in a party other than your own. Is it true?" I replied, "I have never taken the trouble to count them, but I would not be surprised if it is true." The burgomaster said, "Do you think it is safe that the police forces of this country should be in the hands of people of a political complexion different from yours?"
  Another burgomaster asked, "What is the political view of the Commissioner of Police for the Metropolis?" I

  1293
  replied, "I do not know. What is more, I do not care." He asked, "Do you never talk politics with him?" "No," I said, "I do not." He asked, "Does he never talk politics to you?" "No," I said, "and it would be a bad job for him if he did. I am not quite sure what I could do with him, but I am certain that it would be very painful."
  It is one of the triumphs of democracy in this country that we have police forces which are not identified with any majority which may happen to be in power in a municipality at any time, and I am quite certain that one of the richest blessings this country can confer on the world is the knowledge that that is the key to the successful development of democracy and to its preservation.
  I hope that we shall have visitors to this country from whom we can learn, for I do not pretend that any form of local government in this country is in itself perfect, for it is a human institution with all the strengths and failings that come from independent human experience. Therefore, we shall learn something from them. I know that, by showing them some of the things we have been able to do, we can demonstrate that democracy is more than a system; that it is a real association of free human beings striving, by the clash of opinions, to work out a form of life, a daily way of life, which enables each individual citizen in a municipality to feel that he is a vital part of that municipality, and that his own life can be enriched by his association with it and with his fellow burgesses.
  3.28 p.m.
  Mr. George Jeger: I should like to join in congratulating the hon. Member for Henley (Mr. Hay), who moved the Second Reading of the Bill, on the able way in which he did so, and also upon the aims that he has in mind. Like many other hon. Members, I, too, can speak from various points of view, but I hope I shall do so very briefly so that there may be the more time for other hon. Members who wish to speak in the debate. I am fortunate in having been a member of a Metropolitan borough council, and it was my duty for some period, while I was the mayor, to entertain visitors who came from other
  1294
  municipalities, from other Metropolitan boroughs, and occasionally from abroad.
  Shoreditch, the borough of which I was mayor, is of great historical interest, even if only to those who like to attempt to discover the site of Shakespeare's first theatre, the Curtain. Moreover, in Shoreditch we had some unique health services. We considered ourselves pioneers in municipal health services. At that time also we were engaged in a large scheme of slum clearance which was of more than local interest, and attracted people interested in housing developments not only elsewhere in this country but abroad.
  It was the duty of the mayor to entertain visiting dignitaries from other towns and other countries; and the cost of such entertainment, the cost of receiving those visitors in the way they ought to be received, and also the cost of our visiting other places to view other people's developments, was a matter of great concern. It was beyond what our small borough could afford. It was certainly beyond the small allowance which was made to the Mayor of Shoreditch at that time. Indeed, my brother and I, being exceedingly interested in housing developments, paid visits at our own expense to other countries and other towns, notably Vienna, which was pioneering in housing at that time, in order to bring the benefits of other people's experience to bear on our own local problems.
  The second angle from which I view this matter is from that of my present position as the hon. Member for Goole, the tenth port in the country and one which we consider of no mean importance. Indeed, it is the only port in the West Riding. It has distinguished visitors from other countries. As a result of the trade which goes on between Yorkshire and the Netherlands through Goole, we often receive visitors from the Netherlands ports. We have had exchanges between the burgomasters of Amsterdam and Rotterdam and the Mayor and Corporation of Goole. Those exchanges must be restricted at present because the means for meeting expenditure on these visits and the exchanging of hospitality are extremely limited.
  If it happens, as it has happened, so far, once only, that there is a representative of the working class as Mayor of Goole, he discovers that the cost of entertainment is

  1295
  high, and the facilities for entertainment existing in the municipal buildings of Goole are shocking. There are no cups, teapots or even glasses available there. An outside caterer has to be summoned when any entertainment of even the smallest kind has to be provided in the mayor's parlour. These are matters which could be covered by the mayor's allowance if it were large enough or by the provisions of this Bill if the hon. Member for Henley would agree in Committee to extend it a little to cover the borough and port of Goole.
