Sitting of 13 November 1957

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

MESSAGE FROM THE QUEEN
The VICE-CHAMBERLAIN OF THE HOUSE-HOLD reported Her Majesty's Answer to the Address, as follows:
I have received with great satisfaction the loyal and dutiful expression of your thanks for the Speech with which I opened the present Session of Parliament.

PRIVATE BUSINESS
  ADERDEEN HARBOUR ORDER CONFIRMATION BILL
  Considered; to be read the Third time Tomorrow.
  CHURCH OF SCOTLAND (GENERAL TRUSTEES) ORDER CONFIRMATION BILL
  Consideration deferred till Tomorrow.
ORAL ANSWERS TO QUESTIONS
  TRANSPORT

    Public Thoroughfares, Slough (Dogs)
    Mr. Baldockasked the Minister of Transport and Civil Aviation whether he will give favourable consideration to the request of the Slough Corporation for authority to introduce a bye-law to ensure that all dogs on public thoroughfares should be on leads, thus making a contribution to road safety.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. G. R. H. Nugent): We will, of course, consider any proposal we may receive from the Borough Council
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    of Slough, but I would draw the attention of my hon. Friend to the replies given to the hon. Member for Eton and Slough (Mr. Brockway) on 10th April.
    Mr. Baldock: When he considers this matter, will the Minister take into account the very large number of human lives that are lost every year as a result of dogs straying on the roads and not being under proper control?
    Mr. Nugent: Yes, Sir.

    Driving Tuition (Standards)
    Mr. Awberyasked the Minister of Transport and Civil Aviation if he will take powers to establish a recognised instructor's certificate to be issued to persons requiring them and make it a necessary qualification for the opening of driving schools.
    Mr. Nugent: As my right hon. Friend indicated in the Answer he gave to a similar Question by the hon. Member for Hillsborough (Mr. G. Darling) on 17th July, we propose to review the whole question of the standards of driving tuition when we receive a report on driving standards from the Departmental Committee on Road Safety.
    Mr. Awbery: Is the hon. Gentleman aware that it is possible for a man to fail his test on several occasions and then pass, and a day or two after passing the examination he is able to open a driving school? Does he not think that a man should have more training than that before being able to open a driving school?
    Mr. Nugent: That is one of the aspects that we are considering. One must also remember that parents often give instruction to their children when they start driving, and we do not want to interfere too much with domestic habits of that kind.

    Fare Increases
    Mr. Remnantasked the Minister of Transport and Civil Aviation to what extent it is his policy to approve fare increases where the undertaking already anticipates a profit.
    The Minister of Transport and Civil Aviation (Mr. Harold Watkinson): Fare increases do not come to me for approval except when there is an appeal from the Traffic Commissioners' decision on bus

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    fares outside London. In such cases I do not approve increases which will enable the undertaking to earn more than will serve to maintain its efficiency and give a reasonable return on its capital.
    Mr. Remnant: Does my right hon. Friend mean by that Answer that if a company has had fares approved by the Traffic Commissioners when it is already anticipating a profit, and there is an appeal, he will negative the decision of the Traffic Commissioners to increase the fares?
    Mr. Watkinson: I certainly should not like to commit myself to that. All these cases have to be judged on their merits. If my hon. Friend has a case in mind, I should be pleased to look at it.

    Road Signs
    Mr. Collinsasked the Minister of Transport and Civil Aviation how many local authorities have adopted the practice of painting "Halt" on the road surface adjacent to halt signs; and to what extent it has proved of value in reducing the accident rate.
    Mr. Nugent: The word "Halt" painted on the carriageway is not a prescribed traffic sign, and there are no figures as to the extent of its use. I have, however, asked the Road Research Laboratory to compare results where it is used with those where it is not.
    Mr. Collins: Is the Minister aware that, where it has been used, it has been found that the accident rate has been lowered, presumably because drivers who may miss the conventional sign cannot very well miss a large painted sign? Will he pursue his inquiries, and if it is found that this reduces the accident rate will he commend it as a general practice to local authorities?
    Mr. Nugent: Depending on the answer that we get from the Road Research Laboratory, the answer is "Yes".
    Captain Pilkingtonasked the Minister of Transport and Civil Aviation whether, for the general convenience of road users, not least those coming from abroad, he will make it the rule that where there is a sign indicating a town, the mileage to that town shall also be shown.
    Mr. Nugent: The new Regulations, which came into force last March, permit the mileage to be shown on several classes of signs. I hope the responsible highway authorities will bring their signs up to date in this respect as soon as possible.

    Speed Limit
    Mr. Ellis Smithasked the Minister of Transport and Civil Aviation (1) if, when the 40 miles per hour speed limit comes into operation, he will restrict it to 20 miles per hour within a reasonable radius of schools at such times as the local police desire;
    (2) if, when the 40 miles per hour speed limit comes into operation, he will restrict it to 20 miles per hour through industrial centres during the peak periods when most people are present.
    Mr. Nugent: The 40 miles an hour speed limit is being introduced only on suitable lengths of busy main roads in the London Traffic Area. The presence of schools and factories is taken fully into account. I do not think a temporary 20 miles an hour speed limit during limited times of the day would be practicable or enforceable.
    Mr. Ellis Smith: While I do not desire to tie the Minister down to exact figures, will he ask his right hon. Friend to reconsider that reply in regard to the industrial areas in particular? Will he also ask him whether he has ever stood on a main road outside a school and watched children coming away from the school, and, if not, before he makes up his mind finally, will he do that?
    Mr. Nugent: I can assure the House that we are fully conscious of the dangers to which the hon. Gentleman referred. The main criterion adopted in putting forward lists of roads in London suitable for the 40 m.p.h. speed limit is that some restriction of speed is necesary on the roads in question but a speed limit of 30 m.p.h. either is or would be inappropriate or unenforceable. The 40 m.p.h. limit is of special use in certain circumstances, either where there is no limit at all at present or where there is a 30 m.p.h. limit which is not enforceable.

    Parking Restrictions (Industrial Centres)
    Mr. Ellis Smithasked the Minister of Transport and Civil Aviation if he will prohibit parking of all vehicles on main roads at peak periods in industrial centres.
    Mr. Nugent: From 1st December this year, responsibility for all such prohibitions will rest with the local authorities concerned, except in the case of trunk roads. We are always ready to consider on their merits any proposals for restrictions on parking on trunk roads.
    Mr. Ellis Smith: Wherever the local authorities decide to apply a policy of this kind and any difference arises, will they be able to depend on the support of the hon. Gentleman?
    Mr. Nugent: Depending on the merits of the case.

    Actes du Rhin (Translation)
    Mr. Knox Cunninghamasked the Minister of Transport and Civil Aviation whether, in substitution for the unofficial translation of the 1947 edition of the Actes du Rhin which he has supplied to the law libraries to enable lawyers and others to comprehend the provisions of Section 6 of the Administration of Justice Act. 1956, he will provide an unofficial translation of the 1957 edition of the Actes du Rhin to the same libraries.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Airey Neave): The Actes du Rhin is an unofficial publication, and my right hon. Friend sees no reason to have a special translation of the 1957 edition made.
    Mr. Knox Cunningham: In those circumstances, why was the Minister so kind as to supply an unofficial translation of the 1947 edition? Will he ask my right hon. Friend to think again, because it is quite impossible for anyone to understand the restriction of Section 6 of the Administration of Justice Act, 1956, unless my right hon. Friend provides a translation, or unless the lawyer happens to be able to speak French?
    Mr. Neave: My hon. Friend will be aware that the 1947 edition was supplied to him in unofficial translation as a
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    matter of courtesy to him and those interested in this matter. He will also be aware that the text of the Rhine Convention is not altered in the 1957 version and my right hon. Friend cannot sponsor a further unofficial translation of any additional matters in the new version.

  ROADS

    Tyne Tunnel Project
    Dame Irene Wardasked the Minister of Transport and Civil Aviation whether, in order to make progress in increasing the productive effort of Tyneside, thus reducing costs, he will now agree to authorising the preliminary work on the Tyne Tunnel project.
    Mr. Fernyhoughasked the Minister of Transport and Civil Aviation (1) if he will now state the approximate date when the Tyne Tunnel project will commence;
    (2) if he will now grant the Tyne Tunnel Joint Committee permission to commence the preparatory work including the construction of the approach roads to the Tyne Tunnel.
    Mr. Watkinson: I am not at this moment in a position to say when I shall be able to authorise this scheme, including the preparatory work.
    Dame Irene Ward: Will my right hon. Friend give an assurance that the decision will not be very long delayed? Will he bear in mind that the North deserves a thoroughly good break, and will he give us one?
    Mr. Watkinson: I will certainly do my best to come to a decision on this matter as quickly as possible, but it has been very difficult to fit it into my programme.
    Mr. Fernyhough: Why cannot the Minister give us some idea when the project will be commenced? He must know the phasing of his programme over the next three years. Can he tell us whether the scheme will be included within the next two or three years? Furthermore, does he realise that if he gave permission for the approach roads to be commenced, this would be looked upon as a token of good faith in the North-East, which is becoming cynical about the matter?
    Dame Irene Ward: It is not becoming cynical.
    Mr. Watkinson: I am very sorry that the hon. Gentleman says that the North-East is becoming cynical. If he presses me for an answer at this moment, I can always reply "No." My position is that I am trying hard to fit the scheme in, but if I am pressed to give an answer at the moment, it will be "No."

    London-Dover Road
    Mr. Jannerasked the Minister of Transport and Civil Aviation, in view of the fact that the proposed new motorway to the Channel ports is intended to consist primarily of the Medway Towns bypass, which is to be a motorway 25 miles long, what other plans are contemplated to make A.2 between London and Dover into a motorway; and whether it is intended that after the construction of the Medway by-pass the A.2 route should provide better facilities for road traffic between London and Dover than A.20.
    Mr. Watkinson: A number of other improvements are in progress on A.2, or will start soon. This work will not be at the expense of A.20, where major improvements are also being effected.
    Mr. Janner: Cannot the Minister provide a much more satisfactory explanation of the reason why this great motorway, to which he referred with such élan and publicity at the Conservative gathering, has dwindled down to a mere routine job of two by-passes?
    Mr. Watkinson: That is nonsense. As the hon. Gentleman's party made no progress on the road programme at all, it does not lie with him to criticise me when I am making some.
    Mr. G. R. Strauss: Does the Minister really suggest that present conditions for road-making are similar to those that existed in this country a few years after the war?
    Mr. Watkinson: I say again that the party opposite made no progress on the road programme at all, and I am making a great deal.
    Mr. Janner: In view of the unsatisfactory reply, I beg to give notice that I will raise the matter on the Adjournment.

    Yorkshire Motor Road
    Mr. A. Robertsasked the Minister of Transport and Civil Aviation what consultation he has had with the interested local authorities on the proposed Yorkshire motor road.
    Mr. Watkinson: Surveys preparatory to a draft scheme under the Special Roads Act, 1949, are being referred to appropriate county councils as the surveys are completed. Certain other local authorities will be consulted before the draft scheme is published.
    Mr. Roberts: Can the Minister give any indication when there is a likelihood of work starting on this proposed road?
    Mr. Watkinson: I am very anxious to get on with it, but, as the hon. Gentleman knows, there is a great difficulty in Leicestershire over the line of the road. As soon as I can clear that up, I hope that the scheme will go forward.

    Methley Water Bridge
    Mr. A. Robertsasked the Minister of Transport and Civil Aviation what recent developments there have been concerning the reconstruction of the Methley Water Bridge in Yorkshire.
    Mr. Nugent: We have told the West Riding County Council that we are prepared to examine a scheme for the reconstruction of the bridge and that when it can be included in the road programme my right hon. Friend will be willing to make a grant towards it.

    Grendon (Dual Carriageway)
    Mr. Mossasked the Minister of Transport and Civil Aviation whether he has now considered the practicability of constructing a short length of dual carriageway at Grendon in the County of Warwick.
    Mr. Nugent: Yes, Sir, but as dual carriageways here would mean serious interference with property, we are also considering the possibility of a different layout.

    A.5 Road, Caldecote
    Mr. Mossasked the Minister of Transport and Civil Aviation whether he will consider how to improve the safety of the A.5 road at the Royal Red Gate at Caldecote in the County of Warwick.
    Mr. Nugent: Yes, Sir. We are doing so.

    By-Pass, Atherstone
    Mr. Mossasked the Minister of Transport and Civil Aviation what steps he has now taken in respect of the construction of a by-pass at Atherstone in the County of Warwick; and what are the next steps to be taken.
    Mr. Nugent: We are waiting for the agent authority, the Warwickshire County Council to send us revised plans. On receipt of these we shall consider publishing a draft Order for this by-pass.

    New Kings Road, Fulham
    Mr. Gresham Cookeasked the Minister of Transport and Civil Aviation whether he will arrange to have the carriageway widened on New Kings Road, Fulham, S.W.6, at the junction of Parsons Green, to allow an easier flow of traffic.
    Mr. Nugent: This is a matter for the London County Council in the first instance.
    Mr. Gresham Cooke: This is an example of a place where traffic running in three or four lanes is thrown into two lanes. Would my hon. Friend try to encourage the L.C.C. to look at this point to see whether widening there cannot be taken in hand quickly in order to free the traffic flow?
    Mr. Nugent: I rather think that the L.C.C. is aware of it.

    Manchester-Chester Trunk Road, Stretford
    Mr. Storeyasked the Minister of Transport and Civil Aviation if he will now state a definite date when the widening of the Manchester-Chester trunk road in the Edge Lane-King Street area of Stretford will begin.
    Mr. Nugent: I cannot yet say when it will be possible to include this scheme in the roads programme.
    Mr. Storey: Is my hon. Friend aware that, by announcing this plan so long ahead and not taking a definite decision, he is causing very considerable hardship to the people who will be affected by this scheme? Is he also aware that this scheme will necessitate a great deal of redevelopment in the area and that the fixing of a definite date is urgent? Can he say when that date will be fixed?
    Mr. Nugent: I am afraid that I cannot go beyond what I told my hon. Friend in a letter which I sent to him earlier this year. This problem of what is now called "planning blight"—on properties in an area to be developed—is a general one and is now being examined urgently by a Government Inter-Departmental Committee. I am afraid I cannot give a more helpful answer than that on this occasion.
    Mr. Storey: I know that it is a difficult problem for the Ministry to have to set these things ahead, but this is causing very considerable hardship to people whose business premises are on this road. Also it is causing a hold-up in the development of the area. Surely it is possible for the Minister to give us some date in the next year or two when this can be undertaken?
    Mr. Nugent: I will look at the matter again, but it is difficult to go much further than I have already gone.

    Medway Towns Motor Road
    Captain Pilkingtonasked the Minister of Transport and Civil Aviation when the route for a future road from London to Dover-Folkestone was surveyed, decided on, and protected from encroachment.
    Mr. Watkinson: Proposals for the Medway Towns motor road were first considered and the route surveyed before the last war. Since the war further survey work has been carried out in connection with the revisions of the route. I shall advertise a draft scheme under the Special Roads Act, 1949, next week and when this scheme has been made the route will be fixed and protected from encroachment. It is at present being protected at my request by the Kent County Council under its general planning powers.
    Captain Pilkington: Can my right hon. Friend assure the House that, wherever it is obvious that a main road or trunk road is likely ultimately to be built, safeguard from encroachment is already in existence in order to economise on future spending?
    Mr. Watkinson: It is a very difficult problem. I am very worried about problem sterilising property when the road is not to be built for a considerable time in the future. We are examining the whole problem, and subject to that I certainly agree that my hon. Friend is quite right. We are trying to follow that procedure.
    Mr. Bottomley: May I inform the Minister that my constituents are glad that the Minister has decided at last that the road should go ahead, and I hope that nothing will be done to hold up this procedure?

    Torpoint Ferry
    Mr. Haymanasked the Minister of Transport and Civil Aviation whether he will make a statement on the increasing congestion of traffic at Torpoint Ferry.
    Mr. Nugent: The Cornwall County Council, which is responsible for this ferry, has informed me that it plans to replace two of the floating bridges and increase the carrying capacity by about 40 per cent.
    Mr. Hayman: Will the Joint Parliamentary Secretary see that there is no hold-up in his Ministry in the provision of these two new bridges, as the position at the ferry is chaotic and has been estimated to cost commercial road traffic at least £200,000 a year?
    Mr. Nugent: I know that the hold-up at the ferry is considerable. At the moment we are making a technical examination of the proposals and we will certainly expedite that to the best of our ability.

    Tamar Bridge
    Mr. Haymanasked the Minister of Transport and Civil Aviation why he refused permission for the construction of the Tamar Bridge to be proceeded with at all speed, since Parliament has sanctioned it and none of the cost will be borne by his Department.
    Mr. Watkinson: This is a capital investment project for which the consent of the Treasury is necessary before the County of Cornwall and the City of Plymouth can exercise their powers to raise money by loan. I have told these authorities that in view of the higher priority of other schemes in the national road programme I would not be able to give any special support to an application to the Treasury for the Tamar Bridge in present circumstances.
    Mr. Hayman: Will the Minister reconsider his decision? Financial speculative interests in London can build palatial offices which often appear to be unnecessary
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    and yet here is a road bridge, sanctioned by Parliament and very badly needed, the construction of which is delayed by the Government.
    Mr. Watkinson: I had the benefit of the advice of a very expert deputation from Cornwall and Plymouth. I told the deputation quite frankly what the position was and it was in no doubt of what its actions could be. On the whole, we had better leave it to the local authorities to decide what next move to make.
    Mr. G. R. Strauss: Can the Minister tell us what next move they can possibly make to expedite the building of this bridge?
    Mr. Watkinson: Certainly. They can put forward a project, and I will do my best to see that it is fairly considered.

    Overhead Roads
    Mr. Russellasked the Minister of Transport and Civil Aviation what modifications he has made in his policy regarding the building of overhead roads in suitable places in Great Britain as a result of the visit of the Joint Parliamentary Secretary to Brussels.
    Mr. Watkinson: My hon. Friend the Joint Parliamentary Secretary has made a full report to me on this subject, and the possibility of using similar methods of construction in this country is being studied.

    Hyde Park Corner
    Mr. Liptonasked the Minister of Transport and Civil Aviation when the road improvements at Hyde Park Corner will be put in hand.
    Mr. Watkinson: I have nothing to add to the Answer which I gave to my hon. and gallant Friend the Member for Poole (Captain Pilkington) on 30th October.
    Mr. Lipton: Having led the House to believe on that occasion that the Queen's Speech might promise some legislation in the matter, which it does not do, will the Minister say whether the whole scheme is now indefinitely suspended? It appears that the Government have gone astray in Hyde Park.
    Mr. Watkinson: The answer to the hon. Member's supplementary question is, "No."
    Sir C. Taylor: Is there any reason why the eastern carriage drives in Hyde Park and Park Lane should not be made one-way streets before the boulevard scheme is introduced?
    Mr. Watkinson: There are very great difficulties, because that would mean taking buses through the Decimus Burton Screen, which I am advised is not suitable for that purpose.
    Mr. Lipton: On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment at the earlest possible moment.

  CIVIL AVIATION

    London Airport and Northolt (Air Traffic Control)
    Mr. Beswickasked the Minister of Transport and Civil Aviation what steps he proposes to take to ensure that the increasing use of Northolt Airport for military services will not reduce the safety standards for civil aircraft using London Airport.
    Mr. Watkinson: Military aircraft using Northolt may enter and leave the London Terminal Control Zone either in accordance with civil procedures or through two corridors of limited height in which some radar surveillance is provided. The use of these corridors is restricted when London Airport traffic is taking off or landing through the approaches to Northolt.
    Mr. Beswick: Does the Minister agree that it is an extraordinary fact that here we have a situation in which the civil services left Northolt in part because of the safety difficulties, and yet the military use of Northolt is now increasing? Can he give an assurance that he is protesting to the military authorities against their decision to bring fresh operations to Northolt?
    Mr. Watkinson: We have recently had another look at this matter, and I think that some of the alterations which have been made in the drill and arrangements will meet the case. However, I agree with the hon. Member that we cannot have risks run at London Airport with civil aircraft, due to near misses and so on, through unregulated traffic around the airport.
    Mr. Mikardo: Has the right hon. Gentleman been absolutely satisfied by his colleagues responsible for the military traffic that there is no other aerodrome which can be used for that purpose where these dangers would not arise?
    Mr. Watkinson: That point is always kept under examination, but I am satisfied at the moment that the new arrangements which we have made should work satisfactorily. However, I will keep that under review.
    Mr. Beswick: Is the Minister telling the House that control of the Metropolitan area rests with the civil authorities, both for civil and military aircraft?
    Mr. Watkinson: We work it together, as we should. What I am saying is that as London Airport traffic grows, and it grows steadily every year, we shall have to take increasing precautions to see that there is no interference from aircraft using surrounding aerodromes.

    Light Aircraft (Airport Facilities, Greater London)
    Mr. Beswickasked the Minister of Transport and Civil Aviation if he has yet made any decision with regard to the provision of an airport within the Greater London area for the use of light aircraft.
    Mr. Neave: No, Sir, but after full consultation with the Secretary of State for Air, my right hon. Friend hopes that when Croydon closes there will be facilities for such aircraft, including those of the flying clubs, at the R.A.F. Station at Biggin Hill, a few miles outside the Greater London area. A meeting of those concerned will be held there shortly to discuss the possibilities.
    Mr. Beswick: If it is not possible to take over Biggin Hill—and there are difficulties about that—does the right hon. Gentleman entirely rule out the possibility of keeping open Croydon for the use of light aircraft only?
    Mr. Neave: At the moment I have nothing to add to what was said about this matter to the hon. Gentleman on 31st July. My right hon. Friend must adhere to his decision to begin the closing down of Croydon when Gatwick is opened for traffic next spring. Perhaps

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    we had better wait until the various interests have met on the site at Biggin Hill on 22nd November to consider the possibility of accommodation there.
    Mr. F. Harris: Does my hon. Friend appreciate that in Croydon there is a very strong feeling that Croydon should not be closed down, and will he give consideration to the representations lately made to him in that direction?
    Mr. Neave: My hon. Friend will know that there are strong feelings both ways about the closing down of Croydon. I have nothing to add to what I have already said—that my right hon. Friend must adhere to his decision.

  RAILWAYS

    Former Main Line Company Directors
    Mr. Mikardoasked the Minister of Transport and Civil Aviation what compensation was paid to the directors of the four main-line railway companies for loss of office following nationalisation.
    Mr. Watkinson: No compensation for loss of office was paid to the directors of the four main line railway companies by the British Transport Commission.

  MINISTRY OF DEFENCE

    Military Headquarters, Kenya
    Major Wallasked the Minister of Defence whether he will now make a statement about the setting up of a military base organisation in Kenya.
    Mr. Bellengerasked the Minister of Defence whether he is now prepared to indicate what arrangements are being made in respect of British defence installations in the Middle East region.
    Mr. Biggs-Davisonasked the Minister of Defence whether he is in a position to make a statement on the future of the British Middle East Headquarters and British military and air bases in Cyprus.
    Mr. Stonehouseasked the Minister of Defence what is the Government's decision regarding the establishment of a military base in Kenya.
    The Minister of Defence (Mr. Duncan Sandys): I would refer the hon. Members to the statement I made in the Defence debate last Thursday on this subject.
    Major Wall: Is my right hon. Friend aware that his statement did much to restore confidence and stability of Kenya? Will he amplify that statement and say whether he envisages an increase in the naval establishment at Kilindini and whether he has considered the setting up of a Commonwealth as opposed to a purely British strategic reserve in Kenya?
    Mr. Sandys: The new arrangements will not involve any increase in the naval base at Kilindini, nor are we planning any Commonwealth reserve in Kenya. I do not think that that issue arises, having regard to all the circumstances.
    Mr. Bellenger: Is the Minister going to make a statement about the stores and installations, equipment and so forth—apart from the personnel situation—in addition to the statement that he made a few days ago? It is quite obvious that if he is going to meet with any success in the redeployment of military forces in these areas he will have to take into account the weapons and other equipment they will want if they have to fight a war.
    Mr. Sandys: Yes. The purpose of the plan is to have a certain number of additional troops in a convenient spot for reinforcement of other theatres. They will have to have, in Kenya, the equipment and vehicles they need for their own training, but we are not contemplating building up base installations there. Some duplication of their vehicles and other heavy equipment will be held as a war reserve in the theatres where we think they might have to be sent as reinforcements. That is the arrangement.
    Mr. Bottomley: Having in mind the fact that in an area like Kenya we have to have a political calm, in view of the present difficulties, does the Minister still feel happy about going on with this arrangement?
    Mr. Sandys: I should make it clear—I think that my right hon. Friend the Secretary of State for War made it clear when he wound up the debate a few days ago—that these plans do not envisage the maintenance of large forces in Kenya. I

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    think that my right hon. Friend mentioned one or two battalions, and that is the order of magnitude.
    Mr. Stonehouse: Is the right hon. Gentleman aware that there is still a great sense of dismay and confusion in Kenya as to the real meaning behind the statement made by the Minister last Thursday? Can he say up to how many men he is proposing to establish?
    Mr. Sandys: I have just said that at the present moment we are thinking in terms of one or two battalions.

    Nuclear Tactical Weapons (Overseas Territories)
    Mrs. Castleasked the Minister of Defence to what extent it is now intended to equip our forces in South-East Asia and other overseas territories with nuclear tactical weapons.
    Mr. Sandys: I have at present no statement to make on this subject.
    Mrs. Castle: Is the right hon. Gentleman aware that the War Office is at present recruiting senior scientific officers to serve with a small detachment in Malaya, one of whose duties is to study the tactical use of nuclear weapons in the jungle? Does not this foreshadow the right hon. Gentleman's intention to extend his nuclear strategy from Europe to South-East Asia? Does he appreciate that this is causing a good deal of alarm in certain areas?
    Mr. Sandys: As the hon. Member knows, she has a specific Question upon this point later on the Order Paper, and I should not like to anticipate the reassuring Answer which I believe she will receive.

    Military Operations, Egypt (Commander-in-Chief's Despatch)
    Mr. Bellengerasked the Minister of Defence whether he has noted the deficiencies in the conduct of war-like operations in Egypt disclosed in the despatch of the Commander-in-Chief, Allied Forces; and whether he will make a statement.
    Mr. Sandys: Certain specific points are being studied; but I do not accept the right hon. Gentleman's implied criticism of the conduct of the operations. I am
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    glad of this opportunity to make it clear that the Government are fully satisfied with the way in which the Chiefs of Staff, the Commander-in-Chief and the Service authorities at all levels discharged their duties.
    Mr. Bellenger: Is the right hon. Gentleman aware that my Question referred to the despatch of the Commander-in-Chief himself? I recognise that the right hon. Gentleman was not in the position of Minister of Defence then, but is it not obvious from that despatch that if the Egyptian forces had acted in any offensive or war-like spirit there would have been disaster among the British forces alone engaged in the operation? Under those circumstances, why does the Minister take such a complacent attitude about this despatch?
    Mr. Sandys: I do not take a complacent attitude. All I said was that I did not accept the implication that the military operations had been conducted in a faulty manner.
    Mr. Paget: As the right hon. Gentleman seems to consider that from a military point of view this operation was perfect, may we take it that the Suez arrangement will serve as a model for future operations?
    Mr. Sandys: I have no doubt that it will be studied by military historians in years to come.

    Missiles
    Mr. Stonehouseasked the Minister of Defence what is the policy of the Government with regard to the development of anti-missile missiles.
    Mr. Sandys: Work is proceeding on this difficult problem in close collaboration with the United States authorities.
    Mr. Stonehouse: Can the Minister give any indication when it will be possible to develop a missile which will be an effecttive means of defence against the intercontinental ballistic missile developed by the Soviet Union?
    Mr. Sandys: I am hopeful that an answer will ultimately be found to this difficult technical problem. I can think of no weapon in the past to which an answer has not ultimately been found—but it is no good pretending that it is just round the corner.

    Land, Scotland
    Sir W. Anstruther-Grayasked the Minister of Defence how many acres of land are held by Service Departments in Scotland; and by how much he estimates that this figure will be reduced in the next twelve months.
    Mr. Sandys: About 77,000 acres are held by the Services in Scotland. Within the next twelve months, it is hoped to sell about 3,300 acres and to give up training rights on about 6,500 acres of other land.
    Major Anstruther-Gray: Will my right hon. Friend bear in mind the fact that that still leaves a great many thousand acres? Will he give an assurance that he will reduce to the absolute minimum necessary the quantity of acres that he holds?
    Mr. Sandys: I can certainly give that assurance. What we are proposing to do in the coming year shows that we are trying to live up to those principles.
    Mr. Steele: Has the Minister of Defence any further proposals for purchasing more land in Scotland for Service purposes?
    Mr. Sandys: That is a rather different question.

    South Uist Rocket Range
    Mr. Malcolm MacMillanasked the Minister of Defence how far it is intended to abandon the guided missiles project in the Western Isles; what changes in expenditure and scale are contemplated; and what arrangements have been made for continuity of employment for workers on the scheme.
    Mr. Emrys Hughesasked the Minister of Defence what consideration he has recently given to reducing expenditure on the South Uist rocket range.
    Mr. Sandys: I hope to be able to make a full statement shortly.
    Mr. MacMillan: Can the Minister give some sort of idea of what the word "shortly" means, in view of the fact that a Question has already been deferred by arrangement with his Ministry in order to give it an opportunity to make a full reply today? There is a good deal of local uncertainty and disturbance about the matter.
    Mr. Sandys: I recognise the need to clarify the position as quickly as possible.
    Mr. Emrys Hughes: Will the Minister's consideration take into account the fact that the lowest estimate for this scheme was £15 million, and that one was £20 million? Is he aware that the Government are advising us to stop inflation, and does not he think that his Ministry, by countenancing this enormous sum of money, is helping to increase inflation? Can he give some assurance that this colossal expenditure of public money will be abandoned, because it is a useless expenditure in view of the recent developments in rocket warfare?
    Mr. Sandys: The reason why I am not making a statement today is that I am doing just what the hon. Member wants, namely, seeing how far we can reduce to the absolute minimum the demands that we shall have to make upon land and the expenditure that we shall have to incur out of the taxpayers' money.
    Mr. Woodburn: Is the Minister aware that fairly definite statements have appeared in the Press that this rocket range is to be abandoned, and can he say whether this information is correct or whether it is intelligent anticipation?
    Mr. Sandys: I should say that it is anticipation, not necessarily correct.

    Retired Regular Officers
    Mr. E. Johnsonasked the Minister of Defence the number of retired Regular officers of the three Armed Services and the Indian Armed Services in receipt of Service retired pay; and how many of these retired before the outbreak of war on 3rd September, 1939.
    Mr. Sandys: There are 41,471 retired Regular officers, of whom 10,559 retired before the outbreak of war.

    Civil Defence (Expenditure)
    Mr. Emrys Hughesasked the Minister of Defence what steps he is taking to increase the proportion of defence expenditure now allocated to Civil Defence.
    Mr. Sandys: Expenditure on Civil Defence is being examined in relation to other defence expenditure.
    Mr. Hughes: Is the Minister aware that there is a general opinion that the Government are not paying sufficient attention to Civil Defence compared with military offensive strategy? Will he examine the proposals for evacuating 12 million people in the event of war; and can he give any explanation and show hon. Members how this operation is possible?
    Mr. Sandys: Civil Defence can help to mitigate the consequences of nuclear attack, but quite obviously it cannot provide security. That is why it is our policy to put the emphasis, so far as possible, on active measures designed to deter aggression altogether.
    Major Legge-Bourke: Will my right hon. Friend consider the possibility of changing the title of this activity from "defence" to "relief and rescue"?
    Mr. Hughes: In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I will endeavour to raise the matter on the Adjournment.

    Defence White Paper
    Mr. Emrys Hughesasked the Minister of Defence if, in view of recent events, he proposes to issue a revised interim defence White Paper.
    Mr. Sandys: No. Sir.
    Mr. Hughes: Does not the Minister agree that recent developments in rocket warfare and inter-continental ballistic missiles have made a great deal of this White Paper completely obsolete and out of date? Does not he think that he should clarify the position in view of recent developments?
    Mr. Sandys: My conclusion is exactly opposite. Recent developments have strikingly confirmed the rightness of the basis of the White Paper policy, which was the assumption that we are now moving into a period where rockets and guided missiles will play a major part in military affairs.
    Mr. Beswick: Are we to take it that the Minister of Defence did not, after all, listen to his right hon. Friend the Member for Carshalton (Mr. Head) when he spoke last Thursday?
    Mr. Sandys: I do not think that my right hon. Friend referred to Sputniks at all during his speech.
    Mr. S. Silverman: If the Minister did not listen to his right hon. Friend, will he at any rate listen to himself? Will he re-read the admirable speech on this subject which he made to the Annual Conference of the Conservative Party at Brighton, and having re-read it, will he reconsider the Answer he has just given to my hon. Friend? Does not the Minister's own speech show how ineffective is the policy advocated in the White Paper for which he was responsible some months ago?
    Mr. Sandys: Perhaps the hon. Gentleman will have an opportunity to develop his ideas on a later occasion.

  MILITARY OPERATIONS, EGYPT
  Mr. Lewisasked the Prime Minister whether he will now publish all the official documents, papers and letters connected with the recent war against Egypt together with any hitherto secret agreements entered into with France in connection with the armed conflict with Egypt.
  The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): I have been asked to reply. I would refer the hon. Gentleman to the reply given on 2nd April.
  Mr. Lewis: Yes, but many months have passed since then. Can the Leader of the House give any sensible or logical reason why these papers should not now be published? There may possibly have been some reason while the war was going on—a war which the Government started—but can the Minister say why they should not be published now?
  Mr. Butler: It is not normally the practice for Her Majesty's Government to disclose the nature of confidential communications with other Governments, whether those are oral or written. Another reason is that the main despatch to which reference was made at the recent interchange at Question Time, namely, General Keightley's despatch, has already been published.

  EMPLOYMENT

    Wages (Percentage Increase)
    Captain Pilkingtonasked the Minister of Labour the percentage increase in earnings since 1951.
    The Minister of Labour and National Service (Mr. Iain Macleod): Inquiries covering manual wage earners in manufacturing industries generally and in a number of the principal non-manufacturing industries showed that in April, 1957, the average weekly earnings per worker had risen by 45 per cent. since October, 1951. Figures for dates later than April, 1957, are not yet available.
    Captain Pilkington: In view of the fact that prices have risen less than 50 per cent. of that figure in the same period, would my right hon. Friend like to comment on the remark of Mr. Frank Cousins at the Trades Union Conference that wages ought to keep pace with the rise in costs?
    Mr. Macleod: Prices over the same period have actually risen by 24½ per cent. If I may, I should like to be excused from answering the second part of the supplementary question.
    Mr. Lee: Will the right hon. Gentleman indicate whether there is now any greater number of hours being worked than at that period, and can he tell us whether the wage bill, judged as a percentage of the national income, is any greater than in those days?
    Mr. Macleod: The hours of work are, of course, an important consideration; but even if we take it on the basis of rates of wages, the increase is still 38½ per cent., which is very greatly in excess of the rise in prices over the period.
    Mr. D. Howell: Comparing these figures with those of the section of the Health Service workers who have just been refused an increase, and whose wages have increased by only 21 per cent., are not the Government's figures shameful and incapable of defence in any way?
    Mr. Macleod: That is a much wider question than the one on the Order Paper, which is purely on the percentage increase in earnings since 1951.

    Catering Wages (Unlicensed Residential Establishments)
    Mr. Lewisasked the Minister of Labour if he is aware that for many years the Catering Wages Commission has been anxious to have a wages board established covering the unlicensed residential establishments; when he expects to appoint such a board; and whether he will make a statement in the light of the Catering Wages Commission's 13th Annual Report and the reference therein to this subject.
    Mr. Iain Macleod: I have noted the views expressed by the Catering Wages Commission, but I have no statement to make at the present time.
    Mr. Lewis: Is it not about time that the right hon. Gentleman's Ministry took action in connection with this matter? This has been going on now for about 10 or 12 years—indeed for about 40 or 50 years before that. If the Commission and the trade unions and the independent members on the various wages boards in the other sector of the industry have said that this is long overdue, and no progress is made because of the attitude of the employers, surely the Minister should take some positive action.
    Mr. Macleod: I do not pretend to have a solution to the problem of bringing the small boarding houses within the ambit of the present provisions and nor had any of my predecessors—though it was not for the lack of trying. I suppose it is because of that that appointments to this board lapsed in 1951. In my view, this problem is likely to be solved only as part of a whole review of the wages and catering position.

    Joint Industrial Councils (Agreements)
    Mr. Collinsasked the Minister of Labour if he will give an undertaking that the Government's declared policy on wage increases will not involve any attempt by him to cancel any decision by a joint industrial council to alter wages or conditions of labour, or any interference with the freedom of members of joint industrial councils in the making of such decisions.
    Mr. Iain Macleod: Joint industrial councils are bodies concerned with collective bargaining and we have already informed the House that the Government

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    have no intention of interfering with such arrangements.
    Mr. Collins: In that event, will the Minister agree that the right of workers and employers to negotiate freely on wages and conditions is absolutely fundamental to our industrial structure? Will he say, therefore, why, if he takes that attitude with regard to the joint industrial councils, the Government have made their recent decision regarding the Whitley Council for the Health Service? What is the fundamental difference?
    Mr. Macleod: Although I should like to look at the first part of the hon. Gentleman's supplementary question when it appears in HANSARD, I do not think that I should disagree. Of course, in the case mentioned, the fundamental difference is that the management or official side who have had the responsibility for making the recommendation are not in the ordinary position of employers in that they are not responsible for finding the money.
    Mr. Awberyasked the Minister of Labour on how many occasions and in what trades the decision of a Whitley Joint Industrial Council has been nullified by any body of employers or by the action of any Minister of the Crown.
    Mr. Iain Macleod: About 180 joint industrial councils or similar bodies operate at the present time and many of them have been in existence for a long period. I cannot say what action has been taken on the decisions of these councils over the last forty years as no record is kept in my Department. It is clearly unlikely, however, that any body of employers would nullify an agreement which they had freely reached in negotiation. It is, of course, only in a very few cases in the public sector that Parliament has decided that a Minister's approval is necessary before an agreed recommendation can be put into effect.
    Mr. Awbery: Is the Minister aware that, since Whitley Councils were established in 1917, this is the first occasion that an agreement has been nullified by the Government? Is he aware that he has created a precedent which will be adopted by employers and lead to chaos in industry and that all he is getting out of it is £604,000 a year? Will the right hon. Gentleman ask his right hon. Friend
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    the Minister of Health to reconsider his veto on the recent decision?
    Mr. Macleod: I note what has been said without agreeing with it. My right hon. Friend will also see in HANSARD what has been said. Obviously one cannot tell—because no records have been kept, and there are 180 of these councils going back forty years—whether such action has been taken before. The important point is that in the vast number of cases of joint industrial councils concerned with industry no Minister comes into the picture at any stage. It is only in a few cases that Parliament has decided he should, and presumably Parliament did not intend Ministerial approval to be a rubber stamp.
    Mr. Lee: Would the Minister care to resolve the anomaly which now faces us? Can we take it, the Whitley Council having made its recommendation and the Minister having vetoed it, there is now no opportunity for the trade union side to go to arbitration on the matter? Would the Minister accept that the anomaly works out in a way which means that the trade union side must now present its case so very badly as to be sure that the official side will turn it down, so that the matter can go to arbitration? Is that the position?
    Mr. Macleod: The position is that, as there is no arbitrable issue at present, arbitration does not arise. [HON. MEMBERS: "Oh."] There is no dispute, and therefore there is no arbitrable issue. It is possible that such an issue will arise in connection with this particular claim. Nothing I have said today, and nothing that my right hon. and learned Friend the Minister of Health said to the deputation on Monday, excludes that possibility.
    Mr. Lee: The Minister has said that there is no issue to go to arbitration. Would he not agree that the trade union side of the Whitley Council made an application which was agreed to at the Whitley Council, and because there was no failure to agree the matter cannot now be taken to arbitration? It does not alter the fact that the trade union side is insisting on its right to get a 3 per cent. advance. Will the right hon. Gentleman say what he means by his observation that there is no case to go to arbitration?
    Mr. Macleod: There is no case to go to arbitration because at the moment there is, in this particular instance, and in the technical sense, no dispute. Therefore there can be no arbitration. The hon. Gentleman knows that perfectly well. I have made it quite plain that nothing I have said today excludes my consideration of an arbitrable issue if one is put before me.

    Industrial Disputes
    Mr. Fletcher-Cookeasked the Minister of Labour the total number of working days lost as a result of industrial disputes from 1st January to 1st July, 1957; what proportion of that total was lost as a result of disputes in the coal mining, ship-building and ship-repairing, water transport, docks and road passenger transport industries; and what proportion of the civilian labour force is employed in those industries.
    Mr. Iain Macleod: The total number of working days lost as a result of industrial disputes from 1st January, 1957, to 31st July, 1957, was 7,830,000. Forty-five per cent. of this total was lost as a result of disputes in the coal mining, ship-building and ship-repairing, water transport and docks, and road passenger transport industries. On the last available estimate, which relates to the end of May, 1956, some 7½ per cent. of the total civilian labour force of the United Kingdom was employed in those industries.
    Mr. Fletcher-Cooke: Do not these figures show that very few of the workers in this country in proportion to their total number are involved over the years in industrial disputes?
    Mr. Macleod: Yes, indeed. I made that clear in my speech in the economic debate a fortnight ago.

  NATIONAL SERVICE

    Exemptions
    Mr. Haymanasked the Minister of Labour what classes of young men are exempted from National Service; how many, in each category, have been granted exemption in the last six months; and how many young men were actually called up in that period.
    Mr. Iain Macleod: The classes of men exempt from National Service are set out in the First Schedule to the National Service Act, 1948. Precise figures are not available but it is estimated that in the six months ended 30th September, the number of men found to be exempt was about 600. In addition about 4,500 men who were liable for National Service were granted indefinite deferment, so long as they continue in the employment concerned. The number called up during the same period was just over 50,000.
    Mr. Hayman: Do not the figures disclose that the right hon. Gentleman's Department ought to give very careful consideration to applications for further deferment where it is clear that young men are carrying on studies at technical colleges and have the approval of the principals of the colleges for deferment?
    Mr. Macleod: I do not think the hon. Member has got it quite right. Those who are exempt are a very limited number indeed and are such people as ministers of religion and blind persons. There is a second class, which includes coal miners and the Merchant Navy, which has indefinite deferment. Beyond that there is a wide field which the Question did not touch and therefore was not referred to in my Answer, and which covers postponement on hardship grounds.

  EGYPT (DISMISSED BRITISH OFFICIALS)
  Mr. Kershawasked the Secretary of State for Foreign Affairs whether he will now take steps to ensure that the claims of British subjects dismissed from the service of the Egyptian Government in December, 1951, receive consideration equal to that given to British subjects who suffered as a result of the events of 1956.
  The Minister of State for Foreign Affairs (Mr. D. Ormsby-Gore): In the Anglo-Egyptian talks in Rome in May this year, in which the claims of British subjects arising out of the events of 1956 were discussed, the British delegation also placed on record with the Egyptian delegation the claims of these officials dismissed in 1951. Their association has been assured that at the talks which were resumed last month, and are now

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  in progress, our delegation will continue to urge a settlement of these long-outstanding claims.
  Mr. Kershaw: Is the Minister aware that, in the meantime, these unfortunate people have nothing to live on? It is very difficult to understand why, whatever the origin of their claims against the Egyptian Government, they should not be treated in exactly the same way as people who were immediately affected by the events of 1956.
  Mr. Ormsby-Gore: It is not true that these people have nothing to live on. If there are real cases of hardship they can go to the Anglo-Egyptian Resettlement Board, which has the authority to give them relief. The reason that they are not placed on the same footing as the other claimants was made clear in a very long Answer which I gave on 30th October.
  Mr. Younger: Is the Minister of State contending that these people are any less victims of the Egyptian action resulting out of the quarrels between Governments than those who left Egypt in 1956? Is it not possible to put the 1951 victims on the same basis as those of 1956, as regards granting them loans on the security of the claims which may or may not succeed against the Egyptian Government? If it can be done for the 1956 people why not for the 1951 people?
  Mr. Ormsby-Gore: For the simple reason that the conditions under which the people left in 1951 were very dissimilar to the conditions under which people left in 1956. I am sure that the best way to get compensation for these people is to press on with the talks which are going on with the Egyptian delegation.
  Mr. Younger: Irrespective of how they left in 1951, is it not a fact that their claims have been prejudiced with the Egyptian Government by the events of 1956? They were hoping that their claims would be settled until 1956. Are they not just as much the victims of the events of 1956 as those whose claims only arose in that year?
  Mr. Ormsby-Gore: I have already said that their cases are not the same. That is why they are being dealt with in a different manner.

