Sitting of 17 February 1956

Preamble
The House met at Eleven o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
NEW MEMBER SWORN
Edward Dillon Lott du Cann, Esquire, for Taunton.

ECONOMIC SITUATION
11.7 a.m.
The Chancellor of the Exchequer (Mr. Harold Macmillan): With your permission, Mr. Speaker, and that of the House, I will make the statement about the economic situation, to which reference was made yesterday.
The Government have come to the conclusion that further measures are required to deal with the overload which has put such a strain on our balance of payments. I propose to give a brief explanation of the measures we have taken and propose to take. When the debate takes place, there will be an opportunity to develop at greater length the reasons why we think them necessary.
Before, however, dealing with the wider field, I should like to refer to the current expenditure of the central Government. The expenditure which we propose for 1956–57 is made known in the Defence White Paper and in the Civil Vote on Account, both of which are being published today. I should like to say a word about the new figures.
The defence total will be £1,499 million net, as against the original Estimates of £1,494 million for 1955–56. As the White Paper will show, we have carried out a comprehensive and forward-looking review of our defence effort. In this we have had regard both to the needs of the new strategic situation and to the dangers of overloading the economy with the cost of defence, whether in terms of manpower, materials, or money. The total Estimates for Defence would have been much lower, but for the increases in Service pay and
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emoluments which are to cost £67 million in all. The addition, of course, will cost £67 million in all.
The Civil Estimates, at £2,481 million, show an increase of £112 million over the original Estimates for 1955–56: of the increase, the Social Services account for £99 million.
It will be seen that the total Estimates, Defence and Civil, are £117 million more than those presented at this time last year. This represents a rise of about 3 per cent. in money. This, at a period of higher costs, is actually a fall in real terms—that is, in demand on labour and materials. If the Government had not exercised the most rigorous check, the increases in Service and Civil Service pay, in wages generally and in the costs of all the supplies needed for the Government services would of themselves have carried the total of the Estimates to far higher figures.
But we have made vigorous and sustained efforts, initiated by my right hon. Friend the Lord Privy Seal and continued by me since I took up my present office, with the help of all my colleagues, to reduce this total. The fact is that rises in education, the Health Service and Service pay more than account for the net total increase. Over the rest of the field, notwithstanding developments such as those of atomic energy and roads, we have brought the total estimates below this year's figure.
We shall continue our efforts to reduce the total of public expenditure and shall not hesitate to ask the country to accept a reduction of existing services, if we judge it as any time proper and expedient to do so. We shall also pursue a continuous search for further administrative economies. We have already carried this so far that, short of changes in policy, such economies cannot yield large sums: but, as an earnest of our intentions. I would remind the House that in his recent speech at Bradford the Prime Minister said that our target was a reduction in the staffs of Government Departments by a further 10,000 to 15,000. This work is being put in hand.
So much for the Estimates. Now I come to the wider problem. There is general agreement that the combined demands of investment and consumption are growing too fast for our economic health. This has held back our exports, swollen

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our imports, forced us into balance of payments deficit, helped to reduce our reserves by a quarter, and driven up our domestic price level. After much study during the past few weeks of developments under all these heads, it is clear to me that something more must be done, in addition to the measures taken by the Government in the course of last year. The more quickly we are able to act, the more effective will be the results. We must make an even more determined attack on the roots of the trouble and enforce still further reductions in investment and consumption.
I will state, first, the measures which are being taken in the monetary field. As the House knows, the Bank of England yesterday increased the Bank Rate from 4½ per cent. to 5½ per cent. I regard this as a timely move which will reinforce the further disinflationary measures on which the Government have decided. Next, the reduction in bank advances has accomplished a good deal, but I must look to the banks to continue their efforts to reduce the total of their advances. Similarly, I look to the Capital Issues Committee to maintain a vigorously critical attitude towards all applications. The Committee should recommend consent only when it is satisfied that the purpose has a definite urgency under current requirements; and, where such urgency is not proved, it need not be moved by the argument that the applicant has committed himself to the development in advance of Treasury consent.
Credit restrictions are designed to slow down investment and consumption in the private sector of the economy. I would also appeal to businessmen who are able to finance investment out of their own resources to apply the same tests as to the timing and rate of their investment as if they had to borrow. Meanwhile, I have given careful thought to the question whether it is right in present conditions, to continue the investment and initial allowances. I have reached the conclusion that I should suspend the investment allowance and in its place restore the former initial allowances.
I propose that as a general rule no investment allowance shall be given in respect of capital expenditure becoming due and payable after today, but that
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such expenditure should qualify for the rate of initial allowance in force in 1953. There will be two classes of exception. In the first place, where a definite contract has already been placed for the purchase or construction of capital assets the investment allowance will still be given in respect of the relevant expenditure when it becomes payable. Secondly, capital expenditure on the construction of ships and on scientific research assets will continue to qualify for investment allowance. The necessary resolutions and legislation will be brought forward in the Budget and in the Finance Bill.
Again, we have reviewed the Orders regulating the terms of hire purchase. We propose to tighten up the present arrangements in three ways. First, the minimum down payments for consumer goods will be increased from the present 15 per cent. and 33⅓ per cent. to 20 per cent. and 50 per cent. respectively. Maximum periods of repayment will remain unchanged. Secondly, power will be taken to control hiring of certain of these goods—as opposed to hire purchase. Thirdly, the control will be extended to a comprehensive range of capital goods subject to a 50 per cent. down payment and maximum repayment period of two years. We expect these change to restrict credit over a wide field. I regret the need for these changes, which will disappoint many people. But at a time when we are restricting borrowing for investment and production, we must also restrict borrowing for purchase. We must all join in the battle against inflation.
The Government must also play its part in this campaign through the public authorities and departments over which it has control. I have, therefore, made a full review of these plants with the Ministers concerned. Useful works already started must be completed with all expedition. But we shall take measures to impose delay on some works not yet started so as to reduce, as quickly and by as much as possible, our demands on productive industry, especially building and heavy engineering.
I will deal, first, with the nationalised industries. As a result of previous requests, they had already reduced their programmes of capital expenditure in 1956 before submitting them to their appropriate Ministers. They have readily co-operated further and by reassessing priorities and by rephasing they have now

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further reduced their programmes, as submitted, by just under £50 million. In the result, the total capital requirements of the fuel and power industries should be some £20million less than in 1955, although investment in coal production will, in fact, be higher.
On the other hand, the British Transport Commission, although it has agreed to substantial reductions in its 1956 programmes, must spend more than in 1955, in order to make a start with its major plan for re-equipping and speeding up the railways.
The contributions to this of the various authorities are:

Central Electricity Authority and the two Scottish Electricity Boards, £13¾million.

The Gas Council and Area Boards, £5million.

National Coal Board (on items other than coal production), £5million.

British Transport Commission, £22 million.

Airways Corporations and Airports, £2¼million.

B.B.C. and I.T.A., £1½million.

Next, capital expenditure financed direct by the central Government will be reduced by over £20million in all below what had been planned for 1956. Towards this the Post Office, by rearranging its programmes, will find £5¼ million; and the restriction of storage facilities and stockpiling for Home Defence will save £10million on the original plan. The New Town Corporations are also being asked to defer the starting of new capital projects wherever possible. We do not propose any change in the programme of hospital building already announced.
The same principles must be applied to the capital programmes of local authorities. As regards housing, the Government's proposals have been embodied in the Bill which has just passed through the House.
As regards education, the changes which the Ministers concerned are making in the school building programmes affect only timing. The programme stands. But the 1955–56 programmes of the local authorities are seriously in arrears. It is, therefore, prudent, since they are in arrears, to make room in the 1956–57 programmes for starting the carry-over from the current year. For this purpose a control of starts will be necessary. The
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Minister of Education will, therefore, postpone until 1957–58 a proportion of the 1956–57 programme of starts. The Secretary of State will take the corresponding action in Scotland. My right hon. Friends will shortly issue circulars to local authorities, explaining these arrangements in detail.
The grant of loan sanctions for other capital schemes of local authorities will have to be severely restrained, except where there are exceptional circumstances. The sanctioning Ministers will be sending out circulars to explain the new arrangements for the services with which they are concerned.
Finally, I must refer again to the question of the current expenditure of the central Government. This is part of total demand on our resources and we cannot allow any expenditure for which there is not full justification.
So far, nearly all the decisions of the Government, whether in the monetary or in the physical sphere, bear principally on investment. We regret the need for this; but even investment, on which our future prosperity depends so much, cannot be allowed to outrun our resources of men and materials or to make excessive demands on the balance of payments.
Nevertheless, it would not be right to-put the whole burden on the future, especially when we are paying out large sums to encourage consumption. In present circumstances, with full employment and high wages, it is difficult to justify the continuance of these general consumer subsidies on their present scale. At the same time, a period of reasonable stability in prices remains a primary aim of Government policy; and the progressive reduction of these subsidies must take place consistently with that aim.
The bread subsidy, which amounts to about 2¼d. on the 7½d. loaf, costs about £40 million a year. Ordinary milk—I am not speaking of school or welfare milk —is subsidised to the extent of £37 million a year. As a first step, the Government have decided to reduce the subsidy on bread by 1d. on the 7½d. loaf. This will operate as from 26th February, and will represent an immediate reduction in the subsidy at the rate of some £18 million a year. The retail price of milk will be put up by ½d. a pint as from 1st July. The saving will be at the rate

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of some £20 million a year. These proposals, of course, do not affect the cost of welfare or school milk to mothers and children.
The immediate increase in the price of bread amounts to an increase of 0·6 of a point in the cost-of-living index. The milk increase in July will amount to 0·4 of a point. But these movements, although important, are not the true test of our measures. The real effect must be judged in the light of the general success or failure of the national campaign against inflation.
I have now completed my account of the results of the review which the Government have made of the whole range of public expenditure, capital and current. The reductions we have been able to make in the capital expenditure of the Government and of the nationalised industries will reduce the pressure of demand in 1956 by about £70 million. The savings on the food subsidies will amount to £38 million. To these must be added—though I cannot put a figure on them at this stage—the reductions in outlay which will result from the rephasing of local authorities' capital expenditure.
Finally, we must expect that the continuing, and—in the case of hire purchase —the still tighter restriction of credit, coupled with the increase in Bank Rate, will achieve a more definite slowing-down of demand from private industry and the consumer.
As the House knows, I have made this statement today to give hon. Members the opportunity to think over its contents before the debate on Monday and Tuesday.
Mr. George Cherwynd: Why not last week?
Mr. Macmillan: I trust that hon. Members, in considering it, will bear in mind one important point. We are attempting to grapple with inflation, an obstinate and gravely serious problem which has beset us ever since the war and has not been fully mastered at any time by any Government. Yet it must be mastered, if our personal lives are not to be darkened by continual anxiety and uncertainty, and our country's position in the world steadily undermined.
Though our measures are in this sense restrictive, our purpose is positive and
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constructive. We want to call a halt to the prospect of a continuing rise in costs, so that the constant upward pressure on prices will be relieved. We want to safeguard the internal purchasing power of the £, so that the shopping money will go as far at the end of the year as it does at the beginning.
We want fixed incomes to mean what the figures say, and not be reduced by a dwindling of the value of the money they represent. We want to fill the gap between our exports and our imports by successful trading, not by draining our gold and dollar reserves. We want to go further than that, and build up the strength and effectiveness of the whole sterling area by increasing our reserves. We want, in fact, to safeguard the striking gains in our standard of life that have been achieved since the end of the war.
Never before has the standard of living been so high or general well-being so widespread. Never before has every individual home had so great a stake in the continued prosperity and solvency of Britain. I believe, therefore, that although these measures will, naturally, result in some sacrifice or some disappointment, they will be accepted as wise and timely.
Mr. H. Wilson: The Chancellor will no doubt expect the gratitude of his hon. Friends for having postponed this grave announcement until his by-election candidates scraped home safely on a document called "Prosperity Plus."
As the Chancellor said, on Monday and Tuesday we shall be debating this very grave epitaph to his predecessor and Tory freedom. But there are one or two questions which I should like to put to him right away. As the House will understand, this is broadly the continuance of existing policies—the intensification of hire purchase and his predecessor's class policies in that direction—swingeing cuts in the expenditure of public industries, and local authorities, including education, because of Government failure to control the private sector of industry. Quite apart from that, as one understands it——
Mr. Pickthorn: Is this a question?
Mr. Wilson: There is no question about any of this. Apart from that, with the increase in the Bank Rate and this continuing reliance on monetary weapons alone——
Mr. Pickthorn: On a point of order, Mr. Speaker—[HON. MEMBERS: "Sit down."] I quite understand, if I may respectfully say so, the convenience to the right hon. Gentleman opposite of having previous notice. What I wish to ask is, what is the Motion before the House which justifies the amount of argument and innuendo we have already had? Will other hon. Members be allowed to participate?
Mr. Wilson: Further to that point of order. Has it not been repeatedly ruled— and was it not invariably the practice of right hon. Gentlemen opposite when in opposition—that questions after a statement of this great length should be preceded by an expository sentence?
Mr. Speaker: The right hon. Gentleman said, quite truly, that we shall be debating this matter on Monday and Tuesday of next week. He then went on to say that there were certain questions which he wished to put to the Chancellor. No doubt a certain amount of prefatory matter is allowable, but it would be for the convenience of the House—may I remind all hon. Members that I feel a certain responsibility to the private Members whose day this is—if, in view of the debate we are having on Monday and Tuesday, we got this stage of the proceedings over as quickly as possible.
Mr. Wilson: Since the Chancellor appears to be continuing with a reliance on monetary policies which, if they are persisted in, will inevitably lead to mass unemployment, will he answer this? He seems to have rejected physical controls. Would he not agree that he would have a better hope of stopping frivolous building expenditure, and giving the green light to essential investment, were he to reintroduce building licences instead of using this blunt instrument of investment allowances?
The second question I want to put is; will he tell us what will be the increase in council house rents as a result of this statement? Will it be as some people have estimated, a 6s. increase, and if that is so, will he stop the Housing Subsidies Bill, now on its way to another place, and introduce another Bill?
My final question is: since his aim is declared to be an attempt to stop rising prices, how does he think that he will
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achieve this by putting up the price of bread and milk, and what effect does he think that that will have on the wage and prices spiral?
Mr. H. Macmillan: The right hon. Gentleman has said that we are to debate this on Monday and Tuesday and I think it would be a waste of time to have a peroration now which we shall have to have again. Nor do I intend—I hope the right hon. Gentleman will forgive me—to answer purely theoretical questions which I think could be better dealt with in debate. However, they give me an opportunity to say something which I want to say, and perhaps I ought to have said. We shall have a debate upon what are the best methods to try to deal with a disease which I think we all feel ought to be dealt with. The right hon. Gentleman suggests one method and we say another.
I shall be very happy to discuss the question of building controls in the debate. I would say now that we have no intention of re-introducing the old building licences system, which had practically broken down when it came to an end. These are very serious matters and we can debate the merits for and against doing it in that way. Having regard to the fact that such a high proportion of the total building—I think over 90 per cent.—is either for housing or factories, it is doubtful whether that is worth doing. However, it gives me an opportunity of saying, on the other form of control—where it would be much more serious were there any misunderstanding —that we have no intention of reintroducing import controls.
I think that the rise in the price of bread or milk by 1d. or 2d. in either case—0·6 of a point in one case and 0·4 in another—introduces another theoretical argument over which, I agree, there is a difference. If it is right to keep down prices by subsidies, then we ought to subsidise everything, and it is just that policy which has proved to be a failure. It is because we know that—[Interruption.]—I remember Sir Stafford Cripps having to stand at this Box and say, "We have subsidised up to £485 million." Then he had to stop.
Mr. C. Davies: May I ask the Chancellor of the Exchequer this question? The Government must have known about the weak economic position of the country

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for some considerable time and, consequently, must have known that it was getting worse day by day. Assuming that the Chancellor thinks that the steps he proposes to take will have some effect, may I ask why he delayed his announcement until today?
Mr. Macmillan: I can give an answer to that question and it is absolutely simple. One of the steps on which we rely is the raising of the Bank Rate, that is very important. But I should have been very much averse, and so would the authorities, to the raising of the Bank Rate by itself until we were in a position to fortify it by a statement of the Government decisions which we have now taken, because I believe that all over the world an announcement of a rise in the Bank Rate—had it been made a few weeks ago when I first took office—would have been regarded as a sign of weakness and fear; whereas I believe that, combined with these measures, it will be regarded as a sign of strength.
Mr. Bellenger: May I ask the right hon. Gentleman whether he proposes to maintain the figure of £50,000 below which it is not necessary to get the authority of the Capital Issues Committee? Is not there some evidence that certain companies, particularly those engaged in hire-purchase finance, are getting round this figure by the flotation of several £50,000 companies?
Mr. Macmillan: I am grateful to the right hon. Gentleman for referring to that loophole. We have it under review. I should hesitate to make a general rule to reduce the £50,000; it would be very inconvenient to administer. I think that by one way or another, by monetary control, credit control, bank control and the capital issues control, we ought to be able to achieve our purpose.
Sir R. Boothby: I welcome the domestic proposals of the Chancellor, but may I ask two questions arising out of the fact that the most dangerous aspect of our situation, as I am sure my right hon. Friend will agree, is the excess of imports over exports. Has he any plan in mind for decreasing the former and increasing the latter? I am not talking about direct physical controls. Is he considering the problem and, if so, will he produce a plan?
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The second question is: does my right hon. Friend really think that in the present situation we can go on giving to commodity exchanges and cereal importers unlimited quantities of dollars which we have not earned and which, shortly, we shall not possess?
Mr. Macmillan: The hon. Gentleman has made two points, very helpfully. The first asked me to say again—and I want to make it perfectly clear if there was any misunderstanding—that we do not intend to have any form of import control. We believe, on the other hand, that the general application of the measures we are taking and the general working of those measures will have the effect of reducing imports because of the difficulty of financing them or due to reducing the demand for them.
On the wider problems of increasing exports and the whole trade position, I would hope to be able to say more at a later stage. There are the great problems of European development and the development of trade overseas, and in all that field we have the possibility of making advances. I think that the whole of this body of measures will give us the breathing space and the control which is necessary for our success.
Mr. Jay: Is the Chancellor aware that the cut in bread and milk subsidies is a piece of unbelievable folly which will push up the cost of living, wage levels and the cost of our exports? Will the right hon. Gentleman say whether, simultaneously with this, he intends to increase the rates of old-age pensions and National Assistance?
Mr. Macmillan: The right hon. Gentleman asked whether I agreed that my proposals are those of unbelievable folly. I can only say that I answer that question in the negative.
Mr. Jay: Will the right hon. Gentleman, if he has given any thought to the matter, answer my second question? Is he proposing to raise old-age pensions and National Assistance rates immediately?
Mr. Macmillan: No. As the right hon. Gentleman knows well, the National Assistance rates, which are fixed on the recommendations of the Board, were increased only a week or two ago. They have increased to a figure which would

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take account of a far greater increase in the cost of living than is proposed by these proposals.
Mr. Doughty: Will my right hon. Friend assure the House that the measures taken will reduce the rise in the cost of living, which is such an anxiety to those with fixed incomes?
Mr. Macmillan: The object of these measures is to reduce excess demand. I know that the Opposition has one way in which it wants to do it and we have another way on which we rely. If we can succeed in reducing the excess demand, by whatever method, then we shall succeed in getting the reasonable stability in prices that we want.
Mr. Crossman: Will the right hon. Gentleman say whether the £70 million which we may have to pay for the British Army of the Rhine is included in his calculated advanced cost next year?
Mr. Macmillan: In the Defence White Paper figures—I am sorry that I have to use the total figures—we are allowing for the receipt of £50 million from the German Government.
Mr. Maclay: Is my right hon. Friend aware that it is a matter of great satisfaction that he has not resorted to those forms of control which, in the years after the war, produced gross extortion in our economy?
Mr. Strachey: Will the Chancellor add to his answer about German policy, and say why he thinks he can bring the £50 million from the German Government into these calculations, because his other calculations are likely to be as unfounded as that appears to be?
Mr. Macmillan: The right hon. Gentleman has held very high office, and is a member of the Privy Council. I am sure he would think it very odd if I were to embark upon a negotiation by starting to write off the figure before I began.
Several hon. Members Several hon. Members rose——
Mr. Speaker: The House is now getting into questions of detail which are far better reserved for the debate. I have again to remind the House of the interests of private Members, whose day this is.