  Mr. Hay: As I said when moving the Second Reading, I am very largely in the hands of Her Majesty's Government in this matter, because upon their good will and upon the Money Resolution which will have to be tabled will depend whether or not one could agree to any concessions at this stage. I hope, therefore, that the hon. Member will address a remark or two on that point to my hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government.
  Mr. Jeger: I willingly acquit the hon. Member of any desire to exclude Goole from the provisions of the Bill. I hope that later discussions with representatives of Her Majesty's Government will enable the port of Goole to be included.
  I am quite sure that we shall be successful, because Her Majesty's Navy regularly pays courtesy visits to Goole. The children particularly enjoy the hospitality of the vessels which come to Goole because the Navy knows how to put on a children's party. Obviously, the mayor and corporation return that hospitality as best they can, but it would be of great assistance to them if, under the provisions of the Bill, they were able to go a little further than they have been able to do in the past and not have to rely on the pocket of the mayor, who is not always a wealthy man in a small town like Goole.
  We hope that the Bill will have a Second Reading and be so amended in Committee as to enable Goole and places like it to be included. The question of expense is important but the district auditor keeps a very close watch on these things. My experience is that even a sum of £2 for a framed testimonial to the mayor did not escape the eagle eye of the district auditor, who surcharged each member of the council 1s. 6d.
  1296
  Therefore, we can rely on him to keep a watch on expense and to see that it is reasonably incurred, as laid down in the instructions which he receives from the Government.
  The third angle from which I view this matter has been referred to by other hon. Members who have spoken of the Council of Europe and its activities. I have had the great pleasure of being one of the representatives from this Parliament to the Council during the last year. I was greatly impressed with the growth of the European idea and the enthusiasm with which it is taken up in Strasbourg and then disseminated amongst constituent bodies in the various countries. The passing of this BUI will enable us to play our part on the Council of Europe, as perhaps we have not done in the past, in pursuing the European ideal even more rapidly than hitherto. I hope we can spread that idea, because the future of mankind depends on a greater understanding and bringing together of the peoples of Europe and, ultimately, of the world.
  3.36 p.m.
  The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. Enoch Powell): All hon. Members who have taken part in this debate have, from their differing points of view, commended the Bill which is before the House. I must remind hon. Members, however, that it is essentially a Bill which provides for, and facilitates, additional expenditure falling largely upon the ratepayer but partly upon the taxpayer.
  As my hon. Friend the Member for Henley (Mr. Hay) pointed out, the expenditure is governed by the expression "reasonably." My hon. Friend observed the slight emotion I showed on hearing that word. It derived from the recollection of an occasion two or three days ago when I found myself explaining to the House, in Committee, exactly what was the meaning of the word "reasonably." Even with that qualification, however, much or little as it may import, the fact remains that this is a Bill to facilitate additional expenditure, and Her Majesty's Government could not at present positively support and commend to the House a Measure which has the effect of facilitating additional local government expenditure on anything but an essential purpose.

  1297
  On the other hand, it is true that the powers which this Bill seeks to confer on all the authorities defined in it are already enjoyed under local Acts by quite a number. I am informed that the powers mentioned in Clause 1 (1, a) are enjoyed by about one-fifth of the authorities covered by that paragraph, and those specified in paragraph 1 (1, b) by one-third. The majority who are still outside provisions of local Acts divide themselves into those which are subject and those which are not subject to district audit, and the incurring of expenditure by those two classes of authority involves different procedure.
  Where the body is subject to audit, a specific dispensation must be obtained under the Local Government Act, 1933, from my right hon. Friend. So that there is an anomaly as between different authorities in the position as it stands today, and in view of the opinion which has been expressed in the House, and the atmosphere in which this Bill has been received, Her Majesty's Government would be willing to take the pleasure of the House upon the subject.
  3.39 p.m.
  Mr. G. R. Mitchison: I was glad to note the last words of the Parliamentary Secretary and I associate myself with every other speaker in thanking the hon. Member for Henley (Mr. Hay) for having made such good use of his place in the Ballot.
  I have been making inquiries among my own hon. and right hon. Friends and I cannot find any opposition anywhere to this Bill. On the contrary, I have heard from people representing the most various places strong' expressions of support for it, support that I am quite sure would not be given if they felt that there were any possibility of municipal extravagance in this respect; or, indeed, if it were to involve, even without extravagance, any serious burden on the rates.