  DISARMAMENT SUB-COMMITTEE MEETINGS
  Mr. Langford-Holtasked the Secretary of State for Foreign Affairs the cost to date to Her Majesty's Government of the recent series of meetings of the Disarmament Sub-Committee at Lancaster House; and what daily charge is made by the United Nations Organisation to Her Majesty's Government for the services of translators at the meetings of the Disarmament Sub-Committee.
  Mr. Ormsby-Gore: The cost to date to Her Majesty's Government of the recent series of meetings of the Disarmament Sub-Committee at Lancaster House between 18th March, 1957, and 9th September is £1,927 14s. 0d. This is principally accounted for by the provision of suitably furnished accommodation at Lancaster House and the provision there of the necessary equipment for simultaneous interpretation of the proceedings. No charge is made by the United Nations to Her Majesty's Government for the services of translators at meetings of the Disarmament Sub-Committee. These costs are paid by the United Nations.
  Mr. Langford-Holt: Would not the Minister agree that regardless of who pays—because what the United Nations pays we pay—it would be much easier and more satisfactory to use translators who are here and are ready and competent to do the job?
  Mr. Ormsby-Gore: My hon. Friend is now talking about the subject of his next Question on the Order Paper.
  Mr. Langford-Holtasked the Secretary of State for Foreign Affairs why it was necessary to bring Russian language translators from New York to the proceedings of the Disarmament Sub-Committee when competent and qualified translators were already available in this country.
  Mr. Ormsby-Gore: All arrangements for the provision and payment of Russian language translators were made by the United Nations, which no doubt used, as far as possible, members of its existing staff.
  Mr. Langford-Holt: In view of the fact that the United Nations' existing staff presumably had to cross the Atlantic to

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  get here, would not a saving have been effected if the United Nations had made use of translators already in this country?
  Mr. Ormsby-Gore: The arrangements were obviously under the control of the United Nations. If a number of translators are paid by the year it is unlikely to be a saving to pay for new translators in the United Kingdom.
  Mr. Langford-Holtasked the Secretary of State for Foreign Affairs the nationality of the United Nations chief administrative officer at the recent meetings of the Disarmament Sub-Committee.
  Mr. Ormsby-Gore: The chief administrative officer from the United Nations at the 1957 meetings of the Disarmament Sub-Committee was of Jordanian nationality. He returned to New York in May, after which the administration of the meetings was handled by the documents officer, whose nationality was British.

TELEPHONE CHARGES
The Postmaster-General (Mr. Ernest Marples): With your permission, Mr. Speaker, and that of the House, I would like to make a statement about telephone charges.
As from 1st January, 1958, charges for calls will be drastically altered. Most calls now costing 6d., 9d. or 1s. will be reduced to 3d. The majority of charges for trunk calls will also be reduced.
These changes pave the way for full automation in the telephone service, including trunk dialling by subscribers, which will begin at Bristol towards the end of 1958.
Full details are given in a White Paper which will be available in the Vote Office later this afternoon.
Mr. Ness Edwards: Before commenting on the right hon. Gentleman's statement or questioning him about his extraordinary pronouncement, may I draw your attention, Mr. Speaker, and that of the Leader of the House, to this habit of "leaking". This change has already been announced to the public in a newspaper today. It is quite unfair to the House and to hon. Members for this leaking process to go on. May I draw your attention to the matter Mr. Speaker,
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and ask the Leader of the House to look into it and to consider what he can do to protect the rights of hon. Members?
With regard to the statement made by the Postmaster-General—
Mr. Nabarro: Cheer up.
Mr. Ness Edwards: —we want to reserve our position until we have seen the White Paper. The right hon. Gentleman practised this technique with his last statement when he announced increases.
May I ask how far these proposals are an attempt to retrieve the Post Office telephone service from the disastrous consequences of the handling of the Post Office finances both by himself and his predecessor? Is it not peculiar to give as a reason that this is to prepare the way for automation, which will not come until twelve months' time? Does he not agree that the change in charges ought to follow automation rather than the reverse?
May I ask the right hon. Gentleman how much longer would-be subscribers will have to wait for their telephones as a consequence of the £5 million cut in telephone expenditure which has been imposed by the Treasury?
Mr. Marples: If the right hon. Member disagrees with the proposed changes when he sees them in the White Paper, no doubt he will move a Prayer against the regulations which I shall lay. As to the second part of his supplementary question, this is the only nationalised industry which is directly responsible to this House. Oliver Cromwell started it off by the Post Office Act. Unlike hon. Members opposite, he thought that a nationalised industry should be run in a democratic way.
These proposals constitute the most sweeping and radical reform since the Post Office took over the telephones in 1912. I thought it only right that the first statement should be made in this House—[HON. MEMBERS: "Oh."]—accompanied by a longer White Paper, which explains in detail what the proposed changes are.
The difficulty with right hon. Gentlemen opposite is that they read the newspapers, but never read HANSARD. If they had read HANSARD for 18th July, four months ago, they would have found that in the statement I then made these

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changes were forecast. This is what I then said:
"Ordinary local calls will go up to 3d., but from 1st January next this will be offset by a very big extension of the distance over which tins charge will apply."—[OFFICIAL REPORT, 18th July, 1957; Vol. 573, c. 1354.]
The House knew of the change more than four months ago. It is scarcely my fault that the right hon. Member chose other parts of my statement on which to question me then.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: I hope that supplementary questions will be limited on this matter. After all, a White Paper is to be read and understood by hon. Members on this remarkable subject and regulations are to be laid, which will he debatable. I merely say that because I do not want Question Time to become a time for debate.
Mr. W. R. Williams: On a point of order, Mr. Speaker. In view of the fact that only right hon. Members of the respective Front Benches have so far been allowed to comment on this very important statement, I wonder whether you would allow some of us very directly interested in the matter to put supplementary questions?
Mr. Speaker: I did call an hon. Member on the Government side of the House and so long as it is not overdone I shall be glad to hear what hon. Members have to say.
Mr. S. Silverman: On a point of order of a rather different kind, Mr. Speaker. The Postmaster-General has just said that the House was placed in possession of the salient, basic facts of this matter four months ago. If that is so, is not the right hon. Gentleman today rather abusing the custom of the House in making a special statement after Questions about something which he informed us all about—he says—four months ago?
Mr. Speaker: That is not a point of order. I think that the statement today was a little more precise.
Mr. John Rodgers: Is my right hon. Friend aware that this statement will cause general rejoicing throughout the country? Could he, however, be a little more specific and tell us exactly what we shall get for our 3d. calls and, also,
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whether this applies to calls from call boxes?
Mr. Marples: It is all in the White Paper. It applies to call boxes in the same way as to private telephones. Some of the examples of savings are really quite remarkable. For example, a call from Westerham to Elstree before the war cost 1s., at present it costs 1s. 6d., and as from 1st January it will cost 3d. The area covered by the 3d. call is at present 80 square miles on average and after 1st January it will be 900 square miles.
Mr. C. R. Hobson: While welcoming the statement made by the right hon. Gentleman, who claimed a precedent for a nationalised industry which might be followed by private industry, may I ask whether the White Paper explains the anomaly whereby a distance call costs less than a 4d. call from an ordinary call box? Secondly, is the very large profit that is made on the trunk network now to be devoted to toll calls?
Mr. Marples: I think that the hon. Member will find the White Paper is specifically clear. This change does not mean using the profits of the trunk calls but, for the first time, using existing machinery to the full. It is difficult to explain, but perhaps I could give the House an example.
Take the Holborn Exchange, which was the first automatic exchange, having been started in 1927. At present, for a local call the subscriber dials the number automatically and the call is recorded automatically as having cost 3d. If the Holborn subscriber wants to get Watford, although the instrument can mechanically obtain Watford it cannot record a 9d. charge. In fact, it cannot record a 6d., 9d. or 1s. charge; it can record only a 3d. charge. To overcome that, the subscriber has to dial the operator, who connects him to Watford, and the operator records the charge by hand.
To use the machinery to the full, one has either to install machinery which will record a multiplicity of charges or increase the charging area. To install machinery costs millions of pounds, but to alter the charging area costs nothing. From 1958 onwards, for the first time, subscribers in Holborn will be able to dial Watford automatically and the charge will be recorded automatically.
Sir R. Grimston: Following the supplementary question asked by the hon. Member for Keighley (Mr. C. R. Hobson), inasmuch as certain local calls from call boxes will cost more than long-distance calls, could my right hon. Friend hold out some hope of a reduction for the purely local call when he has had time to look further into the matter?
Mr. Marples: That is another question, but I can tell my hon. Friend that we have ideas on that subject. This operation is the biggest since 1912, and I think it ought to rest on its merits as it stands. I can tell my hon. Friend that the matter to which he has referred is on the agenda, and, without making any commitment, I can say that we shall look into it carefully.
Mr. W. R. Williams: Without going into all the anomalies and details, or even going back to the days of Oliver Cromwell, may I ask the Minister whether he is aware that this dual achievement by the oldest nationalised industry in this country meets with the full approval of most hon. Members on this side of the House, and, indeed, I assume, all hon. Members. The dual achievement consists of a reduction in prices when all private industries are putting prices up and the magnificent achievement of having automatic dialling of trunk calls. Is the right hon. Gentleman further aware that the House and the country are greatly indebted to the Post Office Research Station for these very magnificent and remarkable achievements?
Mr. Marples: I am sorry that only most of the hon. Members opposite were pleased about the reduced charges. I should have thought that all hon. Members would have been pleased about them.
I want to make it clear to the House that this operation has not been brought about by new machinery. It has been brought about by the better use of existing machinery. Machinery can have restrictive practices applied to it, as is often publicised, by labour and also by administration. In this case, I have tried to remove administrative restrictive practices from the machinery. That is where the benefit is derived. It is not a matter of there being new machinery.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. We shall return to this subject, no doubt, in due course.

BANK RATE INCREASE (INQUIRY)
The Prime Minister (Mr. Harold Macmillan): With permission, Mr. Speaker, I wish to make a statement.
Yesterday, certain Questions were put to my right hon. Friend the Chancellor of the Exchequer concerning an allegation that there had been a leakage of information regarding the intention to increase Bank Rate.
My right hon. Friend was asked to say what individuals he saw on the day preceding the increase in Bank Rate. He took the view that it would be contrary to precedent and damaging to the conduct of public business to disclose the confidential discussions which are frequently held in advance of an announcement of Government policy; and he therefore declined to give the information sought.
But in view of the interpretation which has been placed on his replies I have decided, with his full concurrence, that this information should be given on this occasion. I wish to say at once that I have the categorical assurance of my right hon. Friend that in the interviews to which I am about to refer nothing was disclosed about the intention to increase Bank Rate. But, apart altogether from Bank Rate, the Government were about to announce a number of important measures for dealing with the economic situation, including the limitation of bank advances, control of the money supply and the adjustment of public investment. These measures must inevitably have wide repercussions on wages, profits and many other sections of the economy.
It was, therefore, both necessary and normal that the presentation of these measures to the public should be discussed in advance with a number of interested persons including certain representatives of the Press. Accordingly, in a series of separate interviews during the afternoon of 18th September, my right hon. Friends the Chancellor of the Exchequer, the Minister of Labour and the Minister of Power explained these measures to representatives of certain of the nationalised industries, to representatives of the Trades Union Congress

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and the British Employers' Confederation, to representatives of certain newspapers and to Mr. Oliver Poole, the Deputy Chairman of the Conservative Party.
I wish once more to say that I have been assured that in none of these interviews was any disclosure made of the intention to increase Bank Rate. I accept those assurances. Moreover, full information about these interviews was placed before the Lord Chancellor in the course of the inquiry which he made at my request; and, as the House will remember, he reached the conclusion that there were no grounds for further investigation.
No new evidence of any leakage of information has been adduced. But in the course of the supplementary questions yesterday imputations were made—or, at any rate, implied—on the honour of my right hon. Friend the Chancellor of the Exchequer and on the character and probity of Mr. Oliver Poole. These are serious imputations, and my right hon. Friend and Mr. Poole have both represented to me most strongly that they should be given an opportunity to rebut them.
Mr. Poole, who is no longer in a position to defend himself in this House, has sent me a letter, which I will circulate in the OFFICIAL REPORT, asking that an inquiry should be held for this purpose. In the circumstances which have arisen, I have decided that this is now the right course to take. Therefore, I shall tomorrow move in this House, and my noble Friend will move in another place, for the setting up of a Tribunal of Inquiry under the Tribunals of Inquiry (Evidence) Act, 1921. Notice of motion will be given under the usual procedure.
Mr. Gaitskell: In view of the Prime Minister's decision to set up a Tribunal of Inquiry, it would clearly be inappropriate to pursue the matter further this afternoon. I would, however, like to ask him two procedural questions. First, will the tribunal sit in public? Secondly, what precisely will be the terms of reference—how wide is the scope of inquiry to be?
The Prime Minister: The terms of reference, will, of course, appear in the Motion that I will place upon the Order Paper, and, as soon as it is ready, I will see that a copy is sent to the right hon. Gentleman through the usual channels.
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I would like notice of the first part of his question.
Mr. Gaitskell: In view of the importance of clearing up the matter in a satisfactory manner, I would ask the Prime Minister whether he would consider consulting the Opposition about the terms of reference and the scope of the inquiry?
The Prime Minister: No, Sir. This is a completely changed situation. This is now an attack on the honour of two gentlemen, and I think it right that they should have an opportunity to rebut this attack upon them, which, at an earlier stage, was mere tittle-tattle.
Mr. Gaitskell: Are we to understand from that reply that the inquiry will be limited simply to the particular imputations or allegations made regarding Mr. Oliver Poole, or will it be into the whole question of whether there was a leakage, and what exactly happened?
The Prime Minister: Perhaps the right hon. Gentleman will be good enough to wait until I have given him a copy—[HON. MEMBERS: "Answer."]—of the Motion that I propose to put upon the Order Paper. That must be upon my responsibility, and nobody else's, but, of course, it will be debatable tomorrow, and if the right hon. Gentleman and his hon. Friends are not satisfied with it they will be able to move Amendments to it.
Mr. H. Morrison: May I put it to the Prime Minister that my right hon. Friend's point is a very valid one? Presumably, the Prime Minister is now thinking about the terms of reference and, therefore, if the House were informed of the proposed terms that are in his mind, and we thought that they were inadequate, persuasion could be brought to bear upon him to amend them now. It would be much more difficult when the Motion was on the Order Paper.
Secondly, although I think I follow why industrial interests and commercial interests that were intimately concerned might have been informed—within strict limitations—I should like to know from the Prime Minister why the Deputy Chairman of the Conservative Party was brought into this privileged body of people, and given highly secret and confidential information. I am bound to say

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that I never remember, on our side, representatives of the outside political Labour Party organisation being brought in to receive such information.
The Prime Minister: I am grateful to the right hon. Gentleman for his helpfulness. I will certainly consider, when drafting the Motion—which I have not yet completed—the point that he has made. I hope that the Motion will be found satisfactory to the House, but it must be made upon my responsibility. If it is not satisfactory, Amendments can, of course, be moved, but I will take the earliest possible opportunity of conveying the terms of the Motion, when we decide upon them, to the Leader of the Opposition, through the usual channels.
In reply to the second part of the right hon. Gentleman's question, this is, of course, a matter which is now one of discussion. What I am concerned with, and what I wish to rebut, is that any information on the raising of Bank Rate was given either to these or to any other gentlemen not Ministers or in the public employ.
When an imputation is made, as it was made by the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) yesterday which is, in effect, an accusation not only that the truth was not told but that a most disgraceful act of corruption was committed by Mr. Poole—for that is the only point in saying that he had vast City interests—[Interruption.]—and since Mr. Poole points out to me that nobody is prepared to libel him outside the House of Commons, I think that it is only fair that he should have an opportunity of clearing his honour.
Mr. Gaitskell: Reverting to the first part of the supplementary question put by my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), will the Prime Minister be good enough to let us see the draft of the proposed Motion before it goes upon the Order Paper? I think it is far more desirable in a matter of this kind that, if possible, there should be agreement about the terms of reference. Of course, the Prime Minister takes the responsibility for those, but what we are seeking is an opportunity of giving an opinion upon them before he actually makes his decision.
The Prime Minister: I will consider that, but I am bound to say that after imputations of this kind have been made from the Opposition Front Bench I feel inclined to take the responsibility myself.
Mr. Gaitskell: I am sorry that the Prime Minister insists on taking this extremely high line about a matter which has been a source of very grave concern in the Press, and in the country generally. I have made, I should have thought, a very reasonable request to him, namely, that, if possible, we should agree on these terms of reference. I think that it is desirable, Mr. Speaker, that justice should not only to be done but should be seen to be done. I again press the Prime Minister and ask that we should have an opportunity of giving our views before the Motion is actually tabled.
The Prime Minister: I shall do everything that I can to get agreement, of course, but I think that the right hon. Gentleman is a little unreasonable. The object of putting the Motion on the Order Paper is that the House can debate it, and if he and his hon. Friends do not like it they can move an Amendment.
Mr. Glenvil Hall: I understand that the Prime Minister has not yet made up his mind whether to hold the inquiry in private or in public. May I press on him that it should be held in public, if the public at large and Members of this House are to be assured of the actual facts of what took place?
The Prime Minister: I will, of course, look into that. The only reason for my wanting a little notice is that I am not quite sure whether that lies within the control of the Government, and of the House, or of the judge himself. I should like to ascertain the facts on that. It is always dangerous to make a statement "off the cuff." I do not know the facts of that yet.
Following is the letter:
13th November, 1957.
Dear Prime Minister,
I am deeply disturbed by the use of my name in the House of Commons under cover of the absolute privilege accorded to Members of Parliament to which, in the natural course of events, I have no opportunity to reply, or to make my position known.
I now wish to state categorically that while, as I disclosed to the Lord Chancellor, I saw the Chancellor of the Exchequer on the afternoon of Wednesday, 18th September, I at no

969
time received any prior information relating to the increase of the Bank Rate either from the Chancellor of the Exchequer or from anyone else. I neither made nor caused to be made any sales of Government or other securities between the time when I left the Chancellor's presence on the Wednesday afternoon, which was at approximately 4.45 p.m., and the public announcement of the change in the Bank Rate.
Whilst I appreciate and respect the Chancellor of the Exchequer's reluctance on constitutional grounds to disclose, in answer to a Parliamentary Question, the names of the persons whom he had seen, I feel that in fairness to myself and to the persons and firms with whom I am associated I must ask you to institute a judicial inquiry in order to establish the facts as contained in this letter.
Yours sincerely,
OLIVER POOLE.

BALLOT FOR NOTICES OF MOTIONS
  Chronic Sick and Elderly Persons
  Mr. L. Thomas: I beg to give notice that on Friday, 29th November, I shall call attention to the nation-wide survey of services available to the chronic sick and elderly, and move a Resolution.
  Commonwealth Trade and Economic Conference
  Mr. Russell: I beg to give notice that on Friday, 29th November, I shall call attention to the forthcoming Commonwealth Trade and Economic Conference, and move a Resolution.
  Work of Parliament and Members
  Mr. Benn: I beg to give notice that on Friday, 29th November, I shall call attention to the work of Parliament and Members of Parliament, and move a Resolution.
BILLS PRESENTED
  NEW TOWNS
  Bill to increase the aggregate amount of the advances which may be made to development corporations under subsection (1) of section twelve of the New Towns Act, 1946; and to amend section thirteen of that Act in respect of the reports and accounts to be laid before Parliament, presented by Mr. Henry Brooke; supported by Mr. John Maclay, Mr. J. Enoch Powell, and Mr. Bevins read the First time; to be read a Second time Tomorrow and to be printed. [Bill 11.]
  ISLE OF MAN
  Bill to repeal certain enactments relating to the Isle of Man; to empower the Court of Tynwald to make provision with regard to customs and harbours; to provide for the payment to the Isle of Man of a share of certain duties; and for purposes connected therewith, presented by Mr. R. A. Butler; supported by Mr. J. Enoch Powell and Mr. Simon; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 12.]
BUSINESS OF THE HOUSE
Proceedings of the Committee of Ways and Means, of the Committee on National Insurance [Money], on the Expiring, Laws Continuance Bill, and of the Committee on Expiring Laws Continuance [Money], exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. R. A. Butler.]
ORDERS OF THE DAY

  NATIONAL INSURANCE BILL
  Order for Second Reading read.
  3.59 p.m.
  The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): I beg to move, That the Bill be now read a Second time.
  This Bill, as I think the House knows, is designed to implement that part of the improvements in social benefits, which were announced in my statement of a week ago, which require legislation. In other words, it does not seek to deal with war pensions which, as hon. Members know, are dealt with by prerogative Instrument, nor with National Assistance in respect of which I have already laid regulations which will come before the House in due course on affirmative Resolution. The Bill is, therefore, confined to securing the changes in National Insurance and in Industrial Injury benefits and contributions and matters closely connected with them.
  The Bill, as has already been noted, seeks to effect substantial improvements in the benefits payable under those two schemes while maintaining their main existing structure. It has been suggested in, among other places, The Times, that right hon. Gentlemen opposite will seek in the course of this debate to criticise these proposals on the grounds that instead of proceeding, as we are proposing to proceed, on the basis of effecting substantial improvements within the structure of the existing schemes, we should have approached the matter in a different way altogether and introduced a system involving graduated contributions and, perhaps, graduated benefits.
  It may save a little of the time of the House if I say, at the outset, why it does not seem to us right, in this Bill, to take that course. Whatever may be the merits or demerits of such schemes as have been suggested and discussed over recent months, most of which, I think, are based on some form or other of graduation, it is clear that even when such schemes have been fully worked out and fully calculated a considerable time would elapse before they could have actual practical effect.
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  What we are seeking to do in this Bill is to deal with the present position of existing pensioners and of those shortly due to come on pension who, as I shall suggest to the House, can only be given a real improvement in their standards, as the Bill seeks to do, on the basis of the use of the existing system.
  May I carry that argument further for a moment? Let us assume that the suggestion is still made that we should have proceeded by way of some graduated scheme or other. I think the House will realise that, in the first place, a change such as is involved in any of these schemes involves a profound change in the system of collection of contributions. The present stamp card system operates perfectly well in respect of flat rate contributions which are the same for broad categories of people. It certainly would not have worked for a system in which the contribution of the individual varied from week to week in accordance with his earnings, and varied, apart from those variations, through the whole spread of earnings in our society or certain levels of it today.
  It is obvious that a wholly new system of collection of contributions—perhaps something on the lines of the P.A.Y.E. system, but profoundly different from that of the stamp card—would have to be evolved and put into operation; and anyone with experience of administration of these colossal schemes will know that these sort of changes which, when worked out, are perfectly feasible, are not very rapidly put into effect.
  Similarly, if the new proposed alternative were a real insurance scheme—that is to say, a scheme in which additional benefits were earned by additional contributions—it is equally clear that it would be some years, at least, before appreciable improvements in benefits could be effected from the medium of such a scheme. That is why it seems to me that it is really not material or relevant to the present Measure. Ideally, it may well be possible to construct some other system, but the one thing that all such other systems have in common is that they cannot do, as this Bill can do, what I think both sides of the House desire to do, and that is to make it possible for there to be early, very early, improvement in the standards for the recipient of National Insurance and Industrial Injury benefits.

  973
  Before I leave this matter, there is one broader aspect of this problem which is worth the consideration of the House, and it is this. The present National Insurance scheme has been in operation for only nine years, and I think that before there could be any question of making a radical change in it, and so, of course, affecting the lives and arrangements of people who have made their plans on the basis of the existing scheme, it would be necessary to allow a substantial time to pass for discussion and with a view to obtaining, perhaps, the widest possible measure of general agreement.
  It may help the House to recall how the National Insurance scheme itself came about. It did not spring, fully armed, from the head of the right hon. Member for Llanelly (Mr. J. Griffiths). It was the result of a much more prolonged period of gestation. It was, indeed, back in 1941 that Lord Beveridge and his committee were appointed and Lord Beveridge made his report in 1942. The Coalition Government's broad proposals were announced in September, 1944. The National Insurance Act passed through this House in 1946 and came into full operation in July, 1948.
  Although I am not suggesting that a similar period of time, no doubt necessary under the trying conditions of that period, would be necessary if some such fundamental change were to come about again, I think that that process, with the prolonged public discussion and the genuine attempt to achieve a very high measure of general assent, are probably fairly good guides as to the attitude of mind that any of us should adopt if we were to contemplate similar radical changes in the future.
  As has been said, and as is indicated in the Gracious Speech, and as was confirmed on the first day of the Session by my right hon. Friend the Prime Minister, we are continuing to study these subjects, but it seems to me that that study or, indeed, the preference of anybody for other schemes, really has no bearing on the practical problem before this House today, and that is the problem of how to make improvements in benefits for those who are at present on pension or who will shortly go on pension.
  Though, for the reasons that I have given, this Bill does not change the major structure of the schemes it is none the
  974
  less a major Measure and one which will have a very considerable effect on the lives of our fellow citizens and upon the economy of our country. When account is taken as well of the increase in the number of pensioners which will take place next year, combined with the improvements in rates, retirement pensions will cost next year £622 million compared with £463 million in the current year, and National Insurance benefits generally will cost £897 million against £685 million.
  When I made my statement a week ago, the main criticism which seemed to be made of it in its then necessarily concentrated form by the right hon. Members for Llanelly and for Middlesbrough, East (Mr. Marquand) was the odd one that it did not cost the Exchequer enough. That is a rather curious criticism, but it is one which, if the two right hon. Gentlemen are still disturbed by it, it is only too easy to allay.
  The right hon. Gentlemen and the House as a whole will now have had an opportunity to study the Report by the Government Actuary which, in accordance with custom, I laid when the Bill was introduced. They will see from that Report that the capital value, on the present basis, of National Insurance benefits is the vast sum of £34,000 million, that this will be increased by the provisions of this Bill to £42,000 million, and that of that immense total under the arrangements now proposed, if they were to continue over the whole period, the capital liability falling on the taxpayer would be £17,500 million.
  I hope that those figures will satisfy the appetite of even the most hungry protagonist of Government expenditure.
  Mr. James Griffiths: I hope that the right hon. Gentleman will give us certain comparative figures, quite apart from any absolute figure as to what Exchequer contributions are. This is most relevant. Will he tell us what proportion of the expenditure in this current year was contemplated in the 1946 Act as having to be met by contributions and what proportion has been paid by the Exchequer? Will he tell us what the difference is between those sums as contemplated for 1958–59 in the 1946 Act and the proportions he proposes in the new Bill?
  Mr. Boyd-Carpenter: I will give the right hon. Gentleman, if he does not intervene, a great many facts and figures which, I think, will fully satisfy his legitimate desire for information on the subject, and will, I hope, satisfy his still unabated craving for increased Exchequer expenditure. May I deal with it as I have proposed? We are at the beginning of the debate. My hon. Friend the Joint Parliamentary Secretary, when she winds up, will be more than capable of explaining any point which I fail to cover.
  Yesterday, the right hon. Gentleman the Leader of the Opposition returned to this point during the debate on the Address, and expressed very great indignation because, he said, the Treasury would make a profit out of this. I am sorry that the right hon. Gentleman is not here, because that attitude is very different from that which he adopted in 1951, when he himself was Chancellor of the Exchequer, and when, under the legislation of that year, the Exchequer was relieved of £86 million liability to the National Insurance Fund. It is a very different attitude now to complain, as he did yesterday, that the Exchequer—by which, of course, he meant the taxpayer—was making a profit out of this. Even if his indignation would come well from someone who had himself improved the position of the Exchequer at the expense of the Fund to that substantial degree, the right hon. Gentleman was not right on his facts.
  The facts are that, in any event, owing largely to the increase in the number of pensioners—particularly, as the House will realise, because of the coming into payment of pensions to the late-age entrants, in the middle of next year, and a very welcome thing it is to many of them—the cost to the Exchequer of these services generally would rise by £44 million next year.
  In addition, as the direct consequence of this Bill, the net result of the whole operation is to add to the expenditure on Votes a further £14 million next year—I will give the details if any hon. Gentleman wants them—and on top of that there is some additional further loss of revenue which I cannot give precisely, though I am advised that the increased revenue from the withdrawal of the tobacco concession, which will come in on the Customs side, will be more than offset
  976
  by the loss of Income Tax and Profits Tax on employers' National Insurance contributions at the new level and of Income Tax, though in smaller measure, on the employees' contributions.
  We have, therefore, the position that, next year, as compared with this, the Exchequer liability for the services will be increased above the level of the current year by approximately £60 million. I am tempted to adopt the phraseology of my right hon. Friend the Member for Woodford (Sir W. Churchill) and say, "Some profit!" If that is the idea of profit entertained by the right hon. Gentleman the Leader of the Opposition, heaven protect the country from any further financial administration by him.
  The story does not end there, of course. In the longer run, the burden will be even heavier, because, owing to the steady increase in the number of recipients of National Insurance benefits, the expenditure will go on rising, and, by the year 1964–65, the total Exchequer liability to the National Insurance Fund on the present basis will be £357 million, £45 million of which will be the direct result of the passing of the Bill.
  I have said enough, I think, to indicate that, so far from the facile assumption of right hon. Gentlemen opposite being correct—some of them have had the audacity to use the word "swindle"—these Measures involve the assumption by the taxpayer of heavy and increasing liabilities. It is really not very helpful, in the course of our discussions, for any hon. Gentleman on either side of the House to suggest that the financial burden which this country has assumed, and is, by this Bill, to increase for the benefit of these older people, is a light one to bear. It is, on the contrary, a very heavy one, as the figures I have given illustrate. Though we think that it is right that the country should assume the burden, it is a profound mistake to under-rate the magnitude of the liabilities which the community as a whole, that is to say, the taxpayers, are assuming.
  Mr. John Paton: I am grateful to the right hon. Gentleman for giving way. Is not the whole of his argument applicable not at all to this new Bill which he is now presenting, but to the whole scheme of National Insurance? These formidable increases were implicit in the old scheme from the very

  977
  beginning, and were understood to be there. We knew that, by 1970, the increases would be of the formidable kind that he has just mentioned. What has that to do with the present Bill?
  Mr. Boyd-Carpenter: I am sorry if I have failed to impress upon the hon. Gentleman the point I was making, which, indeed, some, at any rate, of his right hon. Friends need to have impressed upon them, namely, that by this Measure we are adding very substantially to those pre-existing burdens which the community assumed and that it verges upon the irresponsible and frivolous to suggest that this is something out of which the Exchequer is doing well.
  Mr. R. H. S. Crossman: I accept the right hon. Gentleman's figures, of course, but could he give us now the proportion of the increased burden borne by the Exchequer, by employers, and by employees? It would he very useful for the debate if we could have the figures broken down by percentages so that we knew how much of the increased cost went to the Exchequer, how much to the employers, and how much to the employees.
  Mr. Boyd-Carpenter: The hon. Gentleman will be reassured at once, without figures, if I tell him that we are continuing to use the formula for Exchequer contribution which was introduced by his own right hon. Friends in 1951.
  Mr. Crossman: That is not the question I asked.
  Mr. Boyd-Carpenter: It is the answer that the hon. Gentleman is going to get. No doubt it is an answer which he does not wish to receive.
  Mr. Crossman: No. It is not the question I asked.
  Mr. Boyd-Carpenter: If the hon. Gentleman would be kind enough to listen, he might possibly apprehend that I am answering his question. At any rate, if he does not listen to it he will not be in a position to form a judgment either way.
  We are using the formula for Exchequer contribution which was laid down by his right hon. Friends in 1951 but made more heavy on the Exchequer by the subsequent legislation of my right
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  hon. Friends, and applying that formula, weighted more against the Exchequer, to the higher levels of contribution which are to be imposed on employer and employee. That, rather than any calculations about percentages which vary from time to time, ought to reassure the House, if it does not reassure the hon. Gentleman the Member for Coventry, East (Mr. Crossman).
  Mr. Crossman: It does not.
  Mr. Boyd-Carpenter: I could hardly hope to satisfy the hon. Gentleman in his new-found interest in the subject. I hope that the House as a whole will be glad to know that, in this respect, we are adopting the same formula, so adapted, as was adopted by right hon. Gentlemen opposite in 1951. I will give the figures. They are certainly important. Indeed, part of the debate will undoubtedly turn, and rightly, on the question of the level of contributions for both employer and employee. Of course it will; that is a legitimate and proper subject for discussion.
  The effect of the Bill will be to raise the total contribution income next year from employers and employed and others, to £708 million, of which the employers will find £348 million and their employees, the self-employed and the non-employed £360 million. That provides for an increase of £82 million by the employers and £85 million by the employees, self-employed and non-employed. The increased contributions and all the improvements which we are bringing forward deal not only with pensions, although emphasis has fallen on them, but also the other benefits under the scheme. Although it is right to some extent to look at that as effecting a transfer between those who are at work and those who have retired from work, that is an over-simplification, because those at work are getting an increased ultimate right to pension when they retire and immediate substantial improvements in sickness, unemployment, widows', industrial injury and other benefits as the necessity arises.
  In addition, there is the important factor of the transfer of some wealth from those at work to those who—generally because of old age—are no longer at work. A very clear and apt way of

  979
  expressing that was adopted by Sir Alfred Roberts at the recent meeting of the T.U.C. Annual Congress. He said:
  "We are demanding the acceptance of substantially greater obligations towards the old, and the only way in which those obligations can be met is by transferring a greater part of current consumption and productive power of the country to the old."
  That is certainly what the Bill sets out to do.
  When I made my statement last week, the right hon. Member for Middlesbrough, East immediately raised the question of the level of contributions and, with complete accuracy, calculated—and I congratulate him on his speed in doing so—that they amounted to 7 per cent. of average industrial earnings. The House is aware that the figure for average industrial earnings relates to manufacturing industry generally and covers about hall the working population, but it is the best and widest in scope of figures for earnings as opposed to wages.
  As I reminded the right hon. Gentleman then and would like again to remind the House, those figures have to be considered against the background of what has been our past practice. Let me make it clear that the 7 per cent. relates to the total contribution—the employee's plus his employer's—and that the employee's corresponding figure will be 3·8 per cent. It compares very modestly, as the House will appreciate, with the 7 per cent. a side for superannuation only which is being provided under the scheme in the Federal Republic of Western Germany, but a more important comparison is with the origin of the National Insurance Scheme itself.
  When the Measure introducing that Scheme was taken through the House by the right hon. Member for Llanelly and the contributions were being fixed, the contributions embodied in that Measure amounted to 7·5 per cent. of average earnings at that time. When the Scheme had actually come into operation, in July, 1948, although owing to the rise in earnings the figure had fallen somewhat, it still amounted to 6·7 per cent. It is, clear therefore, that in its relationship to average earnings the new figure is somewhere between the figure originally contemplated when the Measure was taken through the House and the figure actually
  980
  operating when the Scheme came into effect two years later. As I said last week, it is therefore very closely in the line of precedent under the Scheme.
  I was asked at the time—I did not then have the figure available—how the increased contributions looked in relation to agricultural earnings, since those, as the House knows, are not included in the figure for average earnings in manufacturing industry. The new contributions from both sides amount to 9·3 per cent. of average agricultural earnings compared with 9·8 per cent. in 1946 and 8·4 per cent. in 1948. It is therefore in the bracket between them. In mining, which is of interest to many hon. Members, it will be 5 per cent. compared with 6·1 per cent. in 1946 and 5·2 per cent. in 1948, so that for mining the percentage is even lower than that for 1948.
  As the House knows, since 1951, wage rates and, still more, rates of earnings have risen appreciably more rapidly than the increase in retail prices; but it has not seemed to us, after very careful consideration, that these contributions are or should be excessive to any section of the community. They still amount to an absolutely first-class bargain. At the new rate of benefit, a married man aged 65 receiving a pension receives something of a capital value of £2,650. If he retires in 1968, at the absolute maximum without having received any credits at all, he will have paid £550 for something of a capital value of £2,650, and if he retires in 1978—even at as remote a time as that—he will have paid only £970 against the £2,650.
  It is therefore clear that for many years to come these benefits will be a most valuable bargain for those concerned; and this provides an indication—which meets the point of the hon. Member for Coventry, East—of the extent to which the taxpayer is behind the system, thereby enabling pensions to be paid where the contributions of either side on an actuarial basis would have given a very much smaller pension.
  Now I come to the topic on which there will, no doubt, be a good deal of discussion, the withdrawal of the tobacco concession, which was introduced by the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) in the Finance Act, 1947, and which was somewhat modified in the following year.

  981
  Clause 3 deals with this matter. I say at once that I accept the excellent intentions behind that proposal, but hon. Members who have had direct experience of it have been well satisfied that it has worked unfairly in practice and is of very doubtful merit in principle. When I was Financial Secretary to the Treasury—as the House knows, this concession is administered by Her Majesty's Customs and Excise—I was in continual correspondence with hon. Members on both sides of the House who pointed out to me the unfairness of this concession as between pensioner and pensioner.
  It has been found administratively necessary, under all Governments, to tie this concession to the possession of either a retirement pension book or a book for payment of a non-contributory old-age pension. As a consequence, people who did not have such a book—for example, some retirement pensioners themselves when in hospital for long periods, war pensioners as such, war widows as such, industrial injury pensioners as such, Post Office and police pensioners—did not have the concession. There has been a good deal of very natural feeling that this is unfair as between pensioner and pensioner.
  Even among those who were eligible to apply for it, as the years passed it became more and more evident that there was very little to be said for assisting the purchase of one particular amenity of life and not others, of giving help to habitual smokers and not to those who found the pleasures of life in other directions, tea, beer, or whatever it might be; so it was unfair even among those eligible for it—I appreciate that the original intention was to counterbalance the heavy increase in duty in the right hon. Gentleman's Budget, but, as the years passed, other prices adjusted themselves.
  That view, as to the unfairness of the concession, is certainly not confined to this side of the House. The hon. Member for Erith and Crayford (Mr. Dodds), with his usual speed, put a Question on the Order Paper on the first day of this Session asking us what we intended to do about this matter. The hon. Member for lichen (Dr. King)—I do not know whether he is in his place or not—said last year:
  "…if the Government choose to abolish the tobacco concession and give in lieu of it some concession in cash to all old-age pensioners,
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  I am quite sure that those who have enjoyed the tobacco concession would be delighted to think that non-smokers were also getting the benefit."—[OFFICIAL REPORT, 5th June, 1956; Vol. 553, c. 917.]
  Although I disagree with him on many matters, the hon. Member speaks with great sincerity and authority on that class of subject. The right hon. Member for Huyton (Mr. H. Wilson) also took the same point in a debate in March of this year.
  Therefore, for some time we have held the view that this concession should be brought to an end, but it could in fact be fairly and sensibly brought to an end only at a time when substantial increases were being given in the rates of benefit, and that is the process we have followed. Among other factors we have taken into account in considering what should be the proper level of benefits is the fact that, so far as retirement pensioners are concerned, about half the total were losing vouchers which, if used to the full, were worth 2s. 4d. per week. We have taken that into account in deciding the level of benefits, and the House will have noticed that we have given increased benefits, not only to those who have not applied for this concession because they were not habitual smokers, but also to recipients of benefits which did not carry this right with them—widowhood, sickness, unemployment, industrial injury benefits and the like.
  Therefore, I do commend to the House the suggestion that, whatever the original and excellent intentions of this concession, the time has come to end it; and the right way to end it—the way in which we are seeking to end it—is by taking it into account when making changes in the main National Insurance scheme.
  Mr. Ellis Smith: Is the Minister saying that 2s. 4d. per week is the value of the vouchers?
  Mr. Boyd-Carpenter: The full value of the voucher, if fully used, as I understand it, represents the difference between the duty on 40 cigarettes before the right hon. Member for Bishop Auckland raised it and afterwards. The right hon. Gentleman will no doubt correct me if I am wrong, but that is my impression of how it arises.
  Dr. Horace King: As the Minister has been kind

  983
  enough to refer to me, may I ask him if he will address himself to a point on which many of us feel very sincerely—that it would have been all right taking away the tobacco concession if a substantial concession had been made to the old-age pensioners? The people we are worried about are getting no substantial concession, and the very poor people are going to get an increased benefit of only 2s. 8d. out of this.
  Mr. Boyd-Carpenter: I am coming to that argument, and I hope the hon. Gentleman will acquit me of any desire to avoid it. I shall deal with the level of benefits in a moment, and will deal with this aspect when I come to it.
  The only category of person who cannot be taken into account in this way, who is losing the possible right to these vouchers, is the non-contributory old-age pensioner. The House will recall that that pension, based on the preservation of existing rights before the National Insurance Act was passed, was preserved by that Act for a limited time only. As I understand it, under the Act, these pensions could not be awarded to people who become 70 after 1961. This pension is administered by the National Assistance Board on a means test basis and is very often supplemented by National Assistance. It has been the policy of successive Governments to treat this as an obsolescent benefit and not to alter it.
  In these circumstances, it seemed to us that the right thing to do, as we were going to take the withdrawal of the tobacco concession into account in an increase of National Insurance benefits, was to make a special payment of the precise value of the token—the figure I have given of 2s. 4d.—and pay it as an additional payment to all recipients of non-contributory old-age pensions, whether smokers or not. That is dealt with in Clause 3 (2), and I hope the House will think that it is a fair and reasonable method of dealing with the matter.
  Now I come to the question of benefits. It is proposed by this Bill that these will be raised to a new high level in real terms. My noble Friend who is now Lord Ingleby, when he introduced the Measure which became law in 1954, told the House with truth that that Measure marked a new high level in the real value
  984
  of the benefits. This present Measure, the third to be introduced since 1951, takes that process further, and makes a substantial increase in the value of the National Insurance benefits in real terms. If the House would like the figures, using the Index of Retail Prices, for a single person it raises the value 7s. 6d. above the 1946 value, and, perhaps this is more significant, to approximately 12s. above the value to which right hon. Gentlemen opposite raised it in September, 1951, taking its real value at the time at which they raised it to that level. Whatever arguments may ensue as to the precise amount, it is clear beyond doubt that this constitutes a further advance in improving the benefits of those who are the recipients in this immense system.
  In judging, under a contributory scheme, what is the correct level of benefits, there are a number of factors to be taken into account, and no doubt most of them will be taken into account during the course of the debate. Our view is that this is a substantial advance which it is right, though hard and difficult in present circumstances, to make, and it does represent all that can be done in present circumstances. I think it will be accepted that it does involve a real advance. Let me, on this subject, read some wise words:
  "If the basic retirement pension were raised, similar provision should be made for the sick, the unemployed and the widowed mothers. The cost of corresponding increases in these benefits would be about £200 million a year. This would have to be found by still further increasing the contributions and adding to the burden from taxation. Such additional burden on our economy would undoubtedly lead to inflation which would leave the pensioners no better off than they are now and may cause great injury to the country."
  Those words come from the "Socialist Speakers' Handbook" for 1949–50, and I think they deserve full weight. Despite their origin, they are sound, wise and true.
  Mr. J. Griffiths: There are other books from which the right hon. Gentleman could quote.
  Mr. Boyd-Carpenter: As the right hon. Gentleman says, there are other books to quote from, and I shall be quoting from some of them in the course of my remarks. I am grateful to him for the reminder.
  We take a different view of our proposals for improving the benefits from

  985
  that taken by right hon. Gentlemen opposite in respect of the treatment of married pensioners. As I understand the proposals of right hon. Gentlemen opposite, they propose no greater increase for a married pensioner, as compared with a single person. On the contrary, we propose lo raise the rate for the single pensioner from 40s. to 50s. and for the married pensioners from 65s. to 80s.
  The view has been expressed, and I think the hon. Member for Coventry, East expressed it, if I recall rightly, at the Labour Party Conference, that married pensioners were a minority. I do not think that they are as small a minority as the hon. Gentleman thinks. However, were they so small a minority, is that any reason for discriminating against them? Certainly, I do not share the view expressed by one member of the Socialist Party's Technical Sub-Committee on Superannuation, who was reported in the Grimsby Evening Telegraph of the 5th October as having decided all this by saying:
  "Married couples are at present over-provided for."
  That is certainly not my view.
  Mr. Ellis Smith: What is his name?
  Mr. Boyd-Carpenter: I shall be delighted to let the hon. Gentleman have the extract, but in these circumstances I do not like to refer to the gentleman by name, because he is not a Member of this House. I merely refer to him as the source of this opinion; but this is a public statement, and I will give the cutting to the hon. Gentleman with pleasure.
  Let me now take one or two points in these changes which are of particular interest. On Second Reading, I shall not take the House through all the details of the changes in the benefits. They are in a Schedule to the Bill, and they are in the White Paper. Many questions which may arise can arise naturally in Committee. There are, however, two points to which I would refer.
  We are increasing the rate of guardian's allowance by some 50 per cent., from 18s. to 27s. 6d. We are doing that partly because we believe very strongly in the social value of the allowance, which enables orphaned children to be taken into private homes instead of living in institutions; and also because
  986
  this guardian's allowance did not share in the increase for the widowed mother's children which was effected in last year's Act. Therefore, we have made a bigger increase in this respect.
  Another fact which is of some general interest is that we propose to bring together the rates of sickness and unemployment benefit for married women. That was the original Beveridge recommendation, but the rates have become separate, largely for historical reasons. Unemployment benefit for married women is at present 30s., and sickness benefit 25s. We propose to bring them both together at 34s., which is very close to the two-thirds of the basic single person's rate which Lord Beveridge recommended.
  The House will recall—I do not want to detain it over this—that in view of the option which married women in employment have as to whether to come in or go out of National Insurance and the fact that this is an option against the Fund, it has always been held to justify paying benefit at a somewhat lower rate to them than to single women. I think it will be agreed that by bringing their rates of sickness and unemployment benefit together a great deal of confusion and misunderstanding will be avoided, and in both cases the increases constitute substantial improvements on the existing rates.
  There is one Income Tax aspect of the proposed increase in pensions which I must mention. This concerns the tax allowance given to those who help to support elderly or infirm relatives. Under the present law, the maximum allowance of £60 is given only where the dependant's income is not more than £105 and is reduced by £1 for each £1 of any excess of the dependant's income over the £105. Thus, if nothing were done about it, the proposed increase in pension would have the effect of cutting down the tax relief given to those who help elderly relatives. That, of course, is not our intention, and we are anxious to prevent any anxiety on this score. In the special circumstances, therefore, the Chancellor of the Exchequer has authorised me to say that the next Finance Bill will include provision increasing the income limit for dependant relative allowance to £135.