ORDERS OF THE DAY

  NATIONAL INSURANCE (INDUSTRIAL INJURIES) BILL
  Order for Second Reading read.
  11.45 a.m.
  Mr. Roy Mason: I beg to move, That the Bill be now read a Second time.
  This Bill aims to help two sections of our community, firstly, the industrial worker who, following an industrial injury, has lost his earning power, and subsequent earnings too, and, secondly, the unemployables who, in receipt of un-employability supplement, are allowed to earn only a maximum of 25s. a week. The aim of the Bill is to increase the special hardship allowance for injured workmen from 27s. 6d. to 40s. per week and the earnings limit for unemployables from 20s. to 40s. a week. In both cases, also, the Bill attempts to broaden the range of application.
  In introducing the Bill, I think it most appropriate that some history should be given of the introduction and growth of the special hardship allowance. In 1944, a White Paper was published—(Cmd. 6551)—which dealt with the basing of compensation for an industrial injury on loss of earnings, and it concluded that the difficulties were insuperable. It proposed instead a disability pension based solely on loss of faculty and not in any way related to the injured man's employment or earnings. The debates on the White Paper, however, revealed some feeling that compensation based solely on loss of faculty and unrelated to earnings was not entirely satisfactory.
  The Trades Union Congress also made known its view that though compensation based on an assessment of the disablement had certain advantages, this assessment ought to be weighted to take account of the effect of the injury on the man's employment. It was recognised that a man's standard of living sometimes depended on a special skill. Even a relatively slight injury might permanently deprive him of the power to exercise that skill and so have a disproportionate effect on his earnings. Many cases were quoted at that time, but the two classic ones, always remembered, were the express

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  engine driver losing an eye and the skilled compositor losing a finger.
  During the Second Reading of the 1946 Bill, my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) undertook to remedy this defect by introducing a new Clause. That Clause, known as Section 14, provided that the basic industrial benefit could be supplemented in certain circumstances by a special hardship allowance. In its original form, this was a flat rate allowance of l1s. 3d. It was to be paid to the man whose injury made him permanently unfit for his regular occupation—and unfit for equivalent work.
  That was the first time that a special hardship allowance for loss of earnings had been recognised. The amount was small and the granting of the allowance limited. Nevertheless, recognition of this important factor—loss of earnings—was now an established principle. The limitation was very narrow because, in effect, it only provided special compensation for the man whose established career was permanently brought to an end. It did not compensate the man if his injury left him still able to do equivalent work.
  As we all know, the 11s. 3d. rate never operated. The 1948 Act superseded that particular advance. That same Act was further responsible for progressive legislation in this field. It first of all increased the allowance from 11s. 3d. to 20s. payable on condition that it did not raise the post-accident earnings higher than the pre-accident earnings. But, of equal importance, it widened the scope of claims. It allowed payments of special hardship allowance to be paid to a man who, though it was not certain that he would have to change his job permanently, would be unable to resume it for some time. Then, in December, 1954, the Government increased the special hardship allowance by 7s. 6d., bringing it to the figure at which it now stands of 27s. 6d. a week.
  So much, then, for the way in which this special hardship allowance has developed. The Bill asks, first that the special hardship allowance should be increased to 40s. a week. I am sure we all agree that the loss of faculty provision in the Act must be preserved. It would be folly to interfere with it in any form at this stage. Whilst
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  recognising the effect of loss of faculty, however, we must also remember that, consequent upon an injury, a loss of wage-earning power and the means of livelihood results. Therefore, because of the high earnings in industry at the present time—and there seems to be no reason why they should not continue—the loss of earnings following an industrial injury must surely be considered.
  In other words, in order that the Act shall not be jeopardised and brought into disrepute through lack of balance, Clause 1 attempts to give it stability by strengthening the loss of earnings provision. When a man sustains an accident at work and, because of his degree of injury, is unable for a period of time to follow his occupation, he receives industrial injury benefit for a maximum of 26 weeks. He is then examined by a medical board which assesses his degree of disability, which may vary between 1 per cent. and 100 per cent. The medical board makes its assessment solely on the loss of faculty.
  In 1952, 746,000 cases were dealt with, and 83,000 applied for disability benefit at the end of the injury benefit period. In 1953—these are the latest figures which I have been able to obtain—the number of claims on disability benefits had increased to 106,100, and 57,000 of these are in receipt of special hardship allowance. The loss of faculty may be small —it may be only 10 per cent., which means that the injured person receives only 6s. 9d.—yet sufficient to prevent the person in question from attending his pre-accident occupation. This results in a drastic cut in his earnings, his standard of living and his skill as a producer, in addition to which he becomes a disgruntled man and complains bitterly of the injustice meted out to him. He becomes antagonistic towards the Industrial Injuries Acts and tends to bring them into disrepute. These men, in the main, are the skilled producers of the nation's wealth—the miners, steelworkers, engineers and railway men. They all figure in this unfair deal.
  I want to quote one or two examples. The first concerns a coalface worker who contracted pneumoconiosis in 1953. He was then earning £14 10s. a week. He followed the medical advice which he was given and found employment in a less dusty atmosphere, but his earnings slumped to £8 0s. 6d. His disability was

  2681
  assessed at 20 per cent., which realised 13s. The National Coal Board granted a supplement of 4s. 6d., and with his special hardship allowance he received a total of £9 18s. Immediately he suffered a loss of £4 10s. in his earnings. Since 1953 the earnings in his grade of work have risen to £17 a week, which means that his present actual loss is nearly £7 a week, in spite of the fact that he received an increase of 7s. in his special hardship allowance in 1954.
  My second example concerns a pneumoconiotic who continued at his heavy coalface work against medical advice. He contracted this awful dust disease and was advised to find more suitable employment in a clearer atmosphere. This, as he knew, would mean a drop in his earnings, and he rejected the advice. Having made a calculation of his income over the next two or (three years, he had committed himself to certain purchases—probably buying a house, if he were newly married, or building a home —and his disability benefit and special hardship allowance could not by any stretch of the imagination bridge the gap in lost earnings. He therefore decided to carry on as a coalface worker.
  Needless to say, not much time lapsed before he was forced to leave his job, find cleaner employment, and suffer the inevitable cut in his earnings. Above all, he was suffering seriously from this most dreaded dust disease. Who can tell how many men are having to make this decision and are being driven to early graves in this way, mainly because the special hardship allowance is totally inadequate?
  I now want to give an example in connection with industrial injury. This concerns a young married man with four children. He was working on a coal-cutting machine—a very highly-skilled job—earning £3 10s. a shift, or approximately £21 a week. He suffered an injury to his hand and lost four fingers. After rehabilitation he commenced work in what was termed suitable employment, namely, Grade 4, with a daily wage of 27s. 9d. per shift. If he worked a full week, therefore, he would be entitled to approximately £11—including his special hardship allowance and disability benefit of 50 per cent. Unfortunately—and this happens to the majority of injured workmen—he cannot fulfil at all regularly a five-day week. Consequently, the whole
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  life and future of himself and his family are most seriously jeopardised.
  I could go on quoting case after case, but I think that I have given sufficient examples to focus a spotlight upon the gravity of the injustice of the present figure of 27s. 6d. for special hardship.
  Before I go any further I would like to submit that the title "special hardship allowance" is a misnomer in present circumstances. It is not a hardship allowance in the true sense of the word. A more suitable title would be "supplementary earnings allowance." It may be asked why it should be 40s. How do I arrive at that figure? In 1948, the special hardship allowance payment was made for the first time. It was a new venture, and the House decided that 20s. was a suitable sum at which to start. We all recognise that this was a leap in the dark, and, upon reflection, I think we should all realise that it was inadequate.
  However, many of us were thankful for the provision, because it was a start. The only trouble is that it has tended to become a firm basis upon which to calculate for all time. I suggest that it was too low then, and that the 27s. 6d. is too low now. We have all noticed that average earnings, especially in the skilled jobs of heavy industries, have risen quite substantially since 1948. The gap has widened between basic rates and earnings, and, in keeping with this, the bridge— the special hardship allowance—should also be increased for the industrially injured.
  In coal mining, in 1948 the average earnings were £8 13s. 2d., but by April, 1955, they had risen to £13 4s. 6d. There is no real measure of security in the Industrial Injuries Acts for these people. They are among the most skilled of our workers, and are susceptible to a high accident rate. Yet they are disregarded in the shabbiest manner by being denied adequate compensation following an injury which can shatter their whole life and deprive them of their hard-won skill.
  The Acts contain another anomaly which the Bill seeks to correct. Before a man can become entitled to a special hardship allowance he must prove either that he is permanently incapable of taking on his old work or work of an equivalent standard, or that he has been so incapable since the end of the injury benefit period. The second alternative has been made to

  2683
  some extent less restrictive by the provision that a period of trial or rehabilitation can be excluded from the test of whether a person can be treated as capable of following an occupation.
  Scores of men have been unable to claim special hardship allowance because, although they are not permanently disabled, they have gone back to their old work or equivalent work, and have suffered a relapse. For example, a man may injure his back in the course of his work. He may obtain injury benefit for some months, after which he returns to his former employment. A year or so afterwards, the effect of his back injury may force him to take on light work. He may be unable to prove that the deterioration in his condition will be permanent, and in these circumstances he will be able to claim only disability benefit and no special hardship allowance for the loss of earnings which he has suffered because of his industrial injury.
  This anomaly, which is causing a great deal of discontent among industrial workers, could be corrected quite simply by amending Section 14 (1) of the National Insurance (Industrial Injuries) Act, 1946, so that it would provide for the payment of special hardship allowance if, as a result of the relevant loss of faculty, the beneficiary
  "(a) is incapable of following his regular occupation; and (b) is incapable of following employment of an equivalent standard which is suitable in his case."
  This change has been long overdue. If it is accepted that the benefit should be payable for loss of earnings as well as loss of faculty it is logical that it should be payable whenever, and as long as, a man through industrial disablement is unable to earn his usual wage.
  This situation obtained under the Workmen's Compensation Acts, and it is unreasonable that it should not be carried through into the Industrial Injuries Acts. On the last occasion that this special hardship allowance problem was discussed in the House the Minister said that the estimated total cost would be about £2½ million. If that is the sum required to right this injustice and stabilise the Act, surely the Minister can see that the money will be well spent?
  I realise that the special hardship allowance problem is a difficult one for the Minister, but my aim in this Bill is not
  2684
  to add to his problems, but to help him to get rid of the stigma which is associated with this part of the Act. The Act is based mainly on loss of faculty. Therefore, a man with a minor injury but with a high loss of earnings suffers under the Act, and I am asking the Minister therefore to right this unfair and most unjust balance.
  In regard to Clause 2 of the Bill, it deals with an amendment of the conditions under which unemployability supplement is payable. I ask the Minister to consider altering subsection (1) of Section 13 of the National Insurance (Industrial Injuries) Act, 1946, by adding, after the words "permanently so incapable," the words—
  "or has failed to obtain employment, and it is probable either (i) that he would, but for the relevant loss of faculty, be able to obtain work in the same grade in the same class of employment as before the accident; or (ii) that his failure to obtain employment is a consequence wholly or mainly of the relevant injury."
  I am attempting to widen the scope and range for claiming the unemployability supplement. It is confined to a very narrow margin, since it is provided in Section 13 (1) of the 1946 Act—
  "…if, as the result of the relevant loss of faculty, the beneficiary is incapable of work and likely to remain permanently so incapable;"
  By substituting the words suggested in my Amendment, a few more people would be brought in.
  There are not many cases which would benefit, but they are hard cases—men suffering from industrial diseases, and pneumoconiosis in particular, who, because they are not classed as unemployables, yet in effect really are, no employer will entertain because of their condition. There are also a few accident cases of people in the same position. Many of these are being forced to claim National Assistance. Incidentally, if they were drawing unemployability supplement, they would not have to consistently obtain doctors' certificates or keep signing on at the employment exchange. I do not think that this part of the Bill would involve very much expenditure, and I hope the Minister will view it with some sympathy.
  Finally, I ask that the earnings maximum in Section 13 of the 1946 Act should be increased from £52 a year to £104.

  2685
  There are quite a number of industrially crippled men, such as paraplegics, who to fill in the time might benefit both physically and financially by taking on small tasks which can be done in their own homes; for instance, toy making, working with hand moulds, knitting and stocking machine work. It is in their own interests that they should be encouraged to do this. As the position is at present, however, if by this means they earn 21s. a week, they are denied the unemployability supplement of 40s. a week. Surely, the Minister will agree and recognise that that situation is quite absurd?
  In 1946, the unemployability supplement and the earnings maximum were both 20s., and, as the supplement has itself since been increased to 40s., and in view of the cost of living having increased fairly substantially meanwhile, I think it is only reasonable that the earnings maximum should also be increased to 40s. Such is my Bill. I think it is just and humane, and therefore commend it to the House.
  12.3 p.m.
  Mr. Harold Finch: I beg to second the Motion.
  I take this opportunity of congratulating my hon. Friend the Member for Barnsley (Mr. Mason) on bringing in a Measure which, if adopted by the Government, will greatly improve the security of industrially disabled persons. Of course, my hon. Friend is an ex-miner, and he is only too conversant with the suffering and distress which is occasioned almost daily as a result of injury or industrial disease in the mining industry. He has put forward his proposals today with great sincerity and earnestness, and I feel sure that hon. and right hon. Gentlemen will give those proposals every consideration.
  This Bill is not confined to the mining industry, although unfortunately, the majority of cases arise in that industry. It attempts to cover all those who come within the provisions of the National Insurance (Industrial Injuries) Acts. There are thousands of men and women who sustain accidents in the factories, the engineering works and on the railways, and the aim of the Bill is to take care of all those who come within the provisions of industrial injuries legislation.
  2686
  I fully recognise how much has been done in recent years and the advances which have taken place in medical science, and in regard to hospital treatment and rehabilitation centres, which are going a very long way to bring about a considerable improvement in the position of disabled men and women. But we are today dealing with men and women who are disabled, either for long or short periods, and with that class of disabled workers either permanently incapacitated or whose physical impairment seriously restricts their ability to carry on their employment for the rest of their lives.
  These men, many of whom have learnt their skill in apprenticeships, face the prospect of all their piece work earnings being taken from them. They come to me frequently and tell me that, while they realise that they have to put up with the disability benefit, what they are most worried about is that their wives and children shall not forgo those necessities and that standard of living which they have enjoyed when the men were earning high wages.
  Here, we are dealing in large measure with skilled workers and piece workers. We hear so much in these days about incentives for production and the need to produce more. We are all agreed about that, and, indeed, we have heard sufficient this morning to make us realise how essential it is to increase production. Under the present legislation, we are penalising those workers who are producing most.
  Let us take the case of the mining industry. The collier who, by producing more and more coal, receives higher wages, may be stricken with an accident and, ultimately, only earn £7 or £8 per week. The future of his family is prejudiced and their standard of living is reduced as a result, and, therefore, the provisions of the Bill, though it is a very modest Bill, will go some way towards bridging the gap between the pre-accident wages and the wages which the workman receives for the light work which he has to undertake.
  The Bill aims to increase the special hardship allowance from 27s. 6d. to 40s. a week. There are certain principles in the National Insurance (Industrial Injuries) Act connected with the special hardship allowance which this Bill does

  2687
  not in any way change. These principles remain. For instance, a disabled worker cannot get by way of special hardship allowance a sum higher than the difference between his wages in his pre-accident employment and his light work wages. The amount is limited to the difference between the two figures. Many men who were on lower rates of wages may now be getting £6 or £7 a week today will not receive the maximum, because their pre-accident wages were only a little above present earnings. Then, again, this special hardship allowance is payable with the disablement pension, and the disablement pension and the special hardship allowance together cannot in any case exceed the maximum of £3 7s. 6d. per week for a single man.
  Therefore, the Bill does not affect these principles, which are already contained in the existing legislation, but what it does do is to provide, that where there is a gap in earnings, and where the assessments of the degree of disability happens to be, as it is in most of the assessments made by a medical board, 30 per cent. or less, in these instances, the men will derive full advantage from the Bill.
  As I say, I regard this as a very modest Bill. As wages rise so, relatively, does the financial suffering of these disabled men increase. I agree with my hon. Friend when he says that one of the important features of the National Insurance (Industrial Injuries) Acts is that a man's pension is based on his loss of faculty. That is a great improvement on workmen's compensation which was paid only for loss of earnings. There are now thousands of men who for that reason, because they are earning more on light work than they earned at their previous occupation, get no compensation at all.
  The Industrial Injuries Acts laid down that a man would be entitled to a pension provided that the medical board assessed his condition as being such as to warrant a pension irrespective of what his earnings or his future might be. My hon. Friend's Bill tried to adjust the position between the workmen's compensation Acts, which put that emphasis on loss of earnings, and the Industrial Injuries Acts where the emphasis is more on the medical condition. We believe that this Measure will go a very long way to putting the Industrial Injuries Acts on a better basis, which will result in there
  2688
  being far less bitterness among skilled injured men.
  I often think that our sense of values is all wrong. When it is a question of loss of property or loss of financial interest every precaution is taken to ensure a fair valuation. When the mines were nationalised it was agreed that the former coal owners should be very well compensated, and every precaution was taken to see that their property was fairly valued. Since that valuation interest rates have risen and those concerned have had the full advantage of those increased rates of interest—and after the Chancellor's statement this morning I can well imagine that they will get a further enhancement of their holdings, and that a valuation which was originally put, I think, at £165 million may well end up at about £300 million.
  That being so, we must put an equally fair valuation on men who have been maimed and twisted, who are suffering from pneumoconiosis and gasping for breath. Those men, whose work has helped and is helping the nation, axe entitled to a better deal than they at present get under the Industrial Injuries Acts and we believe that this Bill bridges the gap to a very considerable extent.
  The original provision was that to obtain hardship allowance a person must prove either that he was permanently disabled or disabled since the date of the injury benefit period—that is, that he was unable to work immediately following that period. I recognise that that was a great experiment, but experience has shown that those restrictions have worked very harshly against those thousands of disabled men who are not able to show that they are permanently disabled.
  The medical board will tell a man that it will give him only a provisional assessment because his condition may improve in six or twelve months—or the board may think his condition will deteriorate, but, in any case, it is not quite sure. If he needs attention at a rehabilitation centre or needs hospital treatment the medical board will not say that his incapacity is permanent.
  In any case, the man may agree to try his employment to see how he gets along —and despite what is so often said here and elsewhere, many miners, like other men in industry, want to get back to their work. If, after working for six or

  2689
  eight months, the man again breaks down he has lost the hardship allowance. All he then has to fall back on is a pension of perhaps 20 per cent. or even just a gratuity.
  Dermatitis, a very nasty and irritating disease, is caused by handling dust and liquids in the mines and in the factories. A man contracts it, and the medical board, at the end of the injury benefit period, will quite likely say that as, by treatment, there is a chance of improvement or of complete recovery it will make a provisional assessment only of 15 or 20 per cent. or even less.
  I may say that if I have a complaint at all it is about the low assessments which are given—but that is not the subject before the House today. The man may try his work again and continue for, say, six months until the dermatitis breaks out on him again. He cannot continue his employment—but he gets no hardship allowance; the assessment had not been made permanent and he has gone back to work after the end of the injury benefit period. In such a case, I cannot see what justification there may be for withholding that allowance.
  My hon. Friend the Member for Barnsley, by this Measure, seeks to make adequate provision for as long as a man is unfit to return to his regular occupation, or an occupation of equivalent standard and is unable to earn his pre-accident wages. We are not asking for something for nothing—the man has to be disabled. Surely no hon. Member would seek to justify depriving of the hardship allowance a man who tries his work, continues at it for three or four months and then again breaks down. I know that some time ago the Government went some way towards recognising that position, and said that a man who is in hospital or is given special treatment for a period of three months will not be deprived of the hardship allowance, but there are many cases such as the dermatitis case that I have quoted and I hope that hon. Members will give us their support.
  This Bill does not seek to make fundamental changes in the Industrial Injuries Act. We are not asking for that. In that cause we reserve our powder for some other occasion. This is a modest Bill, which asks for only a modest increase in
  2690
  the hardship allowance to help those on low pension.
  Mr. E. Partridge: The hon. Member says that if a man works for three or four or even six months, but then finds that he cannot follow his regular employment, he is deprived of the hardship allowance. I thought that it was part of the hon. Member's case that he must prove that he is permanently disabled, and this hardship allowance applies the moment it can be said that he is permanently incapacitated for his job.
  Mr. Finch: No. Perhaps I had better run over the matter again. When a worker is granted assessment by the medical board it does not regard his condition at that time as permanent. The assessment is provisional. It is hoped that he will be cured, that he may get better. Therefore, the man loses by that first condition to be fulfilled for hardship allowance, for he is not then, or is not then regarded as being permanently disabled. Then he tries his work again, and later, having tried his work, he breaks down.
  Many men in that situation return to the medical board, and their assessment is then increased. I can cite case after case of assessments thus having been increased later, though not permanently. The medical board says, "Your condition has worsened. You were assessed at 20 per cent., and now we will assess you at 50 per cent." Perhaps, even 60 per cent., but the fact that he has been back at his old employment for over three months means that he cannot get the hardship allowance. We are asking that that anomaly should be removed. It is a very serious one.
  There is the matter of the unemployability allowance. This is an allowance which is paid to a workman regarded as unemployable. If the disability is such as is described in the Act of 1946 there is an allowance of £1 a week. This is of great significance because there are many men who are not entitled to unemployment benefit because they have not sufficient stamps to their credit. That was; why the unemployability allowance arose. The insurance scheme is based upon contributions, but there are many men who do not fulfil the necessary contributions to entitle them to unemployment benefit.