  I feel sure that, as a matter of practice, local authorities can be relied upon not to abuse powers of this sort, which, of course, are purely permissive, either by extravagance on any one occasion or by too frequent repetition. If we feel that, as I do, I do not think it is really for us to try to lay down any more than the sort of general criterion which I gather the Parliamentary Secretary agrees is imported by the word "reasonably."
  1298
  Whether or not it is a matter of strict audit—I believe that it is, of course—I do not think there is likely to be anything about it which would cause any trouble with ratepayers when it happened.
  I feel that there is room for reminding local authorities that there is a great deal to be gained, even in a quasi-practical form, from these sorts of receptions and visits. I am sure that all of us, and particularly those who, like the hon. Member for Winchester (Mr. Smithers), have concerned themselves with these matters at the Council of Europe, have noticed how very different the structure of local government is not merely between this country and any foreign country but between the foreign countries themselves. I am certain that no one could go to Stockholm without appreciating what a magnificent job—at any rate, to the outward eye, and, I believe, beyond that— has been done by way of municipal work there and how different appear to be the relations between the central and local governments in that country.
  I have never met Mr. Brian Chapman, and I know nothing whatever about him, but I have been reading an extraordinarily interesting recent book by him about the prefectoral system in France. The system is vital to local government in France. It represents something which is completely unknown in this country. It is a completely different kind of machinery from anything that we have. We can all form our own opinions as to whether in its long and chequered history it has been a good thing or a bad thing for France, but, surely, to examine that kind of difference must be a most stimulating experience for local authority people in this country.
  I entirely agree with what has been said. This is not just a question of one council visiting another. It is a question of broadening the basis of international understanding, and, where proper use is made of the provision, it will be something which will affect the inhabitants of any town just as much as it will affect the councillors.
  If I might refer to my constituency, Kettering has always been exceedingly good at some kinds of international relations, largely because it has been very much a centre of the Co-operative movement. Quite apart from questions of trade, and so on, the Co-operative move-

  1299
  ment has undoubtedly been very conscious of its own international character and of the need to promote international understanding. On that account visits take place between Co-operative people all over Europe and, indeed, other parts of the world.
  On the coat of arms of the borough we have depicted an emancipated negro supporting a hide, out of which boots are shoes are made; because it is a small place which, at one time, deserved its name of the Holy City—I do not know whether it still does—and used to be so conscious of international obligations of a very different character that it took a prominent part in sending missionaries to Africa, Asia, and so on, and, later, a very prominent part in the history of negro emancipation. That kind of thing is found all over the country if one looks for it.
  I entirely agree with what has been said upon the question of exchanging children. Nothing could be more useful. Here again, it begins in an official way and leads to exchanges of visits which go on upon an individual basis and which make a very real contribution to the sure foundation of world peace—as good, perhaps, as any that can be made. If that principle is extended, as it ought to be, to local government relations, it will be extended to something which is rather broad, touches the life of every citizen, and comprises a whole variety of interests.
  We have our inter-Parliamentary associations. They have no normal function other than to promote friendly understanding between Parliaments and their members, and a knowledge of what they are doing as Parliaments. If we have those, surely the time has come to extend that principle to local government units. This country has taken a leading part in that matter—a fact which some might find surprising, because we once had a reputation for being very insular. I do not think that we are insular now; on the contrary, we are so proud of our own institutions—and rightly so—that we desire to show the world how good we are and, at the same time, oddly enough, English people have the requisite humility to be prepared to learn from others, however proud they may be of what they do themselves. That also applies to local government.
  1300
  The question of expenditure has been raised. This is the most valuable form of education. It is education in practice; voluntary education—something which we take upon ourselves to do. What could be better than that? I trust that no one will forget that that is of real value, and something which is worth spending money, time and trouble upon. It is for that reason that I welcome the Bill.
  At the risk of being a little tedious, I want to say a few words of a general character. I believe that I shall have the support of the House in putting forward the proposition that true democracy, as we understand it, is now at risk. It has been at risk for many years. I am not talking party politics in any form whatever today. As I sit here and try to carry out my constituency duties I feel more and more that for some purposes we take the responsibility of being links between the Government and the people, and we sometimes find it uncommonly difficult to discharge that duty in the way we should like.