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  The Bill, of course, deals with improvements in the rates of benefits and of contributions under the Industrial Injuries scheme. That scheme is nine years old, and its finances are on a totally different basis from those of the National Insurance scheme. The Fund has been maintained on an actuarial basis, and the proposals of this Bill will continue that process. We were advised, before making these improvements, that contributions were actuarially 1d. a side deficient, in view, among other things, of the changes we made last year. The effect of the Bill, therefore, is to raise the contribution by 3d. on the man's employer and 3d. on the employee to 9d. and 8d., respectively. That will increase the revenue of the Fund by £22 million in the first full year and maintain it, I am advised, on a sound actuarial basis.
  The benefits, of course, have been very substantially increased. Injury benefit and 100 per cent. disablement pension go from 67s. 6d. to 85s. Unemployability supplement, about which the right hon. Gentleman asked me last week, goes—and I confirm the accuracy of the figures I then gave him—from 40s. to 50s. The special hardship allowance, in which, I know, the trade union movement takes a great interest, goes up from 27s. 6d. to 34s. Constant attendance allowance is increased from 30s. to 35s., and widows' pension is increased from 45s. to 56s.
  There is in this connection a small provision in Clause 4 (2) relating to byssinosis. Byssinosis is a chronic chest complaint to which workers in certain types of cotton mill are liable. It closely resembles bronchitis, and for that reason it has always been treated as an industrial disease to qualify for benefit in respect of which one has had to show that one has been working in the process for a certain number of years. When the National Insurance (Industrial Injuries) Act was passed, the prescribed period of working in the cotton industry to obtain benefit for byssinosis was twenty years.
  As a result of further research, the Industrial Injuries Advisory Council advised me that for payments for byssinosis under the Act the period could be safely reduced to ten years, and by the regulation I made last year that was effected. It is not, however, possible to
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  do the same by regulation in respect of the Byssinosis Benefit Scheme, which relates to those who contracted this disease before the Industrial Injuries Act came into operation. The figure is statutory.
  I have, therefore, inserted in this Bill a provision which, I hope, the House will pass, which will enable me to reduce also the period for the benefit scheme to the ten years which it is already by regulation under the Industrial Injuries Act. That provision is rather apart from the main purpose of the Bill. It is, perhaps, a separate issue, but as it seemed to me a clear anomaly which required legislation, I hope that the House will agree that it is well now to put this right.
  I should, no doubt, be out of order if I were to refer to what is being done in another direction which we shall discuss later on in respect of National Assistance, but I can, perhaps without being out of order, say that regulations which I have laid prescribe 27th January as the operative date for the increases in respect of National Assistance.
  As the Prime Minister indicated, it is our intention, if the House is prepared to deal quickly with the present Bill, to bring the improvements in the long-term benefits due under it, the retirement pension and the widow's pension in particular, into payment on the same date as that proposed for the National Assistance increase; that is, 27th January. That should help to avoid the disappointment and friction which, I am afraid, resulted in 1955 from bringing the Assistance changes into effect two or three months before the increases in National Insurance benefits, thereby giving people the feeling that Assistance had been put up only to be reduced when the National Insurance benefits were increased.
  To do this by 27th January will, of course, involve very rapid moving indeed. One or two newspapers have made the comment on my statement of last week that we were being slow in getting these benefits into payment. That is the very converse of the truth. Normally, the time taken—and I have been into this in some detail—between an announcement in this House and the operation of the announced changes has rarely been less than between five and six months. From 6th November to 27th January is under three months. That is an indication that

  989
  we are seeking to carry through this very large operation just as speedily as possible to give help as quickly as possible.
  Mr. Tom Brown: I think that the newspaper said something else. I do not think it is fair to take the statement out of its context. The newspaper said that the Government ought to have started sooner and arrived home much sooner.
  Mr. Boyd-Carpenter: I do not know which newspaper entertains the hon. Gentleman's leisure hours. It may be that the one which I saw was a different one.
  Mr. Ellis Smith: The Daily Herald.
  Mr. Boyd-Carpenter: However, the criticism has been made of dilatoriness in this respect, and as it has been made I am sure that I owe it to my own Department and to the House to point out that the period between the announcement and the operation will be very substantially shorter than it has ever been in respect of any previous change. This will impose very Heavy strain on my Department, which, as the House will appreciate, has already been exposed to a very heavy strain indeed on account of the payments of sickness benefit needed during the recent influenza epidemic.
  It may interest the House to know that new claims for sickness benefit in the period from mid-September to the end of October were 3 million, which is about three times a normal average for that time of year. Seven million payments of sickness benefits have been made. New claims for the week ending 8th October numbered 566,000, which is a record since the National Insurance scheme came into being. I should like to pay tribute to the staffs of the local offices for maintaining the payment of benefits by great devotion to duty and hard work whilst themselves in many cases suffering from this complaint. These are qualities which will be demanded of them equally in our attempts to secure that the new benefits proposed by the Bill operate more quickly than they have ever done since the first operation of the scheme.
  Changes in the Bill affect in some degree directly or indirectly virtually the whole population. They are not easy steps to take against the background of
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  the economic situation and the real necessity to combat inflation. We have had to consider with very great care whether we were justified in going so far in providing a new, higher level of benefits on so large a scale. But we believe that measures of this kind, although they involve as I said in the House last week, some sacrifice by many people, are right, not only because they give comfort and help where they are needed, but because it serves the true health of a community such as ours to make sacrifices in order to make proper provision for its elderly, its sick and its disabled.
  4.52 p.m.
  Mr. H. A. Marquand: My first reaction on hearing the Minister announcing his new intentions, which he has just expounded to us at greater length, was to call them "niggardly". The Economist newspaper, with a little more leisure to reflect upon the matter, said a few days later that the Bill was
  "…a drearily bad one in flat-rate form…."
  The right hon. Gentleman has given his reasons for introducing one more Bill in flat-rate form, and I accept them. He is quite right. If he had made up his mind that something must be done quickly, it would not have been possible to have introduced any more comprehensive or far-reaching scheme now. I do not quarrel with that at all.
  Neither, incidentally, do I object, nor will any of my hon. Friends object for one moment, to the increase in the allowance made for the dependent wife of the pensioner. There has been no intention at any time on our part, and there has been no commitment by the Labour Party on that subject at any time, although a model scheme has been drawn up by experts on assumptions of the scheme as it exists at the moment and the commitments that we had made. We shall not object at all to what the right hon. Gentleman proposes in that respect.
  Despite all the criticisms which we shall undoubtedly advance during the debate, we shall do nothing to retard the passage of the Bill into law. We do not intend to vote against the Second Reading today. We want as good an increase as we can get from the Government to come into force as quickly as we can get it for the benefit of the people concerned,

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  and we shall not impede or retard the passage of this Measure. We shall, of course, try to improve the Bill as much as we can during its passage through Committee.
  In February, we did our best to persuade the Government that the time had come for substantial improvements in the pensions provided under the existing scheme. When no sign had come by August that the Government had any such intentions we repeated our plea. We are glad, indeed, that today the Minister admitted the need for "early action", I think that those were his words. We only wish he had admitted that need a little earlier. We are glad that, having admitted it, he has had the good sense to arrange that the increases, such as they are, in the National Assistance rates will come into force at the same time as those in the benefit rates.
  In February last the right hon. Gentleman and his Parliamentary Secretary told us that there was no need to act. The hon. Lady told us in the debate in February:
  "It is sometimes said that pensioners are going without the necessities and without essential food…. Where is the evidence? I have none within my own personal experience."—[OFFICIAL REPORT, 25th February, 1957; Vol. 565, c. 893.]
  She went on to give some evidence in support of her view. She told us that the pensioners' consumption of bacon, ham and meat was increasing, and that their consumption of fish, fruit, and so on was also increasing. She told us that the proportion of pensioners receiving National Assistance in September, 1956, was only 23·6 per cent. as compared with 27 per cent. in December, 1954. She added that that showed that the need to apply for National Assistance was less acute than it had been, and that the position in February had improved if anything over the previous position.
  Later in the same debate, the Minister told us that 22 per cent. of men pensioners were drawing increments averaging 7s. 6d. each, that 50 per cent. of those men now retiring were drawing average increments of 9s. 8d., and that about one-third of the working population was covered by private schemes. He added that others had the right to resort to National Assistance for payment of their rent. He had been asked how people
  992
  could live on 40s. a week, and he replied that that question was quite irrelevant to this issue.
  That was the attitude in February, which is not so very long ago. How has the position changed since then? We are told that private schemes are increasing. The increments earned by retiring pensioners who work a little beyond pension age are just the same as they were, and the proportion of pensioners on National Assistance is very much the same. The Index of Retail Prices stood at 104 in February, and it was 106 in September. The index figure for food only stood at 103·5 in February and was 104·8 in September. If it is irrelevant to say that these people could not live on 40s. in February, these changes in prices and general circumstances cannot possibly account for the change in the Government's attitude.
  Mr. Boyd-Carpenter: I might save the right hon. Gentleman a little trouble if I say that I accept his argument that the real level of benefits today is still better than it was during the whole period of 1948–55, but we have come to the conclusion that the recipients of these benefits should have their standards further improved.
  Mr. Marquand: The right hon. Gentleman knows perfectly well that he is trying to put words in my mouth which I did not say. It was not my argument. I said that it was his. I was quoting what the right hon. Gentleman had said. I shall not bore the House by repeating what I said. But what accounts for the difference in his view now? Why this change? What has happened between February and now? [HON. MEMBERS: "By-elections."] Yes, by-elections have taken place, but the significant event that occurred to change the whole situation happened in May, 1957, and that was the publication of the Labour Party's pamphlet on its future proposals. It is that which has changed, is it not? The Minister laughs. If it is not that, there is only one other possible explanation—that the Minister knows already the effects of the Rent Act which his Government have put on the Statute Book and is anticipating the effect of the 7 per cent. Bank Rate, in turn, upon municipal housing which will come about very soon. Those are the only two possible explanations of why the right hon. Gentleman

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  has so changed his tune. My word, it was a soft tune this afternoon compared with the tone we heard in February last.
  Before I come to some major criticisms of the Bill, as I do not think I have annoyed the Minister very much so far, may I appeal to him to consider for a moment or two the rectification of some omissions from the Bill? I hope he will help us a little in this matter.
  I can see no mention in the Bill of any increments for postponed retirement. We all know that the pensioner gets an increment in his eventual pension for every year he remains at work after retiring age. A 10s. increment on a 40s. pension is 25 per cent. of the basic pension, but a 10s. increment on a 50s. pension is only 20 per cent. It is still the same amount, but the inducement to postpone retirement and to continue at work is obviously reduced.
  The same reasoning applies to a class of pensioner who is, I think, even more adversely affected if he is left out of the improvements that are made for others in this Bill. Those are pensioners who were drawing what we call modified pensions. They are persons who, before the war, were excluded from National Insurance because they were in excepted employment, later were allowed to join, were required to make heavier contributions than the average, and became contributors, but who are drawing less than the standard pension. I believe there are about 80,000 such beneficiaries. What happens to them? Are they catered for in the Bill? As far as we can see, they are not, and in Committee we shall seek to give them some of the benefit that the Bill confers on other more fortunate persons.
  Then there are the disabled persons who are not entitled to Industrial Injury benefit; workers who, in the past, received compensation under the old workmen's compensation laws but who never qualified for the new benefits. They have had increases in their benefits on previous occasions such as this. What about them now? If increases on grounds of increases in prices are justified, and particularly increases in rents, which must be one of the main justifications for the Bill, what about them? These things affect them just as much as the others.
  994
  These are essentially Committee matters, and my reason for mentioning them at this stage of the Bill is that I am wondering—I hope I am wrong—whether under the Long Title it will be in order to move that the conditions of these people also shall be improved. I feel sure that the right hon. Gentleman would like an opportunity during the Committee stage to discuss the situation of these groups and to give reasons why he does not propose to increase their pensions, if he does not do so, or to make a concession.
  Would the right hon. Gentleman please inquire now of the experts on these matters whether the condition of those pensioners can be brought into order when we reach the Committee stage? When the Parliamentary Secretary rises to reply to the debate, would she kindly advise us as to whether we will have the right? May I appeal to the right hon. Gentleman and to the hon. Lady to agree to use any method that may be open, by amendment of the Title of the Bill or whatever it may be, to bring these things within order if they should be out of order? This is a reasonable and fair request which, I hope, the right hon. Gentleman will grant.
  Inevitably in all these debates we talk more about the retirement pensioner, or as he is always now colloquially called, the old-age pensioner, than we do about the other beneficiaries. Before I make any reference to the retirement pensioner, I shall say something about the other beneficiaries. In this matter we must not forget that, though children are not entitled in their own right to gain benefit from the National Insurance scheme, when their parents are adversely affected by unemployment, sickness, widowhood and so on, they have to be maintained out of the National Insurance Fund. It is the household with children, and especially the household with what we call a large number of children—four or more—which is always the first to resort to National Assistance. I mean the children of the unemployed, the sick and the widows, and even some children, though they are not numerous, of retirement pensioners.
  Recently Parliament made improvements in the condition of widows' children and of widows themselves. Though, as

  995
  the right hon. Gentleman knows, we willingly took part in that legislation, we expressed doubts at the time, and they are still not removed, about the results. In 1955, 94,000 widows were obliged to draw National Assistance, and in June, 1957, there were still 64,000. The latter figure must include for the most part the widows with large families.
  I have pleaded many times for these children, and I want to do so again. I do not think that the children of the unemployed, the sick and the widows ought to be made a pariah class in our community, and as the level of benefits now exists, I still think that they are not given their fair chance. Certainly they are not given anything like the chance to grow up healthy, to enjoy childhood, to get their education in the secondary school and the university, if they are fit, which the Prime Minister told us he wanted everybody to have in the Opportunity State.
  The proposals in the Bill provide for an allowance for the dependent child for the person drawing benefit of 15s. a week and 20s. for a special allowance or for a widowed mother's child. The corresponding figures for National Assistance are higher once the child is over five years of age, and they reach 20s. for a child between 11 and 16 years of age. I welcome the increase that has been made, but I still feel that it does not go far enough. These allowances are still inadequate, especially when we realise that on the evidence of the Government's own publications the average weekly expenditure in this land per person on food alone is 28s. 4d.—and the mother is given 20s. to maintain her child. I still say that it is not good enough.
  Now what about the retirement pensioners who smoke? The figure mentioned by the right hon. Gentleman this afternoon was 50 per cent., whereas the figure which he gave in answer to a Parliamentary Question a year ago was 53 per cent. I do not quarrel with that, but we must remember that between 50 and 53 per cent. of these pensioners will not get the full increase of 10s. a week in the purchasing power of their pension, because there has been removed from them the right to buy a certain quantity of tobacco at 2s. 4d. instead of at the higher price which the rest of us have to
  996
  pay. The real value to them of the pension increase in purchasing power, in view of the sort of goods they want to buy, will be 7s. 8d. because the tobacco concession is to be taken away. If they fall into that class of retirement pensioner, of whom there are nearly 1 million, who has to draw National Assistance benefit, then the increased benefit they get is only 2s. 8d.
  As the right hon. Gentleman said, this concession has been available for ten years, since my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), feeling sympathy for the old people at a time when he imposed a heavy increase in the Tobacco Duty in order to try to reduce our dollar expenditure in 1947, gave them this concession. Whatever our views—and the Minister devoted some time to this subject—about the merits of a concession to old people for a particular kind of purchase, I think the Minister himself must be convinced that his proposal to withdraw the concession has been received with the utmost disfavour throughout the country. I cannot believe that he would have devoted as much time as he did to the subject this afternoon if it had not been that he had heard on every hand what people were saying and had read in the newspapers, which in general do not agree with the politics of those on this side of the House, their agreement with our criticism of the withdrawal of this 2s. 4d. when the increase was to be only 10s.
  The Minister said that the time might come when this special, peculiar concession might be withdrawn and that it should come when there was a substantial rise in pensions. We do not think that the rise of 10s. is substantial in view of rising prices and increased rents. If 10s. is a justified increase for other people, 7s. 8d. is not a justified increase for these people. This is not a substantial rise at all. In the case of those on National Assistance, the poorest of the poor, it is an increase of only 2s. 8d. a week.
  These new rates will leave far too many of those entitled to benefits of all kinds in a position where they must have recourse to National Assistance. The Minister estimates the saving on National Assistance payments as £8 million a year. What will be the reduction in actual numbers of people? Some of this reduction

  997
  is surely bought about merely by a reduction in actual amounts paid to individuals which will not have the effect of taking them off National Assistance.
  The significance of a pension paid as of right, which was the basic idea of the whole Beveridge plan, which we all accepted when it was first put before the country fourteen or fifteen years ago, is taken away if people have to resort to National Assistance and submit to the means test. It is not much compensation for people who have to go to the National Assistance Board and disclose all their resources to be told that some part of that is due to them as a matter of right if they still have to go to the National Assistance Board and be visited from time to time by National Assistance Board officers, kindhearted though those men are.
  Mr. Boyd-Carpenter: The right hon. Gentleman will appreciate that the effect of this proposal is to widen the lead of the National Insurance benefit to the National Assistance scale. That was the very argument the right hon. Gentleman was using, and I should have thought that he would applaud it.
  Mr. Marquand: It widens the lead, but I want to know by how much.
  In December, 1956, there were 927,000 pensioners drawing National Assistance. Of that number, 852,000 were receiving from the National Assistance Board 5s. 6d. or more a week. Those are figures taken from the Annual Report of the National Assistance Board. If, then, these persons had been receiving from the National Assistance Board 5s. 6d. a week, they will still remain on National Assistance. Of course that is so under the new proposals. Therefore, if they are non-smokers, they will get an increase in their income of only 5s. a week. If they are smokers, they will get an increase of only 2s. 8d. a week, and, presumably, half of them will be smokers. There is no reason to suppose that the proportion of smokers among them is different from the proportion of smokers among retirement pensioners generally. Therefore, we draw the conclusion that 426,000 of these pensioners will get only 2s. 8d. a week increase in their benefit.
  The full impact of the Rent Act has not yet been felt. It may be that, in the end. National Assistance Board payments
  998
  may turn out to be as high as ever. The full impact of increased rents has not yet been felt because numbers of people have put in forms which have caused landlords to postpone increasing their rents until repairs have been done. As we heard front my hon. and learned Friend the Member for Kettering (Mr. Mitchison), there is the prospect of further increases in rents as a result of the increased charge for capital, which will raise the cost of house-building.
  Therefore, though there appears to be what the right hon. Gentleman called a bigger "lead", a bigger difference between the pension and the National Assistance Board rate, a difference of 5s. a week, I doubt very much whether there is going to be any very substantial reduction in the number of retirement pensioners obliged to apply for National Assistance. There may be some people who will very shortly find themselves just as badly off as they were before.
  I hope I can be forgiven for not entirely grasping some of the figures which the right hon. Gentleman gave and for not commenting on them now. Some of these matters I must leave to my hon. Friends behind me who have had a little more time to consider them and particularly to my right hon. Friend the Member for Llanelly (Mr. J. Griffiths), who knows so very much more than anybody else on these benches about this whole matter.
  The increases now proposed are designed to offset possible increases, actual increases, and forthcoming increases in prices and rents. A very large part of these increases in prices was deliberately caused by the Government abolishing subsidies on the kinds of food which, in very large measure, the poorest of the poor have to include in their diet—milk and bread, and foods of that kind. The proceeds of that operation have been handed over to the Income Tax and Surtax-payers in three successive Budgets since the present Government came to office. They have deliberately redistributed the income of the country in favour of the Income Tax and Surtax-payers and to the disadvantage of the rest of the community.
  Are the Income Tax and Surtax-payers going to pay for the offsetting increases in benefit? To some extent they are, said the Minister today, because the

  999
  Exchequer will lose some of the tax which they would otherwise pay and which they will pay in their contributions. It does not really mean that they are going to lose anything. They will pay an increased amount in contributions and recoup it from the Exchequer. The Exchequer loses, but I cannot see that the Income Tax and Surtax-payers, to whom the whole advantage of the reduction of subsidies was given, will lose anything at all. They will not be paying for this.
  In the last Budget, £35 million of relief was given to Surtax-payers, and immediately afterwards, with scarcely a pause for breath on the part of the House, the then Minister of Health imposed on the National Insurance contributors a further toll of £40 million by means of a new National Health Service contribution. The Surtax-payer received £35 million and the contributors to National Insurance had to pay for it, and a little over, by an increase of £40 million. In passing, may I say that I greatly regret the absence of the then Minister of Health from the House today? I hope that he is rapidly recovering his health.
  The then Minister of Health said quite clearly on 1st May, 1957, that he wished to have a Bill
  "to double the contribution at present paid to the National Health Service and, at the same time, to relieve the taxpayer…of an equivalent amount."—[OFFICIAL REPORT, 1st May, 1957; Vol. 569, c. 237.]
  It was an exact quid pro quo.
  We believe that a similar manoeuvre has been carried out in this Bill. The figures are complicated, but it seems to me that the essence is found in the figures given by the actuary for the year 1958–59. I readily admit that the figures change as the years go on, and I will say something about that later, but for 1958 an increase in the Exchequer supplement will be balanced by an equal reduction in the Exchequer grant. The increased expenditure on general National Insurance benefits will be balanced by an increase in contributions—exactly the same, £167 million.
  The Minister said that the Industrial Injuries scheme had always been actuarial. That is true, but look how "actuarial" it will be this time. In the Industrial Injuries scheme the contribu-
  1000
  tion for next year will exceed the benefit by £12,900,000. Of that, the increase in the Exchequer supplement will be £4,600,000. On that scheme the Exchequer in round figures will be £8 million better off.
  What of National Assistance? The Minister told us that he expects a net saving of £8 million. To offset that he has an increased payment to non-contributory pensions of £1¼ million. In other words, the Exchequer benefits by £6¾ million. On National Insurance proper the gain for the Exchequer in that year is £8 million; on National Assistance it is £7 million, in round figures; and there is, therefore, a total gain for the Exchequer of £15 million out of this operation.
  It is true that the Minister told us that there will be some compensating loss of tax to the Revenue, and the total gain to the Revenue may therefore not be quite as large as the £15 million which I have indicated. There can, however, be no doubt that the total effect of the operation for this year is to leave the Exchequer in substantially the same position as, indeed a slightly better position than, before and to put off for some time the time when the Exchequer will have to subvent these various funds.
  This is the very opposite to the situation which we claim should exist. We believe that after all the deliberate increases in prices laid so heavily upon the shoulders of the poorest of the poor, the taxpayer should help the poorest of the poor. As a result of the Government's proposals it is not the taxpayer but the contributor who is asked to help the poorest of the poor; it is upon his shoulders that the burden is being laid.
  Mr. A. E. Cooper: The contributor and the taxpayer are one and the same.
  Mr. George Thomas: Millions of people do not pay Income Tax because they are too poor.
  Mr. Marquand: We all pay tax; we pay it in prices as a result of tax levied on imports, and we pay it in other ways. We all pay it, but we do not all pay Surtax, and it was the Surtax-payer who received the relief when the subsidies were withdrawn. It is there that we say the burden should be laid. From that source the payment should be taken.

  1001
  This is the biggest increase in contributions which we have ever had—2s. each for every insured worker, irrespective of his income, and 1s. 11d. for his employer. I aroused some passion on the Conservative benches last week when I asked whether the Trades Union Congress had been consulted about these proposals. Hon. Members opposite shouted, "Why?" Do they not realise that trade unions and their leaders are bound to be interested when the incomes of their members are to be reduced by 2s. a week? Of course they are bound to be concerned.
  Cannot hon. Members guess the reaction of the younger workers, particularly in the trade unions, to these proposals? Although the younger workers in trade unions may not always be very close students of documents like the report of the Government Actuary on the financial provisions of the Bill, even they will know before very long the excess of the proposed contribution over the actuarial contribution which the young worker needs to pay for his own pension. The younger worker will know the excess he will pay over the contribution which would be sufficient to earn him the pension now proposed at the end of his working life. That excess for the insured person will be 14·8d., or 1s. 3d. a week, for a man and 1s. 0½d. for a woman. They are to be required to pay these weekly amounts in excess of what is necessary to buy their pensions. Will they show a lack of interest in that or will they be apathetic about it?
  Of course the Trades Union Congress ought to have been consulted before such proposals were made, and of course the Trades Union Congress will make representations about them now that the opportunity has arisen. They are bound to do so. It is their duty to do so. As the Minister knows very well, they have made representations in the past on changes of this kind which have increased the actuarial contribution paid by new entrants and younger people in the scheme. They have made representations in the past that the size of the Exchequer supplement is now too small and that the Exchequer supplement, which used to be one-fifth and then was reduced to one-seventh, ought to be put back to one-fifth. I wonder what they will say this time?
  Mr. Boyd-Carpenter: Will the right hon. Gentleman tell us who reduced it from one-fifth?
  Mr. Marquand: We reduced it without any loss to the Fund.
  Mr. Boyd-Carpenter: Who did it?
  Mr. Marquand: It was, of course, my right hon. Friend the Leader of the Opposition. This is the old business of trying to reintroduce the red herring, "What did you do in 1951?" I tried previously at some length to explain all the reasons for that, and I will not go all over that situation again. We were at war in 1951. In any event, that does not in the slightest degree alter the situation which the Minister has to face now and it in no way helps him to justify his increases in the contributions of the younger workers today.
  The Minister may find that he has gone too far. Certainly he has reached the end of the road. No one after him, Tory Minister or Labour Minister, can go any further along this road. There can be no doubt at all that this Bill must be, for this reason alone, an interim Bill. I was glad to judge, from the remarks which the right hon. Gentleman made in his speech, that he realises that this is the last time we must rely for an improvement in conditions of retirement for the mass of our people on this sort of scheme.
  The right hon. Gentleman indicated fairly clearly that he had it in mind to move forward to a different type of scheme. We have long thought so. We thought before these increases were made that the burden was already too heavy on the lower-paid worker and that an increase sufficient to provide a satisfactory pension in retirement could no longer be made except by means of an increase in contribution so heavy that the lower-paid worker could not bear it. Now the contribution is to be 9s. 5d. a week and, whatever proportion it may be of average wages, it is nearly 7 per cent. of the wages of the lowest-paid workers in this country.
  It has reached a point beyond which I feel it is quite impossible to go any further. The only solution is to embark, before long—and I hope that it will not be long—on a system of graduated contributions. Graduated contributions will require graduated benefits. How is it

  1003
  to be done? We have put forward our plan, as everyone knows, and it is available to everyone to examine and discuss. It has been discussed at the Labour Party Conference. Some of it was referred back for examination and discussion and further publication will take place in good time.
  What do the Government intend to do? I think that we had a hint today that they have it in mind to do something. I think that we had a hint from the Prime Minister's opening speech on the Address in reply to the Gracious Speech. But we had a hint before that, because the Life Offices' Association and the Associated Scottish Life Offices published in March of this year a pamphlet on this subject. Their major conclusion, after examining the possibilities of a better system of pensions—they were, of course, in favour of a system of pensions proportionate to earnings—expressed in the form of a question, was that
  "the basic issue was whether it is in the best interests of the country that the State pension scheme should be extended beyond the level of basic needs."
  When the Prime Minister addressed the House a few days ago, he said:
  "We all agree that in a modern society the State must secure that provision is made for basic needs, but I think it is a different question, and a difficult one, how far it is the right or duty of the State to compel people to go beyond this."—[OFFICIAL REPORT, 5th November, 1957; Vol. 577, c. 31.]
  It was an echo of his master's voice. It was an echo of what the life offices had already said.
  All I want, in conclusion, is to tell the Minister that if he is thinking of a different kind of scheme based on graduated contributions and giving graduated benefits, he must abandon the conception that the only duty of the State is to provide for basic needs. Anything that does not provide a superannuation for the whole of our population—anything that does not take care of the requirements of farm workers, building workers and many others who work for small employers and who have no real prospect of getting a supplementary pension—will not do.
  It is no good bringing before Parliament and the country a proposal for some basic national pension and erecting upon that merely a system of voluntary pensions
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  provided for those who are in sufficiently good employment to be able to afford them through the insurance companies. What is required is a national scheme of a different character giving better and graduated pensions and more satisfaction than the one we now have.
  5.35 p.m.
  Mr. Anthony Kershaw: I could not follow the right hon. Gentleman the Member for Middlesbrough, East (Mr. Marquand) in his explanation of the figures whereby he sought to prove that the Exchequer contribution will be reduced in the pension in the future. Perhaps I should leave that to my hon. Friend who is to reply to the debate. I understood quite clearly the Minister to say—and I believe that the figures show—that the obligation on the Treasury will be about £60 million more in consequence of the proposals.
  I was very interested to hear that the reason the Labour Government, in 1951, reduced the Exchequer contribution was because we were at war. I must confess that I have never before heard that responsibility put upon the Korean war. I should have thought that a country like ours might possibly have been able to maintain a brigade group in contact with the enemy without having to alter the whole pensions structure at home, especially at a time when expenditure on defence was very much less than it is now.
  Lastly, the criticism which the right hon. Gentleman directed to this side of the House, that the trade unions should have been consulted beforehand, does not fit very well the newspaper which, I see, is still lying on the Table, about which the Opposition took a Minister to task this afternoon on the ground that he had told someone else before he told this House about the alteration of telephone charges.
  Mr. Marquand: No one took him to task for consulting even the newspapers. He was taken to task for consulting the chairman of a party political organisation.
  Mr. Kershaw: I think that we are on a different point. Perhaps the right hon. Gentleman was not present.
  The Postmaster-General was taken to task because there was a headline in the Star containing news that he should have revealed first to the House. I think

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  that there would have been criticism if the pension proposals had been put before the public before they were put before the House. While, no doubt, he would wish to consult as much as possible the Trades Union Congress now that the proposals are public, certainly this is the place where they ought first to be made.
  Like a number of hon. Members opposite and, no doubt, others on this side who will speak, I welcome the proposals that the Government have made. I welcome the fact that old-age pensioners and others are now to receive the highest benefits they have ever had, the highest in real terms, and so are to share to some extent in the general increase of prosperity in the country. I welcome the fact that it has been possible, in this Administration, to do more for old-age pensioners than the Socialists were able to do during their time in office, and that the real benefits of the pensions now will be 12s. higher than right hon. Gentlemen opposite were able to arrange for retirement pensions when they left office.
  I welcome, also, the administrative expertise which has made possible the payment so early of the extra benefit—in three and a half months—which is very much quicker than it was possible to do it before.
  Mr. Walter Monslow: Is the hon. Member aware that I have a case which completely wipes away his argument? Last week I met a pensioner, a constituent, who was paying a rent of 10s. 3d., but is now paying £1 5s. 6d.
  Mr. Kershaw: If it is a case which wipes away my argument, doubtless the hon. Gentleman will have an opportunity to explain it to the House later.
  The question of the extra contribution is, of course, a serious matter. These are the highest contributions that have ever been paid and the highest increase in contributions ever to have been paid, as the right hon. Member for Middlesbrough, East said. He might, in fairness, have added that it is also the highest increase that has ever been made in pensions. [HON. MEMBERS: "No."] The people who are in employment and whose wages have, by and large, kept abreast and have, in the average industrial case, gone slightly ahead of prices will not
  1006
  begrudge this extra payment to the old and retired pensioners.
  I hope that the extra 2s. contribution will not be regarded as a reason for a demand for extra wages. I must add, in fairness, that I very much hope that the extra contributions that the employers will have to pay will not be made an excuse for a rise in prices, which would have an equally harmful effect for the old people.
  There is no doubt that the burden of these contributions will be considerable. The extra contributions which are demanded will, of course, balance the extra benefits only in the first year. Thereafter, the taxpayer will continue to find the extra money which is required to the tune of, in twenty years' time, £475 million a year, even if the benefits and the contributions continue the same.
  The argument has been put forward that the extra payments should be met by taxation rather than contributions.
  Mr. Arthur Lewis: By the Surtax payers.
  Mr. Kershaw: Or by the Surtax payers. That is a perfectly maintainable argument. I can only follow my right hon. Friend in saying that the contribution is now 7 per cent. of the average industrial wage and that when this House passed the proposals to start the scheme, in 1946, it was envisaged that the contribution should be 7½ per cent; so that we are on the right side of that figure.
  Furthermore, one must consider that the extra cost of the pensions will he £167 million a year and, thereafter, will rise sharply. An extra tax of £167 million this year and rising sharply in that way is bound to be inflationary in its effect. Nobody would disagree with the proposition that high taxation has an inflationary effect upon the economy. After all, not for forty-nine years after 1948 will the contributor have paid an actuarial value for his pension. Not until 1997, when, I hope, most hon. Members will still be here, although some may not be, will it be possible for a man to say that his contributions have paid for his pension. Until that time, the taxpayer has to step in and help him. As my right hon. Friend said, the taxpayer will have to step in to the tune of £17,500 million during that time. Therefore, if we are placing an even greater burden on the

  1007
  taxpayer in respect of pension schemes, we must at least think seriously about it.
  The right hon. Member for Middlesbrough, East suggested that the limit had been reached. I would not dissent from that view, but if we are to put the burden not on contributions but on taxes it might be that the taxpayer will come to think of pensions, not as something that he is saving for himself for his old age, but as something for which he pays a tax in order to keep other people who have not paid the full contribution. The working population may in due course get fed up with this. They may jib and demand alterations. In the last resort, they may refuse to pay the taxes by emigrating and going elsewhere, thus removing our productive labour, which is the only means by which the old-age pension can be paid. There is a danger, which the House should consider, that the taxpayer may go on strike against the contribution that is necessary from him. This is a factor which should be borne in mind.
  Nevertheless, we must wonder whether the flat-rate pension has reached the limit of its usefulness. When the flat-rate pension was low and when taxes were low, it was surely possible to pay to everybody a flat-rate pension whether people needed it or not. That flat-rate pension, however, is no longer the demand of the ordinary pensioner. He does not want merely a little something to keep him out of the direst poverty. The demand—and it is a natural and reasonable one—is that he should have a decent pension upon which he can live respectably. Is it possible for a flat-rate pension to be provided to everybody, irrespective of need, to fulfil that legitimate demand?
  Mr. Crossman Mr. Crossman indicated dissent.
  Mr. Kershaw: I agree with the hon. Member, who signifies that it is not possible.
  Any flat-rate pension is basically unfair to the poorest people, because those who do not need it are also getting it and, therefore, the poorest person cannot have the higher rate of pension which he ought to have. Therefore, I should say, in passing, that a flat-rate pension of £3 a week to those who need it is more unfair from that point of view than a basic pension of something less
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  I welcome the statement in the Queen's Speech that the problem of the long-term solution to this question, to which the right hon. Member for Middlesbrough, East referred, is being studied. I hope that in discussing the complicated scheme which alone will be satisfactory—and we must discuss it at some length—we do not fall into the same errors as the Socialist scheme published in May. I think I can say without being accused of any party political bias that that scheme is a piece of political window-dressing and that the scheme as a whole will take so long to come into operation that it is basically a flat-rate pension scheme. "Half-pay in the next century" is not a cry that is likely greatly to enthuse the people, nor does it alter the type of pension scheme from a basic flat-rate pension, which, as I have tried to indicate, has very great defects.
  The Socialist pension scheme has many other objectives than merely providing a pension. It is loaded very much against the better-off contributor. As I understand, the £12 a week man will get a pension of £6, whereas the £24 a week man will get only £9—that is, a 50 per cent. rise in pension for a 100 per cent. rise in contributions.
  Mr. Lewis: How much does the £12 a week man get now?
  Mr. Kershaw: The £24 a week man would get a pension of about £15 a week for the contributions which he now makes if he did it through an insurance company. The consequence will be that all the higher-paid people will wish to opt out of the scheme put forward by the hon. Member for Coventry, East (Mr. Crossman). But if these people opt out, the scheme clearly will not work, because there will not be enough money. Therefore, the provision which is included that the permission to opt out would have to be considered later would obviously have to be brought into operation and the option out terminated. That element of compulsion is a disagreeable feature.
  Mr. Crossman: I do not think that the hon. Member would wish to misinterpret the scheme. At no point do we say that the right of free choice shall be limited later. We have made it perfectly clear that there shall be a genuine freedom of choice. We believe that the Government are wrong in their calculations; and that,

  1009
  the more they look at the scheme, the people will prefer ours. The basic freedom of choice will remain in our scheme. I am sure that the hon. Member would not like to misinterpret that.
  Mr. Kershaw: I do not wish to misinterpret it. The hon. Member may agree, however, that some of the details of the scheme are not as clear as they might have been and that—
  Mr. Crossman: This point is perfectly clear.
  Mr. Kershaw: If I have been mistaken, perhaps I may be excused. At all events, it is clear that if all the richer members of the scheme opt out, the scheme will not work and, therefore, it would have to be modified drastically or the richer members prevented from opting out. This element of compulsion is a very disagreeable aspect of the scheme.
  The Socialist scheme has a further drawback. The Socialist calculations, I understand, were that there should be more than £3,000 million surplus contributions in the first ten years. I understand that that calculation was not accurate and that the correct figure would be less than £1,000 million. Nevertheless, £1,000 million is a lot of money. The destination of those funds and how they are to be used, whether in subvention of the nationalised industries or for productive enterprises such as making two groundnuts grow where none grew before and none will ever grow again, must give cause for considerable anxiety.
  One of the very important features of our economy—and it is a capitalist economy whether the Socialist Party likes it or not—is that we must have a fairly large degree of National Savings. If those National Savings are to be taken away by the collapse of private insurance schemes—as I believe will happen—and by the mismanagement of the funds which will flow into the National Insurance scheme in different ways, it will create a very serious problem in the future.
  Such supports are unnecessary. It is quite possible to devise a graded scheme which will not have them. In the first place, I hope that any such scheme will be funded, so that it will be safe from the depredations of any future Chancellor of the Exchequer. Secondly, it is obvious that the contributions will have to be graded to some extent, and I hope also to
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  see the transferability of pensions—[HON. MEMBERS: "Hear, hear."] I am glad to see that I am getting agreement from hon. Members opposite—to assist in the mobility of labour.
  It is absolutely unnecessary and, for the reasons I have given, harmful, for the State to take over and float its own scheme, subsidised by the taxpayer, because that means that the scheme will never be funded, and will always be at the mercy of Chancellors of the Exchequer. But the State, which has an interest in this matter, should encourage each industry, which knows its own problems best, to work out its own scheme. That would get rid of some of the difficulties which will loom up in the future, such as the question of the retiring age, and whether men and women should have pensions at the same age.
  In different industries different conditions apply, and schemes could be worked out better industry by industry than upon a State basis. It is desirable that trade unions should run their own pension schemes, as many already do. This is a very suitable activity, as opposed to the purely political activity in which some but not all leaders of trade unions indulge at present. It is not impossible to imagine that the State machinery for pensions could be lent, provided that it did not result in a subvention from the State, to ensure that these graded pensions worked. All the schemes should be vetted to see that they come up to certain standards.
  In that way it would be possible to preserve the liberty of the subject and to build up savings to allow the future investment which alone will permit us to pay the pensions which we demand. I agree that as such schemes develop we shall he able to leave behind us the basic pension, with which we are principally concerned this afternoon, because it will cease to be relevant. In the technical age into which we are entering, to a greater degree every day, we should not need the basic pension to ward off poverty, because we will not have poverty, but only varying degrees of wealth.
  5.53 p.m.
  Mr. R. H. S. Crossman: I was not going to refer to the Labour Party's national superannuation scheme, except indirectly, until I heard the speech of the hon. Member for Stroud (Mr. Kershaw). I should like to make

  1011
  two comments upon it. When we began to think about the matter many of us also thought that it would be nice to operate the scheme industry by industry. Indeed, our plan makes it clear that any industry which chooses to organise a scheme of its own—provided that it passes the three tests which the hon. Member laid down; I am glad that he mentioned the transferability test and the necessity for it to be fully funded—should be encouraged to do so.
  The hon. Member should realise that nobody who has studied this question believes that much more than 50 per cent. of the employed workers are ever likely to be included in a private occupational scheme. Even if they gave every encouragement during the next ten years it would be surprising if the Government could get more than 10 million workers into those schemes. The hon. Member will therefore appreciate why we started by saying that our aim was, through the State, to provide National Superannuation for every worker who had not available to him an adequate and sound occupational scheme.
  The Labour Party scheme, when passed into law, will compel every worker who is not in a sound occupational scheme, or who does not choose to remain in one, to be a member of the State scheme. It fills in the gaps in the occupational schemes and completes them, so as to ensure that every person will receive superannuation benefit. That is the plan that we have laid down, and I am afraid that any Government facing this question will very soon find that without a State scheme we shall have all the people who need it most permanently excluded.
  Looking forward to the Britain of the next ten or twenty years—it will not be a completely capitalist Britain or a wholly Socialist one; it will be a Britain with a mixed economy—we believe that the scheme that we have worked out will provide a framework for collaboration between the private and public sector which will set a precedent for genuine freedom of choice. We have allowed people genuinely to choose which they want, and I think that that is all to the good, because it will mean that all the private schemes will have to be as good as the State scheme, and vice versa, in order to attract people. I should have thought
  1012
  that hon. Members opposite would appreciate the virtues of that kind of competition.
  I now want to turn to the Minister's speech. I accept his rebuke—his statement that I had a new-found enthusiasm for this matter. It is only two years since I have been studying it. I would add that it is also just two years since he began studying it.
  Mr. Boyd-Carpenter Mr. Boyd-Carpenter rose—
  Mr. Crossman: I am willing to give way when I have finished my sentence. We are both novices in this subject; there are Members on both sides of the House with years of experience in this matter. But I will try to be a little less cocky in my attitude to the House than the right hon. Gentleman was, because I am very much aware that this is a job in which experience tells a great deal. Those who have the privilege of having my kind of luck and being thrown into the job of thinking out new ideas on this subject, should realise that they are inexperienced. During the last year I was chairman of a working party of the Labour Party Executive, and our job, taking account of all the research and resources available, was to try to work out a plan for abolishing poverty in old age.
  The Minister has also had two years, with all the resources of the Ministry at his disposal besides the advice of the central statistical staff, and he has had every chance of bringing out a scheme. But what did he say this afternoon? He said, "It will be years before we can do anything, because we have to start thinking." I would ask him what he has been doing for the last two years, because for two years it has been known that the Labour Party was preparing a superannuation scheme. If he thinks that it is so important—and he must realise that this is the last Bill of this sort that can be passed, because it is the reductio ad absurdum and the total destruction of National Insurance as we know it—why has not he been getting on with the job of formulating a basically new policy? I will answer that question at the end of my speech.
  Mr. Boyd-Carpenter: I wish to intervene only to say that if my casual aside to two simultaneous interruptions