  2691
  The position was seriously aggravated by the Government when they removed Section 62 of the Act. The miners of South Wales had mass demonstrations some years ago about that. The abolition of Section 62 meant that only certain days were to be added to a man's unemployment benefit under the old system. Under the scheme of my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) a man could continue to get unemployment benefit even although his contributions had expired. He could do so by attending the appropriate tribunal. The onus was placed upon the tribunal of showing whether the man had not been able to get employment. If the tribunal was of the opinion that the workman genuinely failed to get work unemployment benefit was resumed irrespective of whether he had paid the necessary contributions or not. That has now been altered.
  It is true that, under the arrangements the present Government put into operation some time ago, it is not necessary for the man to go before a tribunal. What the Government say, in effect, is, "We will give you added days of benefit after a statutory period has expired, and up to a period of 96 days." I think that is the number; 96 or thereabouts. There is a limit. It is also true that there are not many men at the moment affected by this arrangement, but as time goes on there will be a greater number of men failing to get unemployment benefit because the days have expired. This will be especially so in South Wales. Their only recourse then will be to National Assistance.
  If this Bill is passed they will have a better chance of getting the unemployability allowance. As my hon. Friend pointed out, we must pay them either by National Assistance or by way of unemployability allowance. Which is it to be? Men and women would rather get a statutory benefit than apply for National Assistance. Therefore, I hope that the Parliamentary Secretary will seriously consider this contention we are making about the unemployability allowance.
  There is the third point my hon. Friend mentioned, the limit of 20s. a week. I know of many cases, especially in South Wales, of men suffering from pneumoconiosis, of whom the board has said, upon inquiry, that they can do
  2692
  only sitting down jobs. It is only very little work they can do. The case of such a man goes before the commissioner. He has regretfully to state, "Although this man can do only the work of a watchman, can do only a sitting down job, after all, according to the Act, he can earn 20s. a week."
  These provisions bear very harshly upon the men, and act against rehabilitation centres, against Remploy Limited, which provides a man with work in his own home, to encourage him, to give him occupation, and to enable him to earn some money. There are the paraplegics, for instance. Surely, we ought not to limit them to 20s. a week. I cannot believe the House would wish to treat paraplegics like that. As it is, they cannot get unemployability allowance, and their wives and children have to depend upon National Assistance.
  The Bill is based upon experience of the working of the existing legislation. The Labour Government introduced the National Insurance (Industrial Injuries) Act, and that was a great new venture. Now we have had some years of experience of the working of this legislation. It was a great experiment. We can now see its weaknesses, its flaws, and in the light of that experience we have produced this Bill, in an attempt to put right some of those flaws.
  We are not being unreasonable in what we ask, and I hope that the Government will so respond to us that there will be a better chance for these men of who I have been speaking, who deserve all that Parliament can give them in their misfortune as a result of accident and disability suffered in industry.
  12.28 p.m.
  Mr. Denzil Freeth: The hon. Member for Barnsley (Mr. Mason) is to be congratulated on bringing this Bill before the House. As the hon. Member for Bedwellty (Mr. Finch) said, it is now some nine years since the National Insurance Scheme was drawn up. It has become obvious during this period, and particularly since the 1948 Act, that there are many ways in which it can be improved. It is inevitable when starting a scheme of that magnitude, when altering so many of the principles upon which compensation and unemployment benefit were paid in the past, that there should be cases where the shoe pinches,

  2693
  and it may therefore be desired to alter some cases and some benefits.
  I was a little apprehensive when the hon. Member for Bedwellty started drawing an analogy between compensation for injury and loss of earnings, and compensation for property compulsorily acquired by the State. The last thing I would wish to do would be to re-argue coal compensation, but it is worth pointing out that compensation for property compulsorily acquired by the State is not luck, unless we regard the results of General Elections as luck, but is calculable within fairly broad limits.
  No one, however, can calculate the hardship caused to a man by his physical disability or the harm caused to him by the fact that he is no longer able by his own exertions to keep his family. Probably hon. Members have met cases where marriages have degenerated owing to the fact that the man was no longer the adequate breadwinner of the household owing to some kind of industrial injury.
  I would remind the hon. Member for Bedwellty that the announcement by my right hon. Friend the Chancellor of the Exchequer had the effect of sending up the price of War Loan one point after the Bank Rate went up 1 per cent. yesterday. To my mind the essential part of this Bill is to increase benefit under the National Insurance Scheme without at the same time increasing the payments that are made into that scheme by the employer and the employee. This is a principle which we should try and keep straight in our minds: whether it is a desirable thing to increase the benefits under the National Insurance Scheme at the present time without increasing the payments that have to be put into it.
  We have also to consider, if we find that we have a certain sum of money which can be distributed as a benefit, whether this Bill is the best way of so distributing the surplus. I will deal first of all with the cost of these proposals and the fact that no increased contributions are provided for in the Bill. As hon. Members know, the National Insurance Fund is actuarially unsound at the present moment.
  Mr. Bernard Taylor: I hope that the hon. Member will draw a
  2694
  distinction between the National Insurance Fund and the National Insurance (Industrial Injuries) Fund.
  Mr. Freeth: I was going to do so. Not only is the National Insurance Scheme actuarially unsound, but this particularly applies to the Industrial Injuries Fund. The cost of the benefits under Clause 1 of this Bill, it was said by the late Minister of Pensions and National Insurance, would be in the region of £2½ million a year to begin with. I do not know—perhaps the Parliamentary Secretary can help me on this later in the debate—what the actual cost of enlarging the scope of the hardship allowance and the supplementary benefit will be. At any rate, we start off with something in the region of £2½ million a year. It may therefore be argued by the promoters and supporters of the Bill that £2½ million is a vary little sum when, in fact, at the end of 1954–55 the cumulative balance in the Industrial Injuries Fund was £121·5 million and over the next five years the cumulative balance of that Fund will rise by something like £10 million a year.
  It is unfortunately true that this increase will not go on. According to the estimates in Table 22 of the Ministry of Pensions and National Insurance Report for 1954, the increase, having risen by an average of £10 million a year over the next five years, will in the following ten years be at an average of only about £2 million a year, and in the period between 1960 and 1970 there will be a deficit rather than an excess of income compared with the expenditure of the Fund.
  So we find ourselves starting the downward turn. Between 1970 and 1980, the Government Actuary estimates or calculates—I am never quite certain which is the better word with actuaries—that the balance in —the Fund will decline from £182·9 million to £88·5 million. That is partly due to the increase in the special hardship allowance. At the moment the cost is £3·3 million, and by 1979–80 it will be no less than £14 million. It will roughly quadruple. It is reasonable to assume that the cost of the proposal to raise the hardship allowance from 27s. 6d. to 40s. would also quadruple over this period. If that is so, the special hardship allowance by 1979–80 will be costing no less than £24 million a year.
  Mr. S. O. Davies: The hon. Member will be conscious that the figures which he has just given must be regarded as wildly speculative, because no consideration at all has been given to the great efforts made in several major industries today to keep down physical injury as well as industrial diseases; so really he must be aware that he is making his case on very treacherous sands this morning.
  Mr. Freeth: I agree that many industrialists and prominent companies are making very determined efforts to reduce the accident rate. This House has considered on Second Reading a Bill to try to reduce the accident rate on farms and we all hope that the accident rate will be decreased. Unfortunately, in agriculture, at any rate, over the last thirty years the tendency has not been for it to decrease. I hope that trend may now be turned. I think in industry it may have been turned.
  At any rate, the views of the Government Actuary have a certain weight, and I do not think that "wildly speculative" is a term which can be put on actuarial forecasts. Assuming that the actuarial forecast has any degree of truth in it, then by 1980 we shall be in a situation in which the excess of expenditure over income of the Industrial Injuries Fund is not less than £24 million a year, while the accumulated balance is £88 million. Thus, within four years of that date the Fund would have a deficit to be paid by the general taxpayer.
  Mr. B. Taylor: Do I gather that the hon. Gentleman is basing his actuarial arguments on present rates of contribution?
  Mr. Freeth: Yes. This is taken from the Government Actuary's report. The Government Actuary says, in paragraph 199:
  "…to ensure the solvency of the Fund on the new basis",
  —that is, the 1954 rate—
  "the rates of contribution prescribed by the 1954 Act would have to be raised by such amounts as would increase their overall yield by 18 per cent.; i.e., by about 1d. a week each from employer and worker in the case of men and smaller sums from women and juveniles. The annual income from contributions and Exchequer supplements would then become approximately £56 million; the balance in the Fund would gradually rise to
  2696
  an ultimate level of some £435 million; and the annual interest yield on this capital sum would be just sufficient to secure a balance between total income and total outgo in subsequent years."
  Assuming that one can attach any credence to the Government Actuary's forecast, the Industrial Injuries Fund will get not merely severely in the red, as it now is, but further in the red from about 1985.
  I congratulate the hon. Member for Barnsley on having found a way of introducing a Private Member's Bill into the House which manages to become a charge or, the Exchequer. He deserves every congratulation for that, but unfortunately my admiration for him does not necessarily lead me to believe that to be a good thing. I believe that it is a good thing for the National Insurance Scheme and the funds and accounts in that Scheme to be basically self-supporting, and even in this case, where we find, today, that actuarially they will not be self-supporting in twenty or thirty years' time, I believe that we should not increase that potential actuarial deficiency.
  That view is not held by certain hon. Members. I do not know whether many hon. Members on this side of the House believe that the National Insurance Fund and the various connected funds are actuarial camouflage and of no use at all. I think possibly the case was put with his usual vigour, best of all by the right hon. Member for Ebbw Vale (Mr. Bevan), who said at Margate on 13th October last year:
  "When everybody is 'in' and when insurance is universal and compulsory it is no longer insurance. We should not therefore collect contributions because payments to compulsory insurance are a poll tax. The finance should be found by the Exchequer…Last year the T.U.C. embarrassed the Party by expressing the view that it would be unreasonable in securing higher benefits to oppose some increase in contributions on an actuarial basis…and that if we abandoned the insurance principle there would be a danger of a means test…It is nonsense to say that it is necessary to defend the Fund—because there ain't no Fund. The so-called Fund is invested in pits, power stations, new towns, factories. I hope they will not produce the argument that we must fall down and worship the old actuarial gods."
  If hon. Members take that view, they can only congratulate the hon. Member for Barnsley on his ingenuity and pursue their course to its logical conclusion, but I must confess that I do not take the

  2697
  point of view that in fact the Insurance Fund does not exist except in the minds of Ministers, nor the idea that it is a bad thing for the Fund to exist in anybody's mind.
  Sir Alfred Roberts, of the United Textile Factory Workers, replying to Mr. Bevan said:
  "Mr. Bevan says there ain't no Fund. On that basis Mr. Bevan has no bank balance, because his money is invested by the bank…If the money were to be raised and doled out by the Treasury in benefits it would inevitably be done on the basis of a means test. I hope you don't mind me helping Mr. Bevan to educate the Labour Party."
  I do not mind anybody helping anybody to educate the Socialist Party.
  I believe that if we get into the position in which a substantial proportion of the National Insurance Funds, to put it no higher, have to be subsidised by doles poured out by the Treasury from general taxation in order to meet a loss, we shall find that the whole insurance principle has gone. We shall find that a person who wishes to draw benefit will one day come up against a Government which says,
  "It is no use talking about your right to draw this benefit. Although you have paid the contributions, the benefit is not there. The Treasury does not feel like paying the difference."
  I always find it very strange that hon. Members opposite, in whose minds the memories of the early 30's are very often so strong——
  Mr. S. O. Davies: Why not?
  Mr. Freeth: —should want to make the National Insurance Fund more insolvent, so that more and more of the benefits from the National Insurance Scheme have to be paid by the Government as a dole or a gift from the general Exchequer——
  Mr. Davies: Made insolvent by the Tory Government. The hon. Member must know what Government were in power when the country went almost to rags and tatters. Is he proud of it?
  Mr. Freeth: We might get rather wide of the question if we were to consider the economic conditions of 1931.
  Mr. Charles Doughty: May I remind my hon. Friend that there was a Socialist Government from 1929 to 1931 and a Coalition Government, largely Conservative, which had the mess
  2698
  to clear up, as is so frequently the case after Socialist Governments?
  Mr. Davies: Is he not equally aware that before 1931 there were millions of persons unemployed in the country and that my constituency had been ruined by the Tory Government? The hon. Member for Basingstoke (Mr. Freeth) started all this.
  Mr. Freeth: I think the hon. Member for Merthyr Tydfil (Mr. S. O. Davies) is coming to support the point which I was making, that where a fund has ceased to exist, as the Unemployment Fund ceased to exist in 1929–31—incidentally, under the Government of his party—there is a great danger that the Treasury, which has to provide the money which is not in the Fund, may alter the rates of benefit. If we have a Fund which even now, like the Industrial Injuries Fund, is not actuarially solvent, it does not necessarily make life better to make it actuarially more insolvent. I do not think we help these matters by making them worse, and I therefore think it a great pity that in the Bill the hon. Member for Barnsley is not prepared to put on the credit side of the Fund something to match the outflowing of expenditure from the Fund which will occur when the Bill becomes law.
  Mr. B. Taylor: Would the hon. Gentleman inform the House the extent of the Exchequer contribution to the Industrial Injuries Fund? Is it the basis of his argument that if this small improvement were made in this benefit it would bring eternal ruin to the Fund?
  Mr. Freeth: I do not think anything brings eternal ruin to Funds, but if a Fund gets into a position where it has no assets and where its commitments exceed its income, then even if not in eternal ruin it has at any rate a shadowy existence. At the moment the Exchequer supplement is running at the rate of £66 million a year and it will rise to £8 million a year by 1979–80.
  What happens when the balance in the Fund has run out? At present it is runing out at an estimated rate of £14 million a year which, if this Bill becomes law, must be increased to between £24 million and £25 million a year. In those circumstances we should be in the position by 1985 of the Exchequer supplement having to be sharply increased by about £25

  2699
  million a year to maintain the benefits paid out. I believe that is basically dangerous. If we wish to increase the benefits paid from a fund which is at present actuarially insolvent, and to whose help the Government will have to come some day if the rates are not increased, it is a bad thing to make the matter worse even by between £2½ million and £10 million a year.
  I do not believe it is right to alter the National Insurance Fund, because I believe the insurance principle has enormous value. First, it means that the Government cannot interfere with the rate of benefit. Secondly, it means that a person has a right because of contributions to hat Fund. I find nobody in my constituency who objects to drawing the retirement pension or any other benefit under the National Insurance Scheme. This is because people feel they have paid by their contributions and so they have a right. However, I find that people object to drawing National Assistance because they will not accept State charity. Indeed, I got into hot water with one lady when I went to the National Insurance officer and asked him to go to her aid because it was revolting that she was having to live under the conditions she did, and that she was having to make do with so little money because of her pride.
  That situation is likely to arise if the National Insurance Scheme goes on the rocks. In that case the Fund would have to be financed by the Government and therefore the Government would have a right to fix the rate of benefit in accordance with the economic situation. As a result people would feel that they were receiving not, as of right, the benefit of their contributions but charity doled out by the State.
  Mr. Tom Brown: The hon. Gentleman mentioned National Assistance. Is he aware that many of the men on whose behalf we are pleading this morning are forced by economic circumstances, not because they like it, to make application for assistance from the National Assistance Board?
  Mr. Freeth: That is true and National Assistance must always remain to underpin the general welfare organisation. In this case I do not pretend that the argument used with regard to a person drawing National Assistance is necessarily a
  2700
  completely white or black argument. In many cases I wonder whether the increase in the hardship allowance from 27s. 6d. to 40s. a week would be sufficient to remove those people completely from the element of National Assistance. At any rate it does not make matters better to try to improve the benefits for a short period when it means sabotaging, to however slight a degree and with whatever good intentions, the solvency of the fund.
  To say that solvency does not exist really does not answer the question. That is why I shall not find it possible to support the ingenuity and the very high motives, which I fully recognise and applaud, of the hon. Gentleman the Member for Barnsley.
  12.55 p.m.
  Mr. D. J. Williams: The hon. Gentleman the Member for Basingstoke (Mr. Freeth) has indulged in highly speculative mathematics which have no relevance to the purposes and the provisions of this Bill. He talked about the finances of the Industrial Injuries Acts. May I remind the hon. Gentleman that the Bill does not deal with mathematics, it deals with men, and with men who have been disabled by accident or disease in industry. If this House had been governed at all times by the kind of arguments put forward by the hon. Gentleman, we would never have had in this country any provisions for the industrially disabled.
  We have heard all those arguments before. I am wondering whether the hon. Gentleman has not taken the place of the hon. Member for Wolverhampton, Southwest (Mr. Powell), who has now been promoted to the Front Bench. I am glad of the opportunity to say a word or two in this debate. I shall be brief because I know our time is limited and that other hon. Members wish to speak.
  I begin by congratulating my hon. Friend the Member for Barnsley (Mr. Mason) on his good fortune in the Ballot for Private Members Bills and, in particular, on his decision to bring forward a Measure dealing with certain aspects of the vitally important problem of industrial injuries. This is a small and modest Bill and its aims are strictly limited, but it deals with matters of vital concern to our industrial workers. I am sure that both sides of the House are deeply indebted to my hon. Friend for

  2701
  his clear and lucid exposition of the purposes and provisions of the Bill.
  This Bill has roused a great deal of interest in South Wales among the industrial workers, and especially among miners. I represent a mining constituency and I have had already many letters from disabled miners, some disabled by pneumoconiosis and some suffering from the effects of injuries sustained at the pits. These men are especially interested in the Bill because it seeks to remove and to correct certain anomalies and injustices from which they have been suffering for a long time.
  The problems dealt with in the Measure before us are particularly acute in the mining industry. Indeed, they are more acute there than in any other because of the high incidence of accidents and disease in mining. I will quote only one figure as an illustration of my point. In October of last year there were 66,000 people in receipt of special hardship allowances, with which one of the provisions in the Bill deals. Half of those were colliery workers. However, these problems are not confined to mining. They arise in varying degrees in every industry and they may affect at some time or other every industrial worker.
  I suppose it is natural for me to relate the provisions of the Bill to my own experiences in the mining industry. It is the industry which I know best and the one in which I have spent most of my life, and, as I have said, it is the industry with the highest incidence of accident and disease. Problems of compensation for injury and disease play a very important part in the life of the miner. They are always live issues in mining communities. They are discussed at almost every lodge and branch meeting. No problem arouses keener and more animated discussion than the treatment of disabled miners. Miners live very close to these problems because all of them at some time or other have personal, unpleasant experience of injury or disease.
  In spite of the heavy toll of life and limb in the mining industry, it was never very easy, especially under the old workmen's compensation Acts, to secure compensation for a disabled miner. The old Acts were hedged around with all sorts of——
  Mr. Doughty: I am surprised at what I thought the hon. Gentleman said. Did I hear him say that it was difficult to obtain compensation under the old workmen's compensation Acts?
  Mr. Williams: I hope that the hon. and learned Member will have a little patience and allow me to develop my point.
  I was trying to stress that it was always very difficult to establish claims for compensation for disabled miners under the old workmen's compensation Acts. If we could have an actuarial assessment of the colossal amounts of money which miners' unions spent in fighting compensation cases in the courts, I am sure the hon. and learned Member would be staggered. Cases were contested at every stage and fought stage by stage, and had often to be taken all the way to the House of Lords. That was especially so in establishing claims relating to pneumoconiosis.
  Mr. Doughty: I am grateful to the hon. Member for giving way to me twice' in such a short time. Is he not aware that in the vast majority of cases there was no contest, and that compensation was paid automatically?
  Mr. Williams: I spent about twenty years dealing with compensation cases in the mining industry, and my experience was that very few cases were automatically admitted. There were always all sorts of complex, restrictive limitations. The legislation was so complicated that it was very difficult for the average miner to understand it. Its administration created friction and suspicion in the industry, and nothing did more to poison and embitter relations within the industry than the treatment of disabled miners under it.
  I mention these things not merely as matters of history, but because they have a very direct relevance to the problems in the industry today. Those experiences completely changed the traditional attitude of the miner towards the industry. They caused him to lose faith in it, to leave it and turn his back on it whenever he had the opportunity, and, most important of all, to persuade his sons not to enter it.
  This, in turn, has created two of the principal difficulties confronting the National Coal Board today The first problem is that of attracting labour into

  2703
  the industry and retaining it. The second is that of establishing good labour relations. In the mining industry, more so than any other industry, good labour relations depend above all on just and generous treatment of disabled men.
  The National Insurance (Industrial Injuries) Act, 1946, radically changed the provisions in respect of industrial disablement. It marked a new approach to the problem. It differed fundamentally in many respects from the old workmen's compensation legislation. It was based on entirely new principles, and was, indeed, a revolutionary Measure. It seemed, in 1946, as if it would remove all the difficulties which we had experienced in administering the workmen's compensation legislation.
  It was welcomed in 1946 by the majority of our industrial workers, and it raised great hopes of a new deal for disabled men. While some of the hopes have materialised, unfortunately, not all of them have been fulfilled. Our experience over the last few years has shown that the Act has many limitations and anomalies which operate harshly and unfairly against disabled men. It is now causing considerable concern, resentment and dissatisfaction among miners.
  In every case of accident or industrial disease, two factors affect the man concerned. The first is the physical disability which results, and the second is the loss of earnings. There are other factors, such as personal suffering, social handicaps and psychological disturbances, but these have never been included in either calculation of compensation or assessment of industrial disability.
  In the determination of the amount of compensation, the 1946 Act was based on principles entirely different from those of the old workmen's compensation legislation. The workmen's compensation legislation was based on loss of earnings. The amount of compensation was based on pre-accident earnings. Whether a man lost a leg or bruised a finger made no difference; the compensation was determined solely by his pre-accident earnings. The 1946 Act was based on the entirely different principle of loss of faculty. It paid no regard at all to loss of wages, and that is the problem dealt with in the Bill.
  To meet the problem, the provision of a special hardship allowance was incor-
  2704
  porated in the 1946 Act. It is payable if, as a result of the relevant loss of faculty, a man is permanently incapable of following his occupation or is incapable of following an occupation of equivalent standard. When the Act was passed, it was thought that the special hardship allowance would meet the problem of loss of wages. Unfortunately, experience shows that it does not. Since 1946 economic circumstances have changed, wages have risen, and the gap between the amount of benefit and the pre-accident earnings has been considerably widened. Many people are now suffering substantial loss of income as a result of the inadequacy of the special hardship allowance.
  Indeed, many people feel that they are less adequately compensated now under the Industrial Injuries Acts than they would have been under the 1925 Workmen's Compensation Act. There is now widespread dissatisfaction both with the amount of the special hardship allowance and the conditions under which it is granted. The remedy is not to go back to the Workmen's Compensation Act. The real solution to the problem is provided in the Bill and it is to increase the amount of the special hardship allowance and to amend the conditions under which it is payable. The special hardship allowance should be paid whenever a man suffers incapacity and, because of that incapacity, suffers a loss of earnings.
  The other provision in the Bill relates to the payment of unemployability supplement. That is provided under Section 13 of the National Insurance (Industrial Injuries) Act, 1946. The Bill seeks to amend the conditions under which the unemployability supplement is payable. In some cases in my own constituency these conditions are very harsh and onerous. They have given rise to widespread dissatisfaction among miners, especially in South Wales. The people who have to claim an unemployability supplement are the most tragic cases of all.
  The claimant of the special hardship allowance is generally a partially disabled man and as a rule he is capable of a number of employments; but the claimant for the unemployability supplement is generally a very seriously disabled man, who is capable of only very light and limited employment.