  It is becoming increasingly difficult, and we all know it, to keep the close personal touch that was possible before all the devices of scientific publicity had attained their present fruitful development. That may seem to some of us a rather personal political matter. But I regard it as a sign of the difficulties of democracy nowadays. What we feel in that respect is also the case, of course, in local government.
  Just as it is true that all that we can do here depends in the last resort on the vigour and freshness of our link with our constituencies, it is equally true that that is the case with local councillors. Everyone knows that it is not always easy on many of these councils to get, shall I say, all the good candidates that we would like to get, and that seems to me to be a very serious matter.
  This Bill will make councillors think and feel a bit more. It will show them things which may or may not be capable of exact imitation, probably not, but it will give them some new inspiration in the work which they are doing. In the last resort, their effectiveness and freshness and the link that they can keep between themselves and their constituents depends on the vigour and freshness of their approach, just as our continued vigorous life as a Parliament depends on the vigour and freshness of our approach.

  1301
  It may be said that that, at least, is not at risk. I think that it is. I think that even within the small limits of local government we have to look to it to retain vigour and freshness. Things are very complicated nowadays, necessarily so, and it is only too easy for those engaged in local government, as it is for us, to be so overburdened by the trees that they cannot see the wood. They have got to see it. This will be of help to them.
  I should not like to sit down without adding one word to what I think has already been said by others. I always feel rather guilty that I have never been on a local authority. I ought to have done it. I had a chance long, long ago and I did not take it. I think it is too late now. I admire people who do that work. They are of all kinds, of all political parties, some of them working day by day for their pay packets, others being much better off, and there is every grade in between. Some of them I prefer to others—that is only proper—but, on the other hand, to each and all of them I say: I believe that the country as a whole owes you a very great debt. Local government in this country is something of which we ought really to be proud. Those who serve in it, paid and unpaid —I am including the officers, too—all deserve our thanks for what they are doing.
  If, therefore, this Bill will do anything to give them thanks in the right way, by giving them a chance to see what other people are doing, to feel that there is fine work going on all over the world as well as in this country and that the conditions are so varied that there is something to be learnt everywhere—if it will do that, I would regard it as a piece of thanks, in the first instance, perhaps, from Parliament and, in the second instance, from those whom we represent, the people of the country, to their co-citizens and colleagues who give their time to local government, and of whom we are really proud for doing so. I hope that the Bill will make its way on to the Statute Book.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee, pursuant to Standing Order No. 38 (Committal of Bills).

  ACQUISITION OF LAND (ASSESSMENT OF COMPENSATION) BILL
  Order for Second Reading read.
  3.55 p.m.
  Captain F. V. Corfield: I beg to move, That the Bill be now read a Second time.
  The purpose of the Bill is to substitute a fair market value as the basis of compensation where land is acquired by compulsory purchase. In Clause 4, we have tried to go a little further in the case of slum property than the Minister of Housing and Local Government did in his declaration of 13th December. Not only does the owner-occupier deserve a higher rate of compensation, but a member of the owner's family in certain cases. The factors are almost exactly the same as in the case of an owner-occupier.
  Mr. G. R. Mitchison: I wonder whether the hon. and gallant Member——
  Captain Corfield: I am sorry, but I cannot give way to the hon. and learned Member.
  The Bill does not favour any particular class of the community. It results from our feeling that the present method of compensation works unfairly. After a great deal of consideration, we have come to the conclusion that the fair market value is a very much better basis than the present system, which is based on land values in 1947. Up to two years ago there was an addition to this basis of an amount agreed under the 1947 Act. Since the introduction of what is generally known as the "Pilgrim" Clause, in 1954, we have to add the amount which would have been agreed in cases where there was no agreement.
  The whole basis of valuation is getting more and more guesswork rather than scientific, as 1947 recedes. Apart from the fact that we cannot possibly foresee what changes there will be in land values, it is obvious that pressure on our economy will create greater scarcity for a limited quantity of land, and that, in the end, there is bound to be an arbitary valuation which causes injustice when applied.
  Mr. Frederick Willey: I do not think that the hon. and gallant Gentleman has explained the

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  purposes of his Bill sufficiently to enable the House to decide whether or not to give it a Second Reading.
  Captain Corfield: The hon. Member is as aware of the rules of this House as I am, and of the necessity to watch the clock.