  1013
  seemed to be offensive to the hon. Member I very much regret it. Secondly, I am not going into competition with him. His right hon. Friend will remember that I did quite a lot of work with him in a very friendly way as long ago as the Industrial Injuries Bill, in Standing Committee, twelve years ago.
  Mr. Crossman: We now understand that the right hon. Gentleman has a great deal more experience than I. He should therefore have done a better job.
  I have never heard a more laboured excuse for total inactivity on long-term policy than the right hon. Gentleman gave at the beginning of his speech. As far as I can see, his only activity in the way of long-term thought has been to try to denigrate the efforts of the Labour Party. He was a little sensitive and he seemed to resent the use of the word "swindle", when used in connection with his Bill. I would refer him to the words that he used about the Labour Party policy. He said that it was:
  "the biggest imposition on public credulity since the South Sea bubble. The truth is that there is not a Labour Party pension scheme and the claim that there is one is simply a phoney prospectus."
  A man who accuses his opponents of being swindlers should not be quite so sensitive to the charge when it is put hack to him.
  One of the differences here is that the right hon. Gentleman was quite well aware that there was no bogus prospectus on our side at all. He was well aware that we were seeking to put forward a workable scheme and then to add to it a model to show how the scheme might work; knowing it to be full of deficiencies, and trying to make it work as best we could. That was no "phoney" prospectus. But I say, with respect to the Minister, that this Bill is a swindle and I am going to tell him why it is a swindle. I am also going to tell him why the right hon. Gentleman made those violent speeches attacking the Labour Party scheme. It was because he knew—and I did not—what a swindle he was going to put forward in the shape of this Bill. During the war I used to be in Psychological Warfare and there I learned that when you are in a thoroughly weak position and proposing to do something a bit dirty, the regulation routine is to charge the other fellow with doing something even dirtier in order to cover up the dirt
  1014
  you are doing. I shall not say any more about the swindle except to say to the Minister "Be careful," now that we all know what he is actually putting forward. I have in my considered verdict come to the conclusion that this Bill is a swindle on the contributors and on the old-age pensioners and I will tell him why I think that.
  Of course, we must be fair. This is not the right hon. Gentleman's Bill, it is the Prime Minister's Bill. The Prime Minister made clear his decision. The Minister of Pensions and National Insurance could have done what the right hon. Member for Carshalton (Mr. Head) did when he was asked to carry out a job which, in his view, destroyed utterly our British defences. He resigned rather than do it. The Minister of Pensions and National Insurance has been told to carry out a pension reform which destroys National Insurance, which restores the purchasing power of the pension to the 1946 level, but at the cost of weighting down the contributor as never before. The Prime Minister said to the right hon. Gentleman, "My boy, you will please produce a Bill which restores the purchasing power of the pension, but reduces to a minimum the liability on the Chancellor of the Exchequer".
  That is what the right hon. Gentleman was told to do and it was clear to him that it could not be done without making nonsense of National Insurance. The really serious thing is that National Insurance is being shattered by this Bill. People were very sceptical about it before, but after this Bill it makes nonsense to talk about insurance principles. Instead, we have a form of regressive taxation, and I take it for granted that some hon. Gentlemen opposite genuinely do not realise that. It is regressive in the sense that it bears far more heavily on the lower-paid worker than on the higher-paid worker. In fact, National Insurance is being destroyed, and the Minister proposes to substitute for it a highly reactionary and inflationary form of regressive taxation.
  I wish to start by discussing the benefits. I hope that the Minister will pay attention to what I am now saying because I wish to ask him a question. Would he agree with my calculation when I say that he has succeeded in

  1015
  restoring the standard of living of the old-age pensioner to almost exactly what it was in 1946 when the pension was first introduced? I think The Times was right in its leader when it stated that if we calculate in the various increases for the cost of living and rent, we find that the old-age pensioner is, roughly, 8d. better off, if he is a smoker, on the 50s. pension than he was on the 26s. pension in 1946.
  To call that a substantial improvement; to say that we can afford to take away the tobacco token, because the pensioner now has such a princely income, when, in fact, what he has is just about what he had in 1946—I am sorry, that disgusts me. That pretence really disgusts me. If the right hon. Gentleman or I were asked to live at the standard of living we had in 1946, we would say that it was rather a poor standard. We hear a great deal from the Tories about the scarcities of 1946 and the shortages. Well, remember that the right hon. Gentleman is giving back to the pensioners just the standard of living of the pensioner of 1946 and saying, "Look what I have done. I have given the pensioner a 'substantial improvement' in giving him a sum equivalent to the 26s. he had at that time."
  When we gave the 26s., it was the first year after the war, and then it was a large slice of the very small national cake. Certainly, to put up the pension 16s. more than it was before represented an enormous increase, yet, it was a great sacrifice then because there was a tiny national cake. We hear about the great increases of income under the Tories. We hear that the national income has expanded hugely. Yet the pensioners' slice of the national cake is to be just what it was in the austerity days of 1946. Moreover, it is to be like that only for the moment. It has only been fixed in pounds, shillings and pence; and when the cost of living rises, as it will do during the course of the next year or so, the pension will he pared away month by month as it has been since 1955. Since the gratuity of the last increase, 3s. 9d. or 4s. has been pared off the pension, which means that month by month through the period the pensioner has been cheated even of that small part he was given. The provisions of this Bill simply mean that for a few months there will be a restoration to the
  1016
  1946 living standard and after that the pensioners of this country are to sink back below that living standard until another lobby has another drive to get another Bill through Parliament.
  We on this side of the House think it shameful to treat the old people in that way, to leave them to be at the mercy of inflation and to have a Bill every time to try to give them back a little of what we promised two or three years ago. We are determined to take them out of that situation, to create a pension system which automatically allocates to the pensioner something which no political party can "welsh" over because the pension will be tied up so tightly. Our desire to take the matter out of politics is something which I believe no decent person should object to.
  There is no suggestion in the Bill that we shall give the pensioner any guarantee against inflation. If the Minister had said today, "I give a pledge on the part of the Government that every six months there will be an automatic review and adjustment," there would have been no opposition from this side of the House. We would have supported the right hon. Gentleman overwhelmingly, if only he had promised not to cheat, but to ensure that, automatically, the cost of living of the pensioners was studied at six-monthly periods and the pension adjusted upwards.
  Captain Richard Pilkington: Did that happen in 1946?
  Mr. Crossman: I think the hon. and gallant Gentleman means after 1946, and I would say this. Unlike the Conservative Party, we in the Labour Party learn. We are not at all ashamed of what we did in 1946, but we hope to do better in 1959. We have learned that we can improve on the scheme of 1946 and one of the essential improvements is to ensure that the pensioner is guaranteed against inflation.
  The argument is advanced that this guarantee itself is inflationary. It is there in one of the beautiful little pamphlets—the Government's "bible"—issued by the life insurance companies. But is there anything more inflationary than armaments? Yet we do not say that we shall have no armaments because they are inflationary. We on this side of the House say that there are some things which are so important that, even if they

  1017
  are inflationary, we have to take the risk of having them. One of the things which is very important is not to cheat the old people who are the last persons who can be said to be responsible for inflation. It is right that those people who push up wages and profits should pay for inflation, but the one group who should be protected against inflation are the pensioners who are not the cause of it, whose expenditure is in no way inflationary.
  Nothing could be less inflationary than the expenditure of the pensioners. They do not buy motor cars which could otherwise be sold in America. They just buy a little food and coal and have to pay for public transport. It would be a very mean Minister who would say that we cannot guarantee the pensioners against inflation.
  Moreover, we have to face the fact that during the period of this Bill the gap between the privileged and unprivileged pensioner will continue to widen; the gap between those on superannuation, whether it be at the top level of the "top hat scheme" or at the bottom level of superannuation at 10s. a week—the lucky one-third who have superannuation and the two-thirds who, through no fault of their own, do not happen to be in superannuation schemes. We on this side of the House cannot tolerate it when the Minister says that we have to spend another two years thinking about the long-term policy. We cannot accept it as inevitable that meanwhile we have to have another makeshift Bill, with all these evils going on and becoming worse than ever under the provisions of this Bill.
  Now, what about the contributions? I hope that I shall have my figures right. My skiffle-group of professors has worked out all four sets of figures for me. [Interruption.] When we have at our disposal the plenitude of staff which the Minister has, by Jove, we will do a good job. I would put four questions to the Minister, to see whether I have the facts right. Would he (1) agree that the pension increase from 26s. to 50s. is an increase of 92 per cent.; (2) that the share of contribution payable by the employee is increased from 19s. 6d. to 53s. 1d. and is an increase of 94 per cent.; (3) that the total contribution of the employee will have risen from 55s. 4d. to 105s., an increase of 172 per cent.; and (4) that
  1018
  the Exchequer contribution has risen from 24s. 8d. to 29s., or only 17 per cent.?
  Mr. Boyd-Carpenter Mr. Boyd-Carpenter indicated assent.
  Mr. Crossman: The Minister agrees. Here, then, is the proof of regressive taxation. The Exchequer contribution is only rising by 17 per cent. while the employed man pays, towards his own pension, a contribution which has increased by 171 per cent. There has been a steady and deliberate policy of shifting from the Exchequer to the contributor the weight of paying for the old-age pension. I want to be fair to the Minister and say that we believe that the contribution ought to be much higher, but we shall not tolerate a flat-rate contribution, which is simply a poll-tax on the lowest-paid worker, producing unbearable hardship.
  These increases are most inflationary. Imagine an agricultural worker suddenly told to pay 6 per cent. of his wage as his contribution. He is almost bound to put in a wage claim. We therefore have the fantastic situation that this Government who talk against inflation are imposing inflationary increases which must put an enormous burden on the lowest-paid workers.
  Let me point out to the Minister some thing else that he is doing. Has he worked out the effect of the new contributions on the low-paid part-time workers? What employer will be able to afford to pay for nine hours work by a domestic cleaner, in addition to the wage a contribution of 14s. 2d. per woman and 17s. 6d. for a man? Does not the Minister think that he is making it almost impossible for elderly persons to get part-time work because of the size of the contribution which has to be paid? The contribution of the employer will either be deducted from wages, which will come even more miserably down, or the employer will not employ the part-time worker. The same is true for women in domestic service or office work; they simply will not get employment. One of the by-products of this scheme will therefore be to take away one source of minor earnings from elderly people who are already suffering under the scheme. Instead of bringing the contribution down for these people the present proposals will shift the burden regressively on to the lowest-paid workers.
  It will also destroy the actuarial basis of National Insurance. National Insurance used to be a tripartite scheme; it

  1019
  will now be a bipartite scheme, because it is now to be paid for mainly by employers and employees. The employer will be able to pass his contribution on. It is therefore inflationary. The Government, who are so keen about preventing inflation, are here giving employers an excuse for raising prices all over again because the Government are putting nearly two bob on their contribution. It will be passed on in increased prices. So the burden falls on the employee contributor and most heavily on the poorest contributor.
  Let us observe something else. Young people will have to pay more under this scheme than will be necessary to get their pension—and it is not a splendid pension at that. Government actuaries tell me that the employee will pay one shilling and threepence per week more than he actuarially needs to do, to graduate for his pension, and that the employer will pay one shilling and twopence more. That means two shillings and fivepence per week more being paid than is necessary. Under the Labour Party's plan those who pay more get more while under the Conservative scheme we all pay more and get no higher benefit. That is called "a noble and substantial improvement."
  The result will be that the insurance principle will have no meaning whatever. It would have been far more sensible under this Bill to give a full pension as well to the non-contributory pensioners. For what is the difference now between somebody who has contributed and somebody who has not? Some have to contribute too much and some too little and there is no relationship between their contributions and the pension that they get. Then why not bring them all into a single non-contributory pension scheme? We all know why the Minister will not do that; because it has to be paid for by the Exchequer. A non-contributory pension would be an equal pension putting a crushing burden of taxation equally on the whole community. The proposals in this Bill, however, are an ingenious device to make the working class pay more than it has ever had to pay, and for an inadequate benefit.
  I know the Minister believes that the right thing to do is to settle things in the short run for the existing pensioners and then to sit down and do some thinking about the long-term policy. Let me be
  1020
  honest with the Minister: we started that way ourselves. We thought we could split these two problems, first getting National Insurance right for the existing pensioners and then putting on top of that a new scheme for the young people. The fact is—I will tell the Minister this free—it cannot be done. The only workable scheme is one which deals (1) with the existing pensioner, (2) with the middle-aged pensioner, and (3) with the long-term pensioner all together. If one deals with (1) by itself, one's scheme will be permanently bankrupt and there will be a permanent political temptation to lobby for higher pensions rates. It does not help solvency to have a safe, non-bankrupt scheme for people of eighteen linked with a bankrupt scheme for people over fifty. We must have an over-all scheme for all the people all the time.
  One respect in which we look at the Bill with pleasure is that it proves conclusively that point. The Bill is the end of the dead-end. It is the end of the blind alley. We are knocking our heads on the end of it. We cannot raise contributions any further under the existing scheme. That is why the next Pensions Bill must be a National Superannuation Bill. There is no alternative and we must always be grateful to the Tories when they prove the necessity of Socialism by their blind, stupid continuation of schemes until they become positively unworkable. In so far as this scheme is workable, it is only against the interests of the poorest people.
  I would now refer to a point mentioned by my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand). It is interesting to speculate why the master ordered the Minister of Pensions to introduce this scheme. Let me quote from the speech made by the Prime Minister on Tuesday of last week. He said:
  "We have been and are giving, as the Gracious Speech shows, very close attention to these problems. Meanwhile, we are very grateful for some of the preliminary suggestions which have added to the pool of general information on these matters. We have watched with interest quite a lot of political garments lying strewn about on the river banks."
  He had already said:
  "We all agree that in a modern society the State must secure that provision is made for basic needs, but I think it is a different question, and a difficult one, how far it is the right or duty of the State to compel people to go beyond this."—[OFFICIAL REPORT, 5th November, 1957; Vol. 577, c. 31.]

  1021
  When I read this I understood all that had happened. The Prime Minister is a shrewd politician. He looked at our scheme, and as it made good sense he wanted to have one like it. Somebody came along and said, "Of course, it is good for the people, but what about the Pearl and the Pru'. Do a bit more thinking. Don't make any decision. Show yourself theoretically in favour, but not in a practical way which is any danger to private insurance schemes." That is a guess, only a guess, but I would say this to the insurance companies. Every time the State has advanced into the world of insurance the insurance companies have been scared lest their business should fade away. They were scared of the 1946 Act, but the result of the 1946 Act was actually an increase in the amount of work they had to do.
  I say in all sincerity that if we could get this country pension-minded, if every worker had superannuation and recognised that his contributions are deferred pay saved up for him in a fund controlled by an adequately independent trustee, I believe he would not be content with that first part provided by the State. Through his trade union he would negotiate other schemes with his employer. So we would build in national superannuation a foundation for the workers who, by their trade union or individual activity as they became more prosperous, would be able to build on that foundation. Therefore, I think the insurance companies are being a little short-sighted in not recognising that it would be a terrible thing if, for the sake of their private commercial interests, they denied to half the people of the country the superannuation which they admit to be a good thing.
  All the insurance companies say that superannuation is right. But they want to do it all themselves, and I say they cannot do it all. No one will believe that the building industry will have a superannuation scheme in the next 50 years, or agriculture either. The insurance companies will not be able to cover all the workers. That is why the next Labour Government will introduce their scheme which, for the first time, will provide superannuation for every worker in the country, either through a private or a public scheme. That in the long run will abolish poverty in old age and
  1022
  produce a higher standard of living, as the Minister rightly said, at the cost of each of us being prepared to cut consumption today for the take of provision for our old age tomorrow.
  That is the philosophy in which we believe. That is what we have put into our pamphlet which the Minister says is ridiculous nonsense and not a pension scheme at all. We are glad that this Bill has been brought in. It gives a very miserable pittance and we cannot oppose it, but what it has done is to make certain that the people of the country, including a lot of Tories, will understand the need for national superannuation. I predict that what the Minister called a scheme by "a skiffle-group of professors," will be the law of this country within the next three years.
  6.23 p.m.
  Mr. A. E. Cooper: The hon. Member for Coventry, East (Mr. Crossman) is always very amusing, but we are never quite sure, when he starts his speech, how he will end it. There were quite a number of points in it with which I hope to deal as I go along. Tonight, he has at least been consistent. He accused us of cheating old-age pensioners of their share of the national product. He said exactly the same to his right hon. Friend the Member for Llanelly (Mr. J. Griffiths) when the right hon. Member was Minister of Pensions and National Insurance, so the hon. Member has dispensed his bouquets rather liberally all round.
  If I may say so to the hon. Member, he addressed the House tonight and the Labour Party Conference at Brighton with some impertinence. He has told the House that he is a novice on the subject of pensions, but he has come to this subject like Moses descending from the mountain and told us how we should behave. I am not so much criticising the hon. Member for that, because I am the first to admit that it is an exceedingly difficult problem for any political party, particularly a political party in opposition, to formulate a scheme of such magnitude that it will be foolproof. Heaven knows, in private industry, where we have to formulate our own pensions proposals, we have just as many problems to face. I would have hoped that the hon. Member and his working party would try to learn from some of the experience which

  1023
  private industry has had, not only in the last two or three years but over half a century or more.
  We have had many setbacks, not so much from the employers' side as from the employees' side. We find that in many industries employees are not willing to make necessary contributions towards a superannuation fund. That is found where employment has been regular and consistent, particularly in my industry the chemical industry. That is a state of mind among many working people that we have to overcome. Unfortunately, a large number of people live for today and let tomorrow take care of itself. There is still a great deal of education to be done before we get all people into the frame of mind to agree that a national superannuation scheme is a wholly desirable thing. If the hon. Member is honest, I think he will be the first to admit that the Labour Party's scheme as at present put to the country has already been riddled with holes by the Minister beyond the possibility of redemption.
  Mr. Crossman: I could not admit that. Will the hon. Member allow me to put this to him? The Minister made one very serious criticism of our scheme. He said that we had miscalculated the amount we would have in contributions. He said that at the end of ten years we would have only £1 billion. I have been working out what we would have at the end of ten years under the Government's scheme. I find that he would have squandered £1,400 million. That is the difference. The criticism of us is that we would have only £1 billion surplus in our fund, whereas, if we do not have the Labour Party scheme, the right hon. Gentleman admits that £1,400 million will be squandered. Therefore, let us improve the fund.
  Mr. Cooper: That was an extraordinary intervention by the hon. Member. Here we have a scheme, formulated after two years' work by a novice chairman and a working party—
  Mr. John Hynd: They are not novices.
  Mr. Cooper: The hon. Member for Coventry, East brings forward the scheme with certain financial explanations and the Minister completely destroys the case.
  1024
  Then the hon. Member says, "Well, maybe we made a mistake of a couple of thousand million, but, nevertheless, let us have another think about it."
  Mr. Crossman: I did not say that.
  Mr. Cooper: I say that the Labour Party scheme is thoroughly ill-thought-out and half-baked. When hon. Members opposite put their scheme to the people in the country, as so many have been doing recently—as the Labour candidate in my constituency has done—and say that it means half-pay on retirement, what is meant is half-pay on retirement in forty years' time. That is a thoroughly dishonest prospectus and the sort of thing which will destroy the Labour Party's scheme in the eyes of the electorate.
  I should like to see my right hon. Friend come forward now with a scheme for long-term superannuation. I believe that before this Parliament is out such a scheme will be brought forward. When it is brought forward it has got to be right, because we are not dealing with a couple of hundred employees, but with more than 20 million people. I should like hon. Members to realise some of the implications of this pension problem over which we skate so freely.
  The population is ageing, and in a few years' time there will be far more old-age pensioners in relation to the working population than there are today. At the other end of the scale, more children are remaining at school until they are older, and in the near future it may be that the compulsory school leaving age will be raised to 16 for everybody. As a result, productivity must increase very substantially because a smaller section of the community will have to sustain a greater proportion than at present. Let us remember that.
  To support this almost Frankenstein monster, there must be a far greater incentive to the working population than there is at present, whether it is through greater superannuation benefits at the end of their working lives or through greater taxation reliefs now. All these things must form the general pattern which we as a nation must follow over the next few years, and it is idle for right hon. and hon. Gentlemen opposite to tell the country that this pensions increase is niggardly and that they would have done more when they know in their hearts that

  1025
  if they had been the Government of the country at present they would have done no more.
  This is nothing more or less than political vote catching, but, make no mistake about it, it will rebound against the Labour Party in a big way. The people are not so stupid. [HON. MEMBERS: "Then have an Election."] The reason we do not have an Election now is that we are busy as a Government and have a lot to do.
  I was rather sorry for the right hon. Member for Middlesbrough, East (Mr. Marquand) who spoke very much with his tongue in his cheek. Why is it that right hon. and hon. Gentlemen opposite look so miserable when the Government are doing something good? When the announcement was made about telephone charges this afternoon, I thought I had never seen such a collection of miserable faces in all my life as I saw on the Labour benches. In this Bill we are increasing pensions to a level which they have never reached before and giving them a purchasing power which they have never before enjoyed, but hon. Members opposite look very miserable. They must learn to cheer up when good news is given to the country.
  The hon. Member for Coventry. East got himself in quite a muddle over contributions. He said, first, that the employer would simply pass on the extra 1s. 11d. which he had to pay. As an afterthought, he said that the Chancellor pays 65 per cent. of it and there is, therefore, not very much to pass on anyway. He said that the only person who suffers is the contributor, who pays an extra 2s., but if he is paying tax—and many contributors are—then 65 per cent. of the increase is paid by the Chancellor of the Exchequer. Let us not forget that.
  When the hon. Member talks about the poor working class it does not cut any ice with me or with many hon. Members. Sitting in front of him is his hon. Friend the Member for West Ham, North (Mr. Lewis). I drive through West Ham every day; I drive through it as quickly as possible, but, nevertheless, I drive through it. I pass through street after street of working-class houses—people working in the docks or in factories of one sort or another—and I see motor car after motor car and television aerial after television
  1026
  aerial. That is all right. I am very happy about it. But hon. Members cannot say that these people are hard up if they have these things. If hon. Members want to know who are the new poor in this country—
  Mr. J. Hynd: The Tories.
  Mr. Cooper: Correct. The new poor are the fixed income, lower middle-class people. They have gained very little or nothing from the country's prosperity over the past few years. Last year, wages increased by £900 million, but there was no proportionate increase in the salaries of the lower middle class.
  Mr. Lewis: The hon. Member has mentioned my constituency. If he drives through it, he knows that it contains quite a large number of railway workers. The majority of them earn £8 or £9 a week. Does he not understand that many are being charged a rent increase of 25s. a week? They deeply resent that when they know that hon. Members opposite are receiving as much as £14 a week extra in Surtax rebates from the Government. That is what they resent.
  Mr. Cooper: I can assure the hon. Member that in my very best ward, a very strong Tory ward, a great majority of the people would love to be earning the wages which are being earned in Becontree at present. They would love to have the facilities to do so. Hon. Members cannot find all the material evidence of prosperity in my Cranbrook ward that can he found in Becontree.
  Mr. Lewis: My constituency is wide, but it does not go as far as Becontree.
  Mr. Cooper: But it is just as prosperous. If the hon. Member wants to make money quickly he could do worse than open a shop in West Ham—much worse.
  Mr. Lewis: If I had the money.
  Mr. Cooper: Which, of course, the hon. Member has.
  I want to make one or two comments about Civil Service pensions to which I hope my right hon. Friend will give attention. I presume that I am not alone in having been approached by Civil Service pensioners who are distressed that their pensions remain at the old

  1027
  figure and that they have had no compensating increases to cover inflation. I wonder whether it is possible to do something about that.
  The second point is one on which I know the entire House is agreed. When we were in opposition we pressed it upon the Government and they were unable to accept it at the time for financial reasons. Probably the same reasons apply today. It concerns non-established service. It has been agreed by the House that it is absolutely proper that this question should be dealt with, and I hope that something can be done about it in the very near future.
  Mr. W. R. Williams: Obviously, that does not come within the scope of this debate but I am very pleased that the hon. Member is sympathetically disposed on that issue. Has he noticed a Motion on the Order Paper which will enable him to try to bring pressure where it is most useful in that connection?
  [That this House takes note of the recent Report of the Royal Commission on the Civil Service (Command Paper No. 9613) and the observations of the Commission in Chapter XV, paragraph 743, on the subject of the reckoning of unestablished service for superannuation purposes in the Civil Service, to the effect that there is no question of merit or principle outstanding, that it is in fact now common ground that it is right that unestablished service should reckon in full, that Parliament conceded that as regards service after July, 1949, by the Superannuation Act, 1949, that the Royal Commission were of opinion that the Superannuation Act, 1949, afforded a precedent for retrospection and supported the argument that if a certain treatment is right at one point in time it is also right at others, and that in the view of the Royal Commission the sole consideration was that of cost; and this House is of opinion that all unestablished service prior to July, 1949, of civil servants subsequently appointed to established posts should be reckonable in full for superannuation purposes (instead of one-half only) on the grounds put forward by the Right honourable Gentleman, the Member for Monmouth, in his speech to Standing Committee B on the
  1028
  Superannuation Bill, 1949 (HANSARD, 10 th May, 1949, Cols. 155–158), and calls upon Her Majesty's Government to take the necessary action.]
  Mr. Cooper: I thought it was a good idea to try to bring pressure on the Minister during the Second Reading debate. The matter might then be discussed in Committee. We will see what can be done.
  The final comment I want to make is about the earnings rule. There is some room for controversy about this, and I know that certain trade union leaders are opposed to any relaxation of the earnings rule. Earlier in my speech, however, I emphasised that for many years we need a greater level of productivity. We must have as many people working as possible. The advantages of medical science and the general standard of living of the people suggests that many people at the age of 65 are fully capable of continuing to work for many more years and want to work for many more years. They could make a positive contribution to the country's economy. I know the disadvantages that can be cited against doing away with the earnings rule altogether. Nevertheless, we have to consider this question in relation to the nation's need for greater productivity. With the burden of pensions growing with the years, we cannot ignore the labour of perhaps as many as half a million people.
  I would suggest that this whole vast field of pensions and pension reform is something we should try to take out of the cockpit of party politics. We can have our individual knockabouts, but that is a little profitless. It may be that the time has arrived when a Royal Commission, or another Beveridge Committee, should consider this whole problem, which is probably one of the greatest domestic problems that the nation has to face.
  6.41 p.m.
  Miss Margaret Herbison: The hon. Member for Ilford. South (Mr. Cooper) has dealt with almost nothing of what is in the Bill, and has given us the present-day Tory patter that we have "never had it so good". After listening to his speech, one wonders what must be the reaction of the old and the sick to his attitude.

  1029
  The provisions of the Bill have been very long awaited, and now that they are before us I am quite certain that the majority of our people will consider them miserably inadequate. In his speech today, the Minister spoke time again of the substantial improvements that the Bill would give to many people. Knowing the provisions of this Measure, I feel that there has never been a more farcical use of our language than his describing them as substantial improvements.
  The Minister is not alone in that. Winding up the very long debate that we had yesterday, the Leader of the House said:
  "In this Session we are going to take great strides forward in carrying forward our philosophy of championing individual rights."
  Again, if one puts the Bill's provisions against that statement, the only conclusion one can come to is that the statement is just sheer humbug as far as it affects the liberty of the old, the sick and the disabled. I have always believed that one of the most important aspects of liberty is a freedom from poverty and from grinding want. The old and the sick are certainly suffering from both at present, and for many thousands of them the Bill will do little to take away that poverty.
  In his last few words in moving the Second Reading, the Minister said that the Bill would bring comfort and help where they were needed. I do not accept that, and I am quite certain that millions of our people will not accept it, either. The right hon. Gentleman announced last week, and the Bill provides, an increase of 10s. in various benefits. I was interested in what my hon. Friend the Member for Coventry, East (Mr. Crossman) gave as what he supposed would be the conversation with the Prime Minister on the question of a superannuation scheme. I am certain that when the Government were pushed to make increases they decided to make them as low as possible and, at the same time, they had long discussions to discover, in what devious ways they could protect the Treasury and the Surtax payers from carrying a part of any burden that might ensue from the increase.
  They solved what was for them this serious problem in two ways, and both are despicable. According to the figures given by the Minister, 1,683,000 National Assistance grants are paid weekly to old
  1030
  couples, and to families where the breadwinner is unemployed, or sick, or industrially disabled. The grants may, indeed, cover well over 2 million people. The old-age pensioners have been given a 10s. increase by this Bill, but, of them, over 1 million are receiving National Assistance. Those people immediately lose 5s. of this increase. I do not know the exact number of those old-age pensioners who receive tobacco coupons worth 2s. 4d., but I imagine that with the disappearance of this concession there will be about a million of them, who will get the princely increase of 2s. 8d. on the present amount. How dare the Minister say that that is a substantial increase for anybody?
  Yesterday, again, the Leader of the House said:
  "…our ideals must expand in the same proportion as our scientific advance…"—[OFFICIAL REPORT, 12th November, 1957; Vol. 577, c. 906–7.]
  We have become very used to the platitudes of the Leader of the House, but when one examines that particular platitude it would seem, from the Bill's treatment of our old people, either that our scientific advance is going at a snail's pace, or that the ideals of the Tories are very poor and makeshift things. I am sure that everyone knows that our old people's troubles are due to the lack of any ideals or decent philosophy on the part of the present Government.
  The Government's second solution to the problem was the raising of the contributions—again, in particular, to relieve the Surtax payers. In giving his financial explanation today, the Minister obviously showed what my hon. Friend the Member for Coventry, East proved so clearly in his excellent speech: that if we try to continue with the present fixed-rate contribution and fixed-rate pension there will be no hope in the future for the old people having any decent standard of living at all. If the Minister examines his own speech he will find that that is the only conclusion to which he can come. I am convinced that either this Government—if they last long enough—or certainly a Labour Government, will get away from the flat-rate contribution and introduce a graded contribution with a graded pension.
  The hon. Member for Ilford, South does not seem to know how many of our people work and live. He does not seem

  1031
  to have any knowledge of agricultural workers. He does not seem to know that those doing the ordinary labouring, the low-paid wages earners with families, will find this extra 2s. a quite intolerable extra burden on them. And for the young in that category it is, as has been pointed out earlier from this side, an extra contribution in order to give to our present old-age pensioners a completely inadequate pension—and also a completely inadequate pension for these young people in the future—although the Government's own actuaries have shown very clearly indeed that the young people in our community, even the lowest-paid wage earners among them, will pay more than actuarially they should for their own pensions in, say, forty years' time.
  I want to touch on what is not in the Bill. A very long fight was put up by hon. Friends on this side of the House to try to bring those men and women who receive benefits under the old compensation Acts up to the same rate as those in receipt of Industrial Injuries benefit. I myself introduced a Private Member's Bill to cover both the partially and the totally disabled under the old compensation Acts. Friday after Friday it was turned down by a Tory Member at the instigation of the Minister. Last year, however, the Minister finally brought in a Bill that took care of the totally disabled and, by giving them an increase of 17s. 6d., brought them up to the same rate as those in receipt of benefit under the Industrial Injuries Act.
  Surely, when the Government decided at that time that it was only justice to give to those people that increase, the Government ought to have had in this Bill provision for raising those old compensation cases to the new level. If the Minister does not bring in the old compensation cases when the Bill is in Committee, the men and women in those old cases will be 25s. a week worse off than those who are receiving Industrial Injuries benefit.
  I ask the Minister to consider this matter between now and Committee, and, if he decides that it is just to bring them in, that he will so phrase his legislation that if there is an increase in Industrial Injuries benefit, those who receive benefit under the old compensation Acts will be able to get such increases. If
  1032
  he does not, we on this side will put down an Amendment.
  Then there are those who get pneumoconiosis benefits—all time-barred cases. They are getting even less than many who are receiving benefit under the old compensation Acts. They benefited under the 1956 Act, but under this Bill there is no benefit for them. I beg the Minister to include in the Bill a provision that will cover these people.
  My last point relates to the non-contributory pension. This was raised to 26s. in 1946, but there has not been a single penny increase since. Many of these people are very badly off indeed. If 26s. was considered the correct amount in 1946, according to the Minister's own figures, given in an Answer on Monday, the figure would now be about 42s. 4d. Surely the Minister cannot believe that to give them the 2s. 4d., which is what they will lose from the tobacco token, will be sufficient. This is a poor Bill. It is completely inadequate and a great disappointment to our old people.
  6.54 p.m.
  Mr. Harold Gurden: If there should be any recently admitted visitors to the Public Gallery listening to some of the speeches from the benches opposite, they might well think that the proposal of my right hon. Friend is to reduce rather than to increase pensions by 10s. a week. It is very surprising that no one has yet seen fit to compliment the Minister on what he is doing in the Bill.
  I would mention, in passing, the statement by the hon. Lady the Member for Lanarkshire, North (Miss Herbison) that this increase is niggardly. She compared it with the contributions increase which she said is very serious. It is 2s. a week, which is less than 1 per cent. of most of the lowest-paid workers' wages. I want to add my congratulations to the Minister for this Bill and for dealing with the matter immediately, although inflation is with us and there are serious financial difficulties. He has done a very brave thing at this stage of our difficulties, and this proposed increase in the pension rates is very large in face of our financial position.
  Of course, the increase in contributions has had to be loaded to a very high figure, although 2s. is not such a great figure proportionately speaking, but—let us

  1033
  admit it—it could well add to our serious financial difficulties and increase inflation. I hope that both those who have to fix commodity prices, and wage earners, will observe restraint and will not add to the country's financial difficulties which would make conditions far more difficult for the old-age pensioner, by increasing prices and adding to the inflationary spiral.
  Mr. Marquand: Do I follow the hon. Gentleman's argument aright, that the increase in pensions is inflationary? How can this be so if the contributors are to pay £167 million and the beneficiaries are to receive £167 million? Is it not just a balance?
  Mr. Gurden: What I am saying is that the increase in contributions could be an inflationary act if the wage earners and the people who fix the prices of goods and not observe restraint.
  I should like to refer to my experiences in my own and in other constituencies during the recent Recess. I visited a fair number of meetings of old-age pensioners. I was told that I was going into the lion's den. In fact, I found that the old-age pensioners themselves were not so very anxious, but that they would like an increase and they felt, very rightly, that they ought to be compensated against inflation—a point with which I agree, and my right hon. Friend has obviously agreed with it since he proposes to increase the pension.
  There are, however, the pressure groups and some of the officers of the old-age pensioners associations who have been whipping up the enthusiasm of these people to a rather disgraceful state.
  Mr. J. Paton: Oh.
  Mr. Gurden: Oh, yes.
  Mr. Lewis: What about the Surtax pressure groups?
  Mr. Gurden: Some of these people themselves were not old-age pensioners. I am sorry to say that, in one case, that person was someone describing himself as a clergyman. I do not know what was his denomination, but he was not, I believe, a member of the Roman Catholic Church or of the Church of England.
  Mr. G. Thomas: The hon. Gentleman is not, I think, being his usual fair self. He has been very unkind to other
  1034
  denominations. Would he not agree that it is natural for one who wears the cloth to be concerned about the living standards of old people?
  Mr. Gurden: I agree that it would be wise for anyone who wears the cloth to be concerned about the living standards of old people, but I should like to go on to explain why I take exception to the way in which these people have been whipping up the enthusiasm of old-age pensioners, often against the wish of old-age pensioners. This type of person has not, may I say, been helping the case of the old-age pensioner. The particular one I have in mind certainly did nor convince me that it was the right way to go about it, and I do not think that he was doing the old-age pensioners' case one bit of good. I saw him working people into a frenzy by the singing of songs with a swaying motion, behaviour which might well have come from heathen parts rather than those he was supposed to represent.
  I say these things tonight so that it may go on record that no good is done by trying to persuade pensioners that the sort of person I am referring to is the one really getting the increases for old-age pensioners, leading them to expect certainly not a penny less than £3 a week, and causing them ultimately, unfortunately, to be very disappointed when they find out that it simply cannot be done at this stage and at that rate.
  Mr. R. E. Winterbottom: Would the hon. Gentleman tell us what is wrong in having enthusiasm for something in which one believes or in having enthusiasm for a cause devoted to the correction of injustice? Would he say why the type of person to whom he refers is undesirable, compared with the bellringer at the Conservative Conference? Probably some enthusiasm was needed there.
  Mr. Boyd-Carpenter: We had it.
  Mr. Gurden: The reason why that type of person doing things like that should not be approved in this democracy of ours is that he is using the same method as was used by the Nazis and other similar national leaders to work people into a state of frenzy quite improperly. As I say, it does not do the old-age pensioners' case any good either. I am quite sure that, if the hon. Member for Sheffield, Brightside (Mr. Winterbottom),

  1035
  had been with me, he would have agreed that that was bad propaganda to use.
  I now turn to the long-term policy which the hon. Member for Coventry, East (Mr. Crossman) touched upon. Of course, we know that he has become the salesman to sell a policy which he hopes to be able to put over from the Front Bench opposite. In my view, we must in the future have more regard to the greater ages people are attaining today. If we do not recognise that people are living longer, we shall undermine any scheme, even that of the party opposite. We are told that, by 1978, at the present rate of old-age pensions, the cost will be £1,000 million a year. I suggest that we cannot go on much longer, probably not more than a year or two at the most, paying out the present pensions at the present minimum ages of 60 and 65.
  I am strongly in favour of paying a higher rate of pension, and I hope that we shall before long be able to pay to the really aged of 70 or 75 a higher rate of pension.
  I will give as an instance the case of a constituent of mine. He came to me in tears, saying that his problem was that he had to retire from his job. He was considered to be an old man at 65. He certainly did not look old; he looked fit for another five or ten years' work, and he hated the idea of retiring. His situation was depressing him tremendously, and he wanted to know what could be done. Because he was entitled to an old-age pension at 65, he was forced to retire from his job. I am strongly of opinion that the age limit of 65 must be raised, perhaps by three or six months at the beginning, and progressively thereafter, to keep pace with the longer life of the average person today.
  We cannot really call people old at 60. Are old-age pensioners aged people who have to come, as they say, for charity, who must leave their jobs and retire? Certainly not. They are not old at 60 at all. Perhaps they were some forty or fifty years ago, when it might have been a reasonable age to take. Perhaps it was even in 1946 a reasonable age to start with; but today it is out of date and people are not, or should not be, old-age pensioners at 60 years of age.
  Mr. Richard Fort: May I ask my hon. Friend a question on some-
  1036
  thing which undoubtedly affects the problem? If he is advocating this change, why should it be that almost every other pension scheme in the world adheres to 65 as the retirement age, just as we do at present?
  Mr. Gurden: I am not quite clear what is the point my hon. Friend is trying to put to me. If we enter a voluntary scheme, we may choose to take the pension at 65; and that is all right. To impose it as a statutory age limit is, I think, wrong.
  Sir Frederick Messer: They are not forced to.
  Mr. Gurden: I am advocating that the savings which will be made by raising the age limit should be passed on to those of 70 and 75 years of age. This would go a long way towards solving the problem of ensuring that people of greater age, who are less able to look after themselves than those of 60, receive the increased money.
  I hope that my right hon. Friend will tackle this matter very closely, and I hope that he will see it through. It would be a sad day for this country if my right hon. Friend had to leave his present Ministry for another, and I hope that he will stay long enough to complete this work which he has set out to do. He is really quite brilliant at it.
  7.8 p.m.
  Mr. Tom Brown: I understood the hon. Gentleman the Member for Selly Oak (Mr. Gurden) to complain about the enthusiasm which was being worked up in the ranks of old-age pensioners by some irresponsible person. At least, I gathered that that was what he said.
  Mr. Gurden Mr. Gurden indicated assent.
  Mr. Brown: My experience does not lead me to that view at all. Old-age pensioners have been very enthusiastic for a number of years in trying to secure redress for the injustice meted out to them. I visit old-age pensioners' clubs in my constituency and elsewhere, and the enthusiasm, if I sum it up aright, is born from the fact that they are suffering grave injustice brought about by the increased cost of living which makes it difficult for the basic pension of £2 to meet their needs. I do not think that the hon. Gentleman meant what he said in the way he put it.