  2705
  Even in these days of full employment, it is very difficult indeed for the man who claims unemployability supplement to find suitable employment. This is especially the case in the mining valleys of South Wales where, as a rule, the only industry is the colliery. The new industries which have come to South Wales, the light industries, Remploy factories and Grenfell factories, have still not provided the necessary opportunities for the employment of all these men.
  The Bill proposes that unemployability supplement should be paid in every case where, because of his disability, a man is unable to obtain work. This is not a revolutionary proposal. It was embodied in the old workmen's compensation Act, 1925, where a partially disabled man could, if he took all possible steps to find employment suitable to his condition——
  Mr. Doughty: The very words which the hon. Member has just read out were in the old Act and are not in this Bill.
  Mr. Williams: I am coming to that. The 1925 Act provided that, where a man was partially disabled and had taken all possible steps to find suitable employment, his partial disability could be treated as total disability and he could be paid full compensation.
  Mr. T. Brown: He had to prove it.
  Mr. Williams: He had to prove it. It was part of our job as compensation secretaries to produce evidence before a judge and, if the evidence were acceptable, the man was treated as totally disabled and paid full compensation.
  The Bill proposes that the same principle should govern the payment of the unemployability supplement. Where a man is unable to obtain work because of his physical condition, he should receive unemployability supplement. I do not want to cite cases and examples. There are many in my own constituency and, indeed, in every mining constituency. We are all anxious to remove these two anomalies from the National Insurance (Industrial Injuries) Act, because they operate harshly and unfairly on two sections of our disabled men. Their removal will bring welcome relief to many disabled people who have been maimed and incapacitated in industry.
  1.16 p.m.
  Mr. Charles Doughty: The hon. Member for Barnsley (Mr. Mason) is to be congratulated on choosing this subject for his Bill. Hon. Members in every part of the House must be primarily concerned with the prevention of industrial accidents, and the compensation or benefit which is to be payable— that is a better word nowadays—in respect of people who suffer from these accidents is a matter of initial concern to such workmen and to all hon. Members.
  The hon. Member for Barnsley and the hon. Member for Neath (Mr. D. J. Williams) and other speakers have referred to the history of this problem. because it has been a problem for a great number of yars. Under the old Workmen's Compensation Act, 1925, of which I have as lengthy an experience as the hon. Member for Neath, the principle was that it was the employer's responsibility to compensate, by weekly payments or lump sum in suitable cases, men who, when in his employment, received an injury. Of course, the problems that arose under that—or any other Act which is made on any principle of payment at all—were bound to be vast and difficult. But I go so far as to say that that Act worked extremely well.
  One could, of course, find individual cases upon which those representing the workman and those representing the employer, generally insurance companies, took different views about what the law might be and where, in order to obtain a few shillings a week, a man had to indulge in very large costs, although they did not fall upon him personally. Those were entirely exceptional cases, and in the vast majority of cases compensation was not only paid without argument but promptly.
  A matter which has not been raised in the debate is that a man who accepted such payment—and the vast majority of men did—had a legal bar against his proceeding at common law to obtain an award of damages. The machinery for working that Act in my experience operated extremely well. But it was decided in 1946 that the whole of that should be put aside, that the method of deciding the questions that arose under that Act, the method of making payments, indeed, the whole principle upon which these payments were made, would

  2707
  be swept aside and an entirely new principle substituted.
  I was not then a Member of this House, nor was I a Member in 1948 when a further amending Act was passed. Had I been a Member, regardless of what was said on this or the other side of the House, I should have said, "The hon. Members of this House are making a mistake in sweeping away the old Act and placing something which is untried and founded upon wrong principles in its place". I may be in a small minority in saying that, but I do not mind that. and as I am now a Member of the House I feel it my duty to say it now. Perhaps in years to come—and today we have heard some criticisms of the present Act —people will look up old and dusty volumes of HANSARD and say, "The hon. and learned Member for Surrey, East was right in what he said in 1956".
  It may be said, "Look what the National Union of Mineworkers has to pay out in legal costs and doctors' fees". The answer to that is," Look what it receives by way of compensation for a very small investment". Hundreds of millions of pounds were paid and rightly paid——
  Mr. T. Brown: I am much obliged to the hon. and learned Member for giving way. Would he not agree that there has been less criticism of the 1946 Act than of the 1925 Act? By removing a great many anomalies in the 1925 Act—and we pride ourselves on this—we prevented a great deal of N.U.M. money going into the pockets of the legal profession.
  Mr. B. Taylor: I know that this is a very controversial subject, but is the hon. and learned Gentleman not aware that in spite of what he has said about Workmen's Compensation, there are armless and legless men who, having had their accidents before 1948, do not get a penny in compensation?
  Mr. Doughty: That is only because they did not come within the provisions of the Workmen's Compensation Act.
  Mr. Taylor: Because of earnings, and not for the reason given by the hon. and learned Gentleman.
  Mr. Doughty: There is a distinction between loss of earnings and loss of faculty. That is the point. I can
  2708
  imagine the case of a man who has lost a leg and yet who is earning as much as his notional pre-accident earnings and, therefore, is not entitled to compensation. That, however, is a different principle altogether.
  In 1946 this House decided to sweep away the old principle and apply a new one to this important question of weekly payments or lump sum payments to men suffering from industrial injury. There were two distinct principles. Instead of the old loss of earnings principle which was based on a man's inability to earn, or to earn so much as he did, and therefore was entitled to have some part of it made up to him, there was another principle whereby a man, regardless of what he was able to earn or was in fact earning, was assessed according to his physical injury and was compensated upon a "hospital" basis.
  The expression used was "loss of faculty". The money was to be paid not out of the employer's pocket but out of a fund to which contributions were made not only by the employer but by the workman as part of his own insurance premium in case he should unfortunately meet with an accident, together with an Exchequer contribution, although that is very small in comparison with the payments made by the workman and his employer.
  Mr. Douglas Houghton: Does the hon. and learned Gentleman think that only one principle or the other is involved—either loss of faculty or loss of earnings? Has he applied his mind to a combination of the two principles, whereby compensation should be paid in appropriate cases for loss of faculty, which is a serious personal and social disability, and for serious loss of earnings, even where the loss of faculty may, from a physical point of view, be a comparatively minor one?
  Mr. Doughty: I can assure the hon. Gentleman that I am going to deal with that subject at some length.
  In my view, compensation for industrial injuries should be based primarily upon loss of earnings, because it is that loss of earning power that a man requires to be restored to him. In the case of loss of faculty, there may often arise a situation in which a man suffers a serious injury which does not preclude him earnning as much as he did before. Under

  2709
  the present Act there are many men who are legally drawing weekly payments in respect of an injury which they have suffered at work, and yet who are back at work drawing as much and sometimes more than they were drawing before the accident. In other words, they are better off because they met with an accident. It may be an anomaly under the Act, but this applies to a very large number of cases. I wonder whether the framers of that Measure had that possibility in mind when they were framing it.
  Because of the difficulty whereby men, having had a small injury, suffered a serious less of earning power, a special hardship allowance was introduced. Having listened most carefully to the proposer of this Bill and to others, it would appear to me—and this is in answer to the hon. Member for Sowerby (Mr. Houghton)—that they are more worried, as I am, about the question of a man's loss of earnings than his loss of faculty. This is a most important question, and it should be tackled by some Government who should boldly say "We have gone too far in the loss of faculty direction, and we propose to restrict it and increase the amount for loss of earnings."
  This is much too wide a question to be dealt with on a Friday on a Private Member's Bill. To restrict compensation for loss of faculty would mean a restrictive Bill, weighting the compensation more upon loss of earnings. I believe that this is really what the supporters of the Bill had in mind. If the onus is shifted from one side to the other, we must reduce the cases where loss of faculty has resulted in a definite financial advantage to the man concerned.
  The old system under which these problems were decided—and there were many such problems—has been swept away. I do not think the new system is nearly as good as the old one. Men have to be refused what they believe they are entitled to, upon grounds with which they do not agree, although those grounds are right in law. All they get in many cases is a piece of paper. I have seen thousands of them, as no doubt hon. Members opposite have. They are very badly written—I cannot think why bad handwriting should be confined to people who are employed under this Act—on rather grubby bits of paper, in language which is difficult to understand even to those
  2710
  who are used to it, stating that the claim is disallowed, either originally or on appeal. From a psychological point of view, I do not believe that that system is anything like so effective as the old system where a man would hear the reasons for the decision either to pay or disallow compensation.
  We have made a mistake in sweeping away that system. I hope that when an amending Measure is introduced, consideration will be given to the advisability of hearing these matters in public, with the Press and the public present, where the matters can be argued out and evidence given by the workmen and others concerned, so that they know the reason for granting or stopping the compensation.
  As I have said, this is much too big a problem to deal with at the moment. We have the greatest sympathy not only for the hon. Member for Barnsley but for the large number of men who are affected one way or the other by this Bill and the original Act. I would, however, draw the attention of the House to one or two matters under this Bill with which I cannot agree——
  Mr. James Griffiths: Would the hon. and learned Gentleman persuade the Minister to accept this Bill and let it go into Committee for discussion?
  Mr. Doughty: I cannot do that. I have already explained that this is much too vast a problem to be dealt with in a Bill of this kind. I have given one reason why I agree that compensation should be weighted upon the side of loss of earnings, and I hope that the right hon. Gentleman was listening. We have gone too far in the direction of loss of faculty. But if we pass this Bill, we must restrict payment to loss of faculty even where loss of earnings is not involved. We cannot have it both ways. I would go further than the mover of the Bill, and perhaps even further than the right hon. Member for Llanelly (Mr. J. Griffiths) and say that we want a Bill which goes further than this and deals with the whole question in a comprehensive manner.
  There are one or two other matters under the Bill to which I wish to draw attention. Clause 1 (1) which increases the compensation to 40s. must be subjected, and the promoter of the Bill did not suggest that it was not, to the over-

  2711
  riding condition that the maximum payment for a single man was £3 7s. 6d., which, I think, has now gone up to £3 10s. 6d. The result of this Bill would be that a man who suffered a slight injury might find himself drawing £3 7s. 6d. a week and a man who was seriously injured would still be drawing only the same amount. It puts the slightly injured man in the same class as a man suffering from a much more serious injury. If we have more money to distribute, in my opinion the people who have suffered the more serious injury, and the widows of people killed in industrial accidents should receive it and not those suffering a lesser injury. That is a direct criticism of this Bill and a reason why I cannot support that particular Clause.
  Mr. J. T. Price: Before the hon. and learned Gentleman leaves that point, may I say that no reference has been made to the fact that loss of faculty of less than 19 per cent. can be compounded by a lump sum under the present legislation? In other words, the weekly payment has disappeared.
  Mr. Doughty: I am obliged to the hon. Gentleman. That is another criticism of the whole of this Bill. In the old days a 19 per cent. disability might well result in full compensation. That and many other criticisms could be made, but I do not wish to weary the House by pointing them out. Clause 2, as was stated by the hon. Member for Neath (Mr. D. J. Williams), was taken from the old 1925 Workmen's Compensation Act——
  Mr. D. J. Williams: I did not say it was taken from that Act. I said the Bill proposed that the general principles of the 1925 Act should govern the payment of unemployment supplementation.
  Mr. Doughty: I accept that that is what the hon. Gentleman said, and there are two criticisms which I make on that statement. First, it was not the 1925 Act but the 1931 Act that introduced those particular exceptions. It was done in 1931 for the good reason that employment was difficult to obtain, and it was done because a man might have an injury which did not prevent him from working but prevented an employer from employing him when the employer had two men, one of whom was a hundred per cent. fit and the other had an injury.
  2712
  Those conditions do not exist today and there is no necessity now to bring in that matter in any form at all.
  Mr. Williams: But they do exist for the seriously disabled, and that is why we have Remploy Factories and Grenfell Factories in South Wales. There is the problem of providing suitable employment for the men.
  Mr. Doughty: There is, of course, the physical disability and loss of faculty which continues at a high rate. But coming back to the other point, whether this should be assessed on loss of earnings principle, the question does not arise.
  I draw the attention of the promoters of the Bill to the fact that one of the most important matters set out in the 1931 Act is not included in this Bill at all, namely, that a man must take all reasonable steps to obtain such employment. Many cases were decided on that very point. In some cases men sat back and did not make reasonable efforts to obtain employment. This Bill does not contain any reference to that and those who copied out the previous Act almost word for word should have gone on and put in the extra words to be found in the 1931 Act.
  Miss Margaret Herbison: Is the hon. and learned Member aware that in many of the mining villages in Scotland even those who are not seriously disabled find it impossible to get a job although they may be fit to take one?
  Mr. Doughty: That is very often true, and each case depends on its own merits. There may be a man who is so seriously injured that he cannot get a job. That is the industrial injuries aspect of the matter, but I do not think that it exists in the case of a slight injury. If a man is injured while working underground, he might be found a job on the surface. In any case, we are discussing the question of earning ability. It may be that a man loses his trade, but is he to be confined to his village or town for the rest of his life? He could leave his valley and go to the nearest industrial town where, I can assure the hon. Lady, he would have no difficulty in finding employment.
  Miss Herbison: Not in the North of Scotland.
  Mr. Doughty: In Scotland on Clydeside; in the Lowlands and on the East Coast. We will not go so far as the Highlands, which is a matter altogether beyond my ken. I should be delighted on a suitable occasion to debate with the hon. Lady the question of the mobility of labour.
  I do not wish to go into the actuarial calculations on the state of the Industrial Injuries Fund so ably dealt with by my hon. Friend the Member for Basingstoke (Mr. Freeth), but I would draw attention to the important distinctions made in the 1946 Bill. One of them was that the risk of accident was no longer a risk on the employer but that it was an insurance matter to which both sides contributed, with Exchequer assistance. The more we have Clauses like Clause 4 the more the Exchequer will be called on to be responsible for the payment of the workers' side of industrial insurance. On the whole, I think that a bad principle. It is a risk which should be borne by the industry in proportion by all those concerned in the industry. Here we have further charges made which I do not believe the Fund can bear.
  We must remember that when it started in 1946, though the Fund had little money, there were also few claims. As the years go on there will be more and more. There will be the residue of the permanent cases, and fresh cases will come along all the time. We must watch this Fund carefully. I do not think it would be right to make the Fund a charge on the general body of the public, that is to say, revenue provided by this House. I think that at any rate we must stick to that principle in the changes made in 1946.
  The important distinction now is that a workman suffering from an industrial accident has the advantage that he can bring an action—in addition of course to the industrial injury benefit he gets—for damages at common law. I do not think I should be wrong in saying that most of them do. A very large proportion of them get both the industrial injury benefit and a sum of money as well. One must remember that when discussing this matter.
  Mr. J. T. Price: I am sure that the hon. and learned Gentleman does not wish to give any false impression to the House
  2714
  in this important matter. I speak from experience of this problem, as he does. I consider that it would be unfair to create the impression that the majority of injured workmen have an alternative claim for damages at common law. There are an increasing number of common law claims because of the removal of the doctrine of common employment, but that does not mean to say that the majority of the men with the injuries which we are discussing have two sets of benefits. I do not think that is true.
  Mr. Doughty: Whether I use the word "majority" or the words "a very large number," the House can take its choice. If the hon. Gentleman objects to "majority," I will use the phrase "a very large number." But whatever our views on this, I am sure that all hon. Members agree that there is something much more important than workmen's compensation and industrial injuries benefit, and that is to see that safety in mines, factories and agriculture are provided.
  Mr. T. Brown: I am rather surprised at the hon. and learned Gentleman raising that point in view of the fact that, although we have been waiting for eighteen months since the recent Mines and Quarries Bill was placed on the Statute Book, those Regulations have not yet been brought forward.
  Mr. Doughty: I am sure that the hon. Gentleman would be the first person to wish those Regulations to have full inquiry and discussion so that when they are produced they are such as can be accepted by everybody. Speed is not the essence of these matters, but accuracy and agreement are.
  Mr. Brown: It is a long time.
  Mr. Doughty: It may be a long time, but the safety aspect is much more important than subsequent compensation.
  The numbers of industrial accidents are falling and the Regulations passed by this House assist very much in that direction. We must watch very carefully and encourage the Government to proceed at the proper pace, neither too fast and certainly not too slowly, in these matters.
  One final word. We ought also to be thankful for the much more successful manner in which the medical profession.

  2715
  owing to its greatly increased knowledge, is, if I may use such a wrong word, helping to "repair" people who are unfortunate enough to suffer industrial accidents.
  For the reasons I have given, I am sorry that I am unable entirely to support the Bill. I think that it should go further. I should be pleased to have a private discussion with the hon. Member for Barnsley because I think I could persuade him that my principle of loss of earnings is better than loss of faculty. I see that he is coming round to that way of thinking, and I believe that between us we could produce a better Bill than the National Insurance (Industrial Injuries) Bill and one which would be fairer and more satisfactory to all workmen who are unfortunate enough to suffer from accidents of this kind.
  1.44 p.m.
  Mr. Bernard Taylor: I rise at this stage only because we on this side of the House are anxious to be as fair, as generous and as reasonable to the hon. and learned Member for Surrey, East (Mr. Doughty) as, up to now, the House has been to my hon. Friend the Member for Barnsley (Mr. Mason).
  The Minister of Pensions and National Insurance has revealed today that a general review of the Industrial Injuries Act ought to have taken place before now. In my view, the controversial points which have arisen between the two sides of the House are an indication that at the earliest possible moment this business should be debated from its wider angle instead of on the restricted conditions laid down in this Private Member's Bill. We would welcome the opportunity of looking at the Industrial Injuries Act in a wider sphere than is permitted by this Bill today.
  The hon. Member for Basingstoke (Mr. Freeth) commented on the cost of the benefits, but it appeared to me that the whole of his actuarial and financial argument was based on the present rate of contributions. I do not accept his premises at all. When on the two or three occasions since 1948 the benefits under the National Insurance Act have been increased, the Minister has always proposed a change in the rate of contributions. I am sure that when the hon. Gentleman spoke about the sum of £2½ million, or anything up to £5 million, he
  2716
  overlooked one thing. I would remind the House that during the past three or four years the Industrial Injuries Fund has taken on liabilities which squarely and properly rested upon the old employers.
  I wish to refer, first, to the pre-1924 cases. I will not go through the whole gamut of that because it would take up more time than I wish to occupy this afternoon, but the fact is that those cases were and should have been the liability of the old employers under the Workmen's Compensation Act. But nothing was done and it appeared that nothing was likely to be done. In an effort to ease the burden which these people were carrying and to improve their standard of life, certain increases in benefits were made which fell not upon the old employers whose liability it was, but upon the Industrial Injuries Fund.
  Then we get the time-barred cases as far as pneumoconiosis and other industrial diseases are concerned. Pneumoconiosis contracted before 1948 was the liability of the employer. But in an effort to bring some easement to these cases, the liability was placed on the Industrial Injuries Fund. I make no complaint about that. Indeed, I supported the proposal because I thought that it was right. I am only pointing out that the Industrial Injuries Fund today is carrying liabilities which, if they were put in their right place, would be borne by the old employers under the Workmen's Compensation legislation.
  I was disappointed with the speech of the hon. Gentleman. I think that it would have been quite a proper speech to make had we been discussing the wider aspects of the Industrial Injuries Fund. The hon. Gentleman did not say a word about the merits of the proposal embodied in this Bill.
  I am sure that the hon. and learned Member for Surrey, East is very sincere in what he says, but there is no doubt that there is an acute difference between the hon. Gentleman and myself respecting the principles upon which compensation legislation was based and those with which the Industrial Injuries Act is concerned. I hope that the Parliamentary Secretary will bear in mind the need for adequate time to be given so that we can fully discuss these controversial and somewhat complicated questions.