  Mr. Mitchison: Cannot the hon. and gallant Gentleman say what he means——
  It being Four o'clock, Mr. SPEAKER interrupted the business.
  Bill to be read a Second time upon Friday, 17th February.

  ZANZIBAR (CONSTITUTIONAL PROPOSALS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Barber.]
  4.1 p.m.
  Mrs. Eirene White: I had hoped we might have had a debate before Christmas on the subject of the political position in Zanzibar, but the luck of the draw does not always favour one, and we have had to wait until February to discuss a subject which has been causing a good deal of concern in that small island for many months past.
  This topic has not been discussed in the House for a considerable time, so perhaps I might remind hon. Members that there are in Zanzibar rather more than a quarter of a million people of mixed racial origin. The latest figures that I have been able to obtain show that about three-quarters of the population is African, but of those a very large number have lived on the island for many centuries and are known as the indigenous African population, and have intermingled with some of the invading Persian and Arabic peoples of earlier centuries. Included also is a smaller number of those who have come more recently from the mainland territories.
  About 17 per cent. are Arabs, roughly 6 per cent. are Indians or persons of Pakistan origin and there is a very, very small number indeed of other communities—with a European population of 0·1 per cent. In other words, in Zanzibar we have not, as in some of the eastern African territories, a settler population.
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  The members of the European community are there mainly as missionaries, traders, etc., who will return to their home country at the end of their career.
  For a long time past Zanzibar has been a particularly happy community where people of different races have lived side by side without any strong social or political difficulties. From the last official Report on Zanzibar it is clear that in the schools people of different races sit side by side. All Government-assisted schools are open to children of all races and creeds; that is to say, all post-primary schools and a number of primary schools as well. To give another example, in the City of Zanzibar the civic centre is in Ngambo, which is primarily an African area, and while it remains the principal centre of communal activity for the African population of the town, it is much used by people of all races. Again, in broadcasting, the chief language used is Kiswahili, a language which is understood by the great majority of the population. There is no discrimination in sport, and all sections of the community compete and play together.
  One therefore has the unusually happy position that while there are certainly differences there are also many factors which make for a population living on a friendly and happy basis under the beneficent rule of His Highness the Sultan, which has its social value, too, in making those who live in Zanzibar feel that they are part of one society. There is also a greatly predominant Moslem following, although there are some Christians there. So far as I can understand the position, one does not find very strong differences on religious grounds either.
  I have said all this because I think it is necessary to have this background in mind in discussing the immediate problem. The present disputes in Zanzibar centre upon proposals for constitutional reform. I think it is right to say that discussions have been going on since about 1947 on this matter. I have a document here which is unfortunately undated, which is most reprehensible, but which appears from internal evidence to be pre-Rankine. It is a long memorandum upon constitutional reform in which it is suggested that only the Arabs and the Asians should have elected members. It sets out a rather complicated explanation

  1305
  of what the single transferable vote might mean.
  However, since then there have been published in Zanzibar the proposals known as the Rankine proposals, from the name of the former British Resident, and it is those which have been accepted by the present official Legislature, but which are being very strongly disputed by various bodies of persons in Zanzibar itself. In fact, they are being disputed so strongly that the Arab Association has boycotted both the Legislature, for the last eighteen months or so, and also, as I am informed in a cable which I received yesterday from Zanzibar, has so far refused to meet Mr. Coutts, who is there to consider the particular suggestions as to how the members of the proposed reformed Legislature should be selected.
  In addition to the objections from the Arab Association, there has emerged within the last few months another political association which is primarily African in composition and which, as I understand it, has very much the same objects as the Arab Association. I am told that the name of this new party is the Zanzibar Nationalist Party of His Highness's Subjects, but in short it is called the Nationalist Party. Its representatives have in fact been prepared to see Mr. Coutts but they have made demands on him which go very much wider than his own terms of reference. In other words, they are not satisfied with the Rankine proposals. They are demanding universal franchise on a common roll, a predominantly elected legislature and responsible Ministers.
  The Rankine proposals do go a little further than the present Legislature. It is proposed that there should be in the first place a Privy Council to advise the Sultan and that he should no longer preside over the Executive Council. That seems to be a very suitable arrangement to safeguard the prerogative and dignity of the Sultan, while keeping him above the day-to-day difficulties of politics. With that I have no quarrel at all.