  1037
  There are many people who are throwing their weight in with old-age pensioners who are not old-age pensioners—members of the Churches, the Co-operative societies, the trade union movement. My experience teaches me that many of the leaders of the old-age pensioners' movement have been members of trade unions in the past. They know very well that if they are to get any redress for the injustice from which they are suffering, they will have to organise themselves, draw up petitions, and so on. I hope that the hon. Member will take it from me that the enthusiasm of the old-age pensioners is born from real hardship.
  I listened with rapt attention, as I always do, to the Minister when he put forward the case on behalf of the Government. I listened to him when he said that he had an intuition that we on this side of the House would advance a very strong argument about graduated contributions. How he got that impression, I do not know, but it would be foolish of us to advance that argument under the present pensions structure. In the days that lie ahead, we shall certainly come forward with a Measure that will have within it graduated contributions. That is as sure as night follows day, because that is the only sensible thing to do.
  When there is such a variation of wage rates and standards in the various industries, we cannot have a fair flat-rate contribution. Therefore, we have to make up our minds, when we face this problem in the future, that there will have to be a graduated contribution.
  The next thing of importance that the Minister said was that the Bill did not alter in principle the structure of the present scheme. Neither would it be wise for the Bill to alter it. We have to make the best of the scheme. However many shortcomings this Bill may have—and it has plenty, which we shall be in duty bound to criticise, if not on Second Reading, in Committee—I think that it would be foolish for us to try to upset the structure which was established many years ago. We have got to improve upon it. I entirely agree with my hon. Friend the Member for Coventry, East (Mr. Crossman) that in the days which lie ahead this problem will have to be faced in a totally different way from that which has been faced in the past. I am not blaming the Government or my own party
  1038
  for the scheme which was inaugurated in 1946. I am blaming the statesmen of the past, who have failed to realise the problem of the ageing population. We should have started a lot sooner. A lot of water has gone under the bridge since then.
  The Minister gave us some staggering figures, which almost made me fear and tremble for the future. We have had staggering figures from time to time of what it would cost to grant the pensions that the old-age pensioner demands. We have had staggering figures for destruction, too, of £1,460,000 million a year spent in the preparation for war and in payment for past wars. If we can afford to spend that money in preparation for war and destroying life, then I say without fear of contradiction that we ought to be in a position to find the money for the maintenanec of life.
  I am not so silly as to suggest that we must not prepare for our defence. We have got to defend this country, and defend it we will with our money and with our physical resources, but, at the same time, we cannot allow the people who have weathered the storm of life to remain in a state of poverty.
  I agree, also, with my hon. Friend the Member for Coventry, East that this will be our last debate on the present scheme. I made that prophecy some time ago and I repeat it. I may be wrong, but as I read the signs of the times—and I think I read them aright—that prophecy will eventually prove to be true, because there is a different approach in many spheres of society regarding the old-age pensioner and the problem of the aged of the country.
  I was glad to see in the Queen's Speech that the Government proposed to do something concerning the wider aspects of old age. When we have finished with the Bill, we shall have to tackle the wider field, because, after all, we can give the old-age pensioner his £2 10s. or the married couple their £4, but one thing that the money will not do is to relieve loneliness. That problem has got to be tackled, and I hope that the Government will tackle it with determination in the near future.
  In the concluding part of the Minister's speech, he spoke of bringing comfort and solace to the old, the sick and the infirm. We agree with him. I assure the Minister

  1039
  that we on this side of the House will not do anything to retard or hinder the progress of this Bill, with all its faults, with all its failings, and with all its shortcomings. We shall assist in every conceivable way to get it on the Statute Book as quickly as possible, so that the old folk may have the benefit of the increase. We realise that the improvements do not go far enough. They ought to go a lot further.
  We should have had these increases long ago, but we are told by the Minister that the old folks will have to wait until after Christmas. It would have been a good thing if the increase contained within the Bill could have been given to the old-age pensioners on the payment day before Christmas. It would have been welcome to them. The Department knew full well that there was this agitation throughout the country. On 20th February this year, there was presented a Petition, signed by 133,000 people over the age of 21, calling the attention of the Government to the dire need for some improvement in the basic pension rates. We had a debate on 25th February, when the Government, through the Joint Parliamentary-Secretary, admitted—I pay tribute to her honesty—that £2 a week was an inadequate pension on which to live. On 1st August, we had a debate and many points were put forcibly and logically. Those three events were sufficient to convince the House and the Department that something would have to be done in this new Session for the old folk.
  It would have been a good thing if it could have been done before Christmas. I have had some experience of administration for over twenty-five years, and I am not unmindful of the administrative difficulties that confronted the Department. At the same time, if the Department had realised the problem that was facing it, preparations could have been made in the early part of this year to meet the situation in the new Session.
  This great family of pensioners is growing, but I am convinced that if the Department had shown the good will which it ought to have manifested towards the old people during the Recess it would have formulated proposals to make it possible for the old folk to have an increase in their pensions before Christmas. Alas, such is not the case, and
  1040
  the old folk are bitterly disappointed at the Government's failure to do that for them, because they are suffering real hardship.
  The old folk have had the most disgraceful treatment given to any section of the community. There is not one of us here, whatever our political philosophy may be, and no matter on which side of the House he sits, who can deny that. They have been left at the back end of the queue. They have been struggling for years to meet the higher prices caused by inflation. They have no trade union, and, therefore, somebody has to take up the cudgels on their behalf. I say with the greatest respect that no other section of the community has had the treatment that our old folks have had. Rising prices have depressed their conditions more and more, and as one views the future one cannot see any hope of an end to rising prices for food, coal, light, clothing, etc.
  The increased benefits foreshadowed in the Bill, such as they are, will be swallowed up by rising prices, may be by 27th January, 1958, when the increases take place. I hope that that does not happen. I hope to have an opportunity of criticising the contents of the Bill at a later date. During the Committee stage, we shall put forward certain Amendments, and I hope the Minister and the Department will give serious consideration to them. The Government are tackling this problem early in their current programme of legislation, and one thing that I admire is the fact that this is the first Bill in the programme of the new Session.
  The Bill offers increases which, if they do not meet all the demands of the pensioners, will certainly do something to ease the strain now being borne by the old folk on their meagre resources. Of course, the proposed increases will have to be paid for, and we all realise that. I have said that before, and I do not go back on my word. The insured workers will have to pay. There is no question about it. We cannot think of a pension scheme unless the workers are prepared to pay towards it, but I say that the payment ought to be on an equitable basis—equitable in every sense of the word.
  Therefore, I say that the Exchequer is not paying its full share of this scheme. It is true that the Minister made some reference to increased contributions from

  1041
  the Exchequer, but I think that if he will turn back the files he will discover that in 1952, 1953 and 1954 the Exchequer grant to this fund went down sharply. I am glad to know that it is now increasing.
  I want to give some figures concerning this family of pensioners, a family for which we must care. In the quarter which ended in June of this year the number of retirement pensioners rose to 4,716,000; that is, the figure of non-contributory pensioners, which had gone down. This is a diminishing figure, and, as the years go by, it will disappear altogether, so that in a few years' time they will all be contributory pensioners. But we still have to meet the liability of paying pensions to 4,959,000. During the first two quarters of this year—I do not know about the third—there has been an increase of over 25,000 pensioners.
  Furthermore, one has to examine the increase in the number of people going to the National Assistance Board, and that is the acid test whether our people are becoming better or worse off. These figures speak for themselves. In July of this year, the number of people in receipt of National Assistance was 1,660,000, and in August it had gone up to 1,663,000. I am informed on good authority—though how far my informant is correct I do not know—that the figure will be considerably greater in October.
  It is not my intention to say very much about the repeal of the tobacco token, which, to me, is the last straw. I am the first to admit that this tobacco token, when it was put upon the Statute Book in 1947, manifested a keen desire to help the old folk. I know that it is illogical, but I think that taking it off now is inopportune in this sense. In one, two or three years' time, we shall have to consider a comprehensive pensions scheme. Whether it comes from that side of the House or this, we shall he forced into that situation, and in my judgment it would have been much better if we had allowed the tobacco tokens to remain for that period and to have removed them when the comprehensive scheme was put before the House.
  I happen to occupy an honorary position in connection with the old folk, and, naturally, I get hundreds of letters. I do not want to weary the House with them, but I think we ought to be able to get a consensus of opinion on this
  1042
  question of tobacco tokens from two sample letters which I propose to read, one from England and one from Scotland. This one came yesterday, along with many others:
  "Dear Mr. Brown.
  It was announced in Parliament last Wednesday, 6th November, that pensioners were to receive 10s. a week increase and also that the tobacco tokens were to cease. If that is the case, how do the pensioners get 10s. a week? According to my reckoning, it is only 7s. 8d. On the 6 o'clock news, it said that the tobacco tokens were to be replaced by money. According to the newspapers, that is not so. Can you please tell me which is the correct version? If the National Assistance do the same as they have done before, and take National Assistance off them as well, can you please explain how the pensioners are going to be any better off than they are now? I am only one pensioner out of thousands, and it affects them all in the same way—give with one hand, and take away with the other."
  That is the policy of the Government. It is causing a great deal of bitterness among the ranks of the old folks.
  I will now quote from a letter which I received from the Scottish Old Age Pensions Association. It was written on behalf of the Executive Council of that Association. It says that the Minister of Pensions and National Insurance has received a letter of protest on the question of the proposed discontinuance of the tobacco coupons and adds:
  "We feel that it is most unfair, especially as it is proposed to give a cash allowance to non-contributors in lieu of the coupons. I have written the Minister, and am giving you the information as it may be possible to raise the question at a later stage of the debate on the Bill."
  That is signed by the General Secretary of the Association.
  All these things are reacting against what the Government, yesterday and the day before, and last week, tried to persuade us all to do—to co-operate with the Government to get through the economic crisis which we are facing. If this policy is to be pursued by the Government I say that the workers will not co-operate, but will look askance at the proposals the Government are now submitting to us.
  I beg the Minister—I have pleaded before and I plead again with the Government—to have another look at the anomalies of this Bill and the injustices it perpetuates. If the right hon. Gentleman will do that he will have the eternal gratitude of the old-age pensioners of this country. I beg of him to do so.
  7.32 p.m.
  Mr. Denzil Freeth: My right hon. Friend's Bill has been criticised from the benches opposite for a number of reasons; first of all, that it does not seek to enact some such prototype pensions scheme of a graded nature as may be found in the second part of the Labour Party's pamphlet on pensions and superannuation, that this Bill is not a "Crossman Plan" or a "Titmuss Flier." It has been criticised also because of the level of benefits and contributions. The first criticism which the right hon. Member for Middlesbrough, East (Mr. Marquand) made of this Bill was that it had been born too late. He asked my right hon. Friend why the Government had not brought this Bill in at an earlier date.
  I shall come to the possibilities of other schemes later, but in considering whether or not under the present scheme to alter the level of National Insurance benefits the Government have two things to consider. First, the Government have to consider the relationship between the present purchasing power of the benefits and the level either at the time of the 1946 Act or the level which was actually paid in 1948. Secondly, the Government have to consider whether the national product has so expanded, without further demands being made upon it in other directions, that it is possible to raise the proportion of the national income which is paid to the retirement pensioners and those drawing other benefits under the National Insurance Acts.
  Of course, in making that last calculation one of the most important things the Government have to consider is the number of people actually drawing benefit, and, in particular, the number of people who may at any one time be drawing National Insurance retirement pensions, because that figure is increasing very substantially next year. Indeed, since the first National Insurance Act was passed in 1946 reviews have taken place, on the average, every three years. Hon. and right hon. Gentlemen opposite reviewed the scheme in the early autumn of 1951. We reviewed it in the spring of 1952, again at the end of 1954 and the beginning of 1955, and again now at the end of 1957 to take effect early in 1958.
  When one is considering the level at which National Insurance retirement benefit should be placed it is essential that
  1044
  one should get away from the idea that it is meant to be the full subsistence level. It never has been the full subsistence level, and I do not believe that it was ever designed to be. It has been meant to be a pension, secured as of right through contributions and Government grants, which can make all the difference to a retired person between having just enough on which to live and being able to live at a slightly higher standard than that.
  We are told that about one-third of the people now retiring have pensions from private pensions schemes. A growing number of people are delaying their retirement and are, therefore, being able to draw higher retirement pensions with the 3s. per annum increment attached thereto, but I fully agree with the hon. Member for Coventry, East (Mr. Crossman) that we are never going to reach the stage, in the normal evolution of events, at which more than about a half of the retired persons of this country have pensions accruing from their jobs or, alternatively, from private schemes which they themselves have arranged with insurance companies. Those other people will have to fall back on the current scheme and upon National Assistance.
  We should face quite squarely that, in fact, that is what the National Insurance scheme ever since 1946 has decided that they ought to do. We have, in fact, said, "If you have no means of your own when you retire, you will have to fall back upon the National Assistance Board." I do not think one need be ashamed of the fact that one pensioner in five, or one in four, or one in three, has to have recourse to the National Assistance Board. It means that most of those people have not been lucky enough to be able to save during their working lives. Therefore, when they retire they have little or nothing to provide them with comfort in their old age.
  I am not at all sure that from now on we ought not to consider far more the level of National Assistance than the level of retirement pension, and ask ourselves whether the level of National Assistance really is the level which we think is fit and proper to be the lowest level of subsistence in our community today. Although this Bill does not deal with National Assistance, if we can spare the money, if the Exchequer can pass on money from the rest of the community

  1045
  through taxation to help the aged, I would hope that it might give a higher level of National Assistance benefit rather than greater Exchequer aid to the National Insurance Fund to pay out higher insurance benefits.
  Surely, it is common ground between us that the taxpayers' money should first go to help those who most need help, and those who most need help are those who have nothing but their retirement pension. Those are people who will not be in receipt also of £300 or £400 or £500 a year from a private pensions scheme. I hope, therefore, that we may in future devote our taxation subsidy to the National Insurance Fund to raising the level of National Assistance rather than quarrel about the level of the National Insurance retirement pension.
  It was announced during Question Time today that the cost of living has risen by about 24½ per cent. since 1951. It is worth while reminding the House and people in the country that, with the benefits included in the Bill, the pension for a single person will be increased not by 25 per cent. but by 66⅔ per cent. Although I do not wish my speech to be very controversial, it is also worth while recording that when the Conservatives came to power in 1951, there were people still on a 26s. a week retirement pension, and these people have had an increase of 92 per cent. under Tory Governments.
  I also believe it is worth while drawing the attention of hon. Members to a reply made by my right hon. Friend the Minister of Pensions and National Insurance to my hon. and gallant Friend the Member for Poole (Captain Pilkington). My right hon. Friend pointed out that, taking the equivalent purchasing value as at September, 1957, it would be found that when the National Insurance scheme was enacted in 1946, the purchasing power of the present single person's retirement pension was 42s. 4d. and that it fell steadily until October, 1950, to 36s. 9d. It has never been below that level under a Conservative Government, but it fell until the pension was increased to 30s. for certain pensioners in the summer of 1951. In October, 1955, the value of the retirement pension was 42s. 11d. and in October, 1956, it was 41s. 4d. In fact, we are today raising its purchasing value to 50s.
  1046
  These are figures which show that there are some pretty substantial increases in train. According to my calculations, the general increase in the cost of living since early 1955, when the last increase in retirement pension was made, is about 11 per cent. Yet my right hon. Friend is proposing to the House that practically every National Insurance benefit is to go up by 25 per cent. I do not think that sufficient recognition has been given to the very wide nature of the increases to be made. Hon. Members have drawn attention to omissions from the increases and I shall agree in a moment with the right hon. Member for Middlesbrough. East about one omission, but this is a comprehensive Measure covering unemployment benefit, widows' pensions, sickness benefit, maternity grants and death grants. Indeed, it covers the whole length of our lives.
  I am pleased to see that my right hon. Friend is now proposing to remove the anomaly of paying different rates for married women's unemployment benefit and married women's sickness benefit, which was something nobody could understand and was continually the cause of friction and discontent. The omission to which the right hon. Member for Middlesbrough, East drew attention concerns the fact that when we are putting up, as we have been doing over the years, the level of retirement pensions, it seems anomalous to leave the increment which delayed retirement can bring at the rate of 3s. extra per week for every extra year's work.
  I should have thought that in these days we want people to stay at work after the age of 60 for women and 65 for men. It would be an excellent thing. Many cannot do so because of sickness or because of the nature of their job, but when they can do so, it is good for the country and for themselves. When they are deciding whether or not to do so, they must think about how much it is worth to have the extra when they retire. An extra 3s. a week is not a very great deal today. They think about the level of the basic retirement pension and, in particular, about the contributions which they must pay during the extra years that they work. A man may say, "A contribution of 9s. 5d. a week is not a very good exchange for receiving back 3s. a week when I retire." I suggest to my right hon. Friend that the time is

  1047
  coming when, whatever we do with the generality of the National Insurance pension scheme, we ought to increase that increment.
  Mr. Marquand: I welcome the hon. Member's support on this, but I should have thought from his previous remarks that he would also have agreed with me that those who receive less than the standard pension, and there are 80,000 of them, should be included in the Bill.
  Mr. Freeth: I thought that I would confine my remarks to that aspect of the subject mentioned by the right hon. Member which I had studied at some length. I did not mean to say that when I have studied that particular point which he has brought to the attention of the House I would necessarily disagree with him. On the other hand, I may disagree.
  It is worth noting that some benefits will be increased under the Bill by more than 25 per cent. The payment for the first thirteen weeks of widowhood will be increased by 27 per cent. The first or only child dependant's allowance will be increased by 30 per cent., and the guardian's allowance by no less than 54 per cent. I believe that everybody will welcome these increases. Retirement pensions are up by 25 per cent., but of the 10s. increase—and that 10s. is the biggest increase since 1948–2s. 4d. is accounted for by the tobacco coupon. I fully agree that the tobacco concession has proved unfortunate in practice. Most people, therefore, will be having a rise of only 7s. 8d. a week, but that is a rise of 19 per cent. over the 1955 figure against a rise of 11 per cent. in the cost of living. Whether we consider the adjective "substantial" to be accurate or not, these are certainly very reasonable increases indeed.
  This brings me to the problem of how these increases are to be paid for, because all increases have to be paid for. It is worth remembering, and the hon. Member for Ince (Mr. T. Brown) drew attention to it in the closing passage of his speech, that this Bill is being introduced at a time when the Government are making a major attack upon inflation and upon all inflationary spending.
  Mr. Lewis: Oh, no.
  Mr. Freeth: We cannot spend the same money twice, and we cannot give a bigger slice of the same cake to one section of the community unless another section of the community is willing to give up some of its slice. If we give more of the community's wealth to the aged, then those of us who are young and able to work must have that little bit less. It is for that reason that I think the case for increased contributions was unanswerable. This is a national insurance scheme. It is a scheme in which the State has its big part to play. The State's contribution is fixed by law, but, in addition, the employer and the employee have each their part to play. This means that it should be a self-supporting scheme, a national insurance scheme.
  Mr. G. Thomas: Would not the hon. Gentleman agree, however, that it is a strange insurance scheme when one of the partners out of three is able to change the amount it must pay to suit its own convenience? That is what the State has done.
  Mr. Freeth: The State is still paying the amount laid down in the 1951 Act, and the major decision to change the amount that the State must contribute to this scheme was taken by hon. Gentlemen opposite when they altered the fractional contribution which the State makes. When we say "the State," do not let us forget that the State is merely another word for ourselves. Primarily, it is the people who are working and producing in this country, because the Government, alas, cannot create wealth.
  I suggest that because this is a National Insurance scheme, the case for increased contributions is unanswerable. An extra £35 million will go into the National Insurance Fund next year as a complement to the increased contributions which employer and employee are at present being called upon to pay. Is this contribution too high? The hon. Member for Coventry, East said he regarded it as merely a form of regressive taxation. It is relatively high, but it is lower, a ½ per cent. lower, than the 1946 calculation, although it is slightly higher than the 1948 calculation.
  If we are to have a flat rate pension then the case for a flat rate contribution seems to me almost unanswerable. I am not at all sure that we should think of

  1049
  an insurance scheme in the sense of it being a form of taxation. It should be regarded rather as a form of saving, a form of deferred earnings. It is not a penal form of tax imposed by the Government from above: it is a form of deferred earnings, of savings, which we in this House agree to accept on behalf of the people.
  Mr. Arthur Moyle: Except, of course, that if the insured person dies there is no return of contributions, so it is not wholly a case of deferred earnings.
  Mr. Freeth: That is true, but when we look at the aid which the State will have to give to the fund over the years, when, in particular, we consider the amount which retirement pensioners are at present drawing out of the fund compared with the amount they had to pay into the fund during the last years of their working lives, it is hard to say, in weighing up the pros and cons, that the pensioner is not getting a very good bargain indeed. There is no scheme which does not have some disadvantages, but I would have thought that the present one is, as my right hon. Friend said, a very good bargain indeed today.
  I understand that the Labour Party proposes to meet this point, of the inability of Governments to raise the contribution above a certain level because of its comparison with the lower wages, by graduating contributions and matching them by graduated pensions, or at any rate by moderately graduated pensions, because some people will be getting in the ultimate stages 75 per cent. of their average earnings over their lives and others will only be getting about 24 per cent.
  What the Labour Party pension scheme is proposing to do is to use the increased contributions in the earlier years to pay the annual deficit which will arise on the existing scheme, and which will arise even more when, and if, the basic rate is put up to £3 a week. I think that must be regarded as not very good finance. I do not believe that it provides a safe pension fund, and it certainly prevents any talk of a funded pension fund. In fact, the document almost goes out of its way to talk about assessment rather than funding.
  The point at issue, when we come to consider whether or not this Bill ought to
  1050
  be a graded pension Bill instead of the type of Bill it is, is that we have got on the present National Insurance Fund a growing liability, to which I will come later. In National Insurance we cannot talk about funding or saving in the sense that an ordinary person saves. What we can do is to say to the nation, "If you will agree during your working lives to pay out in taxation enough according to your means—whether by graded contribution or by higher direct taxation—to pay the pensions of the people who have already retired, and possibly also save a hit extra for the nationalised industries' capital programmes and the like, then you can hope, or even expect, that your children and your children's children equally agree to be taxed to such an extent as to pay you the sort of pension which you have paid to your fathers."
  That is the proposition which any graded National Insurance Fund must produce in the end. To talk about a graded fund, indeed to talk about a fund at all, is economic nonsense. The only thing we can ever talk about is a transfer of wealth from one section of the community to another. If over the years the workers of this country—using the word to cover those who are of working age and working ability—are willing to transfer overall to the retired a sufficiency to give them the half pay pensions, of whatever they may be, well and good. The unfortunate thing is that we have no way of asking the people of this country that question in isolation.
  If we can persuade everybody that it is a good and generous thing, then I am all for it. But by the time I get to draw my old-age pension, there will be an enormous number of old people and there will not be as many people working as there are now. Therefore, I want to think a little carefully before deciding to enter into this very expensive type of "I pay, and I hope to heaven someone else will pay me." I want to be certain that the figures are such that the country can support the scheme. That seems to me to be the basic point about any graded insurance scheme. If we can meet it, to my mind it does not matter two hoots whether we do it by contributions, and grade them, or do it all on the Income Tax. We may find one method or the other preferable or politically easier, and we must make our decision at the time.

  1051
  At the moment, we have not gone into that. We have a National Insurance Fund and we have to look to the future of that fund. I suggest that it is greatly to the credit of my right hon. Friend and his colleagues that they have managed to produce a scheme of increased benefits without making the fund any less solvent than it was, over the short term. I believe that when we have a fund which will run more and more into deficit, as this is, the prudent thing to do every time there is some rearrangement of it is to try to decrease the debit which will be incurred after the next year or two in other words, to keep the fund as much out of the red as possible over the next one, two, three or four years; and that in fact my right hon. Friend has done.
  In 1958–59 the deficit on the National Insurance Fund would have been £44 million; now it is to be £14 million and I think that an achievement. In 1960–61—this is a figure which hon. Members opposite ought to regard with particular attention, if they are hoping to win the General Election—the deficit will be reduced from £226 million to £126 million, a noteable difference. In 1979–80, even so, it will be £475 million. I think we should remember that the deficit in the year 1960–61 is in fact going to be something not far off 1s. in the £ on Income Tax.
  Of course these calculations are very tentative. They assume that unemployment will run at the rate of 4 per cent. after 1962. If it runs at the present rate, my right hon. Friend tells us that by 1970–80 we may be let off with a deficit of some £65 million less than that in the Government Actuary's paper. I think it unfortunate—I do not consider it irrelevant to mention the matter here—that this figure, used by the Government Actuary in Cmd. 294, has been used by the Daily Herald in a piece of political propaganda which seems to me quite disgraceful. Either the article from which I am about to read was written by someone who knows nothing about National Insurance and should never be allowed near a fountain pen, or alternatively, it was written with the deliberate intention of deceiving.
  Hon. Members who have read the Command Paper will recall that on page 5 it states that the Government Actuary has
  1052
  decided to return to the actuarial basis previously used in calculations including the long-term unemployment rate of 4 per cent.
  "…in regard to which I have consulted the Treasury and other Departments."
  Let us see how this particular phrase by the Government Actuary is turned by the Daily Herald. On the front page, on Thursday, 7th November, there was a headline in capital letters:
  "500,000 more work less by 1962."
  I think that is a pretty obvious scare headline.
  "Unemployment will be trebled during the next four years, according to a Government expert."
  That remark is, to put it politely, grossly inaccurate.
  "Sir George Maddox, the Government Actuary, makes this disturbing announcement In his report on the plans to increase pensions."
  Of course, he does not do any such thing.
  "He reveals that after consulting the Treasury and other Departments he concluded that unemployment, now standing at 1½ per cent., would rise to at least 4 per cent. by 1962."
  I think that the two words, "at least" are gratuitously horrible.
  "The present figure of unemployment is about 275,000, so Sir George estimates that 1962 there will be more than half a million more people without jobs."
  I felt it right to draw the attention of the House and the country to that disgraceful exhibition of dishonest reporting by the Daily Herald last week.
  In 1980, at the time when the National Insurance Fund will be running into fairly substantial deficits every year of the order of £400 million to £500 million, I shall be 56. I shall be looking at the next ten years with apprehension, because in 1989 I shall be able to draw whatever retirement pension then happens to be going, as I shall be 65. Therefore, when hon. Members opposite refer to the views of the young workers confronted with contributions, I think that possibly I am in as good a position as any to count myself as in that particular lot of people.
  I would say, as a young worker—at any rate moderately young—that the one thing which I demand is that when I reach pensionable age I have the certainty that there will be a pension paid to me every year; in other words, that the fund which is to pay that pension is moderately

  1053
  solvent. I use the words, "moderately solvent," since no fund of this type run by the Government is ever completely solvent. I am perfectly willing to pay more into that fund at the present time in order to make certain that the fund is not "bust" when I want to draw out of it. The most important thing seems to me to be that the fund shall be solvent at the time we want to use it.
  It is perfectly true that the younger members of the population are paying into the fund more than is actuarially needed to pay their pensions when they retire. Of course they are, because any pension scheme, particularly one which grants pensions to people who have not contributed—as this National Insurance Scheme does to the late entrants—must inevitably mean that people are not saving for their future retirement pension. What they are really doing half the time is paying the pensions of people who have retired now. I assume that pensions have to be paid for by workers and retired taxpayers and that is why I believe that, because retired people also pay taxes, it is a good thing in a retirement pension scheme to keep the contribution paid by taxation over and above the statutory contribution of the Exchequer down to as little as possible. Next year, 1958–59, we shall he spending £125 million out of general taxation on the Exchequer contribution, and a further £14 million on the deficit. That is in fact £125 million, or nearly the value of 1s. on the Income Tax and I regard that as a sizeable sum.
  I read recently that in a Gallup Poll 92 per cent. of the people of this country wanted pensions to go up in October. I wonder how many realised that that could not be done without the transfer of wealth from the producing and working members of the community to the aged and retired.
  Mr. Lewis: And from the Surtax payers who do not work.
  Mr. Freeth: The hon. Member seems to have an obsession about Surtax payers. I would remind him that it was only the Surtax payers who do work who were given the incentive of a tax reduction in my right hon. Friend's Budget in the spring. The point to remember about my right hon. Friend's Budget, as about arty Government, is that it did not create wealth. A Government can print money, but money without real
  1054
  wealth behind it merely loses its value. A Government can distribute only the wealth created by others and, by and large, they can distribute that wealth only if the people of the country agree that the redistribution is right and proper.
  I believe that the workers of this country are prepared to pay an extra contribution because it would go to help the old. It is no use saying that we believe in giving the old a better deal if we are not prepared to make some slight sacrifice in order to do so. Heaven knows, there is a lot in the treatment of old-age—the hon. Member for Ince referred to loneliness—where the Government finds it hard to intervene, and so much must be left to voluntary bodies. But here we have an example of what the Government can do, and I believe that this Bill is a praiseworthy step.
  8.10 p.m.
  The Rev. Llywelyn Williams: The hon. Member for Basingstoke (Mr. Denzil Freeth) made some thoughtful points, although the length of his speech was inordinate. Sonic of us thought that he was making up for the speeches which seem likely not to be delivered now by some of his colleagues.
  I did not agree with some of the hon. Member's points. In the early part of his speech, he referred to pensions not being regarded as subsistence pensions. Unless I mistake the feeling in my own party, we are coming more and more to the conclusion that the retirement pension should be regarded as a subsistence pension. Certainly Lord Beveridge had that conception in mind when he set to work on his great social document.
  The hon. Member also referred, and I did not like the reference, to the larger part which the National Assistance Board could play in social welfare. He thought that alleviation should be directed more to that quarter than to any other quarter. There are profound psychological implications in this question of the National Assistance Board. I do not think the hon. Member can know very much about the feelings of sonic of the finest people who have been unfortunate, through no fault of their own. The hon. Member cannot possibly know the poignancy of their feelings when they are driven, by the exigencies of economic suffering, to the National Assistance Board.
  Mr. Freeth: I agree with all that the hon. Member says about people's feelings, their pride and so on. Would he not agree that although such pride is praiseworthy it is extremely misguided? Since 1946 we have tried to embody National Assistance as part of our social services.
  The Rev. Ll. Williams: I appreciate that, but the thinking of our party is on the lines that we hope for the disappearance of the National Assistance Board when our social ideals have been realised.
  I was not too happy about another of the hon. Member's references. He said that the cost of living had been increased by 11 per cent. since April, 1955, when the last increases were made to retirement pensions, and that the proposals of the Bill would increase them by 25 per cent. He went on, I thought rather synthetically, to refer to the generosity of the Government It is generosity at other people's expense. Contributions are increased by one-third while benefits are increased only by one-quarter. It does not seem very convincing when we are told that that is a wonderful act of generosity.
  I was not convinced by the Minister when, in opening the debate, he sought to excuse the tardiness of the Bill. I believe that the Bill could have been introduced last February. My hon. Friends would have offered every facility to the Government at that time. As it is, the actual payment over the counter will not take place until the end of January next year. It may well be that before that time rigorous tests will be demanded of us all by a very inhospitable winter. It is the old people who will suffer most during the next few weeks while they are waiting for the increases in pensions and other social benefits.
  There are formidable factors in the economic budgeting of old people. Bus fares have increased, and the prices of many commodities, such as fuel, have risen.
  Mr. Lewis: Rents.
  The Rev. Ll. Williams: That is a glaring instance against the Government. Such factors make it impossible for old people to face the coming winter.
  Mr. Lewis: Could my hon. Friend develop a little further the point about
  1056
  rents? Is it not a fact that the great majority of old-age pensioners have already lost the increase because they have had to pay as much as 7s. 6d. per week increase in rent? They are to lose the tobacco token. Will they not be about 2d. a week worse off than they were before?
  The Rev. Ll. Williams: My hon. Friend has made the point for me. My hon. Friend the Member for Coventry, East (Mr. Crossman) made the very important point that there should be a six-monthly or annual review of the pensions situation. If that had happened, this Government would have been compelled to introduce a Measure of this kind many months ago. I was far from convinced by the Minister's attempt to exculpate himself from the charge levelled against him from this side of the House that the Bill is tardy and dilatory.
  I would like to make a reference to the withholding of the tobacco token. I share the misgivings of my hon. Friend the Member for Ince (Mr. T. Brown) and the reservations expressed by other hon. Members about payments in kind, which create as many problems as they solve. I understand the circumstances, of course, in which this token was introduced. It creates resentment between pensioners; there is no doubt about that. Nevertheless, I am opposed to the withholding of the token because once we have instituted payment in kind a tremendous amount of resentment is created at a proposal to withdraw it at a later stage. People are very strange, psychologically, about a benefit in kind. They would be more opposed to the withholding of the tobacco token than to the withholding of some financial benefit.
  Mr. E. Partridge: I am sure that the hon. Member wants to be fair, and that he has noticed, when attending his "surgery," as I am sure he does very frequently, that it is the people who are not entitled to the token and who do not smoke who show most resentment.
  The Rev. Ll. Williams: I will throw out a suggestion. Like the great French statesman, Mendès-France, I am a great believer in the nutritive value of milk. I wonder whether something could be done to ensure that the equivalent value of the withheld tobacco token

  1057
  could be given to old-age pensioners in the form of a milk token. I am sure that suggestion is not so fatuous as it may seem to some hon. Members.
  I wish to refer to a section of people hitherto unmentioned in all the speeches in this debate. They number 130,000. I refer to widows on the basic pension of 10s. a week. Not one reference has been made to them. I have had some bitter and resentful letters from those people, understandably bitter and resentful letters. Not only is there no increase whatever in this Bill on their basic pension for those widows, but from that 10s. they are expected to provide for themselves a National Insurance stamp. In a case I am thinking of a widow is left with 2s. 4d. a week. Remembering that the number involved is only 130,000 and that 95 per cent. are in the age group of 45 to 60, which is a very difficult period physiologically for women, I believe an enlightened and imaginative Government could do more than has been done for this section of the community.
  I wish to say a word about contributions. The hon. Member for Basingstoke said that workers would be glad to pay the 2s. increase in contributions in order that retirement pensions and other social benefits could be increased. I have never thought that the British worker is parsimonious, niggardly or self-centred, but he must not be imposed upon. We feel there is a flagrant imposition here on the low wage workers. In our economic set-up there are widely separated differentials even among the workers. I always thought that Wales was a poorer country than England and Scotland. I was flabbergasted to learn from an economic social study the other day that wage rates in Wales are higher than in England or Scotland. That would be because pro rata we have a larger number of steel workers and miners than there are in the other two countries. We all know how steel workers' earnings compare with those of bus conductors or agricultural labourers.
  Mr. G. Thomas: Or teachers.
  The Rev. Ll. Williams: My hon. Friend can speak for the teachers. I am speaking of industrial workers and pointing out that there is a great differential between the high-earning steel worker and the piece-rate miner and the low
  1058
  wage worker. The 2s. increase for the steel worker or the type of miner to whom I have referred would not be an imposition, whereas it would be a serious imposition for low-wage people. We believe it is completely indefensible, and we hope that in Committee we shall be able to persuade the Government to our point of view.
  Mr. Freeth: Would not the hon. Member agree that it is still less as a percentage, even on the earnings of low-paid workers such as agricultural labourers, than the 1946 calculations?
  The Rev. Ll. Williams: This continual reference to 1946 is made in the debate almost to the point of nausea. Every speech we have heard from hon. Members opposite has contained references to what we did or did not do between 1945 and 1951. Cannot hon. Members opposite realise that with all our failings—we are not a perfect political party—history will indicate that we are an essentially empirical and pragmatic party? We learn from the past; our ideas move as times change. We must not be continually badgered about what happened in 1946 or 1947. If in a debate of this character we were to start talking about what happened in the 'thirties and before the 'thirties, there would be monotonous reference to the poor record of the Tory Party when it was in power.
  I wish to refer to another section which, strangely enough, has not been referred to in this debate, the self-employed. The increase in contribution for them is 2s. 3d., which will make a total contribution of 11 s. 6d. Numerically, of course, they cannot compare with those employed by employers, but among the self-employed many are having a very difficult time.
  I may be allowed to refer to a section about whose problems and difficulties I know something—ministers of religion. When the 1946 Act was brought before the House it was decided that ministers of religion could not be recognised as employed persons but must be regarded as self-employed. I took the trouble this morning to look up a church calendar in the reference room, and a rough calculation led me to the conclusion that there are about 30,000 ministers of religion—Catholic priests, Anglican priests and Nonconformist ministers of all sects.

  1059
  The larger part of those 30,000 must be thought of as being in the low income group. Nonconformist ministers are finding the situation desperately difficult. I know from personal experience, and I speak with passion on this, because I know of the hidden tragedies in the homes of some ministers. Thousands of them are earning less than £8 a week and a National Insurance contribution of 11s. 6d. a week will be something which is intolerable. I ask the Minister to make a special examination of their situation.
  I will say a brief word about benefits. I am surprised that on all non-contributory pensions about 250,000 will be having no increase except for the value of the tobacco token of 2s. 4d. being added to their pension. No one on either side of the House would be unaware of the difficulties of implementing our ideals in social insurance. As my hon. Friend the Member for Ince said, the Minister threw out some staggering figures about future commitments and future liabilities. We are not minimising those. At the end of 1956 the total expenditure on National Insurance retirement pensions was of the order of £450 million. That is a very large sum, but it is not so frighteningly large when viewed vis-à-vis defence expenditure.
  I find that defence expenditure is 25·9 per cent. of the total Government expenditure. The total expenditure on National Insurance pensions is only 8 per cent. of the total Government expenditure and only 2·1 per cent. of our national income. The figures seem frightening, awe-inspiring and overwhelming, but to point out that they amount to 2·1 per cent. of our national income brings these frightening figures into more reasonable focus, and I am sure that no one who has a social conscience about these matters can feel that we are spending too much on pensions in this country.
  To the degree that these increased benefits will raise the standard of living of the pensioners, I naturally welcome them. It would be churlish and hypocritical to pretend otherwise. But a succinct summing up of the Bill and its proposals would be, "Too little, too late". I am proud to think that we in the Labour Party, as so convincingly adduced by my
  1060
  hon. Friend the Member for Coventry, East, have got down to this problem. I am as proud of the constructive thought and the far-sighted vision which is included in our national superannuation scheme as I have been proud during the years of our National Health Service. It is something of which we can be proud. If the Conservative Government cam compete with us, all power to them. The fact remains that in a short time we shall have the power and shall have the privilege and the joy of carrying out our own great scheme.
  8.32 p.m.
  Mr. Philip Bell: We are very nearly at the end of a considerable debate on this subject and I am bound to say that I have heard many novel and interesting points brought forward and seen one or two old donkeys driven round the circus. May I say, straight away, that I support the Second Reading on three grounds: first, that it is a good first-aid Measure, although I do not put it much higher than that; secondly, that I think it is cunningly contrived to avoid what we must avoid now, any heavy inflationary pressure on the economy; and, thirdly, without quibbling about adjectives, that it gives some assistance to deserving old-age pensioners.
  When we debate the subject I wonder whether, except for some of the younger Members, we ought not to declare our interest. I am reaching the stage when I do not mind how much anybody contributes as long as he provides me with a pension, but perhaps I must resist that temptation, because I am near pensionable age. It seems to me that, however we look at it, there is bound to be some suspicion of an electoral advantage if we offer people today large pensions for which somebody else must find the money in forty years' time.
  The temptation now is: how much we can squeeze out of our children? That is true, because many of our pensions will be paid for by the future generation. There is, moreover, no theoretical limit to the amount we can spend on social welfare and pensions. There is no theoretical limit to what we shall pay for pensions—£5, £7 or £10. The limit comes in another way. It comes in haw much the people will, in fact, pay. It was interesting to read that the Labour Party pamphlet recognises that there is a limit

  1061
  to what we can raise. They made the point that there is
  "a very real limit to the amount which the taxpayer is prepared to pay in taxes."
  Whether it be done by Income Tax, or by Surtax, or by contributions, there is some limit—we do not know where it lies exactly—to the amount of money we can raise in the form of taxation.
  There is, however, a second limit, and that is inflation—trying to raise more by taxes than we can afford if we are to be competitive in a world market. I shall not trespass on the time of the House by continuing further with that, but, nevertheless, it is not a matter of simply saying, "Give them more", because that would not be honest unless we can see where we are to get the money from.
  It is quite clear, although it was not made clear by the right hon. Gentleman the Member for Middlesbrough, East (Mr. Marquand), where the trouble arose. The trouble is an old one. When Lord Beveridge—and, indeed, Lord Keynes—recommended their system of security, they made the proviso that late entrants would not get full pension but would have to be supplemented by National Assistance; that only those who paid over a specified time, actuarially calculated, would get the full pension.
  That was the scheme, and when the right hon. Gentleman claimed that Lord Beveridge said that the pension should be paid of right, by that was meant a pension that had been bought and paid for actuarially. In those cases, such problems as staying in employment and having a pension are quite irrelevant. But both Governments—and I think that both sides have a responsibility in this—ignoring the advice of Lord Keynes, produced a pension payable in full to everyone from the time it was brought forward. I quite agree with the attack made by the hon. Member for Coventry, East (Mr. Crossman) but, if I may say so, that attack comes a bit late.
  The pension scheme would obviously come up with a jerk some time. I was only a question of time, and it is really rather bad luck for this side that it has reached the turning point during our Administration. That it would reach that turning point was clear not only to our Administration, but to the previous one, but all of us, in a sort of cuckoo-land, ignored that problem, and it is still pretty well ignored at the moment.
  1062
  This is a problem, not only of the old-age pensioners, but of the whole economy. Of course, it is easy to use exaggerated language about the poor old-age pensioners and say that we must do something in the way of scaling the contributions to the cost of living, but there is a bigger enemy, and that is galloping inflation. It is no good our pretending that there is a bottomless well out of which pensions that are reasonable and proper can be paid. Where I differ at this stage—although, on this Bill, the difference is, perhaps, not necessary—from this idea of linking pensions with cost of living is that it seems to me to be defeatist, for it recognises a powerlessness in checking the cost of living and may destroy the whole scheme by leapfrogging one step after another.
  I noticed that one hon. Member opposite made the point that the new contribution would cause people to ask for more wages. Some hon. Members opposite said that that would be inflationary, but that did not seem to surprise anyone. Hon. Members opposite have been talking about the British workman being prepared to help his lower-paid brother and the down-and-out by paying a little more subscription. Now, apparently, he will ask for more wages to offset that increased contribution and thereby add to inflation. What sort of help is that?
  The figures are there for everybody to see. Before the increased contribution, over 4½ million people of pensionable age cost us £465 million per annum, of which the taxpayer paid £90 million. If nothing happened at all, and we just floated on, in 1960 there would be over 5 million pensioners and we would be running into a deficit of about £160 million, rising in 1970 to £300 million. For this deficit to be met there would have to be a serious increase in taxation.
  There are other ways of looking at the question. If the liability were funded, about £15,000 million, which is almost impossible for us to fund, would be required. We have only about £1,500 million in the fund. We would have to add £300 million a year to taxation if we put this £15,000 million on the National Debt and paid interest on it; and if we put it in the Sinking Fund the figure would be well over £550 million.

  1063
  That is the sort of problem which this country faces both before and after this Bill. The hon. Member for Coventry, East said that we must direct our minds to it, although whether his scheme would not get us into worse trouble and meet with a good deal of resistance is a matter to be debated on another occasion.
  There is only one really safe way to deal with pensions, and we are a long way from it. That is to have a pensions fund—not to eat up the contributions as they come in, but to invest them and live upon the interest from those funds. There is a difficulty, however, except in commercial firms, where 8 million people are covered by pensions, which figure is expected to rise to 10 million, because there is a variation in the pension according to the age and contribution which varies in different circumstances, and our difficulty is that we cannot fund it. It is difficult for the Government to make it as fluid or flexible as a private scheme.
  I understand that the argument which was only tentatively put forward from the benches opposite is that the deficit which arises should not be raised, all or substantially all, by taxation. I thought it was generally agreed, for the reasons which were powerfully advocated in the pamphlet to which reference has been made, that this should not be done. If this burden is put on general taxation, some Government will find something which has priority over it. It is too much of a temptation to the politician. Therefore, to put too much into the general revenue puts us too much into the hands of the general financial position, whereas we want to make it exclusive. I thought that was agreed. If that is agreed, then this scheme must now and in the future generally be financed by contributions.
  What, then, is our disagreement about that? The disagreement—not only in the short term, but in the long term as well—is on whether we should have graded contributions and graded benefits. That is the suggestion which has been made. People seemed to believe that this plan was so obvious that there was no objection to it at all. In fact, behind it all—the hon. Member for Coventry, East, put his finger on it—lies a difference in appreciation of the position. Do
  1064
  we believe that we should tax people to relieve poverty, distress and sickness, or are we going to tax people to lift them above what Rowntree in his survey called the primary and secondary stages of poverty?
  Are we to tax people not merely to give them subsistence above the poverty line, but to give them better conditions than that? It is attractive to do the latter. We would be very odd people indeed if we did not wish our own families to be above the subsistence level. We want our wives to have something more than mere subsistence.
  The question is: what are we going to pay for that? How far are human beings, the better-paid workmen or the Income Tax and Surtax payers, willing to hand out their money not for essential needs but for a general egalitarian theory, however admirable it may be? I have grave doubts whether people will, in fact, stand that form of taxation.
  The hon. Member for Coventry, East said, for the great consolation of some of the more frightened Conservatives, that for the next few years, until the day of Nemesis arrives, private enterprise and State will jolly along together, and that he and his hon. Friends would allow the pensions schemes of private firms, which could not do more than cover 10 million people, to trot along in happy harness with the rest.
  But what will happen if those schemes are so much better, as I believe they will be? What will the more highly-paid worker say? He will say, "I am having all this money taken from me. I do not mind paying for grandfather or grandmother, or even for myself, but when it comes to deploying my extra money, I, as a steelworker, doing very valuable service, would rather put my money into a scheme which brings me a much better return."
  No doubt many hon. Gentlemen have seen the publication, "Pensions in a Free Society", published by the Institute of Economic Affairs. Very good examples are given there of the difference which comes in. I will not weary the House with details, but I will take one example at £12 a week. There, with contributions on the basis proposed according to the figures in the Socialist pamphlet, as a result of that increased contribution, the differential is £3 on the scheme laid

  1065
  before the Socialist Party Conference; whereas the corresponding weekly return from an insurance company is £4 16s. It goes on even higher. In other words, the worker earning more money, when he goes beyond providing basic needs, will say that he wants to be free to put out his resources as he likes.
  Mr. Crossman: He will be.
  Mr. Bell: Will the State then find all its better contributors contributing to private schemes and itself be carrying the lame ducks of the National Insurance scheme? The advantage of a national scheme is in evening out one's risks, taking the good lives and the bad lives, the good earners and the small earners together. It would be fatal to the scheme to allow private schemes for the better-paid people, leaving the State to deal with what I call the bad bargains. That is one of the big difficulties which would arise in the alternative scheme.
  It is not, perhaps, very helpful to anybody merely to point out objections to schemes when we are dealing with what is, I think, now a measure of first-aid relief. To avoid the recurrence of the situation which we are now in, which will come in 1970 if this Bill is not followed by a comprehensive Measure to take care of that consequence, there are certain things which should be done, and I have one or two points to put before my right hon. Friend which either he or his hon. Friend the Joint Parliamentary Secretary might be prepared to deal with.
  Until 1970, we shall not be so badly off, but when 1970 comes, on our present Bill, we shall be back where we started. We shall then be running a higher deficit than we are running at the moment. We hope that it will be possible for all of us to make some provision so that we do not have to take another emergency step.
  The suggestion which I should like, with diffidence, to put to the House and to my hon. Friend, to be considered, at any rate, as an interim measure, is the recommendation of the Phillips Committee, which suggested lifting the qualifying age for men from 65 to 68 and for women from 60 to 63. That is not a matter which, in our present circumstances, when we are thinking of doing the best for the economy and for old people, should be scoffed at. Curiously enough, in Canada, Ireland and Norway the retiring age is
  1066
  70. What about having the same age of retirement for men and women? That is the practice in West Germany, the United States and Holland. The circumstances might be investigated in which both men and women have the common retiring age of 65.
  I wonder whether it is possible to vary the ages of retirement. It is interesting that, for instance, in Australia and in Poland the age for retirement and for drawing the State pension is 60 for anyone who has been in the mining industry, where the work is extremely arduous. Indeed, in the Soviet Union the comparable age is 50. I did not know that the job of a railwayman was as arduous, but it is interesting to notice that in Canada and in Switzerland the retiring age for railwaymen is beneath the average and is down to 60.
  In dealing with pensions generally, there arises the difficulty that private pensions are not transferable. Is it possible to consider a tax arrangement by which, before firms can obtain concessions for their pension contributions, they must make arrangements so that they can either put the pension rights into cold storage or make them transferable? It is in the interests of all of us that pension schemes, however they are operated, should he brought into existence.
  I do not know whether it is possible to fund part of the contributions. Most of the contributions of the young people now coming in to insurance are going to provide their own pensions, but we know that some of their contributions are not going towards their own pensions. I wonder whether it is possible, even at this late stage, to carry out a funding operation and at least to introduce the funding element.
  Finally, there is the question of the distribution of the burden, and between Income Tax and the contribution. Must we exclude for all time the suggestion that the payers of Income Tax may carry some special liability for the social services that they enjoy? A similar point has often been put forward concerning housing and council tenants, that in submitting their Income Tax returns a figure should be included to represent the benefit of the property that they occupy. It does not appear that we can exclude all these things.