  2717
  The hon. and learned Member mentioned that under the old workmen's compensation legislation the financial liability was laid entirely upon the employers. That was generally the case, but I know of one industry where it was not, and where things did not work out in practice as the hon. and learned Member would have the House believe. I should like to take the mining industry as an example in making a brief comment upon this point. In that industry, before nationalisation, 87 per cent. of compensation costs were borne, indirectly, by the workers. The situation was not as the hon. and learned Member made it out to be.
  He raised another interesting point—one which always captivates my imagination and fascinates me. He mentioned the question of damages at common law. He knows as well as I do that before 1948 it was not easy to obtain damages. It might have been quite easy to provenegligence——
  Mr. Doughty: A man was then stopped from bringing a common law action for damages if he had accepted workmen's compensation, but that difficulty has been removed. He can now receive industrial injury benefits without being stopped from bringing an action at law.
  Mr. Taylor: Yes. That was a very unsatisfactory feature of the situation at that time. A man had to choose either one or the other. He now has the opportunity of acting on both counts.
  I was just going to point out that, before 1948, while it was not difficult to prove negligence, it was very often the most difficult job in the world to surmount the hurdle of the doctrine of common employment. It is to the great credit of my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) that he appointed a committee to inquire into this question, and accepted its recommendation that this iniquitous doctrine of common employment should be swept away.
  Thousands of people have benefited as a result. I will give one example for the enlightenment of the hon. and learned Gentleman, if that is necessary. Four years ago, in the area from which I come, a terrible accident occurred at Creswell Colliery. That accident, which must still be fresh in the minds of many people,
  2718
  resulted in the loss of 80 lives, and the widows and dependants of the victims received benefits under the 1946 Act. Without litigation, the National Coal Board accepted liability for negligence. I am quite certain that before the abolition of the doctrine of common employment those widows and dependants would not have received a penny, whereas almost £250.000 in damages was paid to them.
  I should be ungenerous if I did not join with those who have congratulated my hon. Friend the Member for Barnsley in his success, first in the Ballot—because that is a rare privilege—and, secondly, upon the choice he has made, in bringing forward a Bill which seeks to improve the standard of living of those who have been the unfortunate victims either of industrial accidents or industrial disease since 5th July, 1948.
  I had proposed to say something about the different principles of workmen's compensation legislation and the 1946 Act. I shall confine myself to two or three main points. First, under the 1946 Act something novel took place—an insurance fund was provided, to which the State, the employees and the employers had to contribute. There might be differences of opinion about that, but it is now a fact. Entitlements to benefit were based upon entirely different principles, not only in the initial stages of incapacity—'that is, the first six months— but also after that time if the disability was either of a prolonged nature or turned out to be of a permanent character. That is where the point of difference arises.
  While the hon. and learned Member was speaking I was reminded of another important point. The Act took outside the courts, and away from litigation, the question of workmen's compensation. That has been a sizeable economy not only to trade unions, but to industry. With the possible exception of Section 14, the 1946 Act bears no resemblance to pre-1948 workmen's compensation provisions. I am very pleased to have been identified with it. It is a complete departure, and I am satisfied that, apart from the anomalies which experience has revealed, trade unions and workers in general would much prefer to have a scheme based on conditions of the present kind that those of the pre-1948 kind.

  2719
  I remember that in 1946 there was general agreement in this House—though the hon. and learned Gentleman may have called a Division on his own and voted against the Bill—and with the good will of the trade unions a new chapter was begun, on 5th July, 1948. After more than seven years' experience there can be few persons—the hon. and learned Member is one of the few—who would advance arguments for a return to the principles of pre-1948 compensation legislation.
  Further, I am quite certain that the trade unions would prefer to base benefits upon loss of faculty, although admitting that due regard must be paid to loss of earning power. This is where a review of the Act would be very profitable, because the problem at present is to find a method of marrying two opposing principles under workmen's compensation legislation and the Industrial Injuries Act, namely, loss of faculty and loss of earning capacity.
  Mr. Doughty: That is exactly what I said. We want to combine the two. Will the hon. Gentleman agree with me that we cannot have both, but that we have to plump for the one or the other?
  Secondly, he said that except for myself nobody wants to go back to the old system. That is a further question, but would he agree that, apart from myself, there must be a very large number of workmen as well who would like to know otherwise than by being given a little piece of dirty paper informing them that a decision has been arrived at behind their backs?
  Mr. Taylor: No, I do not accept at all the suggestion that there are large numbers of men who would prefer to go back to the system of the pre-1946 legislation, but I hope the Minister will take note of this problem. Let us have a debate upon it and ventilate our views, to see whether we can marry these two opposing principles, so that one set of men will not be at a disadvantage as compared with another.
  The first Clause of this Bill is concerned precisely with the bridging of the gap between pre-accident and post-accident earnings and narrowing the difference that now exists, especially in the cases of those with minor disablements who have very low assessments. If I
  2720
  could interpose a suggestion here, may I say that, in my view, the time has arrived when we should look at the question of the assessments themselves.
  The Bill, however, is concerned particularly with those people with minor disablements and low assessments who are unable to return to what the old compensation legislation described as the pre-accident work and which this Bill described as their regular occupation. I agree with my hon. Friend the Member for Bedwellty that it is a very modest proposal to raise this maximum of 27s. 6d. a week to 40s. It is not a large increase, and I would say to the hon. Member for Basingstoke that it will not in any way bring ruin, as he implied, to the Industrial Injuries Fund. It will bring those people who are on assessments of 10 per cent., 20 per cent. or even 30 per cent. into line with those who, under the workmen's compensation provisions, are receiving the maximum benefit for partial disability.
  We cannot defend the present 27s. 6d. on the ground that there are people getting less than the maximum, as, in fact, there are. Indeed, there are people who are right down to zero. We all know that there are men who have lost an arm or a leg, and there are men who are suffering from acute major disabilities, because they were unfortunate twice; first, unfortunate to have an accident. and, secondly, to have that accident at a time when wages were low or working time was bad. Many of these men are not receiving a penny under the workmen's compensation provisions, and, in my view, that is a great shame. That is also one of the reasons why I am anxious that we should have time to discuss the Bill which is to be debated after this one.
  The Industrial Injuries Act was a new concept and a new approach to this great human problem in an effort to help the unfortunate victims of accident and industrial disease, and particularly those who were likely to get an assessment below 60 per cent. If I had the time, I could give quite a lot of examples of such cases, but I will leave that matter for another day.
  I have been reading the latest Report of the Ministry of Pensions and National Insurance, which is a very interesting and illuminating, though very statistical document. I am sure that we should all agree.

  2721
  whatever differences we may have on these matters, that this problem of disablement by accident and industrial disease is something more than a statistical problem. It is a great human problem. At the moment, there are 106,000 beneficiaries receiving disablement pensions, and about 50 per cent, of them are in receipt of the special hardship allowance.
  I notice that about three-quarters of those 106,000 who are in receipt of disablement pensions are assessed at 30 per cent. or less, and that is one of the reasons why I think the question of assessments should be re-examined. It can be seen at a glance that a large number of these people with low assessments, and their counterparts under the workmen's compensation system, are at a decided disadvantage. This situation is causing irritation and dissatisfaction, particularly in those areas where heavy industry is located.
  The attempt to increase the special hardship allowance is not new. In 1954, in a Committee upstairs, my right hon. and hon. Friends and myself discussed this very figure, and proposed at that time that the special hardship allowance should be increased to 40s. We thought that it was inadequate then, and if it is true that it was inadequate then, it is most certainly inadequate now. The proposal was rejected by the then Minister, who has now gone to another place, and for whom we have a great respect. He advanced arguments for rejecting that proposal which, I thought, were fallacious, and we told him so.
  I have a hope that the present Minister is in a more receptive frame of mind on this point and will say, "Yes, I accept the proposals embodied in this Bill." This is a long overdue improvement, which will be welcomed by the trade unions and the unfortunately disabled, particularly those with low assessments, whose earning capacity has been impaired and who are unable to return to their normal occupation.
  I now come to the question of the unemployability supplement. This is the rarest of the benefits payable under the Act. There are only 410 unemployment payments and supplements being paid and 70 per cent. of those are old workmen's compensation cases. The Bill contains
  2722
  only two very simple proposals. After seven years' experience of the Industrial Injuries Acts, we say that there should be no limitation, no qualification; that where a person is unable to obtain employment—and this was the point made by my hon. Friend the Member for Neath (Mr. D. J. Williams)—as a result of the relevant injury, he should be able to elect to apply for the unemployability supplement. He cannot then have hardship or sickness allowance, unemployment benefit or retirement pension, but if, for reasons best known to himself, he elects to take advantage of the unemployability supplement we say that the conditions should be no more onerous than this— that if it is proved that he is unable to obtain employment he should have that benefit.
  May I remind the Parliamentary Secretary that this is the only earnings rule, limitation or benefit—call it what one will—that has not been raised. The earnings rule for old-age pensioners has been lifted. Even hon. Members opposite were arguing a fortnight ago for an increase in that rule—and I agree with them. The earnings rule for the widow and the widowed mother has been increased. In 1946, £52 had a much greater value than it has today. We are asking that that ceiling of £52 unemployability supplement shall be increased to at least £104.
  I hope that the House and the Minister will give sympathetic consideration to this Measure and that we shall be given an opportunity of discussing it in Committee. If we can succeed with the very modest proposals of the Bill I am sure that the House will have earned the gratitude of those unfortunate people who are disabled either by industrial accident or industrial disease.
  2.13 p.m.
  Mr. Anthony Kershaw: Like others of my hon. Friends, I welcome the spirit behind this Bill and, if I may, would like to congratulate the hon. Member for Barnsley (Mr. Mason) for the moderate and skilful way in which he put forward his proposals. All hon. Members will have a special respect for the knowledge with which so many hon. Members opposite speak on this subject, the more especially because miners comprise the great majority of those receiving industrial injury benefits.

  2723
  On this side, therefore, we very much appreciate the very special knowledge of hon. Members and the care they have towards their constituents and those who have been so unfortunately injured. I hope it will be believed that we, on this side, appreciate just as much as do those who are in daily contact in their constituencies with those tragic cases, the human problems which are involved.
  Having said that, I must add that I cannot support this Bill. I believe that its purpose is good but, in its detailed provisions, it attacks a very wide problem. As the hon. Member for Mansfield (Mr. B. Taylor) has said, it is perhaps time that we had a broader discussion and review of the whole industrial injuries situation, but if that is the case I think it would be possibly not to the advantage of the industrial injuries financial structure itself that there should be this more or less piecemeal attack on just one or two points.
  The hon. Member for Mansfield thought it very desirable that one set of men should not acquire some advantage over another set. I think that the Bill, however good the spirit behind it—and it is a good spirit—falls into that very error. It would set one section of a community, however deserving—and one section of people who are covered by industrial injuries provisions—at a temporary advantage over other sections. [HON. MEMBERS: "Shocking."]
  Hon. Gentlemen opposite say, "Shocking." We all want industrial injuries benefits to be as high as possible, but hon. Members will be at one with me, I am sure, in thinking it best to deal with this problem as one so that all categories deserving attention may be dealt with at the same time, rather than to impose small lifts here—which call for small alterations there—and so tinker with the whole of the present system. The piecemeal approach throws slightly out of balance the whole industrial insurance structure which we all support.
  Clause 1 (1) proposes that 40s. shall be substituted for 27s. 6d. Although no one could say—and I do not entirely agree with my hon. Friend the Member for Basingstoke (Mr. Freeth)—that that is likely to bring down in ruin our industrial injuries insurance set-up, there is a defect—perhaps not a large one, but still a defect. The persons who are to
  2724
  benefit by that increase to 40s. are not those who are in receipt of the full disability pension. They are not those who deserve, presumably, because of the severity of their injuries the most from us.
  The people who are to benefit are the less seriously injured. As the hon. Member for Neath (Mr. D. J. Williams) has pointed out, it is those with less than 60 per cent. disability who will benefit. If we are to make an alteration—and at the moment I am not arguing that an alteration should not be made—surely it would be better to do so in such a way that those who deserve most get most.
  I suppose that the hon. Gentleman the Member for Barnsley would have wished also to have made a proposal about the upper limit of 67s. 6d. I am not very expert in the rules of order of this House and it may be that the rules of order governing private Members Bills precluded his suggesting anything in that regard. However that may be, the Bill certainly makes the situation more anomalous while that 67s. 6d. remains the ceiling.
  If an alteration is to be made in the payment to those less seriously injured consideration should, at the same time, be given to that top limit. Whether the Bill does not deal with that top limit because of the rules of order I do not know, but the omission is a defect, if it cannot be surmounted because of the rules of order then I think that the House should look at it all the more closely.
  We have had some discussion about the distinction between loss of faculty and loss of earnings. I thought we all were agreed that loss of faculty is the basis upon which industrial insurance should proceed. I did not realise that my hon. and learned Friend the Member for Surrey, East (Mr. Doughty) was of a contrary opinion. In 1946 and 1948 the principle of industrial injury insurance was made loss of faculty. I thought hon. Members in all parts of the House were agreed about that. At the same time, provision against loss of earnings was made to some extent by the very necessary alteration in the law to make it possible for the workman to accept industrial injury benefit and still go to common law; and almost at the same time the doctrine of common employment was done away with. That made

  2725
  his progress under the common law infinitely easier.
  Nevertheless, it is obvious that loss of earnings has some relevance, and it was to compensate for that, that the special hardship allowance was brought in. There are many cases, in addition to the classic ones of the compositor's finger and the engine driver's eye, in which the loss of faculty provision does not compensate for the pain or for the social hardship the man suffers. That was why the special hardship allowance was brought in.
  I have read many of the speeches which the right hon. Gentleman the Member for Llanelly (Mr. J. Griffiths) made at that time, and it seems to me that it was accepted then that the loss of earnings was not the proper basis on which to proceed, and that the special hardship allowance was not intended to be the substitute for it, but that it was meant to be only some alleviation, to help the man who suffered hardship and could not go on loss of earnings at common law.
  If that was the basis of the National Insurance (Industrial Injuries) Acts of 1946 and 1948, then the Bill will alter it by bringing back the basis of loss of earnings. As the special hardship allowance goes up it obviously becomes a more substantial recompense for loss of earnings than it is at the moment, and if the loss of earnings in 1948 was a false basis for industrial injury it is a false basis today, and the more special hardship allowance goes up—and I am not saying that it may not be right to say it should go up—the more we affect the basis of our industrial insurance. I suggest, therefore, that that sort of alteration—and it is an important principle about which I am talking—is one which really should not be made on a Friday by means of a Private Member's Bill.
  By Clause 1 (2) and (3) the Bill does away with the permanent and also the continuous conditions to qualify for special hardship allowance. In 1946 there was only the permanent condition, but it was rightly judged the permanent condition did not meet the position at a time when modern methods of rehabilitation are being studied and doctors are unwilling to certify that a man is permanently prevented from following his employment. That has a bad effect upon
  2726
  the man very often. Moreover, it is medically difficult to assert. Therefore, the continuous provision was added in 1948, so that if the man had been continuously unfit since his accident he did not have to show that he was permanently unfit.
  As I understand the provisions of the Bill, the proposal is that there should be no time limit for the application which he may make for special hardship allowance. That would surely cause very great administrative difficulties. These injuries last for many years. A young man who is injured is able to carry on with his employment, but the old injury returns as he reaches middle age. It is medically difficult to decide whether his later inability to work is due to an accident many years ago.
  After all, one of the things which— my hon. and learned Friend the Member for Surrey, East mentioned it—compensation for injuries should be is quick. If correspondence with a man's former employers has to be undertaken, and with the man himself, and the old medical certificates have to be discovered, and if all that sort of thing has to be done, to precede an award of a special hardship allowance, it will bring such awards into disrepute, cause men to disbelieve in them, will arouse irritations for all concerned, and will also cause expense in administration. Thus there is this defect in the Bill, and it is one which cannot very easily be defended.
  Certainly, one result of the Bill would be immensely to increase the numbers of applications for special hardship allowance. Of that there can be no doubt. It is true that applications for special hardship allowance are today causing as much trouble as any other part of the insurance law. Almost half the applications to the commissioner, appeals against assessments of various sorts, concern special hardship allowance, although there are comparatively few people, compared with the number of those who make claims, who are concerned with the special hardship allowance. The appeals to the commissioner are half as many again as the number of appeals which arose because of that phrase in the old workmen's compensation law "out of and in the course of his employment."

  2727
  We all know what a bugbear that phrase was. There are shelves in the Library of the House groaning with the load of books which deal with nothing but interpretations of the phrase, "out of and in the course of his employment." This fledgling, the special hardship allowance, is already threatening to become a greater bugbear than that. If that is to be the case, while I do not say that, just because it is difficult, that is an overwhelming reason why no solution should be attempted—that would be quite wrong—I do say that we ought to go slowly and regard very carefully this process which will certainly increase the numbers of applications under this already difficult point of law.
  I have here some of the decisions which have been given. Although I am supposed to have some knowledge of the law, I can tell the House that some of these decisions seem to turn on the very finest points. There is one of a platelayer's being entitled to special hardship allowance because he was obliged to take an examination to become an engine driver; whereas a steel worker, who worked in almost exactly the same conditions and would certainly have been promoted in his gang on completing a certain number of years' working, because he did not have to take an examination, does not get the allowance. I am quite certain that the steel worker would feel very aggrieved if he knew that, though he was working in exactly the same conditions as the other man, he was not entitled to the special hardship allowance while the other was.
  These fine legal distinctions do not grace any law which has to do with hardship and injury, and it is a defect of the Bill that it would bring about a situation in which a man's future depends upon legal distinctions which he cannot understand, which probably he does not appreciate, and which he will certainly think unfair. That should cause us to consider it very carefully.
  The hon. Member for Bedwellty (Mr. Finch) said, with much truth, that one of the effects of the Industrial Injuries Act and the special hardship allowance, in particular, was to penalise those anxious to carry on with their regular employment, because when they went back to work for two, three or four months and then had to give up because
  2728
  of their old injury they forfeited their chance to have the special hardship allowance. That was not precisely accurate, although with the broad terms of what he said I must agreed.
  I would point out that in 1952 a change was made so that an appeals tribunal could disregard the regular employment carried on pending hospital treatment. That is a fairly important distinction because some industrial injuries, such as hernia, cannot, in many cases, be operated upon immediately, and it is possible for a man to follow his regular occupation while waiting for an operation; and that is not held against him when he applies for special hardship allowance.
  In 1953, the period during which a man might follow his regular employment, without any difficulty being raised, was changed from three to six months. It is not a question, as the hon. Member for Bedwellty said, of three or four months; it is, in fact, six months. The result is that any regular work entered into by the man on medical advice or with the consent of the Minister is always disregarded.
  Finally, if he does have to give up his regular employment and becomes permanently unable to follow his regular occupation, the fact that he had returned to his regular employment is no bar to his receiving a special hardship allowance. It is, therefore, to some extent true to say that the person who is determined to get back to his regular work is not so harshly penalised, as the hon. Member for Bedwellty seemed to think. I do not wish to imply by the use of the words, "seems to think," that the hon. Member does not know about these things, because, of course, he does. But those are facts and it is not quite such a hardship as he painted for the House.
  Another point in principle is raised by the proposals in subsections (2) and (3) of Clause 1. If the benefits are to relate to a large extent on loss of earnings, we come up against the question whether a flat rate contribution in the insurance field is still possible. One point which has to be considered is that in some occupations and professions, more especially those in the countryside far from manufacturing towns, the standard of pay and wages is lower than in others.