  It is also suggested that there should be nominated unofficial members of the Executive Council in addition to the ex officio and official members as at present. That there should be some unofficial members is again an advance and
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  all to the good. It is proposed to increase the membership of the Legislative Council itself from seventeen to twenty-five members. It is suggested that there should be twelve representative members, all nominated, for the time being at any rate, but while fixed numbers from the different communities should not be laid down by Statute, in practice four Arabs, four Africans, three Asians and probably one European should be nominated.
  One might ask why this step, which is certainly some advance, is not found satisfactory by the bodies which are protesting so vehemently against it. I think the most important reason is that they feel that something more specific should be done to give expression to the sentiment which is widely held. I am told, in Zanzibar that Zanzibar is not a community in which matters should be arranged on a communal basis if that can possibly be avoided, whether formal or informal.
  In addition to the discussions on the central government, in the past eighteen months or so we have had a Report on the municipal government of Zanzibar Town Council prepared by Mr. Vasey, who is now Finance Minister in Kenya and was formerly Mayor of Nairobi. In his Report he makes a suggestion which would, with proper safeguards, make no discrimination in the membership of the municipal body between persons of different communities. He suggests that there should be elections upon a common electoral roll; that there would be some restrictions on those who were qualified for that roll, but that would apply equally to all persons. Then he makes suggestions whereby one could reassure the communities in the meantime, until they see how this proposal would work out, by providing three reserved seats for nominated members. They could be used, and should be used, to keep a balance if one community were under-represented. He also recommends six aldermanic seats, which might have the same effect.
  I believe that some comparable safeguards might very well have been devised for the legislature, and that it is not impossible, in such a community as Zanzibar, to envisage the position in which one might have an electoral system without distinction of the communities to which the electors belonged, provided that one was also prepared to have some kind of safeguards, certainly in the

  1307
  interim period, until one felt that the machine was working smoothly.
  Can the Minister tell me precisely which of the Vasey recommendations have been accepted? The Secretary of State did not make it clear in his Answer in December. I should also like to know why there has been some delay in implementing this Report, which Mr. Vasey hoped might come into operation last July and which it is now hoped might come into operation next July. Would it not have been more statesmanlike to have pressed ahead with this smaller experiment and to have obtained agreement on it?
  One would then have been in a stronger position to say to those who are now opposing the Rankine reforms, "At least we have gone all this way in municipal affairs. Would you not be prepared to wait a year or two to see how that works out and in the meantime co-operate with the proposals for the central legislature?" That could have been done.
  There is another point of criticism in which I have a good deal of sympathy with those who are in opposition to the proposals. I do not say that I support boycotts, because I always think such a negative attitude is not helpful and that at least one should discuss matters— although I must recognise that where there is no electoral system it is not easy for people to make their opinions felt without resorting to that kind of negative action.
  I must say that I feel a good deal of sympathy with those who object to the nature of the Coutts inquiry, claiming that it is too restricted. Without casting any kind of aspersion on Mr. Coutts personally, I think it is a pity to have brought into Zanzibar someone without experience of Zanzibar, but with experience of Kenya, where conditions are quite different. He was asked to undertake the inquiry in Kenya for very good reasons, but conditions in Zanzibar, with a very strong Arab influence, are entirely different.
  I am also inclined to think that it would have been more statesmanlike to have done what was asked for by the Arab Association and brought in someone who is known to have considerable constitutional knowledge—which I do not think Mr. Coutts would pretend to have—someone of standing, who could have considered these matters more widely.
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  I want to leave the Minister time to reply and will not go into very much more detail, but I think it unfortunate that one should in any way associate conditions in Zanzibar with those in either Kenya or Tanganyika. Again and again, from correspondence that I have had, I have found objection taken to references to either Kenya or Tanganyika. There is a reference to Tanganyika in the dispatch from the present British Resident. The disparities of the societies are not comparable in range with those in Tanganyika, with a small settler population, and in Kenya, with a large settler population. They are quite different from the range of difference in population in Zanzibar.