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  The Bill, as has been rightly said, is a temporary Measure. As a temporary Measure and with that qualification, I commend it to the House. I am gratified to have had an opportunity to speak in this debate, because, although both parties may quarrel about our respective schemes, a long-term scheme is, it is clear, necessary; and this debate has certainly proved that point.
  8.53 p.m.
  Mr. George Thomas: The hon. and learned Member for Bolton, East (Mr. Philip Bell) has made a speech which, whilst it is impossible to agree with all his points, has been a useful one. I am grateful to the hon. and learned Member for outlining the gap that exists between the two sides of the House on the approach to the question of the redistribution of wealth. The very basis of the Welfare State was that if people were not willing to contribute to help the weaker members of the community, through the Chancellor of the Exchequer, we compelled them to contribute to maintain those weaker members of the community. In any civilised community, there is bound to be an element of compulsion in forcing the wealthy to make their fair contribution to those who are not so wealthy.
  The hon. and learned Member, who fears that a Socialist State scheme would be left with the not so good bargains, overlooks the supreme merit of the Labour Party scheme, that it guarantees, as no private superannuation scheme is able to guarantee, that the value of the pension will never fall. There is a guarantee against inflation written into the superannuation scheme of the Labour Party, which the hon. and learned Gentleman must read again.
  Mr. Philip Bell: I know that it is written in, but what I question is whether what is written in is the same as carrying it out.
  Mr. Thomas: The hon. and learned Gentleman's faith is not as great as mine, and I am not surprised. It is not the first time that his faith has been placed in the wrong quarter.
  The hon. and learned Gentleman also joined his hon. Friend the Member for Selly Oak (Mr. Gurden) in suggesting that we ought to consider raising the retire-
  1068
  ment age of our workers. It is a strange commentary on our times that, as we move into the nuclear age, we are thinking of a longer working life instead of a shorter one for our people. Even before the war, we used to speak of a shorter working life, in order that people might have some years in which to enjoy their leisure with their partners away from the harshness of industry and commerce. I earnestly hope that we will not buy our way out of our difficulties simply by increasing the length of the working life of people engaged in industry and commerce.
  Now, I wish to turn to my own contribution to this debate. It is significant that, although the Bill itself covers a very wide field of benefits, most hon. Members have concentrated their contributions on the plight of the old people. This debate tonight is the culmination of a long campaign by the pensioners in Britain for a square deal. The House has witnessed Petition after Petition being addressed to the Minister and the House, and the right hon. Gentleman himself has been good enough to receive deputations from the National Federation of Old-age Pensions Associations. I know that for a long time those who are responsible for the leadership of the old-age pensioners have been deeply disturbed by the harsh poverty of their members.
  This Bill is necessary only because of the failure of the Government's policy. It is necessary only because the Government have failed to mend the hole in the purse. They realise that the pensioner, unfortunately, has to be the last in the queue for increases in income. The pensioner is tied to the tail of the community, and I believe that this imposes an even greater responsibility on us to see that, when a Measure is introduced, it shall be adequate not only to meet current needs, but shall ensure that the pensioner will be cushioned in the future against the harsh, runaway inflation which we have experienced during the past two or three years.
  I suggest to the House that, as we are opposed to this flat-rate contribution, the time has come when we want to think of graduated benefits. Out of all the list of people mentioned in the Bill, in the case of the industrially injured, the sick and the unemployed, their plight is usually a temporary plight; but there is nothing temporary about old age. Once people

  1069
  move into the category of retirement pensioners, there is no hope of improvement in their lot, and I verily believe that there is a case for a different benefit for the old-age pensioner while we are waiting for the superannuation scheme to be introduced. The retirement pension is not regarded by our people as a temporary bad patch or a reduction in income for a while. It comes at a time which brings its own crisis into the homes of the working people who have been unable to save enough to cushion themselves against the falling value of money.
  We ought to face the fact that this is not the last increase we shall have to give to the old-age pensioners. Whether they will have to wait until the superannuation scheme comes in is anybody's guess, but even if we were to have what we all long for, and that is a General Election, even within the next 12 months, I doubt whether, while we were waiting for our superannuation scheme to go through, there would not be an emergency measure to protect the old folk.
  However, I believe that this is the last time it would be done this way. I am not afraid of financing our old-age pensioners—and here I disagree with my hon. Friend—from the Exchequer.
  Mr. Charles Grey: Which hon. Friend?
  Mr. Thomas: My hon. Friend who made that sparkling speech tonight, the highlight of the debate, my hon. Friend the Member for Coventry, East (Mr. Crossman).
  What is wrong in paying family allowances out of the Exchequer? If we pay family allowances out of the Exchequer, why should we not pay old-age pensions out of the Exchequer? The taxpayer pays for family allowances. Of course he does. We all have to contribute to them. Through our taxation, those who are able to pay are the ones who pay and we do not ask the lower-wage earner to contribute. There is a case, while we are waiting for the superannuation scheme to be introduced, for relieving the lower-paid wage earners of this present burden. In our taxation we recognise graded ability to contribute, and that, after all, is the fairest means of obtaining from people their contribution to the upkeep of the Welfare State.
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  I know some people say that once we drop the insurance principle we endanger the pension, but that is not an argument which holds much water, because the pension and other benefits under the same scheme have been interfered with by the Government on past occasions. Governments have a way in emergencies of interfering with any legislation or any scheme they want. So I ask the Minister not to be too hidebound in his attitude towards this suggestion as an emergency measure whilst he is waiting for us to introduce our scheme.
  Mr. Boyd-Carpenter: It may be a very long emergency.
  Mr. Thomas: The right hon. Gentleman's calculation may be out.
  It is quite wrong to try to mesmerise the House with all those figures the Minister gave us today and overlook the fact that the Exchequer's contribution to this is by now—no doubt, the right hon. Gentleman will correct me if I am wrong—nearly £500 million short of what it ought to be.
  Mr. Boyd-Carpenter: No.
  Mr. Thomas: I should think my estimate is about right. I know it was my right hon. Friend the Leader of the Labour Party who was Chancellor of the Exchequer at the time when this balance was altered, but the fact remains that the Exchequer all through these intervening years has not been making the contribution it ought to this scheme. If now, in view of the changed circumstances, it went back to the old formula it would not be necessary to increase the contributions by the working people in the way in which it has been done.
  I turn from contributions to look to benefits, and I note that once again those whose poverty is proved to be the greatest are to receive the least. I read a headline in the newspapers, on the morning following the Minister's announcement in the House, to the effect that there was to be a 10s. increase for old-age pensioners and 15s. for the old couple, but it is dishonest not to take notice of the fact that people in receipt of National Assistance will have 5s. taken away at once from the 10s. Poverty is the normal lot of these people. The Prime Minister can talk as much as he likes about our never having had it so good, but the Government have

  1071
  never had to answer so many Questions about allowances from the National Assistance Board as they are having to do at present.
  I do not speak without knowledge of this subject. I too am in close touch with my constituents and I hold my weekly "surgery". I feel humiliated when decent people have to come to me and say that they want an extra grant to enable them to buy a pair of trousers or to enable a woman to buy a dress. There is something morally wrong when a Member of Parliament has to write to the National Assistance Board to find out whether he cannot have a little extra clothing for decent, honest people. The tragedy is that, after this miserable Measure is passed, we shall still have to send letters to the effect that the plight of these people is not being relieved. The poverty will be there just as much in February next as it is at present.
  The National Assistance Board exists only to keep people alive. It is not there to see that they have any comforts. Indeed, if people want a suit of clothes it is the custom of the Board today to suggest to them that they should have it on hire-purchase and pay so much a week for it. We know that this is happening. I would be willing to go with the Minister to the National Assistance Board's office in Cardiff and bring with me people who have been told that kind of thing. We are toying with a human problem. There are old folk who, after the Bill has been passed, will be cold and hungry this winter. I am not exaggerating. It is a disgrace to our sense of values that we are not giving a more adequate increase than the one now proposed.
  Where is the money to come from? This is a favourite question in the House, and as a rule we have then paraded before us the pensioners of twenty-five years' time. By the grace of God, I shall be parading with them, but I think that it is monstrous to deny justice today because of a problem that will face the House in twenty-five years' time. I do not believe that the Government are justified in doing that. I can tell the Government where they could save money. There is the field of defence, always attractive to me. We have been assured in a White Paper that we have a wonderful defence scheme which does not give us defence. We can save something
  1072
  there since we have not got defence. Surely the Minister knows that there are fields open to him for raising this money. As my hon. Friend the Member for Abertillery (The Rev. Ll. Williams) has rightly pointed out, this whole business represents only just over 2 per cent. of our national income.
  Since they are tackling this problem, I wish the Government had been generous in their thinking, wise enough to realise that the British people are aware that the Welfare State has been undermined, and that this little Measure is no answer to our current needs.
  9.10 p.m.
  Mr. James Griffiths: In this interesting debate, by no means the first on National Insurance in which I have taken part, there have been two noteworthy features. The first is that every speaker on every side of the House regards this Measure as a stopgap, which we are all anxious to get through quickly, and no one regards it as an answer to the problem now confronting us. The Minister will note the significance of the fact that the last speaker on his side of the House described the Bill as a first-aid Measure. Indeed, there have been varying views as to the amount of first-aid which it will bring to the aged people in particular, and to others.
  The other feature of this debate which is encouraging to hon. and right hon. Friends of mine—especially to my hon. Friend the Member for Coventry, East (Mr. Crossman) who presided over the committee, and whose speech gave so much pleasure to me and also to those who were privileged to co-operate with him on the working party—is that the Labour Party's plan for superannuation is being read by hon. Gentlemen opposite, The Minister will discover, if he reads HANSARD tomorrow and measures it by a measuring stick, that there have been more references to the Labour Party's plan than to his Bill. That is only right since it is a more modern, more up-to-date and more real answer to the problem.
  I will limit my speech in accordance with what was the obvious desire of the House in the course of the week, and so I will merely give the Minister notice that during the Committee stage, if I catch the Chairman's eye, I hope to raise two or three problems. First, I shall return to the problem raised by my hon. Friend

  1073
  the Member for Coventry, East, the changes in the proportion of the burden of National Insurance now being borne by the contributors and by the Treasury as compared with what was envisged and prepared and provided for in the 1946 Act.
  There has been a substantial change which, in many ways, has been a departure from the fundamental principles on which that Act was based. It was a tripartite scheme to which the workers and employers would contribute on a flat-rate basis, to which the Exchequer would make two contributions, a supplement to the weekly contribution and another which was designed to meet what actuaries call—I hope they are not skiffle actuaries—the emerging cost. The cost this House fully realised because, as Minister, I was at pains to point out that we were admitting people into the insurance scheme who had not contributed the full actuarial value of their benefits. Indeed, one aspect of it comes into operation next year because we permitted some people to pay for ten years and then become entitled to draw a pension at the age of 65. In July next year 500,000 of those people will be entitled to do so, and I must declare my interest here because I am one of the 500,000, so I shall benefit under my own scheme.
  My hon. Friend the Member for Lanarkshire, North (Miss Herbison) raised another important point, that there is a provision dealing with industrial injuries in the Bill, and in Committee we shall raise several problems on that aspect. For instance, on the Committee stage I want to raise the question of the old cases, in particular those disabled by pneumoconiosis. One of the perhaps unexpected developments in the experience of the National Insurance Industrial Injuries Scheme has been the very much larger part played in it by the provision known as the hardship allowance. I am not making a party point when I say that the Minister will know that his hon. Friends tried to prevent that getting into the Bill.
  I am sure the Minister will share my view that had it not been for the provision of the hardship allowance, the Scheme would have broken down. That allowance was what saved it. Another and perhaps disappointing consequence
  1074
  of the Industrial Injuries Scheme is what I regard as the very low general standard of assessment. We get few opportunities to discuss the Scheme in this House and because of that and because it is related to the question of hardship I give notice that I shall take the opportunity to discuss it.
  One of the reasons why the allowance plays such an important part of the question of industrial injuries is because of this low standard of assessment to which I have referred. We have had experience of assessing disability in this way only in connection with war injuries, and the range of injuries and disablement in the industrial sphere is much wider. Most of the provisions in respect of war pensions could be catered for by a specific list of awards—so much for a finger, so much for a hand, and so on. That is among the problems which I hope we shall have an opportunity to discuss during the Committee stage of the Bill because they are of great importance.
  Realising that this is a temporary Measure, a number of speakers have expressed the hope that this will be the last of such Measures and that the next legislation will be comprehensive. References have been made to reports. I want to refer to three which I consider of vital importance and which have deeply impressed me. To my mind they reveal the problem as it now exists, and as it will present itself in the future, in a way to which I hope hon. Members and the public will pay full attention.
  The first report is a complete survey, although on a limited scale, of the plight of the elderly citizens of Salford. It was made by James Roberts, the Director of Civil Welfare. I hope that hon. Members have read it. Because of my long interest in the matter I read the reports of the National Assistance Board and one thing which I have noticed year by year is very significant. The reports give the percentage in age groups of old people who apply for assistance. The first age group is that of women of 60 and men of 65 to 70. In round figures 12 per cent. of the pensioners in that group, which includes those at the beginning of their pensionable life, apply for assistance and receive it. In the age group of 70 to 80, the percentage receiving assistance is double. 24 per cent. Of those of over 80 years the percentage receiving assistance goes up to one-third.

  1075
  Those figures reveal that when old people first begin to live on their pensions, they eke them out with a little life savings. And as their pensionable life extends, more of them exhaust their savings and have to draw assistance. The story of pensioners in this country is one of deepening poverty and until they reach grim destitution in the last years of their life. That is brought out in the Salford Report.
  Mr. Ellis Smith: Will my right hon. Friend inform us where we may obtain a copy of this report?
  Mr. Griffiths: Yes, from the Central Welfare Office at Salford. I wish to quote from the report, and I make no apology for doing so.
  "To those in doubt of the Plight of Elderly in 1957,…I ask, 'Take a walk with me on the daily round' and see in cold reality homes where replacement or repair of footwear is ' luxury '; a hot mid-day meal for six days a week almost a miracle; warm, winter clothes (so necessary in this part of Lancashire to old people) a mere fancy; see cinders sifted minutely from old fireplaces until they are reduced to fine ash (1 cwt. of coal at approximately eight shillings for each week taking 20 per cent. of the individual's retirement pension); the ability to buy sufficient coal alone, I feel, might be the relevant inducement for them to remain in their own homes with at least the comfort of warmth."
  He adds:
  "One of the most depressing features of the survey was to find so many elderly couples endeavouring to maintain appearances by living practically on bread, margarine, tea, potatoes, and more bread."
  I leave that with the House. There is the problem and there it will remain while we are seeking to meet it with National Assistance.
  I, myself, and my party, have come to the conclusion, which we have put in our Manifesto, that there must be a major recasting of the National Insurance scheme and that the National Assistance Board, as an organisation, must go. It ought to be integrated into one Ministry of Social Welfare.
  We faced the problem of the old people who will not go for assistance. As long as we have the National Assistance office it keeps them away. It is essential to deal with this problem, which is indeed vital.
  In the Bill we shall make a net profit by switching around National Assistance
  1076
  and Insurance. We shall pass the Bill, but none of us on this side of the House will do so with any pride, when we remember the problems to which I have just referred.
  The second report was published before the Labour Party Conference. It was written by a group of workers in working class London. Everybody who takes an interest in this matter will want to read this Plan for Industrial Pensions put forward by a group of trade unionists who are members of a branch of the Transport and General Workers' Union. I compliment them on an extraordinarily valuable document.
  What is indicated here is really basic reasoning about our superannuation plan. I ask hon. Members to think about it. The House is realising that there is a problem. There is, and has been for some time, a movement away from the conception of assistance. It was my privilege to seek to put the Beveridge Report into legislative and administrative form. We all live and learn. Our conception of social security in and immediately after the war years was conditions by our experience in the 1930's. It was the problem of preventing destitution and mass unemployment and all the rest of it. All the time we asked ourselves, "What can we do to put a footing beyond which people will not fall?"
  Beveridge, therefore, conceived a way, which was to have a social security system established, based on the subsistence principle and to establish a national minimum. We can call it a national minimum of subsistence. Now we have had years of full employment. One of the changes I welcome is the tremendous psychological changes that have been brought about by full employment. My working and trade union life was spent in the old atmosphere of decay and unemployment, in which we had one man out of work for every man in a job. The whole idea was, "For God's sake put a bottom to it below which we cannot fall."
  With full employment there are now opportunities for expansive thinking.
  One problem that confronts us and inspires so much of new trade union thought is that now we are thinking of the status of the worker and his place in industry, where he is becoming a partner. Those who wrote this pamphlet had talked about the problem in plain terms.

  1077
  This is the thinking of the working class, of the trade unionist, the man in a branch who is rendering a real social service. Hon. Members do not realise the debt they owe to trade unionsists in many industries. The pamphlet says:
  "Some means must be found to provide adequate incomes for the aged. The standard of living they require must not be calculated on a 'survival' basis. It is not enough to measure how many pounds of coal will keep out the cold; how many ounces of bread and pints of milk will keep the body in health. None of us wants to look forward to an old age spent in scavenging the markets and weighing our food. The only test by which a pension can be judged is by its relation to the wage packet earned at work."
  Hon. Members should listen to this last sentence:
  "This is the way the boss looks at his pension and that is the way we should look at ours."
  Someone asked if public opinion was ready for this. The hon. Member for Basingstoke (Mr. Denzil Freeth) is a generation behind. Yesterday on the train I saw an advertisement of vacancies in railway work, and among the attractions offered were a pension and sick pay. We are entering a new age in social insurance. We came to the conclusion, and I believe that if the Government look honestly at the problem they will come to the same conclusion, that this is a national problem. I hope they will not be enticed away by private insurance companies. One in three of all existing employees can look forward to an old age with National Insurance pension and superannuation. I am very proud that in the ranks of coal miners one in three could look forward to that after nationalisation. Coal miners never had the slightest chance of superannuation during the private ownership of the mines. In five years' time the number will not be one in three; it will grow.
  We welcome the growth of these schemes and want to encourage them. We believe it essential for the country as well as for the people concerned that not only should these schemes grow but that they should become interchangeable and transferable. Otherwise, there will he a big problem for our economy. We can reach a stage in the next five years in which half the people can look forward to an old age with a pension and superannuation; how can we deny the other half that advantage? We cannot have two classes of old-age pensioners.
  1078
  Therefore, when confronted with this problem, we came to the conclusion that the best way of meeting it was the way we have described in this plan.
  There are three ways which we discussed very fully. I shall return to the question of contributions and the flat-rate contribution when we discuss the matter later in detail. I enter that caveat now. I wish to remind the Minister of what I said on the Third Reading of the National Insurance Bill. I said I felt that in five years' time we would probably have to have some method of financing it by which contributions would be equated to capacity to pay. I shall return to that. I hope we shall discuss all three ways of meeting the problem.
  One way was referred to by my hon. Friend the Member for Cardiff, West (Mr. G. Thomas). He held the view, as many hold the view, perhaps including some hon. Members opposite, that we ought to take the pensions provision entirely out of the insurance scheme and make it a provision provided by the State, financed out of the Exchequer, out of taxation, and paid entirely as a national contribution in the way that in the main we run the National Health Service.
  We examined that and rejected it, and I will tell my hon. Friend why. It was because the vast majority of people in this country, and all the trade unions we consulted, regard the insurance principle as essential. They think it essential to maintain it, because they regard the principle of benefit as of right as inseparable from the insurance principle. They therefore rejected the method suggested by my hon. Friend, and we rejected it. I know that there are arguments for it, and we can argue the question again.
  The second method was that by which we had graduated contributions, related to income, and flat-rate benefits—a social security tax in which everyone would pay for the provision for old age in accordance with their capacity to pay and all would receive benefits at a uniform level. That stage may well be reached as the social conscience develops, but the general conclusion which we reached was that at this stage we did not think that method would be acceptable either.
  The only alternative, therefore, and the alternative which we adopted and which we have elaborated in our plan, was that

  1079
  we should move towards graduated contributions and for a transitional period, which is bound to be of some length, in which we would marry together the flat rate basic pension and the differential pension related to earnings.
  We could start a superannuation scheme afresh now, and the benefit would not become payable until people had paid their full contributions, but we cannot start there. Next year we shall be celebrating the fiftieth anniversary of the first Pensions Act, providing a pension which in my country they still very proudly call "Lloyd George's pension." Curiously enough, there is a little of it in this Bill. We shall return to that, too.
  We started as long ago as that and we have proceeded with these pensions schemes ever since. We have not yet found the complete answer. Our new plan says that there must be a basic pension and a differential pension for this transitional period. We say that the basic pension should be £3 and we indicate how the two pensions will march and develop side by side until eventually they are married into one scheme. That is what we suggest, since we cannot start from the beginning but must begin with the history from 1908 in our minds. It is essential to marry the new conception and the old scheme. That is what we have sought to do.
  This is the proposal which we put before the Labour Party Conference. We had a very interesting and valuable discussion. We are now considering the full implications of this scheme as they apply to all the other benefits, the whole of National Insurance and the whole of National Assistance. We believe that in these mid-1950's, almost on the eve of the 1960's, these documents represent as important a contribution to our social thinking as did the Beveridge Report in 1942. We believe that from this plan we can march on to a new system of social security which will pay due regard to the developments which have taken place and to the desire of our people for status, security and opportunity.
  We shall concur in the Second Reading of the Bill and we shall return to some of its details in Committee, and we look forward to the day when we shall be in office and when a plan of the
  1080
  kind I have described will be our next contribution to the social progress of our country.
  9.34 p.m.
  The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Miss Edith Pitt): This has been a rather curious debate for the Second Reading of a Bill. We have had congratulations, we have had criticisms, and we have had some very useful and thoughtful speeches, particularly, if I may say so, from my hon. Friends the Members for Ilford, South (Mr. Cooper), Stroud (Mr. Kershaw) and Basingstoke (Mr. Freeth). We are, in fact, discussing a Bill, the proposals in which are designed to give improved benefits to all National Insurance and Industrial Injuries beneficiaries.
  The proposals mean that the benefits will be fixed at the highest level ever. They also mean that contributions will be increased to the highest level yet. But the reaction of the present workers, as far as I can judge—and here I agree with my hon. Friend the Member for Basingstoke who said that he thought they would be willing to pay these contributions—is that they do not mind paying more now in order to improve the position of the pensioners, and secure for themselves better benefits later.
  Today's debate has tended to centre, as the hon. Member for Cardiff, West (Mr. G. Thomas) has reminded us, on retirement pensions, but the increased benefits will apply to present workers who may need to fall back at some time on sickness or unemployment benefit, or need industrial injury benefit as a result of accidents at work. Certainly, the present worker, so far as he plans ahead, realises that he is building up for himself rights to a retirement pension.
  As our debate has tended to concentrate so largely on pensions, perhaps I may, in reply, very briefly try to set out the position. The standard rates of pensions are being increased, for single persons from 40s. to 50s. a week, and for married couples from 65s. to 80s. a week. The previous increase, as hon. Members well know, came into effect in 1955. Since then, prices have risen by 11 per cent. Incidentally, so have food prices, and I make that point because it is always stressed, and rightly so, that food is very important to the pensioner.

  1081
  To restore the pension to the purchasing power of 1955—when, as I say, we gave the last increase—would need an increase, at present, of 4s. 4d. for the single rate and 7s. 1d. for the married rate. In this Bill we propose increases of 10s. and 15s., respectively, which will more than compensate for the rise in the cost of living—[HON. MEMBERS: "2s. 8d."] I have not forgotten the withdrawal of the tobacco tokens, which are worth 2s. 4d. a week, but even when that is deducted the increase represents a real improvement to all pensioners.
  We in this House should not forget that by no means all pensioners apply for the tobacco tokens. The figures show that about 54 per cent. do, so nearly half of the pensioners will get the full benefit of the increase which is now proposed, and I would suggest that all pensioners would much prefer to have the cash in hand to spend as they choose—[Interruption.] My right hon. Friend dealt with the tobacco tokens and I do not want to take up the time of the House in stressing the difficulties which ail of us have experienced; the unfairness as between one pensioner and another, and the unfairness as between the non-smoker and the smoker.
  Hon. Members must be aware of this source of irritation and dissatisfaction from the letters they receive from their constituents—which, in turn, sometimes come on to me—and must be aware from their contacts in their constituencies that, obviously, the token could be removed only at a time when a substantial increase of pensions was possible. This we have decided to do, and I am a little surprised, I must confess, that there has been criticism of it today.
  The hon. Member for Ince (Mr. T. Brown) said that the tobacco token was illogical—he was with us there—but that to take it away now was inopportune.
  Mr. T. Brown: I still believe that.
  Miss Pitt: The right hon. Gentleman the Member for Middlesbrough, East (Mr. Marquand) said that this proposal to withdraw the token had been received with the utmost disfavour. I do not think that that is true. My right hon. Friend, in his comments, gave two quotations from hon. Members opposite which. I should have thought, committed them to our view, but perhaps I may add one more on behalf of the pensioners them-
  1082
  selves. I noticed in the Birmingham Mail that the chairman of a Leamington old men's club said, on this announcement being made:
  "No doubt, there will be a lot of grumbles about the abolition of tobacco tokens—but as a smoker I find it difficult to justify a concession which gave smokers an advantage over non-smokers. A 10s. increase for all pensioners is far better than cheap tobacco for some."
  We have heard a good deal about alternative superannuation schemes, and the right hon. Member for Llanelly (Mr. J. Griffiths) said that the best way of dealing with retirement pensions was by this plan. I do not deny the merits or the attraction of a graded scheme more nearly related to earnings during working life. The Government have already given much thought and study to this subject, as my right hon. Friend reminded us earlier this afternoon. But the Socialist proposals, as they said in the preamble, were a blueprint submitted to the British people for public examination and review, and they fell into two parts. The first one related to the principles and the second to the working model. It is the second part which has already been shown to be unworkable.
  I can sympathise with the party opposite because the scheme which they produced with such triumph and calculated appeal has not been able to stand up to the tests. They are now committed to far-reaching changes in principle without adequate examination of the facts and the questions involved. If the principles were carried out, they would require a total levy on earnings for pensions of something like 13 per cent., instead of the 10 per cent. provided in the working model, and a further 7 per cent., making 20 per cent. in all, if similar provision is to be made for unemployment benefit and sickness benefit. Such proposals are highly inflationary in themselves. In particular, hon. Members in submitting this plan have failed to solve the problem of integration or exclusion of present occupational pension schemes.
  Mr. Crossman Mr. Crossman rose—
  Miss Pitt: I propose to come to the hon. Gentleman's points later; given time, and I will certainly give way to him.

  1083
  The rapid and encouraging growth of occupational pension schemes—it is estimated that 8¾ million employed people now have rights in various schemes—tends to emphasise the value of this type of provision for retirement years, and the rights of those who already belong to such schemes are improving as some of the benefits have improved in recent years. It is a fact that four years ago more than 25 per cent. of men retiring had some kind of superannuation rights, and the proportion now may well be nearer one-third.
  I have no wish to be unduly critical. No doubt, ideas in this field on proper provision for old age and our growing number of older people are well worth examining. But there are other schemes in the field, too, which are also worthy of examination. America and Germany both have graded pension schemes already, although in neither case is the ceiling anything like so high as in the Socialist proposals. We have, of course, given considerable study to these schemes and have accumulated a considerable amount of information. Perhaps I might add that I have myself had the opportunity of visiting Germany and America this year and studying their schemes.
  Mr. Ellis Smith: Will the hon. Lady tell us something about them?
  Miss Pitt: If we are to change the complete structure of social security, and it is not a matter of retirement pensions alone, we must give the fullest consideration to the long-term plan with all its implications for the individual and the economy. In this connection, I would remind the House, and answer an interjection on the point, that the Phillips Committee recommended the collection of information about occupational pension schemes. The Government actuary is now in the final stages of analysing a pilot survey, and this information, when it is ready, must surely play a very important part in our deliberations. No one has the right to complain that the Government are proceeding with deliberation in considering whether any form of alternative provision for retirement is practicable.
  Naturally, we are all concerned at the growing financial burden on the National Insurance scheme, a burden which is increased by the responsibility which we have accepted for payments for back
  1084
  service, by the additions we have made to benefits, and by the rising proportion of pensioners in the population. The hon. Member for Kirkcaldy Burghs (Mr. Hubbard) in his speech in the debate on the Address last week, which I read, made the point, and made it very well, that he did not think of old people as a burden and he did not wish others to think of them as a burden. I certainly share his view, as I am sure we all do, but the fact remains that we have assumed a considerable financial burden in helping to provide for their old age. Naturally also, we are all encouraged by the developments in private supplementary schemes and would wish to see more and more people brought within the scope of such schemes; but this is not the answer to the problem of present pensioners who have already retired.
  Those who need help need it now, and the Government are taking action now. We intend to provide improvements for present beneficiaries which will bring the rate of pension now to a level which, for pensioners as a whole, married as well as single, compares very favourably with the £3 rate for those insured in their own right which the Socialists promised for 1960—if they are ever to come to power again.
  Coming back to the real discussion tonight, or the discussion as it should be, on the financial side my right hon. Friend dealt with the figures in detail. It is still asserted, however, that the taxpayer is not paying enough or that we are making a profit out of it. That assertion is made by the right hon. Member for Middlesbrough, East and by the hon. Member for Coventry, East (Mr. Crossman). It is just not true. The taxpayer is not being relieved of a penny by these proposals. In fact, he is being committed considerably farther, especially in the years ahead.
  It is true that increases in contributions on the National Insurance side will meet the increased expenditure on benefits next year, but the increase in contributions involves an increase in the Exchequer supplement, and the amount so required is £30 million extra. Again, it is correct that this £30 million extra will, next year, reduce the deficit which also had to be met by the taxpayer. This was estimated to be £44 million for next year, so that it is reduced by the £30 million to which I referred to £14 million. But in total—and

  1085
  this is the point—the taxpayer's liability is unchanged. This is for next year only. In fact, the taxpayer's extra liability will next year be the £30 million Exchequer supplement, plus war pensions increases of £16½ million, plus the increase in non-contributory pensions of £1 million, plus the Exchequer supplement to the Industrial Injuries Fund of £4½ million.
  Mr. J. Griffiths: The hon. Lady must know that we are discussing the burden on the National Insurance scheme. War pensioners are not associated with the National Insurance scheme.
  Miss Pitt: But this is one operation. We are discussing improvements together. In particular, we are at the moment discussing what contribution the taxpayer is to make to the improvements. [Interruption.] My right hon. Friend behind me interjects, "Was the right hon. Gentleman not prepared to do anything about war pensions?" If so, they must be paid for.
  I had got as far as a total of £52 million. From this can be deducted the estimated net saving on National Assistance of about £8 million. That brings us to £44 million. To this, we must add the £14 million deficiency payment already mentioned. There is also the imprecise figure, as my right hon. Friend said, of the loss in revenue to the Exchequer arising from the increased contributions from employers and insured persons which is likely more than to offset any increase in revenue from the abolition of the tobacco scheme. So now we come back to the figure with which my right hon. Friend opened this afternoon of, in all, about £60 million.
  Mr. Marquand: Has the hon. Lady not forgotten that the Actuary himself said that the extra supplements will amount to £30 million but that this will be offset by a reduction in the grant required to meet the deficiency?
  Miss Pitt: That is exactly what I have just said. That intervention has taken up some of my valuable time. I quite clearly stated that there will be a reduction of £30 million in the expected deficit, but it is made up in the increased Exchequer contribution.
  What is even more important than this complicated arithmetic is the mounting liability of the Exchequer to the Fund. The annual liability of the Exchequer for supplement and deficit is estimated to
  1086
  rise to £357 million by 1964–65 and to almost £600 million by 1979–80, the latter being an increase of £84 million over the previously estimated liability and caused solely by the increases proposed under this Bill.
  I want to try to answer some of the other points which I have not been able to deal with en route, but my reply must of necessity be brief. The right hon. Member for Middlesbrough, East asked me about modified pensions. I am glad to be able to reassure him by telling him that we are introducing regulations to bring up modified pensions in the same proportion as the main rates.
  I really must correct the figures given by the right hon. Gentleman. He added to the credit of the taxpayers the increase in the Industrial Injuries Fund. Surely, he knows as well as I do that this is a quite separate fund and one which cannot he used for any other purpose.
  Then, he also asked me about widowed mothers. At least he raised the point, which I know is one on which he feels very deeply, because he has discussed it in the House so often, and it is one on which I find myself in sympathy with him. I want to remind him, however, that improvements were given to the widowed mother last year, as he will remember, when 5s. was granted for each of the children, and that lead has been maintained. We have given her benefits which will still give her a lead over other beneficiaries. Whereas in November, 1955, before the action which he took, 28 per cent. of widowed mothers were on National Assistance, that figure is now down to 24 per cent., which is about the same as that for retirement pensioners.
  My hon. Friend the Member for Ilford. South asked about Civil Service pensions for non-established service. That is not the responsibility of my Ministry and he must pursue it elsewhere. My hon. Friend has the Financial Secretary to the Treasury on the Front Bench.
  He also asked me about the earnings rule, which was changed in 1956. I do not think that circumstances have changed a great deal since then. In any event, perhaps I may remind him that legislation is not necessary to change the earnings rule again, because we took power in the last Bill in 1956 to do this by regulation.

  1087
  Now I come to the hon. Member for Coventry, East. He made a statement, first of all, that this is no better than the 1946 figures. The hon. Gentleman is really not very good at figures. The 26s. for a single person in 1946 would be worth at today's prices 42s. 4d.; or, if we take 1948, when the other benefits came into operation, 39s. 2d., but I will stick to the higher figure of 42s. 4d. Married couples in 1946 received 42s., which is worth today 68s. 5d., at today's prices. We are proposing in this Bill to raise these two figures, respectively, to 50s. and 80s. The hon. Gentleman's criticism is really most unjustified.
  The hon. Gentleman also mentioned part-time workers paying the full contribution. The National Insurance Advisory Committee recently recommended that part-time workers who worked for eight hours in any occupation should not pay the stamp, and the regulations are going through.
  The hon. Gentleman admits that the figures in his own plan are inaccurate and that the party takes no responsibility. In fact he said so in a letter to The Times. Referring to my right hon. Friend's criticism, he said:
  "They relate not to a policy statement prepared by the National Executive and endorsed at the Party Conference a fortnight ago, but to the model scheme for which"—
  Professors so-and-so—I will not mention their names—
  "are responsible."
  The hon. Gentleman disowned the other half of the programme, but for all that, this booklet is published without a disclaimer under the title of "Labour Party's policy for security in old age."
  Furthermore, the hon. Gentleman overestimated the income by including the employers' National Insurance contributions, income in kind, earnings of people in Ireland but no payments, excluding expenditure on widow's benefits for widows under pension age amounting to about £60 million in the first year of the scheme, and he forgot the administrative costs. If that is the best that the hon. Gentleman can do, I think it is really intolerable that he should come here today to suggest that we should have a new
  1088
  scheme when his own is proved unworkable.
  Question put and agreed to.
  Bill read a Second time.
  Bill committed to a Committee of the whole House.—[Colonel J. H. Harrison.]
  Committee Tomorrow.

  WAYS AND MEANS
  Considered in Committee.
  [Sir CHARLES MACANDREW in the Chair]

  NATIONAL INSURANCE (PENSIONERS' TOBACCO RELIEF)
  10.0 p.m.
  The Financial Secretary to the Treasury (Mr. J. Enoch Powell): I beg to move,
  That section four of the Finance Act, 1947 (which provides for relief for pensioners in respect of increase in tobacco duty), shall cease to have effect.
  This Ways and Means Resolution is necessary to pave the way for Clause 3 of the Bill to which the House has just given a Second Reading, and which repeals the provisions of the 1947 Finance Act under which the tobacco token scheme has operated. A good deal of reference has been made to this alteration in the debate which has just concluded in the House, and I need not long detain the Committee in justifying this Ways and Means Resolution.
  The Committee is familiar with the circumstances in which the scheme was introduced in 1947. The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) had increased the Tobacco Duty by 43 per cent., and it was considered desirable, if possible, to work out a scheme which would prevent that dramatic increase in the Tobacco Duty from reducing the purchasing power of the existing retirement pensioners; and so, in that year, the tobacco token scheme as we have had it from than to now was brought into effect.
  It was a complicated scheme, difficult to work out and expensive to operate. It costs about £125,000 a year to operate the scheme. When it came into force about 1,400,000 retirement pensioners benefited from it, about 40 per cent. of the

  1089
  total. That figure has now risen to 2,600,000, or 54 per cent. It is a remarkable but little noticed sociological fact that the proportion of habitual smokers among retirement pensioners has risen from 40 per cent. to 54 per cent. over the last ten years. Or has it?
  From the beginning of this scheme it was found that it inevitably involved severe unfairness and anomalies. My right hon. Friend already reminded the House that it applies only to the retirement pensioners under the 1946 Act and to old-age pensioners under the 1936 Act. Whole classes of pensioners who are at least in equal need and in similar circumstances are excluded from it—the retirement pensioner who is in hospital or an institution where the pensions are collected by the schedule system instead of by the books; the war pensioner or the industrially injured pensioner who is not at the same time a retirement pensioner; and there is the recipient of National Assistance who is not also in receipt of a pension under the 1936 or 1946 Acts. All these classes of persons have been arbitrarily excluded, of administrative necessity, from the benefits of the scheme.
  What is more important, however, is that its effect has totally changed over the years. What was intended to be a maintenance of the status quo for existing pensioners has become a gross discrimination between two pensioners in otherwise identical circumstances, between the pensioner who is and the pensioner who is not an habitual smoker. So the opinion has gained ground, and has been expressed repeatedly on both sides of the Committee, that the disappearance of this scheme was overdue. In the debate on 6th June last year, hon. Members on both-sides
  argued that it ought to be abolished and replaced by a cash payment. Indeed, I think that there will be general agreement that social security payments ought to be made on a cash basis and not in terms of commodities or artificially cheapened prices.
  That point of view was perhaps best expressed by the hon. Member for Tottenham (Sir F. Messer), in the debate on this year's Finance Bill, in a remarkable speech in which he said:
  "I think that it is humiliating when a handicapped person has—as old people have to do at the present time—to show some sort of identification to get something on the cheap, old people getting tobacco coupons, cheap or free baths, free transport by the local authority…. What we ought to do is to assure them of an income."—[OFFICIAL REPORT, 23rd May, 1957; Vol. 570, c. 1469.]
  These anomalies and this unjust discrimination between two otherwise identical classes of people will be removed by the Clause which this Ways and Means Resolution makes possible, and I would remind the Committee that throughout the whole range of benefits which are to be increased full account has been taken of the abolition of the scheme. What this Ways and Means Resolution makes possible is an act of fairness and of common sense, and hon. Members on both sides of the Committee know it to be so.
  Mr. H. Hynd: I will not detain the Committee except to say that this is the meanest thing that the Government have done yet and that they ought to be ashamed of themselves.
  Question put:—
  The Committee divided: Ayes 294, Noes 226.

  Division No. 3.]

  AYES

  [10.7 p.m.

  Agnew, Sir Peter

  Bell, Ronald (Bucks, S.)

  Bullus, Wing Commander E. E.

  Aitken, W. T.

  Bennett, Dr. Reginald

  Burden, F. F. A.

  Allan, R. A. (Paddington, S.)

  Bevins, J. R. (Toxteth)

  Butcher, Sir Herbert

  Alport, C. J. M.

  Biggs-Davison, J. A.

  Butler, Rt. Hn. R. A. (Saffron Walden)

  Amery, Julian (Preston, N.)

  Birch, Rt. Hon. Nigel

  Campbell, Sir David

  Amory, Rt. Hn. Heathcoat (Tiverton)

  Bishop, F. P.

  Carr, Robert

  Armstrong, C. W.

  Black, C. W.

  Cary, Sir Robert

  Ashton, H.

  Body, R. F.

  Channon, Sir Henry

  Astor, Hon. J. J.

  Boothby, Sir Robert

  Chichester-Clark, R.

  Atkins, H. E.

  Bossom, Sir Alfred

  Churchill, Rt. Hon. Sir Winston

  Baldock, Lt.-Cmdr. J. M.

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

  Clarke, Brig. Terence (Portsmth, W.)

  Baldwin, A. E.

  Boyle, Sir Edward

  Cole, Norman

  Balniel, Lord

  Braine, B. R.

  Conant, Maj. Sir Roger

  Barber, Anthony

  Braithwaite, Sir Albert (Harrow, W.)

  Cooke, Robert

  Barlow, Sir John

  Bromley-Davenport, Lt.-Col. W. H.

  Cooper, A. E.

  Barter, John

  Brooke, Rt. Hon. Henry

  Cooper-Key, E. M.

  Baxter, Sir Beverley

  Brooman-White, R. C.

  Cordeaux, Lt.-Col. J. K.

  Beamish. Maj. Tufton

  Browne, J. Nixon (Craigton)

  Corfield, Capt. F. V.

  Bell, Philip (Bolton, E.)

  Bryan, P.

  Craddock, Beresford (Spelthorne)

  Crosthwaite-Eyre, Col. O. E.

  Hughes Hallett, Vice-Admiral J.

  Osborne, C.

  Crowder, Sir John (Finchley)

  Hughes-Young, M. H. C.

  Page, R. G.

  Crowder, Petre (Ruislip—Northwood)

  Hulbert, Sir Norman

  Pannell, N. A. (Kirkdale)

  Cunningham, Knox

  Hurd, A. R.

  Partridge, E.

  Dance, J. C. G.

  Hutchison, Michael Clark (E'b'gh, S.)

  Peyton, J. W. W.

  Davidson, Viscountess

  Hutchison, Sir Ian Clark (E'b'gh, W.)

  Pickthorn, K. W. M.

  D'Avigdor-Goldsmid, Sir Henry

  Hyde, Montgomery

  Pike, Miss Mervyn

  Deedes, W. F.

  Hylton-Foster, Rt. Hon. Sir Harry

  Pilktington, Capt. R. A.

  Digby, Simon Wingfield

  Iremonger, T. L.

  Pitt, Miss E. M.

  Dodds-Parker, A. D.

  Irvine, Bryant Godman (Rye)

  Pott, H. P.

  Donaldson, Cmdr. C. E. McA.

  Jenkins, Robert (Dulwich)

  Powell, J. Enoch

  Doughty, C. J. A.

  Jennings, J. C. (Burton)

  Price, David (Eastleigh)

  Drayson, G. B.

  Johnson, Dr. Donald (Carlisle)

  Price, Henry (Lewisham, W.)

  du Cann, E. D. L.

  Johnson, Eric (Blackley)

  Profumo, J. D.

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

  Joynson-Hicks, Hon. Sir Lancelot

  Rawlinson, Peter

  Duncan, Sir James

  Kaberry, D.

  Redmayne, M.

  Duthie, W. S.

  Keegan, D.

  Rees-Davies, W. R.

  Eccles, Rt. Hon. Sir David

  Kerby, Capt. H. B.

  Remnant, Hon. P.

  Eden, J. B. (Bournemouth, West)

  Kerr, Sir Hamilton

  Renton, D. L. M.

  Elliott, R. W. (N'castle upon Tyne, N.)

  Kershaw, J. A.

  Ridsdale, J. E.

  Emmet, Hon. Mrs. Evelyn

  Kimball, M.

  Rippon, A. G. F.

  Errington, Sir Eric

  Kirk, P. M.

  Roberts, Sir Peter (Heeley)

  Erroll, F. J.

  Lagden, G. W.

  Robertson, Sir David

  Farey-Jones, F. W.

  Lambert, Hon. G.

  Robinson, Sir Roland (Blackpool, S.)

  Fell, A.

  Lambton, Viscount

  Robson Brown, Sir William

  Finlay, Graeme

  Lancaster, Col. C. G.

  Rodgers, John (Sevenoaks)

  Fisher, Nigel

  Langford-Holt, J. A.

  Roper, Sir Harold

  Fletcher-Cooke, C.

  Leavey, J. A.

  Ropner, Col. Sir Leonard

  Fort, R.

  Leburn, W. G.

  Russell. R. S.

  Foster, John

  Legge-Bourke, Maj. E. A. H.

  Sandys, Rt. Hon. D.

  Fraser, Hon. Hugh (Stone)

  Legh, Hon. Peter (Petersfield)

  Schofield, Lt.-Col. W.

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Lennox-Boyd, Rt. Hon. A. T.

  Scott-Miller, Cmdr. R.

  Freeth, Denzil

  Lindsay, Hon. James (Devon, N.)

  Sharples, R. C.

  Gammans, Lady

  Lindsay, Martin (Solihull)

  Shepherd, William

  Garner-Evans, E. H.

  Linstead, Sir H. N.

  Simon, J. E. S. (Middlesbrough W.)

  George, J. C. (Pollok)

  Llewellyn, D. T.

  Smyth, Brig. Sir John (Norwood)

  Gibson-Watt, D.

  Lloyd, Rt. Hon. G. (Sutton Coldfield)

  Soames, Christopher

  Glover, D.

  Lloyd, Maj. Sir Guy (Renfrew, E.)

  Spearman, Sir Alexander

  Glyn, Col. Richard H.

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Speir, R. M.

  Godber, J. B.

  Low, Rt. Hon. Sir Toby

  Spence, H. R. (Aberdeen, W.)

  Gomme-Duncan, Col. Sir Alan

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Stevens, Geoffrey

  Goodhart, Philip

  Lucas, P. B. (Brentford & Chiswick)

  Steward, Harold (Stockport, S.)