  2729
  If a man who pays his contributions and who lives in an agricultural district, is to get fewer benefits if he is injured than the man who lives and earns satisfactory wages in a steel area or an area where there is light industry, this raises the principle whether his contributions should also be lower during the time that he contributes. That is a point of principle of great importance, and this, surely, is not the time—and this is not the Bill —when we should consider bringing it into our insurance law.
  I should like to say a word or two about the unemployability supplement, the terms of which are to be altered in Clause 2 (1). This introduces so large a change that it is almost a point of principle. It introduces what is substantially unemployment benefit into the industrial injuries set-up. That is a thing which we should not do without very careful consideration. As was pointed out by my hon. and learned Friend the Member for Surrey, East, the difference between the words which have been used in Clause 2 (1) and those used in the old Workmen's Compensation Act, 1931, is that if, under the new proposal, a man is out of work and not able to get work, under the terms of the Bill he does not have to show that he has taken reasonable steps to get his job back, or get work of any sort.
  I know what the difficulties are. The hon. Lady the Member for Lanarkshire, North (Miss Herbison), who is no longer in her place, raised this matter when she said that this was designed to deal with the miner unable to carry on heavy work and for whom there was no light work available in the immediate vicinity. I know that this situation is more serious in mining villages than in any other part of the country. I have great sympathy with hon. Members who sit for mining constituencies and have these difficulties brought before them every weekend when they return to their homes.
  But is this a provision which can really be defended as a principle of insurance law applying to everyone in the country? Will the country think it right that there should be no necessity for a man to prove or to show that he has taken reasonable steps to get employment and that, although he need not do so, he should be paid on the basis of his employment when he was injured? I am not sure that, except in the special areas such as the mining areas, the country
  2730
  as a whole would feel that this was entirely the way to test a man's ability to get work.
  It raises a danger. One of the reasons that the old Workmen's Compensation Act fell into disrepute was because it came under suspicion by large numbers of the population. Working people were not happy about it. They felt that the lawyers, as had been said, today were putting too much money in their pockets as a result of it. If the Industrial Injuries Act, which now commands the general support of almost everyone in the country should have imported into it an important change like this by means of a Private Member's Bill, that might seem to suggest to some that public money was being given away without care. This could bring into disrepute some of the provisions of the Act and might, in the end, have a harmful effect on those covered by it, and who now enjoy its benefits.
  I suggest that this Bill makes several suggestions of alterations of principle to our insurance law. It seems to me that it is not designed to help those who need help more than any other—the more seriously injured. It may be that that is not the fault of the promoters of the Bill, but that is the effect of the Bill. It contains points of principle which will to a large extent alter the basis upon which industrial insurance proceeds and upon which, I understand, hon. Members were, by and large, agreed in 1946 and 1948. If those principles are to be altered, I suggest that they should be altered by a general review such as that proposed by the hon. Member for Mansfield (Mr. B. Taylor) and not piecemeal and little by little as proposed in the Bill.
  2.41 p.m.
  The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Edith Pitt): It may be for the convenience of the House if I intervene now, although I do not want to preclude any hon. Members from either side from contributing to the debate later. [HON. MEMBERS: "But we do."] May I first say a word of explanation? I know something about industrial injuries from my previous job as a factory welfare officer, when it was part of my duties to try to help the men injured at work and their families. I can remember the electrician who, when repairing an over-

  2731
  head crane, misunderstood a signal, grasped the live wire and was hurled to the floor of the shop, suffering such dreadful spinal injuries that he was paralysed from the waist downwards. I remember, too, the efforts which many of us made to encourage him to take up some occupational therapy to fill the long hours at home when he sat in a wheelchair.
  Next, I remember the man whom I myself drove to hospital after he had suffered an eye injury. He was loading a lorry, slipped and struck his eye on one of the uprights of the lorry. He was dreadfully injured. I shall not easily forget the journey, during which I plied him with cigarettes and tried to give him a little confidence. When I had taken him to hospital, rushed him through casualty and the sister had removed the temporary bandages, I said to him, "Can you see that chart?" When he answered that he could, I said, "It is all right. They will save your eye. Try not to worry any more. They can repair the damage which has happened round the eye." His immediate reaction, which hon. Members will understand, was, "I am not staying here in this hospital. Who will look after my wife and kids?"
  I can remember the man who had a leg smashed when a bundle of tubes fell from a crane. He recovered and was able to go back to his work, but he was never able to walk quite the same. I can remember—and this is the last example which I will quote—another man who suffered an eye injury because in setting up a die in a jig he struck it with a hammer and a foreign body entered his eye. When I saw him in hospital and talked to him about it he said, quite cheerfully, "I know I was stupid. I know I ought to have used a rawhide hammer, but I used my ordinary fitter's hammer. "This is a regular factor which hon. Members will appreciate—the familiarity which so often leads to industrial accidents.
  I cannot claim any experience of injuries in the mines, such as that which I know many hon. Members have and which, I think, as the debate has shown, largely actuates the sponsors of the Bill, but I hope I have said enough to show that I have some understanding of the problem which we are discussing.
  2732
  It often seems to me that industrial injuries insurance is still too little understood. My own experience has been that the workman who suffers an injury at work not unnaturally feels that he should be entitled to compensation for any loss of earnings caused by the injury. His reaction is that, through no fault of his own, he has been involved in an accident and cannot earn as much as he did before, and that somebody ought to make up the loss.
  I can well understand this feeling, although it is not one which I share. This is the theory of the old workmen's compensation, but in recent years there has been a considerable change in our approach to industrial injuries, as has been emphasised over and over again in the debate, and the old conception of compensation has come to be changed, regarded as out of date and replaced by a scheme of industrial injury benefits based on loss of faculty. I will later remind the House of some of the history of this change which, I would add, was accepted by all parties, but it is important to try to keep it quite clear now, because it is the basis which we ought to have in mind in considering the Bill.
  I welcome the opportunity which the debate gives us of reminding ourselves of some of the principles which shape the Industrial Injuries Scheme. It will help, I think, to establish the modern conception of compensation for lack of faculty. That conception, I believe, is growing; it is becoming acceptable. Nevertheless, it still needs to be more widely understood, not just by those who are concerned with the administration of the Acts but by the man affected by them—the workman at the bench. Certain words and phrases used in connection with disablement benefits need to be explained, and I think I cannot do better, in trying to explain them, than quote words used in the handbook for medical boards:
  "Loss of faculty means the partial or total loss of the normal use of organs or parts of the body, or the destruction or impairment of bodily or mental functions, and it is to be taken as including disfigurement, whether or not accompanied by any actual loss of faculty. Disablement means the total of the disabilities suffered, that is, the aggregate loss of health, strength and the power to enjoy a normal life."
  The history of the changed approach to industrial injuries has been touched

  2733
  on by other hon. Members. I do not want to elaborate it, although I am glad to emphasise it. It begins with the Coalition Government White Paper of September, 1944, as the hon. Member for Barnsley (Mr. Mason) said. In fact it did not really begin there, except on paper, because much thought had been given to the matter and a growing body of opinion had been building up before that date.
  The case against the former workmen's compensation principle of paying for loss of earnings was accepted by the Coalition Government of that time, an acceptance continued by the Labour Government which followed and which was responsible for introducing the National Insurance (Industrial Injuries) Act, 1946. When the 1946 Bill was being debated, however, it was not thought possible to have an industrial injuries scheme which rested solely on the principle of loss of faculty without any regard to the effect of an injury on earnings capacity.
  In what I think can properly be described as a concession to the old idea, to the principle of compensation for loss of earnings, a special hardship allowance—tax free incidentally—was introduced at the Committee Stage of the Bill. Its purpose was to add to the basic disablement pension—that is, the loss of faculty payment—in those cases Where an injury might be slight but had a disproportionate effect on earning capacity. The two classic cases have already been quoted today, as I imagine they have been quoted on every occasion on which this subject have been debated. I will content myself by saying that the example has already been given of the workman whose skill lies in his hands, and for whom the loss of a finger may be enough to mean a change to an alternative. inferior occupation.
  This brings me to the purpose of Clause 1 of the present Bill, which is designed to alter the operations of the special hardship allowance. Subsection (1) proposes to raise the maximum allowance from 27s. 6d. to 40s. I ought to emphasise that the 27s. 6d. rate became payable as recently as May last year. The figure originally was a flat rate of l1s. 3d. when the concession was introduced in the 1946 Bill, to which the hon. Member for Barnsley referred. It was amended to a scale sliding up to 20s. by the 1948 Act. In referring to
  2734
  that change the hon. Member for Barnsley did not say that there was also a change from the flat rate to a sliding scale. And if there was any substance to his argument that 20s. was too low, then by reason of the fact that it was an experimental figure, I wonder why the supporters at that time agreed to 20s. on a sliding scale, if they did not visualise that there were certain cases where less than 20s. would compensate for the loss of earnings factor.
  To increase the present 27s. 6d. to 40s. really means emphasising the old principle of compensation for loss of earnings, at the expense of the new principle of compensation for loss of faculty. It must be emphasised also that special hardship allowance really relates to loss of regular occupation, although loss of earnings is a convenient financial yardstick for measuring that.
  A further argument against the proposal is that if it were accepted the greatest benefit would go to the people the least seriously disabled. A man involved in an industrial accident may qualify for disablement pension up to a maximum of 67s. 6d. If it is a less serious accident, he benefits proportionately, that is to say, he receives either a gratuity or a percentage allowance which may be anything from 20 per cent. upwards to the full 100 per cent. rate of 67s. 6d.
  If, in addition, he is granted special hardship allowance, that, and his disablement pension together, may not exceed the maximum of 67s. 6d. It follows, therefore, that if the 27s. 6d. hardship allowance were to be increased to 40s. the higher rate would in general benefit the less seriously disabled, and would not help those whose assessment of disablement pension was already within the 60 per cent. to 100 per cent. range.
  To give an example of what I mean, a man assessed at 40 per cent. would receive 27s. disablement pension. To add 40s. special hardship allowance to that, as this Bill proposes, would bring him to 67s., which is 6d. short of the maximum. So that anybody above 40 per cent.—that is to say, a man assessed at 60 per cent. —would get nothing more than he does now, even if the figure were raised to 40s. Even if the fund were in a position to carry further liabilities, surely the view ought to be taken that it is the more, rather than the less seriously disabled who should have first claim on it.
  Mr. J. Griffiths: I do not want to interrupt the hon. Lady unduly, and I can see the point of her argument, but she will remember that we pressed her right hon. Friend to raise the basic rate. If that had been done her present argument would have no validity.
  Miss Pitt: I take it that the right hon. Gentleman means the basic rate of the disablement pension?
  Mr. Griffiths Mr. Griffiths indicated assent.
  Miss Pitt: But special hardship allowance would still operate on the sliding scale, so that there would still be the adverse effect on the man more seriously injured. That seems to me to be logical. The effect of this proposal would be to raise the total annual cost of the special hardship allowance from about £5½ million, which it is at present, to about £8 million, which is the answer that my hon. Friend the Member for Basingstoke (Mr. Freeth) invited me to give.
  Mr. J. T. Price: I have been trying to follow the argument which the hon. Lady is putting to the House, but she is missing the whole point of this debate. Comparisons have been made this morning of the present situation of the partially disabled person as compared with that of a similar disabled person under the old Workmen's Compensation Act. In essence, the point put to the Front Bench is that under the old dispensation a partially disabled person who could show that his partial disablement was causing him to be unable to get suitable employment was often in a position to draw full compensation under Section 194 of the Workmen's Compensation Act. It is because these partial cases today are relatively less favourably treated than formerly that the need has arisen to increase the margin open to these people by way of partial compensation. I wish the hon. Lady would deal with that point.
  Miss Pitt: The hon. Gentleman is anticipating the latter part of the Bill dealing with unemployability supplement.
  Mr. Price: Not at all, I am dealing with hardship allowance.
  Miss Pitt: Again, I think that my hon. and learned Friend the Member for Surrey, East (Mr. Doughty) made the
  2736
  point when he said that employment conditions in the years between the wars were so vastly different from what they are now that more emphasis was placed on the man who was disabled and, for that reason, unable to get work because, if the employer had the choice of two men, he would take the one who was fully fit.
  To come back to the question of cost, hon. Members will remember the figures I gave, and if they will compare these with the present annual total cost of the disablement benefit, which is around £13½ million, it will be seen how far the present proposal represents a return to compensation for loss of earnings instead of the main purpose of the Industrial Injuries Scheme. which is compensation for loss of faculty.
  The hon. Member for Barnsley, in introducing this Bill, said that we ought to give the Act stability by increasing the loss of earnings benefit. I think, however, that he and other hon. Members will realise how out of proportion the operation of the Scheme would become. I could not regard it as stability if more and more emphasis were to be put on the special hardship allowance instead of compensation for loss of faculty, which is the main purpose of the Act. The proposals would be a step backwards towards the old loss of earnings principle. We should not consider them without a thorough re-examination of the basis and working of the Industrial Injuries Scheme.
  Subsections (2) and (3) of Clause 1 propose to alter the conditions for the award of special hardship allowance. They are at present either that a man must be permanently incapable of following in his regular occupation—that is what we call the permanent condition—or that he continues to be unable to follow his regular occupation after the injury benefit period has ended; and that period can last for as long as six months. The latter condition is called the continuous condition.
  It seems from the debate that it is in the minds of the supporters of the Bill that the continuous condition appears to operate severely. Hon. Members opposite are thinking of the man who is a trier, who goes back to his old job and then breaks down. I should like to explain that when a man has resumed

  2737
  his regular occupation and continues in it, even for a very considerable time and then has a breakdown, he can still qualify for the hardship allowance on the permanent condition.
  This answers the hon. Member for Bedwellty (Mr. Finch) who said that a man might return to his job, and seven or eight months later have a breakdown and could then not qualify for the special hardship allowance. That is not correct. The man may apply for the allowance at any time, no matter how long after the injury occurred. The one condition that he would have to satisfy is that his incapacity to earn at his old rate was related to his industrial injury.
  Mr. Finch: Might I try to clarify the position? We do not want any misunderstanding about it. If the hon. Lady will give an assurance that she will issue instructions accordingly in respect of people who return to their former employment for a period of five or six months, I shall be most pleased to accept her statement. I have details of dermatitis cases in which men have originally been given an injury benefit and have later been given disablement benefit, obtaining a pension of 5, 10 or 20 per cent., have continued at their employment for five or six months, have then failed, and, upon returning to the medical board, have been given, probably on a provisional assessment, a higher rate of benefit. Actually, the amount of benefit is immaterial. According to the national insurance officers, such persons cannot receive the hardship allowance. I wish to challenge that. If the hon. Lady can tell me that there is something erroneous about it, and that such men can receive the hardship allowance, hon. Members will be most pleased to hear it.
  Miss Pitt: There is no need for me to give an undertaking. That is how the Act operates now. If a man can prove that he is permanently unable to follow his old occupation, he qualifies for the allowance on the permanent condition.
  Mr. Finch: Medical boards cannot, technically, say that a condition is permanent. The point is that a man may be assessed as provisionally incapable of a certain amount of work. The man may get worse, but the medical board will
  2738
  not be prepared to say that he is suffering from a permanent condition. Consequently, the man may continue for four or five years on provisional assessments. He will probably be told "From time to time we have increased your assessment. We do not say that your condition is permanent. There is still hope of recovery." All the time the assessment is provisional, and meanwhile there is no special hardship allowance for the man.
  Miss Pitt: I can well understand a medical board giving a provisional assessment—I was about to deal with the point —because it would, surely, be very hesitant about certifying a man as permanently incapable of following his regular occupation if there was any chance that he could be restored by rehabilitation. Inded, it would be rather damaging to the man himself to be shown as permanently incapable if there was any prospect of restoring him.
  The scheme recognises that it is often not easy to decide whether the condition of permanent disability is satisfied comparatively soon after the accident and that doctors may hesitate to certify a man as permanently incapable of his regular work. It was for this reason, and not with any intention of paying the allowance for temporary periods of incapacity, that the continuous condition was written into the 1948 Act. Moreover, even quite lengthy periods of work in the man's regular occupation can now be disregarded in applying the continuous condition if they are for trial, training or rehabilitation.
  The hon. Member for Bedwellty referred to a period of three months. This was amended to six months in 1953.
  Mr. Finch: I agree.
  Miss Pitt: I am glad that the hon. Member is now clear on the point.
  The House will be interested to know that the total number of people receiving disablement pensions is now about 135,000. The number of special hardship allowances in payment is about 75,000, and these figures therefore mean that the hardship allowances is now paid over a much wider area than was at first envisaged and emphasises the point which I made earlier when I gave the comparable figures.

  2739
  What we need to remember is that, despite the very large number of allowances now being paid, the basic conception underlying special hardship allowance is still compensation for permanent loss of the regular occupation. It is this conception which the sponsors of the Bill are attacking by their present proposal. Apart from the broad objections which I have already mentioned, if the permanent and continuous conditions were to be altered, other practical difficulties would arise.
  Which of us would like to put himself into the shoes of the insurance officer who has to decide whether intermittent spells of lower paid employment qualify, especially when they may occur long after the accident? What was the real reason that the man changed his employment? Did his accident influence him in making the change? What is the real loss in earnings, especially when overtime complicates the picture? Those are the sort of questions which he has to answer before coming to a decision. [HON. MEMBERS: "He did before."] But hon. Members should know better than I of the difficulties of administration and how much those would be increased with the case of a man away from work for a short period.
  Mr. J. Griffiths: The insurance officer has to make a decision, but it is not the final decision. There is the tribunal and the Commissioner. Why be afraid of the insurance officer making this decision when there are all these safeguards for both sides?
  Miss Pitt: I am well aware that there are three levels to which an appeal can be made. Nevertheless, I suggest that the work would be considerably increased and much more difficult. A man might earn less for three months and then go back to his old rate for three months. Those are the questions which make for difficulties before a decision can be reached.
  I turn now to Clause 2 which deals with unemployability supplement. There are two proposals. One is to widen the categories in which unemployability supplement is granted, by giving it to people who, while capable of work, are unable, because of their industrial disability, to get a job. The other is to increase the amount which may be earned from, say, occupational therapy, while
  2740
  receiving unemployability supplement. To deal with the first unemployability supplement is at present paid, at the rate of 40s. a week, to an industrial disablement pensioner, or the man entitled to weekly payments under the old Workmen's Compensation Acts, who, because of his injury, is incapable of work and likely permanently to remain so incapable.
  In other words, it is compensation for the loss of ability to be able to work. For this purpose ability to earn up to £52 a year is ignored. The proposal now to introduce what is in effect an industrial injuries version of unemployment benefit is again a throw-back to the old Workmen's Compensation Act, 1931. Under that Act, someone who was partially incapacitated could be treated as totally incapacitated and receive workmen's compensation at the total rate, if one or other of the two conditions mentioned in this Bill applied. An important proviso of the old Act was that the responsible authority had to be satisfied that the workman had taken all possible steps to find work.
  It is significant that this proviso has not been repeated in the present Bill—I suspect because the sponsors know how unfair the workmen thought this and the trouble it created. There are, of course, disqualifying conditions which go with the regular unemployment benefit under the main National Insurance Scheme—disqualifications for refusing offers of suitable employment, for dismissal on account of misconduct, and so on. I imagine that at the very least, those conditions would have to apply to any new benefit of the kind we are considering today. Yet how vexatious such disqualifying conditions could be, particularly where disabled people are concerned.
  Perhaps I can take as an illustration the disqualification which follows on a refusal of an offer of suitable employment. This question can be difficult enough to decide even with people who are fit. When they are not fit, it is even more difficult. Are we sure that we want to introduce into the Industrial Injuries scheme this kind of test of a disabled man's attitude to work? These are not theoretical objections. If these proposals became law, these difficulties would quickly become real issues, and the time to face up to them is now.
  Mr. J. Griffiths: I am sorry to interrupt, but the Parliamentary Secretary is introducing features which the Bill does not contain at all. No one is suggesting that the old provision of the Workmen's Compensation Act should be introduced into this Bill. The hon. Lady ought to deal with the Bill and not with anything that is not in it.
  Miss Pitt: As I said earlier, I think the sponsors deliberately omitted this provision. How could we have this extension of unemployability supplement under the Industrial Injuries Act and not operate some tests, when in fact tests operate for unemployment benefit under the National Insurance Acts?
  Mr. B. Taylor: Is the hon. Lady suggesting that the disabled are lazy?
  Miss Pitt: Not at all. I want to help the disabled. That is why I think many of them would find it unfair to have to answer such a test.
  I think that figures of the people affected will help us in our consideration of this matter. Fortunately, in these days of full employment, the number is small. It is estimated that at most, there are 6,000 people in this field, but most of the 6,000 are believed to be the old workmen's compensation and not industrial injuries cases, and those the proposers seem to have forgotten because they have not suggested any amendment to Section 82 of the Industrial Injuries Act, 1946, which brings these old cases within the scope of the present unemployability supplement. I should have thought, if anything could be done, it ought to include the old cases.
  If that was the intention, some curious anomalies would arise. For example, the single man on workmen's compensation who is unemployed could receive 40s. a week compensation. His opposite number on industrial injuries benefit will have a disability pension, and assuming his assessment to be at the 30 per cent. rate, his pension will be 20s. 3d. In addition, he will probably be receiving a special hardship allowance of 27s. 6d.
  If the proposals in this Bill were carried out, the single industrial injuries man would lose special hardship allowance of 27s. 6d. but would get the new 40s. unemployability supplement, which would give him in all 60s. 3d. compared with the 80s. which the workmen's compensation
  2742
  man would receive. Where the man was married and getting the 10s. workmen's compensation for his wife, his position would be even worse. I do not think the House would regard favourably a proposal which would put people who had contributed to the Industrial Injuries Fund in a worse position than those to whom the benefits of the Fund were being extended, although they were really outside the scheme.
  I know that some of the supporters of this Bill have a special interest in the problems of those who suffer from pneumoconiosis. But here I think the figures for registered disabled persons speak for themselves. According to Ministry of Labour statistics, there has been a steady fall in the number of unemployed registered disabled persons over the past five years. From nearly 70,000 in February, 1950, the figure has fallen to 36,000 in September, 1955. That is something which I am sure we are all glad about.
  For those disabled from pneumoconiosis, however, the decline has been even more marked; a reduction from 4.760 unemployed in October, 1949. to 530 in October, 1955. I realise that is not a situation for complacency but it is as well that the problem should be seen in its proper perspective.
  Mr. T. Brown: The hon. Lady is making pretty heavy weather of the problem of pneumoconiosis cases. Is she aware that several schemes have been brought into operation to accept men in the first degree of pneumoconiosis and find them work, rather than that they should be walking the streets, and when discussing how these figures have dropped will she give some consideration to that fact?
  Miss Pitt: I will certainly look into the point, but I should have thought that the hon. Member would have been glad——
  Mr. T. Brown: I am glad, but will the hon. Lady put the whole case as it ought to be put.
  Miss Pitt: —that some kind of work is being found for those suffering from this disease.
  If the field were extended for the industrially disabled, the position of war pensioners obviously would have to be

  2743
  considered. Have the supporters of the Bill taken that into account? [HON. MEMBERS: "Yes."]
  Now I come to the cost. If we consider the 6,000 cases I have already mentioned, the cost of these proposals to the Industrial Injuries Fund would amount to about £1 million a year, not counting the extra cost to the Exchequer of treating war pensioners similarly.
  I wish to say a word about Clause 2 (2) which is a proposal to increase the disregard from £52 to £104. The hon. Member for Mansfield (Mr. B. Taylor) referred to an earnings rule, but it is not really an earnings rule, as I shall hope to show. This applies to men who unfortunately are not capable of earning, and so I do not think that we can properly describe the disregard of £52 as an earnings rule. I think that we should be clear about this £52. A man who receives unemployability supplement is, by definition, unemployable. Unfortunately for him, there is no question of employment in the ordinary sense of the word. But there can and does arise the important question of occupational therapy, something to occupy the men during long hours such as the instance I gave at the beginning of my speech.
  We all know the value of encouraging such activities and I think that the provision in the 1946 Act for disregarding up to £52 a year which could be earned in this way is a very sympathetic recognition of the need for such encouragement. I should have though that up to £52 covered this point and, indeed, there is no real evidence to show that earnings from occupational therapy are, or could be, higher.
  Mr. Finch: May I point out that some paraplegic and badly crippled cases take this homework and receive more than £1 a week. That in itself would rule out the unemployability benefit allowance. Some take up basket work, or something of that kind, and get 30s. a week.
  Miss Pitt: If they earn more than £52, it is true that they are ruled out from receiving unemployability benefit. But as I said, there is no evidence of cases where this happens.
  Finally, Clause 4 would give power to meet the administrative costs of the proposals from moneys provided by Parlia-
  2744
  ment, but there is nothing in the Bill about meeting the additional benefit expenditure if these proposals become operative. It is sometimes thought that because the Industrial Injuries Fund is still growing at the rate of over £10 million a year and as a substantial balance has been built up, there is a surplus out of which quite substantial improvements could be made This is not the case as was clearly explained by the Government Actuary in his Report on the First Quinquennial Review of the scheme dated 31st December, 1954.
  There the Government Actuary pointed out that because expenditure from the Fund will build up over the years as the number of disablement and widow pensioners grow, and because income from contributions will remain fairly stable, it will be necessary, if solvency is to be ensured, for a fund of £435 million to be built up. The interest from this, in addition to contribution income, would then suffice to cover the ultimate expenditure. I will quote from paragraph 48 of the Report which reads:
  "This position is due not to any inadequacy of the contributions as originally assessed for the purpose of the 1946 Act, but to the additional liabilities which have been placed on the Fund by subsequent legislation without provision for increasing its resources to a corresponding extent."
  The Actuary estimated then that the rates of contribution laid down by the 1954 Act would have to be raised by approximately 1d. a week from each side, the employer and the worker, to ensure solvency. Therefore, until contributions have been raised in this way, the balances in the Fund will not be sufficient to finance benefits even at present rates and in present conditions. To accept the proposals in this Bill would increase the liability and underline the need to increase contributions if the Fund is to remain solvent.
  The hon. Member for Mansfield referred to the need for a full review and a thorough discussion of this very complicated question—and complicated, I agree, it is. He referred also, in a phrase which I liked, to this new chapter which had been opened in industrial injuries, and I think it as well to remind ourselves that in the fields of compensation for industrial injuries we were breaking entirely new ground when the scheme came into operation in 1948.