  It is most unfortunate that there should be this failure to win the co-operation of those who oppose the proposals, even if the people concerned are being rather difficult. There is strong feeling on this matter, and it is a great pity not to win their co-operation. They have some connection with the Arab world. A great many of the young Arabs have been to Khartoum and some to Cairo. They hear Cairo radio. It would be a great pity if they were to adopt an indifferent, negative and unco-operative attitude because a rather wider view is not taken of their problems and because of their feeling that the matter should be dealt with at a higher level.
  I hope that the Minister will be able to say something which will show that he appreciates that Zanzibar is different from other East African territories, that there is a better opportunity for doing something there on a non-communal basis, and that those asking for a wider inquiry have some justification for so doing.
  4.17 p.m.
  The Minister of State for Colonial Affairs (Mr. John Hare): I am most grateful to the hon. Lady the Member for Flint, East (Mrs. White) for raising the subject of Zanzibar on the Adjournment because, as she said quite rightly, it is a long time since we had an opportunity of discussing the problems which affect that territory.
  I am grateful because it gives me this opportunity of explaining to the House and to the outside world the difficulties which Her Majesty's Government are having and—I wish to be quite frank

  1309
  about them—in putting into practice proposals for a greater measure of self-government in Zanzibar and Pemba. I should like to answer the questions of the hon. Lady in the course of my remarks, and I hope that she will forgive me if I do not pick them up at once at the beginning of my speech as I should like to give the background to the problem.
  Quite bluntly, the main problem we have had to face is the refusal of the leaders of the Zanzibar Arab Association to co-operate. That is the main factor which has rather bedevilled the whole situation. I should like to give the facts as clearly and fairly as I can. The hon. Lady explained in her opening remarks that the Arab community represents rather less than a quarter of the population and the population is rather more than a quarter of a million. Although they do not represent in any way a majority, I would be the first to say that the Arabs have made a most important contribution to the history, economy and leadership of the Protectorate. I agree, also, that the co-operation of the Arabs is essential if we are to get peaceful advancement in Zanzibar and Pemba.
  I should like to tell the House how it is that after so many years of harmonious progress, which the hon. Lady outlined in her speech, these Arab leaders should now be withholding their co-operation and support from the Sultan's Government and from Her Majesty's representative. The hon. Lady mentioned the fact that representations were also being put forward by the Zanzibar Nationalist Party, but I assure her that the main source of obstruction to these proposals has come from the Arab Nationalist organisation.
  As long ago as 1951, the British Resident made it known that he was anxious to promote measures of constitutional reform. He consulted the leading members of the community on the shape which those reforms should take. I think that the approach he made was generally welcomed but he was not able at that time to reconcile the conflicting views which were expressed, on the one hand, by the Asians and on the other hand, by the Arab communities.
  In 1952 and 1953, Sir John Rankine put forward his proposals after a great deal of quiet and determined consultation
  1310
  on his part. Therefore, it was in April, 1954, that he was able to inform Her Majesty's Government that he had secured the agreement of the representatives of all communities on the Legislative Council to the really important measures of reform which he had put to them. I stress that among those who agreed to these proposals was Sheik Ali Muhsin, who at the moment is perhaps the leader of those who oppose our proposals.
  I shall not describe these measures in detail because they were set out fully in an exchange of despatches, published last October, between the British Resident and my right hon. Friend the Colonial Secretary. Briefly, they provided for the appointment of local people to the Executive Council, for their increased representation in an enlarged legislature and for the formation of a Privy Council of official and unofficial members to advise His Highness the Sultan. As the hon. Lady said, these proposals did not provide for the introduction of elections to the Legislative Council as the next immediate step. I emphasise, however, that my right hon. Friend by no means closed the door to this development, nor was it his wish that elections should be long delayed.
  My right hon. Friend made ft clear— and what has happened since has emphasised that he was right in doing so—that he was not yet satisfied that the people of Zanzibar as a whole were ready or willing to embark on an electoral system. He pointed out that the communities varied very greatly, both with reference to each other and within their own membership, in the understanding of political problems which elections would require. He thought they wanted more time to think it over. He therefore welcomed the appointment of Mr. Coutts to investigate the most suitable method of choosing the unofficial members of the Legislative Council. Incidentally, Mr. Coutts' experience is not only confined to Kenya. He had considerable experience of smaller, complex communities in the West Indies. In fact, he was the administrator of the Virgin Islands. I think the hon. Lady would agree that he has just done a fine job of work in Kenya. I put it to the House and to the people in Zanzibar that there was nothing unreasonable or illiberal about these proposals or the way in which we presented them.