  2745
  That was barely eight years ago. The scheme which it replaced had operated for fifty years, and it is natural enough that thought on the subject should still be influenced by what happened under the old scheme. But until there has been a full inquiry into both the principle and the operation of the new scheme—and it is probably early days yet for that kind of fundamental examination—it would be a mistake to go backwards. Substantially, that is what the present Measure will do, and it is for that reason that I ask the House not to accept it.
  3.22 p.m.
  Mr. James Griffiths: I intervene in the debate not to follow the Minister, much as I am tempted to do. The House today spent its first three-quarters of an hour on time which, for reasons that we understand, the Government took from Private Members. We do not complain, but I am now intervening to suggest that the House might come to a decision on this Bill without further argument, particularly in view of the desire, which I am sure we all share, that my hon. Friend the Member for Newark (Mr. Deer) should have an opportunity of presenting his Bill. May I appeal, therefore, to the Parliamentary Secretary and to the Whips present to agree to this in view of the fact that Private Members were asked to give up three-quarters of an hour of their time to suit the convenience of the Government?
  3.24 p.m.
  Mr. Ronald Bell: It is certainly a novel doctrine that because a Government statement is made at the beginning of the debate on a Friday thereafter Private Members should be expected not to speak. I was very surprised that the right hon. Member for Llanelly (Mr. J. Griffiths) should invite the Whips to intervene in a matter of this kind on a Friday. I hope that we are not going to have activities by either the Government or the Opposition Whips on Private Member's days. After those few remarks, I will proceed to say what I had intended to say, which was that at this late stage of the afternoon I do not intend to go into any of the details of the Bill, but merely to concentrate quite briefly on one point which, I think, is the main point.
  2746
  The right hon. Gentleman need not fear that anything I say this afternoon will prevent his hon. Friends from having a chance of dividing upon the Bill. We have had a very interesting debate upon a subject which should not be one of party controversy. [Interruption.] I will gladly explain why I say that. I hope that such controversy will not be introduced now; certainly nothing that I say will introduce it. I can say one thing about any speech that I make—that it is not read. That, at least, is an advantage over some to which we have to listen.
  I congratulate the hon. Member for Barnsley (Mr. Mason) on his good fortune in the Ballot. I say that with the utmost sincerity, because although I never fail to enter these lotteries, in the six years that I have been here I have never drawn a winning place. I congratulate the hon. Member upon the subject he has chosen. Although I cannot agree with the Bill, it deals with a very interesting topic, and we have had an interesting debate.
  My interest in this subject dates back to the old law of workmen's compensation. I have appeared for many workmen under that law. I was not one of those who benefited by the change in 1948. but I say without hesitation that most workmen have benefited by it. I see no reason why there should be any party differences about it, because it was based upon an all-party White Paper of 1944. The right hon. Member for Llanelly knows quite well that it was, in its nature, an agreed Measure, and one which benefited the general body of workmen.
  I want to quote part of the speech made by the right hon. Member for Llanelly during the Second Reading debate in 1945, because I think it goes to the heart of the matter. What is the nature of the change? Before the workmen's compensation law was changed there was a choice either of a common law action for damages for negligence, or workmen's compensation based clearly and simply upon the principle of loss of earnings. The hon. Member for Mansfield (Mr. B. Taylor) was not quite accurate in what he said in this respect, inasmuch as the two were not mutually exclusive. If a man accepted workmen's compensation he could not go to common law. But he could—and always did—go to common

  2747
  law first and, if he did not succeed there, he could take his workmen's compensation. In practice, a man did have a choice between the two.
  The system had many disadvantages, however, some of which have been referred to today and another of which has not, but has always struck me as a rather important one from the workman's point of view. A workman could compound for a lump sum under the workmen's compensation provisions, and only too often did so, though I am sure that he very much regretted having done so later in his life. I always tried to persuade such men not to compound, but one can understand the attraction of the lump sum.
  Mr. J. T. Price: They did not all do that.
  Mr. Bell: Of course not, but many did. That provision was abolished, and its place was taken by the National Insurance Industrial Injuries Scheme, the basis of which was, quite simply, compensation for loss of faculties.
  Miss Herbison: Get to the Bill.
  Mr. Bell: I hope that hon. Members opposite will not keep interrupting me. I am trying to be as short as I can. I am not wasting time, and these interruptions only have the effect of lengthening a speech which would otherwise be quite short.
  We then come to the Industrial Injuries Scheme, which was based upon the principle of loss of faculty. I would invite the attention of the right hon. Member for Llanelly, if I might have it, to what he said on the Second Reading of that Bill in 1945. These are very important words:
  "Now we come to the benefits provided in this scheme and Bill. It is in the method of assessing and the determination of the amount of benefits that the Bill marks a fundamental departure from the present Workmen's Compensation Acts. It is, I appreciate very fully, a radical change, and will be far reaching in its implications,"—
  and this is where we come to the Bill before us—
  "yet I am absolutely convinced that it is a desirable change. The essential difference between this scheme and the Workmen's Compensation Acts is that benefits will be related solely to the degree of disability suffered and will not be related to loss of earning power. We all know the heartburnings that have been caused by the provisions of the Workmen's
  2748
  Compensation Acts whereby compensation fluctuates with every rise or fall in earnings and how, indeed, no compensation is payable, however severe the injury, if the injured man is later able, or indeed is held to be able, to earn as much as he did in the job in which he suffered the injury. My hon. Friends will know, as I do, how difficult it is to explain to the worker how it comes about that his partial compensation has been reduced, not because he is earning more—indeed he may not be earning at all—but because his notional income has increased. We know how this provision causes men to be reluctant to undertake training for new occupations, even though his training would be of great help towards the mental and physical rehabilitation of the disabled men."—[OFFICIAL REPORT, 10th October, 1945; Vol. 414, c. 274–5.]
  Hon. Members: We know all that.
  Mr. J. Griffiths: I am grateful to the hon. Gentleman for quoting what I said, and I stand by every word of it. It is agreed on both sides that it is essential to balance that with a provision for hardship through loss of earnings. We accepted it, and the hon. Gentleman's Government accepted it, and we have increased the amounts. All that we are asking for is a change to amend and modify the qualifications. Therefore, I hoped that the hon. Gentleman would join with us in giving this Bill a Second Reading so that it might go to a Committee.
  Mr. Bell: The right hon. Gentleman is very skilful in his defence, but it really will not do. He went on in his next paragraph to say that we were all agreed on the way to do it, but the right hon. Gentleman has now said that the provisions of this Bill are not detrimental to that object. In the 1946 Act, the right hon. Gentleman laid down the principle which was to run right through insurance in all its aspects, that the benefit was to be related solely to the degree of disability or loss of faculty, and then, subsequently, in Committee, he put in a Clause in which by a mere exception he introduced one special circumscribed qualification, under I think, he will agree, considerable pressure of argument from behind him.
  Very well. The next stage was in 1948 when he extended that, I think he will agree, again in a direction which did not derogate from the main principle, because he only introduced the continuous element which again very narrowly dealt with a particular kind of hardship. Today, we are being asked to do something quite different, and his hon. Friends behind

  2749
  him are asking that it should be paid without respect either to the continuous or permanent qualification, but for intermittent or periodic illness, and the hon. Member for Westhoughton (Mr. J. T. Price) drew attention to the fact that the men would be worse under this than they were under workmen's compensation.
  In 1946 the right hon. Gentleman said that the implications were widespread. He said that the new system would benefit most men, but would benefit less the man who had a slight disability and a fairly considerable loss of earning power. On the other hand, the man with a high degree of disability but proportionately lower loss of earning power would be better off under the new basis of assessment. I think we all understood that at the time. The right hon. Gentleman knew it perfectly, and he and his hon. Friends when in office were always very cautious that nothing they did ever derogated from that main principle which they had accepted, together with its implications.
  There are some people injured now who would do better under the old Workmen's Compensation Acts. Some of my colleagues who have been experienced in this kind of work take the view that injured workmen do less well under this scheme than under the Workmen's Compensation Acts. I do not entirely agree, but it is true that there are some men who are injured, not very seriously but have considerable loss of earnings, who would be better off under the workmen's compensation rules. But others do better under this rule, I think.
  The effect of the change proposed by this Bill would be to abandon the loss of faculty rule, because it would not benefit anyone with more than 60 per cent. disability at all. The effect grows progressively as one goes down from 60 per cent. and, as I say, a man 60 per cent. disabled would be in exactly the same position as if he were 100 per cent. disabled. That is what is proposed under the Bill.
  It is, in fact, washing away the whole of the principle of the 1946 legislation, and to the right hon. Gentleman the Member for Llanelly who asked for the debate to be closed, I say that his work is being washed away. [HON. MEMBERS: "No."] I say to the right hon. Gentleman that were he in office today as
  2750
  Minister of Pensions and National Insurance he would be resisting this Bill.
  Mr. J. Griffiths Mr. J. Griffiths indicated dissent.
  Mr. Bell: The right hon. Gentleman is in opposition——
  Mr. Griffiths: I will not argue now, except to say that I introduced two Bills similar to this one except for a difference in the qualifications.
  Mr. Bell: When in office the right hon. Gentleman did nothing that derogated from the principle which he himself laid down, to which he paid tribute and of which he accepted the far-reaching implications. Not until he got into opposition did he ever give his approval, support or prestige to any proposal that would damage that principle of the 1946 Act.
  For those reasons, I ask the House to reject this Bill. I ask hon. Members not to make this a party matter. It is not a party matter but one about which we all agreed in principle in 1946. We have never disagreed about it in principle until this afternoon, and it would be very unfortunate, indeed, if this subject degenerated into a squabble over an indiscriminate playing around with the balance of the benefits under this very important and valuable scheme.
  Mr. Mason: Mr. Deputy-Speaker, would you accept a Motion that, "The the Question be now put"?
  Mr. Deputy-Speaker (Sir Charles Mac Andrew): Under the Standing Order that Question can be moved only when Mr. Speaker is in the Chair. I am precluded by Standing Order No. 29 (5) from accepting that Motion.
  Mr. J. Griffiths: Then may I ask the Joint Parliamentary Secretary whether, in view of our difficulties, she will not join with us in asking that we might proceed to a Division?
  Miss Pitt: No. I still see hon. Friends of mine who wish to speak.
  3.40 p.m.
  Mr. Tom Brown: I have no intention, at this late hour, of making a speech on this vital human problem. I have sat here since 11 o'clock, through the whole debate, and I have been

  2751
  nauseated. I have seen the movements of hon. Members opposite, coming in and going out, organising themselves to talk the Bill out, and wishing they had a team here for that purpose. During the last few months I have heard from them a stream of sympathetic remarks about those in need They have said such things so often that I had begun to believe them. I know better now. The action of the Government today is nothing less than despicably harsh to a body of men who deserve much better.
  It is not the first time that hon. and right hon. Members opposite have behaved in this way. Two years ago one of my hon. Friends was lucky in the Ballot, but hon. Members opposite spoilt that chance to help those in need. My hon. Friend the Member for Lanarkshire, North (Miss Herbison) was fortunate in the Ballot and hon. Members opposite— and hon. and learned Members opposite—objected to her Bill. Is that treating the workmen as they ought to be treated? Is that something in which hon. Members opposite take pride?
  We register our emphatic protest against the action of the Government today in preventing this Bill from getting a Second Reading and being considered in Committee. We are trying, by this Bill, to help those in need, but hon. Members opposite deny us the opportunity.
  Mr. R. Bell Mr. R. Bell rose——
  Mr. Brown: No, I shall not give way. The hon. Member is smiling, but does he visualise what is taking place in the mining villages and families?
  Mr. Stan Awbery: And in the House of Commons.
  Mr. Brown: Yes. I wish some of the men I represent were here to see the attitude and listen to the policy of hon. Members opposite today. Hon. Members opposite do not laugh at that.
  We have never had any love for them. They have never had any love for us. We are trying by constitutional means to obtain some help for those who, in the past, have been left high and dry. Does the hon. Member laugh at that?
  Mr. Bell Mr. Bell rose——
  Miss Herbison: Sit down.
  Mr. Brown: Here is a photograph of a mining family, a family of eight. Seven Of the eight were injured while working in the pits, or suffer from industrial diseases as a result of such work.
  Mr. Bell: Would the hon. Member allow me to ask——
  Mr. Brown: Definitely not. I try to be courteous to those who are courteous to me. You said that you intended to speak only five minutes, but for the last 20 minutes——
  Mr. Deputy-Speaker (Sir Charles Mac Andrew): I hope that the hon. Member will not attribute that to me.
  Mr. Brown: What would the hon. Member do in a case like this? Here is a Bill by which we are trying to bring some succour and comfort to these people. Not one of this family has received the compensation to which he was entitled. The Bill is an attempt to bring some relief to such people, but all hon. Members opposite are trying to do is to talk the Bill out. It is very rarely that I speak so strongly, but I say that the Government and those who are supporting them in the tactics that they have adopted on this Measure ought to be heartily ashamed of themselves.
  Mr. Bell: So far as I have understood the customs of this House I have always thought that there was a very clear rule that an hon. Member when referring to another hon. Member ought to allow him to intervene.
  Mr. Mason Mr. Mason rose in his place and claimed to move, That the Question be now put.
  Mr. Speaker: There is another hon. Member who is anxious to speak. I cannot accept the Motion now, but I will if it is repeated at a later time.
  Mr. Bell: The hon. Member for Ince (Mr. T. Brown) did not allow me to intervene, although he was making a direct personal reference. I have been sitting in the Chamber since 11 o'clock this morning, with the exception of the luncheon interval, and I have been trying to speak all day. What he said about me is not true, and does not apply to me. I have done nothing to organise the speaking on the Bill. I wanted to make my own speech and I object very strongly to what has been said.
  Mr. Mason Mr. Mason rose in his place and claimed to move, That the Question be now put.
  Mr. Speaker: I see that there are at least two hon. Members desirous of speaking. It is not customary on Fridays to accept the Closure before 4 o'clock.
  3.47 p.m.
  Mr. William Blyton: I have been in the Chamber during most of the debate and I have come to the conclusion that the Government today have two objectives. One is to talk out this Bill and to prevent discussion of the disgraceful treatment which the people under the old Workmen's Compensation Act have received, and which ought to be discussed. We find, true to tradition, that hon. Members opposite have done the same to the injured workmen as they did in the 1924 Act and in the pre-1924 days, and as they continued to do until we altered the basis of compensation in the 1948 Act.
  One can quite understand the presence of the lawyers here today, because the old Workmen's Compensation Act was a paradise for them. They are somewhat annoyed at the fact that the 1948 Act wiped them out altogether so far as workmen's compensation is concerned.
  I listened to the hon. Member for Buckinghamshire, South (Mr. R. Bell) with keen interest. He was not in the 1947 Committee that discussed the National Insurance (Industrial Injuries) Bill. All that he has argued today is what he has read, presumably, in the Reports of the Committee stage of that Bill. Why was he not honest enough to get up and say that the hardship allowance was passed to meet the presumed loss of earnings of an incapacitated man who could not follow his pre-accident employment?
  We are asking that that principle, which is embodied in the 1947 Act, should be continued at a higher rate to close the disparity between the loss of earnings caused and the increased wages that are now being received.
  The Minister himself is a lawyer, so he should know something about compensation law and the National Insurance (Industrial Injuries) Act. But the Minister is not here. He has sent his Parliamentary Secretary here to argue a technical problem which, for the best of
  2754
  reasons, she does not address to the House. I should welcome a Division today in order to prove that the leopard has not changed its spots and that the Tory Party has not changed its attitude towards payment to people who suffer injuries while at work.
  This controversy will not end here, nor will the Bill of my hon. Friend the Member for Newark (Mr. Deer), dealing with workmen's compensation. This battle will be carried into the industrial field. If the legislative machine will not meet the difficulties which are arising in relation to workmen's compensation or industrial injuries, then the Trades Union Congress and the unions must take note of it. It is no good the Chancellor, in the deep economic crisis which we face, going to the T.U.C. and exhorting it to ask the men to speed up in industry and to produce the goods to help solve our balance of payments difficulty, if he then says that the Government are not prepared even to ease the loss of earnings which they may suffer through a serious injury in their employment.
  That is the problem which the Conservative Party will face in the forthcoming months and that is why I am keen that today we shall record our vote, even if we are beaten on the Closure. We can show the working class at large that the Tory Party still believes in being niggardly towards those who are injured. It has been an accepted principle, I believe, since the Crimean War that anybody injured or maimed in war shall have a basis on which to live.
  By their tactics today the Tories have said to men who were not allowed to fight but were injured during the war, "We will not allow the House to discuss your miserable pittance, on which you have received no increase since 1943. You can eke out your existence on £2 10s. a week. We will not give you Parliamentary time to discuss it. We will also try to talk out the Bill which seeks to give to the injured workmen some increase in their hardship allowance to make up for their loss of earnings."
  Mr. W. R. Williams: Would it help my hon. Friend to put his case more forcefully if the Minister of Pensions and National Insurance, who is skulking behind Mr. Speaker's Chair, would care to come into the Chamber?
  Mr. Mason Mr. Mason rose in his place and claimed to move, That the Question be now put.
  Question put, That the Question be now put:—
  Whereupon Mr. SPEAKER declared that the Question was not decided in the Affirmative, because it was not supported by the majority prescribed by Standing Order No. 30 (Majority for Closure.)
  Mr. J. Griffiths: You have ruled, Mr. Speaker, quite correctly, in accordance with the Standing Order, that the Closure has not been carried. However, since it is the desire of the majority of hon. Members present that the Bill should receive a Second Reading, may I ask the Joint Parliamentary Secretary whether it is the desire of her right hon. Friend and the
  The House divided: Ayes 87. Noes 60.

  Division No. 112.]

  AYES

  [3.54 p.m.

  Ainsley, J. W.

  Houghton, Douglas

  Parkin, B. T.

  Albu, A. H.

  Hughes, Hector (Aberdeen, N.)

  Price, J. T. (Westhoughton)

  Awbery, S. S.

  Hunter, A. E.

  Probert, A. R.

  Bellenger, Rt. Hon. F. J.

  Hynd, H. (Accrington)

  Robens, Rt. Hon. A.

  Bonn, Hn. Wedgwood (Bristol, S.E.)

  Isaacs, Rt. Hon. G. A.

  Skeffington, A. M.

  Blackburn, F.

  Janner, B.

  Slater, J, (Sedgefield)

  Blyton, W. R.

  Jones, Rt. Hn. A. Creech (Wakefield)

  Sorensen, R. W.

  Boardman, H.

  Jones, Elwyn (W. Ham, S.)

  Steele, T.

  Boyd, T. C.

  Key, Rt. Hon, C. W.

  Stones, W. (Consett)

  Brookway, A. F.

  King, Dr. H. M.

  Taylor, Bernard (Mansfield)

  Brown, Rt. Hon. George (Belper)

  Lindgren, G. S.

  Thomson, George (Dundee, E.)

  Brown, Thomas (Ince)

  Lipton, Lt.-Col. M.

  Warbey, W. N.

  Butler, Herbert (Hackney, C.)

  Mabon, Dr. J. D.

  Weitzman, D.

  Callaghan, L. J.

  MacColl, J. E.

  White, Mrs. Eirene (E. Flint)

  Champion, A. J.

  McKay, John (Wallsend)

  White, Henry (Derbyshire, N.E.)

  Chapman, W. D.

  McLeavy, Frank

  Wigg, George

  Corbet, Mrs. Freda

  Mainwaring, W. H.

  Wilkins, W. A.

  Davies, Ernest (Enfield, E.)

  Marquand, Rt. Hon. H. A.

  Willey, Frederick

  Davies, Stephen (Merthyr)

  Mason, Roy

  Williams, David (Neath)

  Deer, G.

  Mellish, R. J.

  Williams, Rt. Hon. T. (Don Valley)

  Ede, Rt. Hon. J. C.

  Mitchison, G. R.

  Williams, W. R. (Openshaw)

  Edwards, Rt. Hon. Ness (Caerphilly)

  Moody, A. S.

  Williams, W. T. (Barons Court)

  Edwards, W. J. (Stepney)

  Moyle, A.

  Willis, Eustace (Edinburgh, E.)

  Finch, H. J.

  Mulley, F. W.

  Wilson, Rt. Hon. Harold (Huyton)

  Grey, C. F.

  Oliver, G. H,

  Woof, R. E.

  Griffiths, David (Rother Valley)

  Oram, A. E.

  Younger, Rt. Hon. K.

  Griffiths, Rt. Hon. James (Lianelly)

  Padley, W. E.

  Hamilton, W. W.

  Paling, Rt. Hon. W. (Dearne Valley)

  TELLERS FOR THE AYES:

  Hastings, S.

  Panned, Charles (Leeds, W.)

  Mr. David Jones and

  Hayman, F. H.

  Parker, J.

  Miss Herbison.

  Holman, P.

  NOES

  Alport, C. J. M.

  Harrison, A. B. C. (Maldon)

  Nugent, G. R. H.

  Amory, Rt. Hn. Heathcoat (Tiverton)

  Harrison, Col. J. H. (Eye)

  Nutting, Rt. Hon. Anthony

  Baldwin, A. E.

  Heald, Rt. Hon. Sir Lionel

  Oakshott, H. D.

  Barber, Anthony

  Heath, Rt. Hon. E. R. G.

  Pitt, Miss E. M.

  Barter, John

  Hicks-Beach, Maj. W. W.

  Powell, J. Enoch

  Baxter, Sir Beverley

  Hope, Lord John

  Price, Henry (Lewisham, W.)

  Bell, Ronald (Bucks, S.)

  Hylton-Foster, Sir H. B. H.

  Redmayne, M.

  Body, R. F.

  Jennings, J. C. (Burton)

  Rees-Davies, W. R.

  Boyd-Carpenter, Rt. Hon. J. A.

  Kirk, P. M.

  Renton, D. L. M.

  Boyle, Sir Edward

  Leavey, J. A.

  Robertson, Sir David

  Brooman-White, R. C.

  Linstead, Sir H. N.

  Sharpies, R. C.

  Buchan-Hepburn, Rt. Hon. P. G. T.

  Low, Rt. Hon. A. R. W.

  Spearman, A. C. M.

  Butcher, Sir Herbert

  Lucas-Tooth, Sir Hugh

  Spans, Rt. Hn. Sir P. (Kens'gt'n, S.)

  Channon, H.

  Maclay, Rt. Hon. John

  Stevens, Geoffrey

  Crosthwaite-Eyre, Col. O. E.

  Macpherson, Niall (Dumfries)

  Teeling, W.

  Doughty, C. J. A.

  Maddan, Martin

  Wakefield, Edward (Derbyshire, W.)

  Dugdale, Rt. Hn. Sir T. (Richmond)

  Maudling, Rt. Hon. R.

  Walker-Smith, D. C.

  Fletcher-Cooke, C.

  Molson, A. H. E.

  Wood, Hon. R.

  Freeth, D. K.

  Moore, Sir Thomas

  Gibson-Watt, D.

  Neave, Airey

  TELLERS FOR THE NOES:

  Green, A.

  Noble, Comdr. A. H. P.

  Mr. Partridge and Mr. Kershaw.

  Government that the Bill should not be voted upon in the House?
  Mr. Speaker: It is now past four o'clock. I did not know what the right hon. Gentleman the Member for Llanelly (Mr. J. Griffiths) was about to say when he rose. He must pursue his inquiries in another way.
  It being after Four o'clock, the debate stood adjourned.
  Debate to be resumed upon Friday, 2nd March.

  LOCAL AUTHORITIES (EXPENSES) BILL
  Not amended (in the Standing Committee), considered; read the Third time and passed.

  NAVAL DISCIPLINE ACT
  Select Committee appointed to consider the Naval Discipline Act, and to make recommendations for the amendment thereof:
  Commander Agnew, Mr. Callaghan, Mr. W. J. Edwards, Mr. Greville Howard, Vice-Admiral Hughes Hallett, Commander Maitland, Lieutenant-Commander Maydon, Mr. Basil Nield, Mr. Paget, Mr. William Ross, Mr. Simon, Sir Patrick Spens. Mr. William Wells, and Mr. Willis:
  Power to communicate from time to time with the Departmental Drafting Committee to be appointed to assist them by the First Lord of the Admiralty:
  Five to be the Quorum:
  Power to send for persons, papers and records:
  Power to report from time to time.—[Mr. E. Wakefield.]

TELEPHONE SERVICE, HAYES AND HARLINGTON
Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]
4.5 p.m.
Mr. Arthur Skeffington: In this week of rather sensational events, I am glad to have the opportunity of raising a subject of more local interest, which nevertheless is of some consequence to those who live and work in the area of the Urban District Council of Hayes and Harlington. I refer to the shortages of telephones and the very long delays which occur in their installation. It may be that there is some convincing explanation, and I hope that this short Adjournment debate will provide an opportunity for the Assistant Postmaster-General to state the facts and for the public to judge.
I want immediately to make it clear that I am not one of those who continually indulge in criticism of the Post Office. I very much resent a good many of the
2758
sneers made from time to time, usually by people who are ignorant of the facts about the tremendous job which the Post Office is able to do on so many fronts so satisfactorily. Indeed, considering the time factor against which the Post Office is always fighting, there is no organisation in the world of equal general efficiency and I want to make that clear.
I wish that I could be as hopeful and confident about the telecommunications section of the Post Office, at any rate in the West London area. My first personal difficulty is to understand how it is that this considerable back log of delays in; telephone installations in Hayes and Harlington should exist and continue ten years after the war. One can understand the difficulties that arose in the immediate post-war years, but it is difficult to understand how these particular delays have arisen, and I wonder whether it is due to the fact that the needs of the area have not been sufficiently estimated and foreseen.
Those in charge of the development of the telecommunication service of the Post Office must have known that the whole of West London, and certainly the area of Hayes and Harlington, were rapidly expanding. Hayes itself now has a population of about 64,000. About two-thirds of the houses in the district have been built since 1930, and more than 2,500 have been built by the local council since 1945. Even more important is the industrial nature of the district and that expansion. London Airport is in-the locality and eleven new factories have been built since the war, making altogether about 160 factories in the constituency. It must be one of the most heavily industrialised areas, certainly in the whole of the Home Counties, if not in the entire country. Indeed, I believe that Acton is the only district with a heavier incidence of industry.
With an energetic council carrying on residential expansion, with industry being attracted to the district, industry very largely comprised of light engineering and food processing, I would have-thought it would be pretty obvious to anyone studying the district that there was bound to have a high level of activity, industrial, commercial and business, quite apart from the development of communications which would be required for private and social purposes. I should point out in the case I am

2759
making this afternoon, I am almost entirely concerned with telephone communication for business and commercial not for social purposes, much as that is highly desirable and extremely convenient, particularly in personal emergencies. One wonders if those who were in charge of the telephone development in this part of Greater London have failed to appreciate the type and rapidity of the development there. It almost looks as if that may have been the case.
What is the size of the problem? On 16th November I asked a Question of the Postmaster-General about the number of applications for telephones outstanding, and I was informed that at that date there were 1,309 applications for telephones in Hayes and Harlington. Apparently I could not be given the average waiting time. I understand that that number has increased to something like 1,400 today, and my own estimate, judged by letters which I have had from the Department and from individual cases, is that the average waiting time may be as much as a year.
It is very difficult for me to estimate an average, because I do not know all the cases, but I have a considerable number of examples in which at least 12 months' delay is forecast, and I have several letters from the Department which say that they can offer no hope until the middle of 1957. It needs a great deal of explanation to firms and others who sometimes have already been waiting six months or longer, to be told that it will be another 18 months before they can have either a telephone of their own or even a shared line.
I would like to mention one or two cases because they reveal the nature of the problem and perhaps the atmosphere in this division of the Department's activities. I want to refer first of all to an optician whose business premises are situated in Gloucester Parade, Bourne Avenue. Since I raised this matter the telephone has been installed. I do not claim any credit for that, because I do not think it was anything to do with me. Indeed, it would perhaps be a bad thing if it was thought that because a Member of Parliament took the matter up someone had jumped the queue. Nevertheless I am grateful, at any rate, that the telephone has been installed in this case.
2760
There are, here, however, one or two points which are a little puzzling. First of all, this was only a question of moving a telephone 50 yards. The address at which the optician had been living was only 50 yards from where his new office was to be situated. His old business had been served by overhead telephone wires, and I understand that overhead telephone wires have now been used to connect him. Before he came to me he had written twice, I gather, to the Sales Superintendent of the West Telephone Area, and on 29th December, 1955, he received this letter:
"Further special enquiries have been made…"—
thus I gather there had been a second check—
"…but I am sorry to say that it is not possible to meet your requirements because new underground cables will have to be laid in the locality. A considerable amount of work is involved and no date can be forecast when the work will be undertaken."
I repeat, this was a question of moving a telephone only 50 yards. In fact, by 26th January this optician's telephone problem had been solved, but it is strange that after a check he should get a letter saying that it is impossible to provide him with a telephone, that no date can be given and that the work can only be done after the installation of underground cables, when in fact none of those factors applies a month later. Possibly there are circumstances which explain it, but I think that the very letter may be an indication that those dealing with the problem for Hayes regard it almost as hopeless, and so I thought it right to refer to the case, though I am delighted that this gentleman's difficulty is solved. He is doing National Health Service work, and so a telephone is of importance to him.
The second case concerns a firm in North Hyde Road. After I secured this Adjournment debate, the telephone difficulties of this firm were also solved. I mentioned it to the Assistant Postmaster-General but he assured me that the decision was taken before he knew that the matter was being raised by me in the House. Again, I am grateful. I merely quote this case because before the firm approached me in January of this year they had been waiting for fifteen months, which is quite a long period. The only indication they had was—again apparently because of the

2761
same difficulty of shortage of equipment and the need for underground cable— they might have to wait until 1957. By a lucky chance some spare wires became available or they might have had to wait two-and-a-half years before being connected with the telephone. In this age and generation, ten years after the war, that is a long time indeed, and it needs some explanation.
I would emphasise again that these are all cases connected with commercial needs. I wish to refer to the case of a food producing firm whose factory is in Springfield Road, Hayes. They have a factory of some 15,000 square feet where they are canning food and turning out something like 10 million tins a year. They employ between 50 and 100 workers. Since going to the premises the firm has only had a shared telephone line and naturally they need their own line. Their business has expanded and recently the firm wrote to me stating:
"In view of the volume of business, we are finding it utterly impossible to carry on and we have in fact had to reduce our administrative staff at Hayes, and in order to carry on our business at all we are being forced to retain offices and staff in the West End in addition to a car and driver permanently employed in carrying messages to and fro."
It is a shocking state of affairs when a firm engaged in a vitally useful job of this kind is forced to these sort of measures. Again, I am led to believe that the average waiting time is something like twelve months because in this case, according to a letter written to me by the Postmaster-General on 22nd December the firm cannot be connected up until 1957. The letter stated:
"…there are no spare wires in the local cable and we are very short of spare equipment at the Hayes Exchange…I am afraid we may not be able to help this firm until about the middle of 1957."
Eighteen months is a very long time, and as I said in conversation with the Assistant Postmaster-General, I can well imagine what the Postmaster-General would have said had he been on this side of the House and received an answer of that kind from the Department. I do not wish to adopt that attitude, because I am sure that both of us wish to get something done, but I think that is a very long period for a firm doing a vital job in food production to have to wait for a telephone. The letter states that there
2762
is a shortage of spare equipment. Why is that? How soon can that be put right? Were not these things foreseen? It is on such fundamental problems that I hope that we shall receive some enlightenment today.
I wish to give one more specific case, that of the highways superintendent of the local council. The superintendent, or rather the council on his behalf, made an application for him to be connected to the telephone last October. I heard of this case only yesterday and so I have not been able to notify the Assistant Postmaster-General of it. It is desirable that a highways superintendent should be connected with the telephone because he is often required in an emergency either by the surveyor or by the police. There may be an accident, or flooding, or a subsidence or something of that kind. Again, no action has resulted. The application was made last October, and the most optimistic forecast is that the important officer will not be able to be connected with the telephone until at least next June or July. This is another case which I consider most unfortunate.
One other difficulty is in connection with some of the new housing estates. Many of these estates have no private telephones, because, obviously, unless there happen to be spare wires private individuals are not likely to be on top of the installation list. On one new housing estate, about which I wrote to the Postmaster-General six months ago, there are 34 bungalows let to old people. A call box in the vicinity is essential for fire or ambulance purposes. There is one telephone box, but it must be a good ten-minutes walk away. It takes me that time to walk it, but it would take an old person very much longer. Another is 300 yards away, but too far—in an emergency for old folk. Again, I am told that every effort will be made to instal a call box in that area, but no hope of doing so far many months is held out. I would hope that special provisions might be made in cases of that sort. The installation of call boxes on new housing estates is of some importance, especially from the point of view of fire and ambulance service.
There are two other cases which I wish to mention. One is in connection with the Charville Estate which has six shops. This estate is really considerably cut off

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from the rest of the community. In fact, there are fields in between. I gather that only one of the six shops has a telephone, and, again, it would be much appreciated if something could be done for this isolated community. Both commercially and socially it would be highly desirable to have a telephone there.
Similar considerations arise in respect to the Bourne Farm Estate. I gather that up to a short time ago not one of the four shops on that estate was connected with the telephone. I am only dealing with commercial businesses or with cases where the needs of society should be met. I have not dealt with the desirability of providing telephones for private use.
This is the age of inventions, of man's mastery of the elements. We can now send messages thousands of miles without wires. Therefore, it is a little unfortunate that in an expanding locality of the kind I have described many months of delay occur before a telephone is installed. I very much hope that the Assistant Postmaster-General will be able to say that he will get his specialists and others engaged on the problem and that, in spite of the shortage of equipment, and so on, some progress can be made at any rate in the more serious cases which I have outlined.
4.23 p.m.
The Assistant Postmaster-General (Mr. C. J. M. Alport): I am very grateful to the hon. Member for Hayes and Harling-ton (Mr. Skeffington) for the tribute which he paid to the Post Office and, particularly, to the telecommunications side, for the work which it has accomplished during the last ten years or more. I should like to emphasise that that tribute is more than justified.
It is sometimes not realised that despite the virtual standstill during the war years, the overall size of our telephone system has doubled since 1939. In fact, we have installed almost as many telephones since 1945 as in the whole of the sixty years between the start of the telephone system in 1879 and the outbreak of war in 1939. I am sure, therefore, that when we are considering the problems of a particular district, as we are at present, those problems must be seen in relation to the overall achievement of the Post Office in the development and expansion of the telephone system of the country since
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1945. As I say, I am grateful to the hon. Member for his remarks.
Before I come to the background of the problem, Mr. Speaker, perhaps you will allow me to reply to some of the points made particularly by the hon. Gentleman. The gist of his criticism—and it was put very fairly, for which I am grateful to him—was that there was some pessimism, so far as the sales representatives of the Post Office were concerned, when estimating the time at which the applicant was likely to get his telephone.
The hon. Member mentioned the case of a subscriber who had his telephone installed much more quickly than the sales representative had said was probable. If we err on the side of pessimism in these matters we err on the right side. It would be thoroughly unfortunate and imprudent if we gave over-optimistic estimates to applicants as to when they would have their telephones installed, if we subsequently had to disappoint them —in many cases, probably, after they had made special provisions which would depend upon a telephone being available.
The hon. Gentleman raised some special points about call offices in housing estates. He can be assured that we are fully aware of the importance of providing—as and when possible, and as soon as possible—the facilities of a public telephone in the area of a new building estate, realising that not only the old people will be depending upon it but also many parents, who, in cases of sickness in the family, urgently require the use of a telephone.
The Post Office gives full consideration to these matters in dealing with these problems. At the same time, we are up against an increased demand for telephones both for residential and business purposes, which, despite the very remarkable progress made by the Post Office in this respect since 1945, cannot at present be fully met, for technical and other reasons.
The hon. Member referred in all cases to business telephones, and we recognise that the lack of a telephone is a very considerable handicap to any business. One of the businesses to which he referred— an important and expanding business— already has a telephone. In that case the request was for additional telephone facilities, so that the problem, although causing difficulties, no doubt, is not so desperate

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as those cases where no telephone has been installed.
We also place great emphasis upon the provision, where possible, of residential telephones. We realise that more and more families regard a telephone as an essential amenity in the normal intercourse of social life and, from the housewife's point of view, in dealing with the problems of her home and family. It is because of this that, over the past few years, we have allocated a high percentage of the capital resources available to us to the expansion of our telephone system. But, apart from the fact that, during previous Governments as well as this, these resources have been necessarily limited in relation to the high demand, the work of constructing new telephone equipment and putting up new exchanges is inevitably very considerable and expensive.
If I give the hon. Gentleman some figures it may help him to understand some of our difficulties. After a site has been acquired for a new telephone exchange it takes about 18 months to erect the building, and a further 18 months to install the highly complex automatic equipment which that building has to contain. We have reached a point in the development of our telephone system when it has become increasingly necessary to replace the old exchanges by new and larger ones rather than by merely adding to the capacity of the exchanges already in existence.
This is the problem which we face in the hon. Member's constituency. It is against this background that I ask him and the House to consider the problems of Hayes and Harlington. We calculate that between 1951 and 1953, the population of that area has increased from 65,000 to 90,000, which is a tremendous increase, and the demand for telephones has increased from 400 in 1952 to 1,055 last year. That is an increase of 150 per cent. compared with the average increase in demand of 45 per cent. for the country as a whole.
There is one point which the hon. Gentleman made which, I think, would cause him to be interested in my next figure. It is that of the 1,347 applicants on the order list at present there are 160 requiring telephones for business purposes. The remainder, that is, the vast majority, require them for residential use,
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although I am not decrying the telephone for residential use, because I know how important it is.
The hon. Gentleman questioned whether we had been sufficiently far-sighted in dealing with telephone problems. Between 1951 and 1955, we have supplied 3,000 additional telephones in this particular area, and we estimate—and this is the final figure I shall give-that the demand for the present year will reach about 1,150. We propose to tackle the problem raised by Hayes and Harlington in two phases.
Equipment extensions at the exchange will enable us to gain capacity for an additional 200 connections in March, and a further 1,200 in July. During the next 16 months, we hope to provide local cable extensions—that is, not additional capacity at the exchanges, but additional cable capacity, and the two things present quite different problems—we hope to increase cable extensions in order to connect up about half of the 700 applicants who are now waiting for local cable facilities. That will account for 350, and of the remaining 350 we hope that a large proportion will be accommodated on a shared line basis. Therefore, as I think the hon. Gentleman will agree, the immediate prospects are not too bad, though I think that there will be different problems affecting different applicants.
After March we will be depending to some degree, though not entirely, upon the opening of the new Viking Exchange, the construction of which is due to start in September of this year. This new exchange will serve part of the area represented by the hon. Member and part of adjoining areas. Dependent upon the rate and volume of the demand there may be a period between now and 1960 when we will face new problems in the area, but—and I want to be quite frank with the hon. Member on this—that is not a problem special to his area, but one which will affect other areas.
I hope I have been able to give the hon. Member a general idea of the prospects ahead and of the steps we are taking to meet the problems which his constituents face. I do not think that he can accuse the Post Office either now or in earlier years of a lack of foresight. After all, the new Hayes Exchange was completed only in 1950 and, therefore, the Post Office realised some time

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ago that the expansion of demand in this area would be considerable.
We fully realise the difficulties in which the present situation involves both the businessmen and the residents in the hon. Gentleman's area. We are doing our best to maintain a correct approach to their problems, along with those of telephone applicants in all parts of the country. To the best of our ability we have to base our approach on fair shares of the resources available while, at the same time, keeping a close watch upon the special developments which may
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take place in various parts of the country.
I very much appreciate the way in which the hon. Gentleman has put his case, and I am sure that his constituents will also appreciate it. If he has any particular case that he would like me to look into I hope he will not hesitate to let me know. We shall certainly do our best, as we have done in the past.
Question put and agreed to.
Adjourned accordingly at twenty-five minutes to Five o'clock.

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