  1311
  I now have the less happy task of recounting the difficulties which had already arisen when they were put forward and the way in which they were received by certain of the Arab leaders. I have said that in April, 1954, the British Resident had obtained the agreement of the representatives of the Arabs as well as the other communities to his proposals; but in the summer of that year, the same Arabs said that they no longer supported the proposals and that, in fact, they were totally unacceptable to them. Without affording any opportunity for discussion, the Arabs withdrew their cooperation from the Sultan's Government. I wholeheartedly agree with what the hon. Lady said in that neither of us supports this idea of boycott. Two of the Arab leaders, in fact, resigned from the Legislative Council and the third ceased to attend its meetings.
  What was the reason for all this? I think it was due to the fact that the Sultan's Government, after a number of warnings, prosecuted the executive of the Arab Association in their capacity as publishers of a newspaper which was publishing seditious articles. I do not want to make a great deal of this incident, but the editor paid a fine of £550 and the others were bound over. I cannot accept the suggestion that has been made, not by the hon. Lady but in other circles, that this development warranted a sudden change on the part of these Arab leaders in their political views or justified the very drastic action which they took.
  I think that there is no doubt that the present Resident has gone out of his way to try to get the Arabs to renew their co-operation. It has been his endeavour to secure that co-operation that has caused the delay in the publication and discussion of the constitutional proposals. It was the Resident's idea to ask Mr. Coutts to carry out this further inquiry. Mr. Coutts has now finished his inquiry, but he has not yet submitted his report, so I cannot say what it contains, but I shall be very surprised—I think the hon. Lady would like to know this—if it did not contain constructive proposals for further consideration in Zanzibar.
  I can find very little to substantiate the claims of these Arab leaders that in their demands for a common roll they are
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  representing the majority of the Sultan's subjects. My latest information is that large numbers of the Shirazi Africans from all over Pemba Island have said that while they accept the new constitution they are not yet ready for a common roll elections because the necessary trust does not exist between the various communities.
  What should be done now? I think that the people of Zanzibar should carefully consider the proposals which Mr. Coutts will shortly put forward. As far as Mr. Vasey's proposals are concerned, I think that the vast majority of the ones which are of significant importance have been adopted and recognised.
  Mrs. White: Including his proposals for an electoral system based on rates?
  Mr. Hare: They do include that. The electoral roll will be based on the liability to pay rates, and, based on that, people will vote.
  I have not very much time left, so I will end by repeating what I said at the beginning, that I am very grateful to the hon. Lady for having raised this subject, and I would add that intimidation and sullen hostility do not provide a background that makes for a happy and successful settlement of constitutional problems. I would appeal to the Arab community and to all who have influence over them to play a proper part in the constitutional development of these islands. We can, of course, proceed with-out them, but it would be a thousand pities if we had to do so. The rest of the community, who are a large majority, must not be sacrificed because of the Arab recalcitrance.
  I think that the majority have undoubtedly made it clear that they wish to participate in the proposals we have in mind. It is the wish of the Government that the Arab population should play their part in working out these proposals. I hope that good sense and responsibility will prevail and that the Arab community will grasp the hand of friendship that the Government have never ceased to hold out to them.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes past Four o'clock.

  MALTA (REFERENDUM)
  MALTA (REFERENDUM)
U.S.S.R.
  Jamming of B.B.C. Broadcasts
  Jamming of B.B.C. Broadcasts
  Anglo-Soviet Treaty (Termination)
  Anglo-Soviet Treaty (Termination)
COAL
  Opencast Reserves
  Opencast Reserves
HOSPITALS
  Royal Free Hospital (Vaccination)
  Royal Free Hospital (Vaccination)
CIVIL DEFENCE
  Deep Shelters
  Deep Shelters
SCOTLAND
  New Town Tenants (Pigeon Keeping)
  New Town Tenants (Pigeon Keeping)
ROADS
  Glasgow-Carlisle Road, Lanark
  Glasgow-Carlisle Road, Lanark
BRITISH ARMY
  Territorial Army
  Territorial Army