  Gough, C. F. H.

  Lucas-Tooth, Sir Hugh

  Steward, Sir William (Woolwich, W.)

  Gower, H. R.

  McAdden, S. J.

  Stoddart-Scott, Col. Sir Malcolm

  Graham, Sir Fergus

  Macdonald, Sir Peter

  Storey, S.

  Grant, W. (Woodside)

  McKibbin, Alan

  Stuart, Rt. Hon. James (Moray)

  Grant-Ferris, Wg Cdr. R. (Nantwich)

  Mackie, J. H. (Galloway)

  Studholme, Sir Henry

  Green, A.

  McLaughlin, Mrs. P.

  Summers, Sir Spencer

  Gresham Cooke, R.

  Maclay, Rt. Hon. John

  Sumner, W. D. M. (Orpington)

  Gurden, Harold

  Maclean, Sir Fitzroy (Lancaster)

  Taylor, Sir Charles (Eastbourne)

  Hall, John (Wycombe)

  McLean, Neil (Inverness)

  Taylor, William (Bradford, N.)

  Hare, Rt. Hon. J. H.

  Macleod, Rt. Hn. Iain (Enfield, W.)

  Teeling, W.

  Harris, Frederic (Croydon, N.W.)

  MacLeod, John (Ross & Cromarty)

  Temple, John M.

  Harris, Reader (Heston)

  Macmillan, Rt. Hn. Harold (Bromley)

  Thomas, Leslie (Canterbury)

  Harrison, A. B. C. (Maldon)

  Macmillan, Maurice (Halifax)

  Thomas, P. J. M. (Conway)

  Harrison, Col. J. H. (Eye)

  Macpherson, Niall (Dumfries)

  Thompson, Kenneth (Walton)

  Harvey, Sir Arthur (Macclesfd)

  Maitland, Cdr. J. F. W. (Horncastle)

  Thompson, Lt.-Cdr. R. (Croydon, S.)

  Harvey, Ian (Harrow, E.)

  Manningham-Buller, Rt. Hn. Sir R.

  Thorneycroft, Rt. Hon. P.

  Harvey, John (Walthamstow, E.)

  Markham, Major Sir Frank

  Thornton-Kemsley, C. N.

  Harvie-Watt, Sir George

  Marples, Rt. Hon. A. E.

  Tiley, A. (Bradford, W.)

  Hay, John

  Marshall, Douglas

  Tilney, John (Wavertree)

  Head, Rt. Hon. A. H.

  Mathew, R.

  Tweedsmuir, Lady

  Heald, Rt. Hon. Sir Lionel

  Maude, Angus

  Vane, W. M. F.

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

  Maydon, Lt.-Comdr. S. L. C.

  Vaughan, Morgan, J. K.

  Henderson, John (Cathcart)

  Medlicott, Sir Frank

  Vickers, Miss Joan

  Henderson-Stewart, Sir James

  Milligan, Rt. Hon. W. R.

  Wakefield, Sir Wavell (St. M'lebone)

  Hesketh, R. F.

  Molson, Rt. Hon. Hugh

  Walker-Smith, Rt. Hon. Derek

  Hicks-Beach, Maj. W. W.

  Morrison, John (Salisbury)

  Wall, Major Patrick

  Hill, Rt. Hon. Charles (Luton)

  Mott-Radclyffe, Sir Charles

  Ward, Rt. Hon. G. R. (Worcester)

  Hill, Mrs. E. (Wythenshawe)

  Nabarro, G. D. N.

  Ward, Dame Irene (Tynemouth)

  Hill, John (S. Norfolk)

  Nairn, D. L. S.

  Watkinson, Rt. Hon. Harold

  Hirst, Geoffrey

  Neave, Airey

  Webbe, Sir H.

  Hobson, John (Warwick & Leam'gt'n)

  Nicholls, Harmar

  Whitelaw, W. S. I.

  Holland-Martin, C. J.

  Nicolson, N. (B'n'm'th, E. & Chr'ch)

  Williams, Paul (Sunderland, S.)

  Hornby, R. P.

  Nugent, G. R. H.

  Williams, R. Dudley (Exeter)

  Hornsby-Smith, Miss M. P.

  O'Neill, Hn. Phelim (Co. Antrim, N.)

  Wood, Hon. R.

  Horsbrugh, Rt. Hon. Dame Florence

  Ormsby-Gore, Rt. Hon. W. D.

  Yates, William (The Wrekin)

  Howard, Gerald (Cambridgeshire)

  Orr, Capt. L. P. S.

  Howard, Hon. Greville (St. Ives)

  Orr-Ewing, Charles Ian (Hendon, N.)

  TELLERS FOR THE AYES

  Howard, John (Test)

  Orr-Ewing, Sir Ian (Weston-S-Mare)

  Mr. Oakshott and Mr. Wills.

  NOES

  Ainsley, J. W.

  Hannan, W.

  Parkin, B. T.

  Albu, A. H.

  Harrison, J. (Nottingham, N.)

  Paton, John

  Allaun, Frank (Salford, E.)

  Hastings, S.

  Pearson, A.

  Allen, Arthur (Bosworth)

  Hayman, F. H.

  Peart, T. F.

  Allen, Scholefield (Crewe)

  Healey, Denis

  Pentland, N.

  Awbery, S. S.

  Henderson, Rt. Hn. A. (Rwly Regis)

  Plummer, Sir Leslie

  Bacon, Miss Alice

  Herbison, Miss M.

  Popplewell, E.

  Baird, J.

  Hewitson, Capt. M.

  Prentice, R. E.

  Balfour, A.

  Hobson, C. R. (Keighley)

  Price, J. T. (Westhoughton)

  Bellenger, Rt. Hon. F. J.

  Holman, P.

  Price, Philips (Gloucestershire, W.)

  Bence, C. R. (Dunbartonshire, E.)

  Holmes, Horace

  Probert, A. R.

  Benson, G.

  Howell, Charles (Perry Barr)

  Proctor, W. T.

  Beswick, Frank

  Howell, Denis (All Saints)

  Pryde, D. J.

  Blackburn, F.

  Hoy, J. H.

  Pursey, Cmdr. H.

  Blenkinsop, A.

  Hubbard, T. F.

  Randall, H. E.

  Blyton, W. R.

  Hughes, Emrys (S. Ayrshire)

  Rankin, John

  Boardman, H.

  Hunter, A. E.

  Redhead, E. C.

  Bottomley, Rt. Hon. A. G.

  Hynd, H. (Accrington)

  Reeves, J.

  Bowden, H. W. (Leicester, S.W.)

  Hynd, J. B. (Attercliffe)

  Reid, William

  Bowles, F. G.

  Irvine, A. J. (Edge Hill)

  Robens, Rt. Hon. A.

  Boyd, T. C.

  Isaacs, Rt. Hon. G. A.

  Roberts, Albert (Normanton)

  Braddock, Mrs. Elizabeth

  Janner, B.

  Roberts, Goronwy (Caernarvon)

  Brockway, A. F.

  Jay, Rt. Hon. D. P. T.

  Robinson, Kenneth (St. Pancras, N.)

  Broughton, Dr. A. D. D.

  Jeger, George (Goole)

  Rogers, George (Kensington, N.)

  Brown, Thomas (Ince)

  Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

  Ross, William

  Burke, W. A.

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

  Royle, C.

  Burton, Miss F. E.

  Jones, David (The Hartlepools)

  Short, E. W.

  Butler, Herbert (Hackney, C.)

  Jones, Elwyn (W. Ham, S.)

  Silverman, Julius (Aston)

  Butler, Mrs. Joyce (Wood Green)

  Jones, Jack (Rotherham)

  Silverman, Sydney (Nelson)

  Callaghan, L. J.

  Jones, J. Idwal (Wrexham)

  Skeffington, A. M.

  Castle, Mrs. B. A.

  Jones, T. W. (Merioneth)

  Slater, Mrs. H. (Stoke, N.)

  Champion, A. J.

  Kenyon, C.

  Slater, J. (Sedgefield)

  Clunie, J.

  Key, Rt. Hon. C. W.

  Smith, Ellis (Stoke, S.)

  Coldrick, W.

  Lawson, G. M.

  Snow, J. W.

  Collick, P. H. (Birkenhead)

  Lee, Frederick (Newton)

  Soskice, Rt. Hon. Sir Frank

  Collins, V. J. (Shoreditch & Finsbury)

  Lee, Miss Jennie (Cannock)

  Sparks, J. A.

  Craddock, George (Bradford, S.)

  Lover, Harold (Cheetham)

  Steele, T.

  Cronin, J. D.

  Lewis, Arthur

  Stewart, Michael (Fulham)

  Crossman, R. H. S.

  Lindgren, G. S.

  Stonehouse, John

  Cullen, Mrs. A.

  Mabon, Dr. J. Dickson

  Strachey, Rt. Hon. J.

  Dalton, Rt. Hon. H.

  MacColl, J. E.

  Stross, Dr. Barnett (Stoke-on-Trent, C.)

  Darling, George (Hillsborough)

  McGhee, H. G.

  Swingler, S. T.

  Davies, Harold (Leek)

  McInnes, J.

  Sylvester, G. O.

  Davies, Stephen (Merthyr)

  McKay, John (Wallsend)

  Taylor, Bernard (Mansfield)

  Deer, G.

  McLeavy, Frank

  Taylor, John (West Lothian)

  Delargy, H. J.

  MacMillan, M. K. (Western Isles)

  Thomas, George (Cardiff)

  Diamond, John

  MacPherson, Malcolm (Stirling)

  Thornton, E.

  Donnelly, D. L.

  Mahon, Simon

  Timmons, J.

  Dugdale, Rt. Hn. John (W. Brmwch)

  Mallalieu, E. L. (Brigg)

  Tomney, F.

  Dye, S.

  Mann, Mrs. Jean

  Ungoed-Thomas, Sir Lynn

  Ede, Rt. Hon. J. C.

  Marquand, Rt. Hon. H. A.

  Viant, S. P.

  Edelman, M.

  Mason, Roy

  Watkins, T. E.

  Edwards, Rt. Hon. Ness (Caerphilly)

  Messer, Sir F.

  Weitzman, D.

  Edwards, Robert (Bilston)

  Mikardo, Ian

  Wells, Percy (Faversham)

  Edwards, W. J. (Stepney)

  Mitchison, G. R.

  Wells, William (Walsall, N.)

  Evans, Albert (Islington, S.W.)

  Monslow, W.

  West, D. G.

  Evans, Edward (Lowestoft)

  Moody, A. S.

  Wheeldon, W. E.

  Fernyhough, E.

  Morris, Percy (Swansea, W.)

  White, Henry (Derbyshire, N.E.)

  Fienburgh, W.

  Morrison, Rt. Hn. Herbert (Lewis'm, S.)

  Wigg, George

  Finch, H. J.

  Mort, D. L.

  Wilcock, Group Capt. C. A. B.

  Fletcher, Eric

  Moss, R.

  Willey, Frederick

  Foot, D. M.

  Moyle, A.

  Williams, David (Neath)

  Fraser, Thomas (Hamilton)

  Mulley, F. W.

  Williams, Rev. Llywelyn (Ab'tillery)

  Gaitskell, Rt. Hon. H. T. N.

  Neal, Harold (Bolsover)

  Williams, Ronald (Wigan)

  George, Lady Megan Lloyd (Car'then

  Noel-Baker, Francis (Swindon)

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

  Gibson, C. W.

  O'Brien, Sir Thomas

  Williams, W. R. (Openshaw)

  Gooch, E. G.

  Oliver, G. H.

  Willis, Eustace (Edinburgh, E.)

  Greenwood, Anthony

  Oram, A. E.

  Wilson, Rt. Hon. Harold (Huyton)

  Grenfell, Rt. Hon. D. R.

  Orbach, M.

  Winterbottom, Richard

  Grey, C. F.

  Oswald, T.

  Woodburn, Rt. Hon. A.

  Griffiths, David (Rother Valley)

  Owen, W. J.

  Woof, R. E.

  Griffiths, Rt. Hon. James (Llanelly)

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

  Yates, V. (Ladywood)

  Griffiths, William (Exchange)

  Paling, Will T. (Dewsbury)

  Younger, Rt. Hon. K.

  Hale, Leslie

  Palmer, A. M. F.

  Zilliacus, K.

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Pargiter, G. A.

  Hamilton, W. W.

  Parker, J.

  TELLERS FOR THE NOES:

  Mr. Wilkins and Mr. Simmons.

  Resolution to be reported.
  Report to be received Tomorrow.
  Committee to sit again Tomorrow.

  NATIONAL INSURANCE [MONEY]
  Considered in Committee under Standing Order No. 84 (Money Committees).—[Queen's Recommendation signified.]
  [Sir CHARLES MACANDREW in the Chair]
  Motion made, and Question proposed.
  That, for the purposes of any Act of the present Session to increase contributions and benefits under the National Insurance (Industrial Injuries) Acts, 1946 to 1957, and the National Insurance Acts, 1946 to 1957, it is expedient to authorise the payment out of moneys provided by Parliament—

  (a) of any increase in the sums payable out of moneys so provided under—

  (i) paragraph (b) of section two or subsection (1) of section sixty of the National Insurance (Industrial Injuries) Act, 1946, or

  (ii) subsection (3) of section two of the National Insurance Act. 1946 (as amended by section one of the National Insurance Act, 1951), or subsection (1) of section thirty-eight of the National Insurance Act, 1946;

  which is attributable to any provision made by the said Act of the present Session for increasing any rates or amounts of contributions or benefits under the National Insurance (Industrial Injuries) Act, 1946, or the National Insurance Act, 1946, and

  (b) of any increase in the sums payable out of moneys so provided under subsection (3) of section one of the Old Age Pensions Act, 1936, or in the expenses incurred in the administration of that Act, which is attributable to any provisions of the said Act of the present Session increasing by two shillings and fourpence the weekly rate of pension under the said Act of 1936 to a person satisfying the statutory conditions under that Act.—[Mr. Boyd-Carpenter.]

  10.20 p.m.
  Miss Margaret Herbison: I wish to ask one or two questions about this Financial Resolution. I should not need to do so had the Minister given replies to the specific questions that were asked from this side during today's debate on the Bill. Will paragraph (a, i) make it possible for the Minister to introduce further provision into the Bill to bring the old compensation cases up to the new Industrial Injuries benefit? Will he be able, under that sub-paragraph, to give to those who come into benefit under the 1951 Supplementation Act the additional increase of 29s. that is given under the Industrial Injuries part of the Bill?
  1096
  Paragraph (b) has been very tightly drawn, purposely, by the Government. Part of this paragraph reads:
  "which is attributable to any provisions of the said Act of the present Session increasing by two shillings and fourpence the weekly rate of pension."
  Would not the purposes outlined in the Bill have been served by the omission of "two shillings and fourpence"? The Minister would still have been able, if he wished, in Committee, to increase the amount for people who have had no increase since 1946. He would have been able to put forward arguments on behalf of those people. If the paragraph is left as it is, any Amendment put down by us may be ruled out of order as not being covered by the Financial Resolution. I should like to have the Minister's views on these points.
  The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): I will endeavour, as far as possible, to answer the questions which the hon. Lady the Member for Lanarkshire, North (Miss Herbison) has been good enough to put.
  The purpose of paragraph (a) is to enable the various provisions of the existing Act authorising the payment of moneys under the Industrial Injuries and National Insurance Acts to be applied to the provisions of the Bill. It is designed to cover what is provided in Clause 6.
  It is not my duty to attempt to rule, nor have I the authority to rule, whether or not an Amendment which I have not seen would or would not be out of order or liable to be called, as a result of the terms of the Financial Resolution. I can only advise the Committee of what the Resolution is designed to cover. I have given a brief summary but I can give a longer one, if that is the desire of the Committee. It is to cover Clause 6, which provides authority for the payment of the additional Exchequer contributions which will flow from the increase of contributions under those two Acts and for various other provisions of the Bill.
  The second point related to the two shillings and fourpence which the Bill proposes to add to the payment made to the non-contributory old-age pensioner. It is the purpose of the Financial Resolution to make it possible to take into the Bill provisions which will impose a

  1097
  charge on the Exchequer. In that way it derives from the historic and traditional duty, of those who speak at this Box on behalf of the Crown, to propose expenditure.
  Again, it is not for me to rule as to the view which the Chair will take of this, but it is certainly intended—I say this frankly to the Committee—to authorise the provision contained in the Bill and not any other provision which anyone may have in mind. That is the purpose in the ordinary way. When I filled the chair of the Financial Secretary I suppose I initialled hundreds of Money Resolutions, and that is the traditional purpose of a Money Resolution.
  Mr. H. A. Marquand: It is unfortunate that this should be so, because there is a real discrepancy between the two sections of the Money Resolution. The first paragraph says:
  "it is expedient to authorise the payment of moneys"
  for
  "any increase in the sums"
  which are to be provided under the National Insurance (Industrial Injuries) Act or "which is attributable" to any provisions made by the National Insurance Act. The second part of the Resolution does not say "any increase." It refers to an increase of 2s. 4d., and is very much less wide than the previous part of the Resolution.
  I do not think that the explanation by the right hon. Gentleman of the discrepancy between these two parts of the Resolution was quite convincing. If it is possible to say in the earlier part that the Resolution authorises what is necessary to make any increase, it seems very unfortunate completely to deny the representatives of the people the right to say that they think the increase of 2s. 4d. is not sufficient.
  Mr. Boyd-Carpenter: I am sorry that the right hon. Member should think that. I think he will do me the credit of believing that it was never my intention to
  1098
  inhibit freedom of debate. I appreciate that he has taken the point at short notice, but he has not stated the position quite correctly. It is not to cover "any increase," but any increase in the present Session, and the second provision is for a specified, itemised expenditure proposed in the Bill. I suppose it is fundamental to our financial procedure in this House that it is for the Crown to initiate expenditure.
  Miss Herbison: There is a further point I want to have cleared. It goes back to the first questions I asked the Minister. I think the Minister has hedged his reply to those questions. If there is an increase for the old compensation cases and the lime-barred pneumoconiosis cases, that increase does not come from the Treasury, but from the Industrial Injuries Fund. Surely the Minister is able to tell us about this. He must have played a big part in the formation of this Financial Resolution and it is quite wrong for him to put the onus for a decision on whoever will be in the Chair next week. He must have had in mind certain provisions when this Financial Resolution was drawn. Can he tell me clearly, since any increase for these categories of cases will come out of the Industrial Injuries Fund, whether they are covered by the Resolution as it stands?
  Mr. Boyd-Carpenter: Of course, I have a clear view of what must be covered by Clause 6 of the Bill. What I certainly cannot do is to say what other things might be covered. The hon. Lady will appreciate that the question whether or not a particular Amendment she may or may not wish to put down would be in order does not depend solely on the Financial Resolution but also on other matters, such as the scope of the Bill.
  I must reject her suggestion that it is my duty to arrogate to myself the responsibilities of the Chair and give advice on what could be in order. That, with great respect, I cannot do.
  Question put and agreed to.
  Resolution to be reported Tomorrow.

  EXPIRING LAWS CONTINUANCE BILL
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Wills.]
  Committee Tomorrow.

  EXPIRING LAWS CONTINUANCE [MONEY]
  Considered in Committee under Standing Order No. 84 (Money Committees).—[Queen's Recommendation signified.]
  [Sir CHARLES MACANDREW in the Chair]
  Resolved,
  That, for the purposes of any Act of the present Session to continue certain expiring laws, it is expedient to authorise the payment out of moneys provided by Parliament of such expenses as may be occasioned by the continuance of the Population (Statistics) Act, 1938, until the thirty-first day of December, nineteen hundred and fifty-eight; and of the Rent of Furnished Houses Control (Scotland) Act, 1943, the Furnished Houses (Rent Control) Act, 1946, and the Licensing Act, 1953, until the thirty-first day of March, nineteen hundred and fifty-nine, being expenses which under any Act are to be provided out of such moneys.—[Mr. Powell.]
  Resolution to be reported Tomorrow.

  ESTIMATES
  Select Committee appointed to examine such of the Estimates presented to this House as may seem fit to the Committee and to report what, if any, economies consistent with the policy implied in those Estimates may be effected therein, and to suggest the form in which the Estimates shall be presented for examination:
  To consist of Thirty-six Members:
  Mr. Burke, Miss Burton, Mr. Norman Cole. Sir Henry D'Avigdor-Goldsmid,
  1100
  Sir Eric Errington, Mr. George, Mr. Gibson, Mr. Green, Mr. Gresham Cooke, Mr. Hamilton, Mr. Hannan, Mrs. Hill, Mr. Charles Hobson, Mr. Holt, Sir Ian Horobin, Mr. Cledwyn Hughes, Vice-Admiral Hughes Hallett, Commander Maitland, Mr. MacColl, Major Sir Frank Markham, Mr. Mulley, Mr. Godfrey Nicholson, Sir Ian Orr-Ewing, Brigadier Prior-Palmer, Mr. Randall, Mr. Redhead, Mr. Kenneth Robinson, Mr. Joseph Slater, Mr. William Shepherd, Mr. Sparks, Sir Spencer Summers, Mr. Tomney, Mr. Turton, Mr. Paul Williams, Mr. Dudley Williams, and Mr. Willis.
  Seven to be the Quorum:
  Power to send for persons, papers, and records; to sit notwithstanding any Adjournment of the House; to adjourn from place to place; and to report from time to time:
  Power to appoint Sub-Committees and refer to such Sub-Committees any of the matters referred to the Committee:
  Three to be the Quorum of every such Sub-Committee:
  Every such Sub-Committee to have power to send for persons, papers and records; to sit notwithstanding any Adjournment of the House; and to adjourn from place to place:
  Power to report from time to time the Minutes of the Evidence taken before Sub-Committees and reported by them to the Committee.—[Mr. Oakshott.]

  PUBLIC ACCOUNTS
  Committee of Public Accounts nominated: Mr. John Arbuthnot, Mr. Benson, Mr. Collins, Colonel Crosthwaite-Eyre, Mr. Hoy, Mr. Peyton, Mr. Oliver, Mr. J. Enoch Powell, Mr. Ramsden, Mr. Steel, Mr. Geoffrey Stevens, Mr. Thornton, Mr. Thornton-Kemsley, Mr. Turton and Mr. West.—[Mr. Oakshott.]

  AGRICULTURAL RESEARCH INSTITUTES, WALES
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Oakshott.]
  10.35 p.m.
  Mr. T. W. Jones: Mr. Speaker, my subject tonight will be based on a memorandum prepared and published by the Guild of Graduates of the University of Wales. I wish at the outset to pay a tribute to the authors of that memorandum—a very valuable document.
  There are a number of reasons that can be given why Wales should be provided, and provided without delay, with additional agricultural research institutes. In the first place, Wales is essentially an agricultural country, with 4½ million acres of land used for crops, grass and rough grazing. The farms, mainly upland farms, support no less than 11 million livestock, including cattle, sheep, pigs and poultry. Those two facts, by themselves, justify a request for additional agricultural research institutes.
  The tremendous success of the one and only Welsh plant breeding station is a second reason. This station at Aberystwyth has earned a world-wide reputation for the high standard of its work. It has specialised in the breeding of oats and herbage plants, and in the agronomic problems concerning their adaptability to varying conditions. It has concentrated on the improvement of upland pastures and the production of pedigree seed—grasses, clovers and oats.
  This institute started absolutely from scratch, and when we realise that it has built up a highly competent staff—recruited mainly from Wales itself, I am proud to think—it clearly indicates that Welsh students have a flair for this kind of study and for this type of work. They carry out research into animal husbandry, crop husbandry, agricultural botany, agricultural chemistry and agricultural economics, but these departments could do so much better work if they were
  1102
  strengthened, and not hampered by lack of financial resources. What frightens me is to see the steady decline in the amount spent, for instance, at the Aberystwyth research station over the years. There has been a steady decline between 1953 and 1956. Instead of a progressive annual increase, there has been a significantly steady reduction.
  A third good reason for demanding additional research institutes in Wales is provided by a comparison of the position in the Principality with that in Scotland. I am far from being jealous of my fellow Celts north of the Tweed. Indeed, I am anxious to congratulate them on their good fortune. I have already stated that we have only one research institute in Wales. In Scotland, they have ten. We have not even one agricultural college in Wales, whereas in Scotland they have three. We have not one veterinary college, although one of the most distinguished veterinary doctors in this country was a Welshman, a friend and a neighbour of mine—the late Professor Dr. Share Jones.
  This comparison between the two Celtic countries reminds me of the old-fashioned advertisement with the caption "What's he got that I haven't got?" I am anxious to know what Scotland has that Wales has not, to deserve this great preferential treatment. Is it because Scotland has a Secretary of State? If that is so, then I would ask the Minister to confer at once with the Prime Minister and to prepare the Answer to the Question that my hon. Friend the Member for Flint. East (Mrs. White) will be asking on 21st of this month regarding this very point.
  It is interesting to note that according to the Ministry's own figures the estimated expenditure on agricultural education and research in Wales for the year 1955–56 was £588,000. The corresponding estimate for Scotland for the same period was £1,775,500. It may be argued by some people that the Welsh farmers could benefit from the research which is carried out in the ten institutes in Scotland. This would be true were the problems affecting the two countries identical, but they are not.
  I am very glad to see the Minister for Welsh Affairs coming into the Chamber.

  1103
  It has been proved that the climatic conditions in Wales differ fundamentally from those in Scotland, and that these climatic conditions have a great influence on animal health and production. If this be acknowledged—and I do not think that any authority on the question can doubt it—then it follows that the welfare of the 3 million sheep that we have on the uplands of Wales depends on the advice which can be given to the hill farmers. This advice can only be obtained and be of value if it is based on intensive research carried out on the hills of Wales, right on the spot, and carried out continuously over a number of years.
  Sheep grazing in Wales has one peculiarity. As is generally known, the sheep are removed at various seasons of the year from the upland regions to lowland regions, and vice versa. It is now recognised that this change of diet affects the health of the sheep. As Members of Parliament we have experienced how a change from a diet to which we have been accustomed at home to a diet in this House very often affects us. This is especially so in the case of the ewes.
  Mention of this reminds me of the terrible losses which have been incurred recently by the farmers in Caernarvonshire due to the outbreak of that horrible foot-and-mouth disease. How helpless those poor farmers are. I use the phrase "poor farmers" advisedly, because we in Wales have never understood what was meant by farmers being feather-bedded. I can assure the house that the farmers of Wales have never been feather-bedded.
  It is true that the farmers are compensated for the loss of the animals, but they lose something far more valuable than that. They lose their very livelihood. That is what has happened in Caernarvonshire during the last few weeks—and there is no compensation for that.
  To come back to the point with which I was dealing, I should also like to mention certain other diseases.
  Mr. George Thomas: Before my hon. Friend leaves that point, would he be kind enough—because he is making a statement of major interest to
  1104
  the Welsh people—to give an illustration of the losses to which he has referred?
  Mr. Jones: I always appreciate the interest of my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) in rural problems, representing as he does the industrial capital of Wales, but I will give him two instances quite briefly, because I know that the Minister wants to reply.
  I heard—this is all hearsay; I cannot prove it—of a farmer who attended the funeral of a fellow farmer. Because he had attended this funeral and had traversed the land owned by the deceased man, his stock, although it was perfectly healthy, had to be destroyed. How fantastic! I was told, too, of a widow whose stock, although perfectly healthy, was in the belt which was proscribed, and she too had to destroy her whole flock. Those two persons are losing their livelihood, and indeed a farmer in that district is now on the point of going to New Zealand, having been ruined by this disease and by what he has been paid in compensation by the Government.
  Mr. Goronwy Roberts: May I ask my hon. Friend and the Minister to confirm that 420 farmers in the central belt of Caernarvonshire have been affected by the recent outbreak and some 7,000 livestock have had to be slaughtered?
  Mr. Jones: Those are the facts, confirmed now by my hon. Friend the Member for Caernarvon (Mr. G. Roberts).
  I was going to say, before I was interrupted, that there are certain diseases among flocks of sheep that are far more pronounced on the uplands of Wales than in any other part of the United Kingdom. These diseases include liver fluke and nematodes, and, with the addition of the disease known as the black disease, the resulting losses are enormous.
  An increase in research in Wales would naturally reduce these losses. They are diseases which, if not completely eradicated, should be kept within reasonable bounds. The fact is that we have an annual loss among our sheep in Wales of 5 per cent. Every year we lose 5 per cent. of our sheep above one year old. Among the lambs the loss is no less than 10 per cent. In terms of figures, these losses represent 115,000 sheep and 180,000 lambs. According to present-day

  1105
  prices, they would be worth at least £1 million. Similarly, the loss among cattle amounts to the colossal figure of 10 per cent.
  What are the real causes of these diseases? We cannot tell, and we will not know until a far greater measure of research is carried out within the Principality. I contend that, as a result of this research, our losses could be reduced by at least 10 per cent. If that could be done—and it could be done—then, in terms of money, we will save £1,250,000. If the Minister will reply tonight with the usual story of the plight of the country and that we cannot afford it, we are proving to him that he can provide an institute that will not cost the country a penny piece. He will save the money from the immediate result of increasing this research within the country.
  I therefore beg of the Minister, in the interests of agriculture generally, and particularly in the interests of the Welsh farmers, to give most sympathetic consideration to my plea and declare that at least one—fancy a Welshman asking for only one!—additional research institute will be established in Wales within the coming twelve months.
  10.50 p.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber): I am very grateful to the hon. Member for Merioneth (Mr. T. W. Jones) for raising this very important question tonight, and, if I may say so, for the very persuasive way in which he put his case. He almost convinced us that we could run agricultural research stations for less than nothing, which is a most attractive suggestion. If we could do that everywhere in the country, we should be very pleased.
  The hon. Gentleman has raised a number of points, but before I come to them I should just like to put the general picture as it appears to me. I will say at the outset that my noble Friend the Lord President of the Council, who is the Minister responsible for the Agricultural Research Council, my right hon. Friend my own Minister, as well as my right hon. Friend the Minister of Housing and Local Government and Minister for Welsh Affairs, who has shown his interest by being with us tonight, regard this as being one of the most important problems confronting
  1106
  Welsh agriculture at the present time. It is important that Wales itself, as other parts of the British Isles, should receive proper attention in agricultural research. I agree with the hon. Gentleman absolutely there.
  In approaching the matter, the view of my right hon. Friends is that the first thing necessary is to determine whether Welsh agriculture is really receiving its due share of attention in our research effort. The hon. Gentleman says that it is not, but I should like to say a word or two about that.
  Initially, of course, this matter was raised by my right hon. Friend being approached by the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies) a little time ago, and, as a result of the approach, my right hon. Friend asked the Agricultural Improvement Council to set up a committee to look into the technical problems of Welsh agriculture. The Council willingly consented to that, and the Committee, under the distinguished chairmanship of Sir Frank Engledow, and containing representative agriculturists from Wales, has been at work for some time. The Committee is an eminent body. I assure the hon. Gentleman that its report will be given the very closest attention by my right hon. Friend. It may also interest the hon. Gentleman to know that the Agricultural Research Council has at this moment under consideration the calling of a conference to review the whole subject of hill pasture research, which is really vital. Welsh problems would, of course, feature very largely in any such study.
  The hon. Gentleman will appreciate from what I have said that I cannot tonight tell him anything new about the position in Wales. The important thing is that the situation is being examined very carefully and exhaustively in both these ways. Until we have the report of the Engledow Committee and are able to study the picture as that Committee sees it, we clearly cannot decide anything. I will gladly give the assurance that the Agricultural Research Council will consider, in the light of that report, what additional work, if any, should be done and where it should be undertaken. I am sure that the Council will give the fullest and most careful consideration to the views of the Engledow Committee on

  1107
  the particular point of location, which I know is the point the hon. Gentleman has very much in mind. So much for the position as it is now.
  I should now like to say a word about the existing facilities in Wales, but, before doing so, I should make clear this important point, that fundamental research of the sort the hon. Gentleman has been discussing tonight really knows no national frontiers. The extent to which the problems of Wales are being studied is not to be measured by the number of research institutes in Wales; so many problems are common.
  Over the years, a strong network of agricultural research institutes has been built up in Great Britain as a whole. They have originated in various ways, but they have been worked now into a system co-ordinated by the Agricultural Research Council, which, by the Agricultural Research Act, 1956, is charged with the duty of organising agricultural research generally throughout Great Britain. Since the war, much has been done to extend agricultural research and fill up the gaps in it. We have a collection of institutes which, whatever their origin and location, are mostly doing work applicable to Great Britain as a whole. May I remind the hon. Gentleman that there is the work of Rothamsted particularly on soils and viruses, the work of the National Institute of Research in Dairying on milk production, and the work at Weybridge on animal disease. This work is fundamental and of as much interest to Wales as to the areas in which the institutes are situated. The same is true also of the Edinburgh Poultry Research Station and the Animal Breeding Research Organisation. All these are dealing with things on a national basis covering the whole of the British Isles. None of them has any particular bias for its own locality. The Animal Breeding Research Organisation, for example, is concerned with breeding research to help all sections of the livestock industry.
  A considerable amount of organised research is, in fact, carried out in Wales. First, as the hon. Member so rightly said, there is the Welsh Plant Breeding Station at Aberystwyth. That is one of our major research institutions. I very much agree with the hon. Member when he
  1108
  says that it has a world-wide reputation, of which we may be very proud. The work of Sir George Stapledon there has been quite exceptional. In addition to that, there is, of course, the University College of North Wales at Bangor and the University College of Wales at Aberystwyth, which are both carrying out research with the aid of Agricultural Research Council grants.
  There is one point that I must take up with the hon. Member concerning these stations in Wales. He said that the amounts of money that are being spent are being cut down from year to year. That is not so. I was not aware that the hon. Member would raise the point tonight and I do not have detailed figures with me, but I can assure him that there is no question of the amount of expenditure being cut down. I would say that it has been steadily expanding over recent years. We certainly do not envisage any curtailment or cutting down.
  An example of the research that is going on and which affects Wales is given by the survey undertaken in 1956–57 by, the National Institute of Agricultural Engineering, following the Mid-Wales Investigation Report, to provide information about the mechanisation problems of the Welsh hill farms. This showed the lines on which further investigations should be made and on which advice should be given to the hill farmer—for example, the need for the investigation of haulage problems under difficult hill conditions and also for new hay-making methods. Incidentally, I hope that Wales will take still further advantage not only of hay-making methods, but of silage. Our silage grants are eminently suitable for Welsh conditions.
  In the sphere of experimentation and applied research, Wales has the Ministry's experimental husbandry farm at Trawscoed and the new experimental husbandry farm for hill experiments at Pwllpeiran, together with the usual wide range of N.A.A.S. regional experiments on commercial farms. There are also area veterinary inspection centres at Aberystwyth, Bangor and Cardiff and research in agricultural economics is also conducted at Aberystwyth. It is a quite considerable picture when seen in the whole, and we can say that Wales is not neglected.
  I know that the document from which the hon. Member drew some of his

  1109
  points suggests that research should be placed in research institutes in Wales simply because Wales appears to have less of it than other parts of the British Isles; but I do not think that that argument is altogether valid. If the particular research problems of Wales could not be dealt with at existing research stations, I should be inclined to agree with the hon. Member, but I do not think that that is the case. We shall, however, keep an open mind on this and certainly we shall look into the position when we get the Engledow Committee's Report.
  If we were to deal with research on an area basis, perhaps we should get demands from some of the northern counties of England for stations, for I am told that no English counties north of Warwickshire have them. I ask the hon. Member, therefore, not to look at the question too much on a purely local basis. In fundamental research, we should look upon the picture as a whole.
  The hon. Member raised the important question of foot-and-mouth disease. We all deeply regret the losses which have been suffered in the very serious outbreak he referred to. The hon. Member for Caernarvon (Mr. G. Roberts), who intervened to give the figures, was quite right. They are startling figures and the outbreak is a serious one. In all those cases in which stock has been slaughtered the farmers get full compensation for the value of the stock.
  I know there are additional losses which cannot be covered. There are the problems of those farmers whose stock is kept out on the uplands at the present time, and there is difficulty, I know, about feeding them. There is that sort of problem. Indirect losses always occur where there are outbreaks of foot-and-mouth disease. We do all we possibly can to help, but the great thing is to minimise the area of an outbreak as quickly as we can and to stamp out the disease. That is the prime object.
  I think all the farming community understands and appreciates what we try to do about that. I find that our officers receive the warmest congratulations on the way in which they try to handle this very difficult problem. As I say, I sympathise with the farmers who have
  1110
  suffered; we try to meet their difficulties, but the first and fundamental thing is not to allow the disease to get a hold, because if it did the losses would be far greater than they have been.
  I was sorry to learn of the two particular cases the hon. Member brought up. Of course, stock which may appear to be healthy, if it has been in contact or is considered to have been in contact with the disease, must be dealt with. We cannot take any risks, for if we did not adopt a rigorous attitude towards it the disease might spread more widely. That is the only reason why we are so rigorous. I would assure the hon. Member we have no desire to make things difficult. Our only wish is to help the farmers and to stamp out the disease.
  I have tried to answer the hon. Member's points. We are really sympathetic with the problems of Wales. We await with very much interest the report of the Committee, and, naturally, we shall consider it with the utmost care when we get it. I assure the hon. Member that there is no question of our being anxious to give Scotland any preference over Wales in this matter. As an Englishman I can say that sincerely.
  The hon. Member quoted the question, "What has he got that I have not got?" I have heard those words used before in another context. A lady complained to her husband because he thought Marilyn Monroe looked better than his wife. His reply was, "She may not have more, but she knows how to group it better." Perhaps the Scots have learned something about that.
  Anyhow, I assure the hon. Member that Wales does get the advantages of the research going on in all other parts of Great Britain. We are, as I have said, anxious to help in any way we possibly can. My right hon. Friend will be giving very careful consideration to this problem after receiving the report. I am grateful to the hon. Member for raising the matter; I think that he has done a valuable service in doing so. My reply, I hope, will show him we are genuinely interested in the problem.
  Question put and agreed to.
  Adjourned accordingly at three minutes past Eleven o'clock.

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Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

  ALCOHOL AND ROAD ACCIDENTS
  2.35 p.m.
  LORD MATHERS: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government whether the report on the experimental work in connection with drink in road accidents carried out under the auspices of the Committee appointed jointly by the Medical Research Council and the Road Research Board has been published; what action is contemplated regarding it, and when will this be taken.]
  THE MINISTER WITHOUT PORTFOLIO (LORD MANCROFT): My Lords, the report on the experimental work in connection with drink in road accidents, carried out under the auspices of the Committee appointed by the Medical Research Council and the Road Research Board, is in course of preparation and will be published as soon as possible. Some delay has been caused because the interpretation of part of the data is proving difficult. It will describe some experimental studies of the effect of small doses of alcohol on human reactions relevant to motor driving. I cannot at present say whether it will provide a basis for administrative action, but I have no doubt that as soon as it is received it will be given careful consideration by the Ministers concerned.
  LORD MATHERS: My Lords, while thanking the noble Lord for his Answer, which seems to take us a little further than we were on June 26 when I last raised this matter, may I ask him whether he considers his Answer indicates the importance of the subject and also whether he will bear in mind the vital necessity of getting action on this matter,
  296
  which should be looked upon as one of urgency?
  LORD MANCROFT: My Lords, my Answer does indeed indicate the importance which Her Majesty's Government attach to this matter. I am sorry that there has been some delay about it, but apparently it is not possible to confine research within a rigid timetable.
  LORD LUCAS OF CHILWORTH: My Lords, does the noble Lord appreciate the great anxiety of many people in this country who are interested in this problem? Might I ask him whether he is aware that your Lordships gave great attention to this matter in the passage of the Road Traffic Bill through this House, when the penalty for, and the whole conception of, being drunk in charge of a motor car was altered? Will the noble Lord be good enough to tell us whether he will make a special effort to see if it is possible for statistics to, be produced from the Home Office, even though this Act has been in operation for only twelve months, to find out whether any of the ideas put into the Bill by your Lordships' House have had a beneficial effect?
  LORD MANCROFT: My Lords, I will certainly try to obtain those figures for the noble Lord.

  GRANTS TO BRITISH COUNCIL AND ARTS COUNCIL
  VISCOUNT ELIBANK: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government if they will state (1) the amounts of the grants from the Exchequer to the British Council in the financial years 1954–55, 1955–56, and 1956–57, respectively; and (2) the amounts of the grants from the Exchequer to the Arts Council in the same financial years.]
  LORD MANCROFT: My Lords, as the information about Exchequer grants to the British Council and to the Arts Council for which the noble Viscount asks consists of a number of figures, I will, with the permission of the House, circulate them in the OFFICIAL REPORT.
  Following are the figures referred to:

  —

  1954–55

  1955–56

  1956–57*

  British Council

  Grant-in-Aid

  …

  1,675,000

  1,720,400

  2,187,650

  Repayments of Net Expenditure incurred on behalf of:—

  (a) Colonial Office

  …

  485,009

  555,497

  572,037

  (b) Colonial Development and Welfare

  …

  119,989

  97,087

  101,488

  (c) Commonwealth Relations Office

  …

  328,300

  375,459

  391,473

  2,608,298

  2,748,443

  3,252,648

  Arts Council

  …

  785,000

  820,000

  885,000

  *N.B.—The 1956–57 figures are taken from the British Council account, which has not yet been agreed by the Comptroller and Auditor-General.

  VISCOUNT ELIBANK: My Lords, I wish to thank the noble Lord. I will study the figures when I see them in the OFFICIAL REPORT. May I ask the noble Lord this Question? As there is only a certain amount of money to go round, will Her Majesty's Government consider—and I am only asking them to consider—some pruning of the sum spent by the British Council abroad on drama, music and the visual arts, in order to provide a 25 per cent. increase in the money available to the Arts Council in this country, which would enable the Arts Council to support in adequate fashion the essential needs of the Arts in this country?
  LORD MANCROFT: My Lords, if my memory serves me right, only about 2 per cent. of the total expenditure of the British Council goes on the Arts, and I doubt whether the juxtaposition which the noble Viscount requires would serve his purpose as fully as he thinks.
  VISCOUNT ELIBANK: My Lords, might I ask the noble Lord whether Her Majesty's Government would consider that suggestion? And may I further ask him whether it is not of primary importance that the present level of the fine arts in this country should be maintained? Otherwise, in the long run there may be a general lowering of standards all round, both in this country and for export.
  LORD MANCROFT: My Lords, I most cordially agree with the noble Viscount, but that does not alter the fact that I think he is slightly confused about the objects of the British Council and the Arts Council.
  VISCOUNT ELIBANK: My Lords, I certainly am not.

  BUSINESS OF THE HOUSE
  THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, I believe my right honourable friend the Postmaster General is going to make in another place a statement in which I believe your Lordships might be interested, and I will ask my noble friend, Lord Chesham, to make a statement at the same time in your Lordships' House. Although I do not know for certain, I believe I might have a statement to make on questions raised in another place yesterday concerning the bank rate. If so, I will take an opportunity of making that statement at about 3.30.

  MATRIMONIAL PROCEEDINGS (MAGISTRATES COURTS) BILL [H.L.]
  THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I beg leave to introduce a Bill to consolidate the Summary Jurisdiction (Separation land Maintenance) Acts, 1895 to 1949, and related enactments with corrections and improvements made under the Consolidation of Enactments (Procedure) Act, 1949. I beg to move that this Bill be now read a first time.
  Moved, That the Bill be now read 1a. (The Lord Chancellor.)
  On Question, Bill read 1a, and to be printed.

  PESTS ACT, 1954 (AMENDMENT) BILL [H.L.]
  LORD DYNEVOR: My Lords, I beg leave to introduce a Bill to amend the Pests Act, 1954, in respect of the spreading of myxomatosis. I beg to move that the Bill be now read a first time.
  Moved, That the Bill be now read 1a.—(Lord Dynevor.)
  On Question. Bill read 1a, and to be printed.

  ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
  2.43 p.m.
  Debate resumed (according to Order) on the Amendment, moved yesterday by Viscount Hall, to the Motion for an humble Address moved on Tuesday, November 5 by Earl Waldegrave. The Motion was, That an humble Address be presented to Her Majesty as followeth:
  "Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal, in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."
  To which Viscount Hall had moved, as an Amendment, to add the words:
  "but humbly regret that the proposals in the gracious Speech are wholly incommensurate with the urgency of the problems facing the country at this time in the sphere of home affairs."
  2.44 p.m.
  LORD WISE: My Lords, to-day, on the last day on which we shall discuss the humble Address to Her Majesty, we are to deal with the question of agriculture. It is not possible within a short speech to make a complete survey of the agricultural position, but I want to deal with one or two points which arise from the reference in the gracious Speech to agriculture. This year there appears in the gracious Speech the statement of a definite intention on the part of Her Majesty's Government to amend certain provisions of the Agriculture and the Agricultural Holdings Acts. This is somewhat of a departure from the general
  300
  reference to agriculture which has appeared in Speeches from the Throne over the last few years. It may prove a very important departure indeed.
  In moving the humble Address of thanks to Her Majesty, the noble Earl, Lord Waldegrave, welcomed the pledges of the Government to support British agriculture. He said in the course of his very interesting speech many true things with regard to the agricultural industry. He expressed the view that those engaged in agriculture were casting nervous glances over their shoulders to see whether they were being overtaken once again by the disasters of thirty years ago, during the period between the Wars. I think he was right to remind us of those bad old days, not only for agriculture but for the country as a whole. He was right also to call the attention of Her Majesty's Government to the fact that those engaged at the moment in the agricultural industry are nervous and apprehensive of the future. Indeed that is so, and perhaps our eyes and our thoughts are centred more on the present and the future than they are on the past. We in the industry, and possibly those outside, cannot see the way ahead clearly, and Her Majesty's Government in the gracious Speech have not helped us very much. In other words, they have not improved that vision but made it more obscure.
  No one can say at the moment where the agricultural industry is going or where we in the industry shall end. Uncertainty in many ways is coming once again to us, and the stringent nature of our time darkens our outlook and our prospects of maintaining prosperity in that greatest of all our national industries. The usual platitude of support to agriculture is included in the gracious Speech, as it customarily and always is, but at this moment assurances are insufficient and action will have to be taken if our high-level production and efficiency, and the well-being of those engaged in the task of growing food for home consumption, are to be maintained.
  Two other agricultural matters were touched upon by the noble Earl. He referred to the good record of the industry, unsurpassed by any other, with good labour relations, increasing productivity and non-partisan legislation. He hoped this proud record would long remain untarnished. I heartily agree. Again he

  301
  expressed his view (and I must apologise to the noble Earl for making these references to his speech; I am sorry I did not give him notice and I hope he will not mind) that the Agriculture Acts of 1947 and 1948 were the most far-reaching and fundamental of agricultural legislation. He never said a truer word. He was right to remind us of this fact, particularly at the present moment, and the reference in the gracious Speech to these is of very great importance.
  Her Majesty's Government tell us that
  "Legislation will be introduced to amend certain provisions of the Agriculture and Agricultural Holdings Acts …"
  In speaking in the debate on the Address, in another place, the Prime Minister said the Government had decided to repeal the disciplinary provisions of the Agriculture Act, 1947, and would take an opportunity to amend the existing provisions dealing with the security of tenure to tenant farmers, and considered clarifying the statutory guidance to agricultural rent arbitrators. I am sure that all who are actively engaged in the industry are anxious to know exactly what the Government's intentions are, and I hope the noble Earl who is replying to this debate will be able to elaborate, if possible, the statement of the Prime Minister.
  It would seem to me that Part II of the Agriculture Act, 1947, is in jeopardy. If this goes, one of the fundamentals—as referred to by the noble Earl—disappears, and the foundations on which the Act was brought into being crack and eventually decay. Parts I and II of the Act, noble Lords will remember, are tied together. The first provides for guaranteed prices and assured markets—both, unfortunately, more or less unknown under present conditions and under the present Government. The second deals with good estate management and good husbandry. We cannot hope to achieve this without the assistance which guaranteed prices and assured markets cart provide. Nor are we justified in spending State money by way of subsidies and support prices unless the nation can be assured that the rules of good estate management and good husbandry are recognised and practised.
  The Prime Minister also referred to the disciplinary provisions. When the Agriculture Act was being considered in another place in 1947 there was complete co-operation, consultation and agreement
  302
  between the Government of that day and the representatives of the main interests concerned—namely, the Country Landowners' Association, the National Farmers' Union and the National Union of Agricultural Workers; and a pledge was given at that time that if Part I of the Act was rightly implemented then, in the interests of the nation and of farming, Part II would be operated. And the same applied in reverse: the two Parts must stand together. And it has been so; both Parts have been operated, and the working of Part II has had a very beneficial influence upon the rate of our production and in increasing the efficiency achieved by the industry. The Minister shakes his head, but I am certain that that was the effect of Part II. I do not think I stand to be corrected in this. I am certain that the operation of Part II has made it possible for many farmers who would not have produced at a high level to achieve the result which we required them to do. I am not talking of dispossessed farmers: I am talking of those farmers who have been advised and helped in many ways by the county agricultural executive committees.
  Part II was never intended to be a vicious or penal operation. Bearing out what I have just said, it was enacted for the help, guidance and assistance of those in need of such. Comparatively few dispossessions of either landowners or occupiers have been necessary, or have taken place, and the county agricultural executive committees have carried out a difficult and sometimes unpleasant task in a tolerant and even generous spirit. I wish at this point to give a measure of praise to those members and officials of the county agricultural executive committees who have worked so well during the ten years or more they have been in operation. As a nation we must make the best possible use of our land, and as a farming community we are anxious that all engaged in farming should give of their best and should seek to maintain our present high standard of soil cultivation and stock rearing. As farmers we are as critical of, and as distressed over, bad farming as anyone else in the community. A system of supervisory assistance and advice has come in; and in my opinion it should stay.
  A few moments ago I made a point about consultation with representative

  303
  bodies. I understand that both the Country Landowners' Association and the National Farmers' Union have expressed their disapproval of the Government's intentions. The National Union of Agricultural Workers have not been consulted. I wonder who advised the Government to take a step which cannot be acceptable as being in the national interest. I hope that the Government will go very warily before they seek to amend the main provisions of the Agriculture Act, 1947. The Prime Minister's reference to amending the provisions for security of tenure will frighten a great many tenant farmers.
  I think we should ask whether it is intended that we should go back to the days of wholesale notices to quit, with small disturbance compensation, so that farms can be sold with vacant possession at high prices. If this is so it is a very serious proposal, and I wonder who is responsible for it. The Agriculture Act safeguarded the rights of a tenant to remain in occupation, provided that his farming ability and his financial status were approved by those in authority. If security of tenure goes, as well as the proposed demolition of Part II of the Act, that greatest of all Agricultural Acts will become virtually a dead letter. Does any noble Lord on the Benches opposite want that to happen? I am pretty well certain that everyone who is engaged in agriculture would regret the day that the Agriculture Act of 1947 became a dead letter.
  In my view the industry should be warned about the position which confronts it, in view of this one small paragraph in the gracious Speech. The Government, unfortunately, in my opinion, are still thinking in terms of a "free-for-all" agricultural policy. Noble Lords will have seen articles which have appeared in the farming Press during the last few days, signifying, in my view, that there is a feeling of disquiet within the industry. One particular editorial, which deals with the question of wage and similar claims, may be referred to. The industry is facing additional wage costs. It will also have to bear, in the immediate future, heavy additional costs in connection with national insurance, and here is a matter to which I think I should call the attention of noble Lords.
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  These additional costs cannot be passed on in the prices which the farmer receives for his commodities. The additional cost to farmers in respect of the National Insurance contributions of themselves and their employees will probably be in the nature of £5 or £6 million a year. The farmer also has to meet additional bank charges and increasing costs all round as a result of the raising of the bank rate—higher costs which are passed on in prices by other industries. His disadvantage is very apparent. What are the Government prepared to do? Will they repudiate the workers' claim for higher wages? If they do that, I think that it would be a deplorable action and a great calamity to the industry. Will they say to the farmer at the next February Price Review, "We will not reimburse your additional costs," and impose upon him the price cut of 2½ per cent. which was considered in the last Review? That is the position in which we find the industry at the present time.
  I want to call your Lordships' attention to the serious cereal problem. The markets are flat, prices are low and difficulty is being experienced in moving and caching grain already threshed. Buildings and stores, cart sheds and the like, are full of barley and wheat which cannot be moved by the merchants or by the farmers. Money is tight and is required by both. Can the Government do anything to relieve this unsatisfactory state of affairs? Is there some solution at which they can arrive and by which this heavy load of corn can be moved and sold?
  A few days ago the amount of the first deficiency payment on wheat was announced. It will amount to a total of £5¼ million, at a rate of approximately 7s. 8d. per cwt., which is equivalent to £7 14s.-odd per ton. Payment is to be made on approximately 6·8 million cwt. Last year the first payment was on a quantity of 8·8 million cwt. and amounted to £2 million, as against £5¼ million this year. That payment was at the rate of approximately 4s. 6d. per cwt., or £4 10s. a ton, as against the present rate of £7 14s. In my view this shows the trend of present home-grown wheat movements and prices, and it is significant in this way: that the lower the price, the greater

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  the payment by the Exchequer and, bearing out what I say about the barns being full of grain, less wheat has been moved for sale after harvesting this year than last year. Again, as a result of the increased wheat deficiency payment the Exchequer may have to bear a heavier wheat payment this year than last. Who gains by these additional payments? Does the nation gain? Do the consumers gain? Do the farmers gain, or do the merchants gain?
  VISCOUNT ALEXANDER OF HILLSBOROUGH: Or the millers?
  LORD WISE: I forgot the millers; I will put them in for luck. I leave it to noble Lords to decide for themselves who are the gainers; I think that many of us realise who, in fact, do gain.
  I want now to say a few words about horticulture. A few days ago I received a letter of doubt about the future of horticulture in the arrangements to be made in connection with the European Free Trade Area. I have already made reference to agriculture and forestry, and we who live on the borders of the fen country know the problems which confront some of our horticulturists. From the letter I have received from the fen area, it appears that horticulturists are perturbed and suspicious about what is to happen, to their industry under the new arrangements, if they ever come into operation.
  Where are we going? Those of us engaged in agriculture have to contend, and can contend, with the natural difficulties of our industry. We have to suffer from pests and weather conditions—and in the last few days those farmers who have been working on sugar beet have suffered indeed from weather conditions; we suffer from crop failures, stock casualties and disease. All these are sufficient in themselves for one industry. We do not wart also to suffer without reply the high costs of the things we have to buy and of the money we have to borrow; low prices for our commodities; the extraordinarily bad marketing conditions; insecurity of tenure and unhealthy foreign competition. We hope that the time will come when all these will be things of the past. l hope that the Government will act very cautiously here, and, bearing in mind the possible curtailment of the Agriculture Act, that they will not tinker with it so as to undermine the structure of the
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  industry on which alone our prosperity can be safeguarded. We are all concerned—landowners, farmers and farmworkers—and I hope that nothing will be done to shake the confidence of the producers in the fair deal from the nation which they have a right to expect.
  3.9 p.m.
  EARL FERRERS: My Lords, we are in the fifth day of the debate on the Address in reply to the gracious Speech, and despite the many references which have been made to Her Majesty I feel that I must add my humble thanks that we should have so gracious and so charming a lady at the head of our nation. In this respect we are the envy of countless thousands of people, and it behoves us well to remember that. The charm and dignity with which Her Majesty and her husband conduct their affairs is the inspiration not only of us who are privileged to be her subjects, but of those of other free countries of the world.
  I wish to refer at the outset to one part of the gracious Speech to which the noble Lord, Lord Wise, has already referred. The gracious Speech states that:
  "Legislation will be introduced to amend certain provisions of the Agriculture and Agricultural Holdings Acts …
  We do not know exactly which provisions are to be amended, but I hope, as I indeed believe, that Sections 16 and 17—and particularly paragraph 1 (b) of Section 17—will be among those which will come under review. Those sections deal with dispossession of owners on account of bad estate management or bad husbandry. I believe that this principle is intrinsically wrong. Over the past eighteen months we have seen a clear example of the operation of these sections in the eviction of Lady Garbett from her farm in Sussex. In my opinion that was an act of wicked bureaucracy. I do not say that the Minister was wrong, but I do say that the law was wrong. I should like your Lordships to realise, however, that any observations I may make refer not to that one particular incident but to the whole basis on which those two sections operate; I use the example of Lady Garbett only as a typical result of the way that they operate. To my mind, it cuts right across the very basis of human freedom that an owner, an individual person, should be thrown out of his or her own property because somebody determines that he or she is not

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  looking after that property to a sufficiently high standard.
  There are many plausible reasons—the noble Lord opposite has just given us some of them—why Sections 16 and 17 should be retained. The noble Lord has said, as indeed is always said, that if the taxpayer is to provide support for the agricultural community, he must, in return, expect a reasonable standard of farming from the farmers. In principle I would agree with that; but in practice I disagree with it. Democracy is a very fine thing and something that we all treasure, and we might agree that it is through the principles of democracy that our agriculture has been supported. But the greatest danger that lies in democracy—and it is one against which we should for ever be on guard—is the possibility of its transition into bureaucracy. Bureaucracy is the curse of the individual.
  I believe it to be fundamentally against the basic interests and basic principles of freedom that in peace time a person should be thrown out of his own property. That is a cry which the Party that noble Lords opposite support invariably produce on behalf of the tenant against the landlord. But if it is wicked for a landlord to throw out a tenant, surely it is criminal for a Government to throw out an owner. However, I do not believe that we need worry ourselves for fear that there will be many farmers farming badly, yet living riotous lives and "growing fat" on the superfluity of Government grants. I have yet to find it possible to "grow fat" farming to the best of one's ability. I know that the 1947 Act is the "baby" of the Labour Party, and they feel that it has given agriculture such confidence that it must never be touched. It is true that it has given agriculture great confidence; but it is not sacrosanct; and if it is possible to improve the Act, the Government should not hesitate to do so.
  I said that one must guard against the encroachment of bureaucracy, and I believe that to be true both in our everyday life and in agriculture. I should like to give your Lordships a few examples of the encroachment of bureaucracy into agriculture. I know of an individual, highly respected (I do not know whether he is highly paid, but he certainly should
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  be) and a highly qualified member of the Eastern Area of the National Agricultural Advisory Service who is required to sign the book at 8.30 each morning to show that he has reported for work; and there are many others in a similar position. Your Lordships may consider that a rather insignificant matter to bring forward, but if your Lordships will bear with me, I will endeavour to show how dangerous it is.
  A highly qualified, highly respected individual, holding the equivalent of an executive position, is paid to do a job of work. If he is going to be made to "clock in" at 8.30 in the morning, the natural and obvious corollary will be that he will "clock out" at 5 o'clock in the afternoon. Surely, these people must be paid to do their job of work, and not be paid for an eight-hour day. It is this type of petty bureaucracy that destroys the initiative, the individuality and, indeed, the responsibility of people who have to work with it. If I may coin a rather vulgar word, one might call it an encroachment of "oculo-schizophrenia", which, being interpreted, means split eyes—one on your work and one on the clock. That, to my mind, is a particular aspect of our nation which we see only too often nowadays, and it is one which fundamentally destroys interest.
  I have even been sufficiently unfortunate to witness a most incredible piece of bureaucracy. I once saw a circular that had been sent to the Norfolk Agricultural Executive Committee, and, frankly, it was enough to make a strong man weep. It said that, in the interests of economy, pins and paper clips were to be cut by 50 per cent. It is incredible to think that any business, any institution, which is supposed to be run on reasonably sensible lines could ever tolerate such utter rubbish as that. One may laugh; but my point is this—and it is a serious one: it is this dreadful encroachment of bureaucracy that is undermining not only the work but also the morale of the people who work in the Agricultural Advisory Service and in other departments of the Civil Service connected with agriculture. I would ask the noble Earl, Lord St. Aldwyn, to take this matter seriously, and I should like him, if he would be so good, to give an assurance that he will look into the extent of the encroachment of this bureaucracy and

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  give us some idea whether it is, in fact, as bad as to me it appears to be.
  There is one other point that I should like to mention, and I do this, I confess, with a certain amount of trepidation, because I once remarked to a noble Lord that there was to be a debate on agriculture the following day. From his rather palsied reply I gathered that he was not very interested. When I asked him whether he was in fact interested, he said, "The trouble is that whenever there is a debate on agriculture noble Lords always seem to reach for the money, and they all say that their particular aspect of farming requires a greater subsidy than another." He capped it by suggesting that it was a little undignified. At the risk of being even a little more undignified than is my normal habit or, indeed, at the risk of resembling a character from a Fougasse cartoon, I should like to mention one particular aspect of subsidies which I feel has room for improvement.
  Contrary to what many people believe, farming is not such a prosperous industry as it used to be.
  A NOBLE LORD: Come over here!
  EARL FERRERS: No, not yet. However that may be, to a large degree the farming industry is reliant upon the subsidies which are given to it. My point is that there is a very poor correlation between the amount of subsidy that is given, when it is given, and the harvest to which it refers. To give an example, on October 28, 1957, the agricultural workers' wages were increased. We are told that that increase in cost is to be taken into account in the February Price Review of 1958. That refers to the harvest of 1958, and the barley harvested in August. 1958, will receive its subsidy, its deficiency payment, in September, 1959. 'Therefore farmers will not have the full recoupment of the cost of the increase in wages which has just taken place until two years have elapsed, by which time they will have had three more wage claims. So where are we?
  Although the Government and other interested bodies tell farmers that their costs are to be recouped in the next February Price Review, the farmer has come to take that as meaning very little.
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  In other words, he has to find the extra increase of money himself.
  SEVERAL NOBLE LORDS: Hear, hear!
  EARL FERRERS: It is all very fine for noble Lords opposite to say "Hear, hear!"—I am glad they agree with me. But the point is that if the farming industry is to expand and increase, there must be some more immediate correlation between the increase of costs and the increase of subsidies. I should be grateful if the noble Earl would give that aspect a little thought and see whether it is possible to avoid these great lapses of time, particularly with reference to the cereals deficiency payments.
  3.25 p.m.
  LORD DYNEVOR: My Lords, I find it a little difficult to follow the noble Earl who has just spoken in his strictures on the procedure in cutting pins and papers by 50 per cent. I should have thought that he would have enjoyed that experience, because if all bureaucracy could in fact be cut by 50 per cent., there might be one shilling off the income tax.
  EARL FERRERS: My Lords, if the noble Lord will pardon, me for one moment, I think he will agree that to take one shilling of the income tax you would have to save a considerable quantity of pins and paper.
  LORD DYNEVOR: I think the noble Earl did not take my point, which was that it was a beginning and that if bureaucratic expenses could be cut all through by that amount, then we should be able to see that reduction in taxation.
  We have had a good many debates on agriculture just lately, and no doubt when measures are brought before the House to implement the undertakings that have been given we shall have a few more. But agriculture is timeless and farming is timeless, and it can never suffer from having the problems which beset it ventilated from time to time. Perhaps the most interesting feature of the present day is that the policy of noble Lords belonging to the Party opposite—and I believe it to be their official policy—is rather not to nationalise the land. Not long ago we had a by-election in the county in which I reside, and the official speakers of the Opposition—and I am bound to

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  say they won the seat—went about promising the farmers of Carmarthenshire that land nationalisation was not in the Labour programme. If that is the case, it would be right that it should be known to the full.
  I am encouraged by it, because in the speech of the noble Lord, Lord Wise, he referred in kindly and generous terms to good estate management and the good handling of husbandry by private enterprise. It would be a great thing for agriculture if it could feel that it is not to be torn between the Scylla and Charybdis of private enterprise, on the one hand, and nationalisation, on the other, but will be free to proceed with its plans—and they have to be long-term plans. It would be interesting if the noble Viscount who is to reply for the Opposition could give us some indication of the intentions of the Party opposite should they win the next General Election.
  A few minutes ago your Lordships generously gave me permission to introduce a Bill dealing with the return of the rabbit. I will not on this occasion spoil what I hope will be a good Second Reading speech, if I am fortunate enough to be given time in this House to make it, by saying any more about the return of the rabbit, except this: it is a very serious problem and a serious pest. My Bill, which perhaps will be in your Lordships' hands to-morrow morning, is a bigger and better Bill than the one I introduced last summer. Its most important provisions will be to allow the artificial spreading of myxomatosis, if required, and I am adding to the Bill a provision to make it illegal to sell wild rabbits' skins and carcases in the shops. I say no more now than that I am not at all sure that the second provision is not going to be more effective than the first, if it ever became law. I leave that matter now until the Second Reading debate, which I hope may take place before too long.
  All the speeches of noble Lords have drawn attention to the three main promises that have been given by the Prime Minister lately in connection with agriculture. If I might summarise them at the risk of repeating what was said by the two noble Lords who have already spoken, these are the three main points: the repeal of the disciplinary measures under the 1947 Act; the amendment of existing provisions for the
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  security of tenure of tenant farmers, and the clarifying of statutory guidance to arbitrators in fixing farm rents.
  May I discuss those three points very briefly, in order? The question of the repealing of the disciplinary measures in the 1947 Act is all very well so far as it goes, but, unlike the noble Earl who has just spoken. I take the view that if farmers receive large agricultural subsidies from the State, the least that the taxpayer can expect is a reasonably good standard of farming in return. Up to now so far as estate management is concerned it has always been possible in the case of bad farming to apply to the county agricultural committee, either for a supervisory order or, in an extreme case, for an eviction. I happen by good fortune to be the tenant for life of a reasonably large agricultural estate, and I am happy to say that so far as I am concerned the relations between the estate and the tenants are always excellent. because we try to row together; and if it so be, in certain very infrequent cases, that the standard of farming is allowed to decline, a friendly visit and friendly talk generally does the trick. So far as I am aware no question of appeal to the agricultural committee or eviction has ever arisen. That is a point that is very important.
  But that only touches the fringe of the problem, in my submission, because by far the greater number of farm holdings in this country are not owned by the tenant of a landlord; they are owned by the farmer himself; he is the landlord, and there is no supervision whatsoever except his own good will and, hitherto, of course, the discipline of the agricultural committee should the bad farming become too apparent. I forget the exact figure, but the State pays something like £250 million to £300 million a year in agricultural subsidies of one sort or another, and, as I say. I do not think it is the least unreasonable that some return should be made.
  The second point is about security of tenure. Security of tenure is now pretty well absolute, and I do not think anybody would wish ever to see a return to the days when a landlord could evict his tenant at will. Security of tenure has meant in practice that the farmer has carried out great improvements to his own house and farm at his own expense

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  in the certain knowledge that unless he really fails to carry out the terms of his lease or really goes in for very bad farming he can stay there. As noble Lords will know, the only way at present that an owner can regain possession of his farm is either by voluntary surrender of it by the tenant, or by giving three months' notice to resume possession in the event of the death of the tenant.
  That, I think, has brought great satisfaction and contentment to the countryside, and I do not know the answer to my next proposition—that is, that security of tenure has gone so far that ii is becoming more and more difficult for young farmers to get a farm. I had a farm to let only two or three months ago and there were twelve applications for it. Ten of the applicants were under thirty-five years old, so it shows that there is, in my part of the country at any rate, a very considerable land hunger among the younger people. If you ask what the solution is; I do not know whether you can make an age limit or some other provision I do not know. I can only throw out the suggestion that in satisfying one side of the question you are making it very difficult for the other side to come along. If the discipline of the agricultural committee is to be abandoned—and here I should be grateful if the noble Earl who is to reply could tell us what is in the mind of the Government on this matter, because I have the feeling that there is more to it than the bare announcement we have already had—it will make it very difficult in estate management for the owner to have rigidly to enforce the terms of his lease or take his tenants to court. I very much hope it will never come to that.
  As regards the fixing of farm rents I have not much to say, except to remind Her Majesty's Government that the 1957 costs of repairs are extremely high. If it ever comes to the question of increasing rents, as noble Lords will know, a year's notice has to be given by Michaelmas in any one year in order for that increase to take effect in the following year. But there is one small point—I do not know whether l can expect the noble Earl to reply to it; it is more a Treasury matter. Although in farming there are certain substantial rebates obtainable under the income tax laws, for which agriculture is extremely grateful, is there any way in which they could take effect a little more
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  quickly? It takes such a very long time for maintenance claims and other claims to be passed through the Inland Revenue. If there were any way in which, for example, on January I or within a month you could claim straight away the rebates you will get in due course for the previous year, I believe it would be quite an encouragement to people to spend money, because by the time the benefit comes through you have forgotten what you spent the money on. Perhaps it is a matter for the Chancellor of the Exchequer, but maybe the noble Earl would be kind enough to draw his attention to it.
  The rural worker has just received another increase in wages, and I for one do not dissent at all. Provided it is possible to pay the money, I think the agricultural worker is as much entitled to the amenities of modern life as anyone else. It is plain that the actual scale of wage cannot be as high as the industrial rate, but in point of fact what is so often overlooked is that this is the basic rate and that in practice the actual wage packet taken home is a great deal more. The agricultural cottage in many cases is still rented at about 3s. a week, and I have noticed, as many of your Lordships have, quite a number of modern amenities in the countryside in the form of television masts and so on, and I am delighted to see them. In my own case we have carried through, just finished, a big scheme of modernisation of workers' cottages. Some are being held up because the South Wales Electricity Board will not bring the electricity, but the cottages are ready to receive it as soon as it comes. The young married woman, quite properly, is not going to take the old-fashioned agricultural cottage that looks extremely nice, with roses round the door and a thatched roof, but is extremely dark and insanitary inside, although of course beautifully kept by the occupant it means much harder work than when one has running water, nice appliances and all modern amenities.
  With the hope of education, the younger people wish to receive these benefits, and that brings me to just one more point in connection with education. At last I think the teaching profession is beginning to come away from the point of view that to be an agricultural worker is not to be as good or as grand or as smart as the industrial worker, and the

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  schools can do a great deal in that direction. If agriculture itself is provided with more up-to-date amenities I see no reason whatever why the younger people should not come into it. There are, happily, even in this mechanical age, a number of persons who do not want to work in a factory, who do not like the noise and the banging and the clanging but are much happier in rural surroundings. Good housing and good education are fundamental matters in connection with the agricultural industry.
  May I just turn for one moment to another aspect of the policy of Her Majesty's Government, and refer once again to the Report which was debated in your Lordships' House, although I think this part was never mentioned the Report on Forestry, Agriculture and Marginal Land, in so far as it affects Wales. I quote it really as an instance of the success of the policy of the Government, which I hope they will be able to continue and to expand, because in central Wales they are faced with a difficult problem in regard to rural depopulation. It is a trend that we should like to see reversed if it is at all possible.
  May I cite two or three small points to illustrate what I am saying? The rural development panel of the Council for Wales and Monmouthshire carried out a survey of a selected 300,000 acres in Cardigan, Montgomery and Radnor. That area, in round figures, was broken up like this: under tillage, 17,000 acres permanent and temporary grass, 64,000 acres; rough grazings in sole occupation (that is, by the small farmer) 180,000 acres; common grazings, 15,000 acres; forests, woodlands, other non-agricultural areas and inland water, 22,000 acres. The population in 1951 was 10,646, which works out at a little more than one person to 30 acres, compared with 12,000 in 1931—a drop of about 13 per cent. That is quite a severe reduction in rural population. There were, on the other hand, 25,000 cattle and calves in 1953 compared with 22,700 in 1931, an increase of 10 per cent. or so, and there were other figures of that kind. An interesting point is that there were 358,000 sheep and lambs in 1953 compared with 305,000 in 1931.
  That is an area where there is still vast potential development. The increase in
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  knowledge of grasses and so on enables the stock of sheep and lambs to be almost trebled; the operation of the Hill Farming Act has been of considerable advantage, and in these directions, when we are losing land at the rate of 50,000 acres a year for building and other purposes, it is most important that these outlying parts of marginal land should be developed to the fullest possible extent. If I commend the attention of Her Majesty's Government—if they need it to be commended, which I do not think they do—to these areas, it is because I believe there is still a great field for development, with its bearing on the foreign exchange in the sense that the less we have to import in the way of foodstuffs the less foreign exchange we have to find.
  Perhaps the noble Earl can say something on this, my last point, upon which I am not clear myself. To what extent will European free trade really affect the agricultural industry—and in that definition I include the word "forestry"? We are told that agriculture is to be excluded from European free trade, but I do not think that that exclusion applies to the timber industry. We are being encouraged in every possible way to replant our woodlands—by grant, by example and by encouragement from the Forestry Commission, who are extremely helpful; but if European free trade is really going to hurt the price of timber in this country, I fear that some of those efforts may be brought to naught. I ask for information on this point only because I do not really know myself. My Lords, on those points to which I have endeavoured to draw the attention of your Lordships, I await the reply of the Government.
  3.45 p.m.
  THE EARL OF SWINTON: My Lords, I would intervene for only a few moments on the Amendment moved yesterday by the noble Viscount, Lord Hall, and I do so after hearing yesterday's debate, the appeal made by the noble Viscount, Lord Hall (a very old friend and colleague of many of us), which moved me, and also because of a suggestion made by my noble friend Lord Salisbury. I think the noble Marquess was led to make that suggestion by a sort of feeling that we all want to get together; that we all realise we are facing a difficult situation, and yet it seems a little doubtful whether on either side we know just where we are going. Let me say about that particular

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  suggestion, which, if I understood the noble Marquess aright—and I have reread his speech—was that in deciding on wages in industry, whether by arbitration, or conciliation, no one takes into account the general interests of the country, or even the particular interest of the consumer, that there is a certain amount of truth in that suggestion, but at the same time I should have thought that it was the duty of the independent arbitrator to pay some attention to those matters.
  But I come to the particular remedy which the noble Marquess proposed, which was this: that because it is so important that the general interest, the general world situation, particularly the interests of this country as a whole, should be taken into account, all wage awards should be referred to a Minister, should have his imprimatur or his dissent, and should then be subject to debate in Parliament. I am bound to say that I could not possibly agree with that suggestion, and I am not sure that, on reflection, the noble Marquess would press it. Let us accept at the value he put upon it the failure of arbitration hoards to take the wider view. But is his proposal really the way out? As noble Lords opposite know, I have never taken an academic view on nationalisation. On the whole, I have thought that nationalisation was a bad policy for most industries because it eliminated competition; there was no yardstick of comparative efficiency to which one could work, and so on.
  But I always felt one objection to nationalisation more than anything else: that in all industrial relations in what is still, next to America—I leave out Russia—the greatest industrial country in the world, it is tremendously important that the State, the Government. Parliament, should stand aloof from the day-to-day management and affairs of industry and should therefore be able, when it became necessary, to represent the common interest and speak for the nation as a whole. For that reason, I felt that nationalisation, leaving aside its economic merits or demerits, presented one great danger—namely, that the moment the State, in effect the Government, became the owner of a great basic industry and the employer in a great basic industry, then the Government themselves, by becoming the employer, became involved in every industrial dispute, became both employer
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  and judge, and there was no sort of court of appeal outside it. In short, the Government abdicated their impartial and national function.
  It was exactly to meet that danger that we all agreed (I think it was common ground between all three Parties) that, if we were to have nationalisation, we must remove an industry which was nationalised as far as possible from the individual control of a Minister, and must place it under some board which would be independent and would work in its labour relations in the same way as employers in ordinary industry would work, and that the Minister would come in only in the last resort. If that is right—and I still think it is—surely it cannot be a solution of our present difficulties to make the Minister himself not only the employer in the nationalised industry but also the dictator and arbiter in wages disputes in every industry; and there are not only wages disputes, for many disputes concern not only wages but details of employment within an industry. I believe that it cannot be right to refer all this to the Minister, to the intense embarrassment of the Minister himself—and, if I may respectfully agree with the noble and learned Viscount the Lord Chancellor, this applies whichever Party is in office—and the almost equal embarrassment of the Opposition who, because they are an Opposition, have almost as a matter of course to take the opposite line.
  I do not think therefore that the solution lies along those lines. At the same time I was impressed, as the noble Marquess, Lord Salisbury, was—and as I believe all of us are, in Parliament or in the country—with what I said at the beginning was the feeling: that somehow or other we have to get together over these things "which belong unto our peace" and our salvation, and on which, if we go wrong, we may go wrong for all time. Yet it would seem we have nothing to bring us together. I am not quarrelling about what has been said by spokesmen for Her Majesty's Government. For my part I believe that a very great deal that has been said is absolutely right and that the economic situation is as serious as they say it is.
  At the same time I can well see the pressure upon trade unions and trade union leaders who, after all, must have the interests of their clients at heart. So

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  that, while we all have the feeling that we must get together, we seem somehow to be drifting further apart. Reasonable things are said by Her Majesty's Government on economic dangers, and on the other side there are wage claims, some of which merit careful consideration. But what is to bring us all together? It has been my experience that it is often difficult to get together about general principles, except perhaps at some international conference, where the only thing that ever comes out is some formula which means very little and is a kind of lowest common denominator on which everybody can agree. That will not be any good here. I believe that if we are really to come together we must have a concrete plan.
  That leads me to this comment. A very old friend of us all, a colleague of many of us in the National Government under Sir Winston Churchill, and of others of us in the Conservative Government which Sir Winston headed, Lord Chandos (Mr. Oliver Lyttelton as he then was), who, apart from the few—too few—years during which he was a Minister, has been all his life a very able industrialist, has made a concrete suggestion. That is that throughout industry there might be an annual offer of a 2½ per cent. increase in wages, with a condition with which I believe most people on both sides of the House would sympathise, and which many practise; that there should be a longer term of notice, or security of tenure, for those who have been longer in the business. I believe that that is very important, because although security of tenure may not mean much when there is over-employment and a man can get work anywhere, that position may not go on for ever. I believe that security of tenure is more important in industry than it is in farming, but that aspect was almost a sideline of the noble Lord's proposal. The main proposal asked, in
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  effect, could we not agree that, with this so-called "standstill," we could go forward together, in a combined effort, without further wage claims on either side, except for minor adjustments, for, say, five years, and this links up with the idea of Her Majesty's Government that increases in wages should be compensated by increased production.
  After all, as the Lord Privy Seal said in a debate in another place, we have lately shown a remarkable increase in output, and it is not unreasonable to suppose that, taking industry broad and large (though some industries will not do it), this 2½ per cent. increase ought to be on an average, year by year, a not unreasonable increase in productivity to assume. In return for that increase in productivity every workman in industry would know that he was guaranteed that, year by year, there would be a 2½ per cent. increase on his basic wage or earnings. I do not think that is unreasonable.
  I would not ask your Lordships to commit yourselves to that unconditionally without further consideration, but I do want to put this thought to the House to-day. Neither side has concrete proposals to put forward. It is much easier to meet over a concrete proposal. Could not that suggestion of the noble Viscount, Lord Chandos, be taken as a basis on which both sides—though I do not like that expression "both sides"; all who are interested in this: Her Majesty's Government, the Opposition, employers and trade unions—can come together for discussion as to whether out of that proposal, could not come some result so that, instead of drifting wider apart, we might get together and see whether we cannot find, starting with that idea as a basis for discussion, something on which we can go forward, to the mutual advantage of everybody in industry and to the great benefit of this country and the world?

  THE BANK RATE INCREASE
  4.0 p m.
  THE EARL OF HOME: My Lords, as I indicated at an earlier stage, the Prime Minister has just made a statement in another place which I should like to repeat to your Lordships:
  "Yesterday certain Questions were put to my right honourable friend the Chancellor of the Exchequer concerning an allegation that there had been a leakage of information regarding the intention to increase bank rate. My right honourable friend was asked to say what individuals he saw on the day preceding the increase in bank rate. He took the view that it would be contrary to precedent and damaging to the conduct of public business to disclose the confidential discussions which are frequently held in advance of an announcement of Government policy; and he therefore declined to give the information sought. But in view of the interpretation which has been placed on his replies I have decided, with his full concurrence, that this information should be given on this occasion.
  "I wish to say at once that I have the categorical assurance of my right honourable friend that in the interviews to which I am about to refer nothing was disclosed about the intention to increase hank rate. But, apart altogether from bank rate, the Government were about to announce a number of important measures for dealing with the economic situation, including the limitation of bank advances, control of the money supply and the adjustment of public investment. These measures must inevitably have wide repercussions on wages, profits and many other sections of the economy. It was both necessary and normal that the presentation of these measures to the public should be discussed in advance with a number of interested persons, including certain representatives of the Press, Accordingly, in a series of separate interviews during the afternoon of the 18th of September, my right honourable friends the Chancellor of the Exchequer, the Minister of Labour and the Minister of Power explained these measures to representatives of certain of the nationalised industries, to representatives of the Trades Union Congress and the British Employers' Confederation, to representatives of certain newspapers and to Mr. Oliver Poole, the Deputy Chairman of the Conservative Party.
  "I wish once more to say that I have been assured that in none of these interviews was any disclosure made of the intention to increase bank rate. I accept those assurances. Moreover, full information about these interviews was placed before the Lord Chancellor in the course of the inquiry which he made at my request and, as the House will remember, he reached the conclusion that there were no grounds for further investigation. No new evidence of any leakage of information has been adduced.
  "But in the course of the supplementary questions yesterday imputations were made—or at any rate implied—on the honour of my
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  right honourable friend the Chancellor of the Exchequer and against the character and probity of Mr. Oliver Poole. These are serious imputations, and my right honourable friend and Mr. Poole have both represented to me most strongly that they should be given an opportunity to rebut them. Mr Poole, who is no longer in a position to defend himself in this House, has sent me a letter, which I will circulate in the OFFICIAL REPORT, asking that an inquiry should be held for this purpose. In the circumstances which have now arisen I have decided that this is now the right course to take. Therefore I shall tomorrow move in this House and my noble friend will move in another place for the setting up of a Tribunal of Inquiry under the Tribunals of Inquiry (Evidence) Act. 1921. Notice of motion will be given under the usual procedure."
  Following is the letter from Mr. Oliver Poole:
  "47, Parliament Street,
  Westminster, S.W.1.
  13th November, 1957.
  Dear Prime Minister,
  I am deeply disturbed by the use of my name in the House of Commons under cover of the absolute privilege accorded to Members of Parliament to which in the natural course of events I have no opportunity to reply, or to make my position known.
  I now wish to state categorically that while, as I disclosed to the Lord Chancellor, I saw the Chancellor of the Exchequer on the afternoon of Wednesday, 18th September, I at no time received any prior information relating to the increase of the bank rate either from the Chancellor of the Exchequer or from anyone else. I neither made nor caused to be made any sales of Government or other securities between the time when I left the Chancellor's presence on the Wednesday afternoon, which was at approximately 4.45 p.m., and the public announcement of the change in the bank rate.
  Whilst I appreciate and respect the Chancellor of the Exchequer's reluctance on constitutional grounds to disclose, in answer to a Parliamentary Question, the names of the persons whom he had seen, I feel that in fairness to myself and to the persons and firms with whom I am associated I must ask you to institute a judicial enquiry in order to establish the facts as contained in this letter.
  Yours sincerely,
  (Sgd.) OLIVER POOLE.
  The Rt. Hon. Harold Macmillan. M.P.,
  10, Downing Street, London, S.W.1."
  VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am very much obliged to the noble Earl the Leader of the House for giving your Lordships the benefit of the statement made by the Prime Minister in another place. The House will, I think, agree that there has been a good deal of anxiety since the first of the imputations mentioned in the noble Earl's statement became known. I think that, whilst there are enough lines in this

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  very careful statement of the Prime Minister upon which comment may well be made, in view of the nature of the last part of the noble Earl's statement, that the question is to go before a proper Tribunal of Inquiry, under the Act, this House, and any other House for that matter, ought to regard the matter as sub judice until the evidence has been given there and the result of the Inquiry is made known. On the other hand, I should like to say to the noble and learned Viscount who sits on the Woolsack that I am quite sure that Members of the House here will not by reason of this step have any less confidence in him than we have hitherto had.
  THE EARL OF HOME: My Lords, the House will be grateful and my noble friends will be grateful to the noble Viscount the Leader of the Opposition. I am sure that that is the right course: that we should let the tribunal take its course.
  LORD SILKIN: Would the noble Earl tell us when the terms of the Motion to be moved to-morrow will be available to the House and when we shall know those terms?
  THE EARL OF HOME: As soon as I know them myself I will let noble Lords opposite have them. I have not had the opportunity yet to see them.
  LORD SILKIN: Is it likely to be to-day?
  THE EARL OF HOME: I would hope it would be to-day. I have to go now to a meeting and I will look into this matter at once and let noble Lords know.

  TELEPHONE CHARGES
  4.6 p.m.
  LORD CHESHAM: My Lords, with the leave of the House, I should like to make a statement on telephone charges similar to that being made by my right honourable friend the Postmaster-General in another place. As from January 1, 1958, charges for calls will be drastically altered. Most calls now costing 6d., 9d. or 1s. will be reduced to 3d. The majority of charges for trunk calls will also be reduced. These changes pave the way for full automation in the telephone service, including trunk dialling
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  by subscribers, which will begin at Bristol towards the end of 1958. Full details are given in a White Paper, which will be available in the Printed Paper Office later this afternoon. I should add that, for the convenience of your Lordships, I have arranged for a number of maps typical of the new arrangements to be displayed in the Royal Gallery, which may assist in the understanding of the White Paper.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, it is a matter of reaction. As one looks round the House at the faces of noble Lords one ought to describe this as a joyous announcement, and we are very much obliged to the noble Lord for having made the announcement. Having listened to him, I would say not only that I welcome the statement but that I should like to know exactly how it has been arrived at. This is a most extraordinary anti-climax to the debate in which we were engaged on the general condition of the country, national finance and Government reflexes thereto. Perhaps it has been possible because some telephone users have been, and apparently will still continue to be, subject to much higher annual rentals for telephones. That is a possible answer. There is the next point, and that is that all of us are now paying. I think, 3d. for every local call.
  SEVERAL NOBLE LORDS: Fourpence.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: Yes, I had forgotten that. Thank you. We are all now paying 4d. for a local call.
  LORD CHESHAM: May I interrupt the noble Viscount? It is 4d. from call boxes.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: I thought I was right with regard to renters—3d. as distinct from the humble 1d. we used to pay not so very long ago. That is perhaps another reason. But we have been discussing finance, and what I am wondering is whether the noble Lord could tell us if there has been a kind of Post Office extra budget, with preparation for this to be fitted in as a new part of it. Will it result in a diminution or in the abandonment of any surplus in the Post Office which is paid to the Treasury? Are the

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  Post Office definitely going to help to finance this scheme out of the normal surplus paid over to the Treasury, or is that surplus actually to be wiped out?
  There is another point to which I would draw attention, and that is that this statement says that this action will pave the way to the development of automation. Apparently, automation is not yet completely universal. It is going to be tried out in Bristol and successively in other areas—that I deduce from the statement. One question that arises at once among noble Lords on this side is how much labour will be displaced. I am entirely in favour of the development of automation—please understand that. But will the Government tell us exactly what plans they have for making some provision for the people who will be displaced, either by absorbing them into the Post Office services or by taking them into alternative occupation?
  LORD REA: My Lords, I should like to join the noble Viscount who has just spoken in welcoming this most attractive bombshell. I should also like to follow very much on the line taken by the noble Viscount in asking whether this is due to a sudden increase in surplus in the Post Office accounts or is based on the economic theory of "small profits and quick returns". Is it the case that the Minister hopes that there will be more thin four times the number of three-penny calls in the future than there are one shilling calls made at the present time? If that is the case, will any of us ever be able to get any telephone call through at all?
  LORD LUCAS OF CHILWORTH: My Lords, may I ask the noble Lord, Lord Chesham, whether it would be more convenient for him to answer the questions together, or would he like to reply now to the questions already asked before being asked any more?
  LORD CHESHAM: If I may reply to that, I should prefer, with noble Lords' permission, to answer now what has already been asked. I have been following noble Lords as closely as I can and I will do nay best to answer their queries, and will then deal with other questions that may afterwards arise. Straight away, let me say that I realise that I am in a better position than any of your Lordships, having seen the contents of the
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  White Paper. That White Paper, I must say, makes the whole matter much clearer, as your Lordships, I am sure will agree, when there has been time for you to refer to it.
  The noble Viscount, Lord Alexander of Hillsborough, who asked most of the questions, will probably not want me to go into vast detail on this matter but to deal broadly with the basic principles of the questions which he has asked. There is, nothing magic about this. The Post Office has had no extraordinary windfall anywhere, neither has it been supplied with a little extra capital, or anything of that sort, by the Treasury. As your Lordships will see from the White Paper, this is simply a question of re-arranging the charging arrangements in the first place on a much more rational basis than before. It involves very much greater use, and much more economic use, of existing equipment which is now, for technical reasons which I do not want to enlarge upon, not used to the fullest extent. It means much more economic use of existing equipment with very little extra cost. It will be possible, we believe, by virtue of the economies which will arise from that. I hope that that will be sufficient for me to say at the moment on that side of the question.
  The noble Viscount's second question referred to the Post Office surplus. I do not think that this scheme is going to have very much effect on that. The present surplus which is budgeted for, I think, is generally agreed to be quite a modest one in an organisation the size of the Post Office. As the whole of this programme, or a large part of it, is going to be realised by economies, I do not think there is anything to fear in the way of any difference in the Post Office budget as we already know it.
  The noble Viscount was right, of course, to have raised the question of personnel, and I will spend a moment on that. The people concerned fall into two sections. First there are those who will be displaced by the difference in the charging arrangements which will save a good deal of manpower—the number is estimated to be about 3,000. These will quite rapidly be taken up by the wastage which normally occurs during each year. When automation comes in, that will raise a somewhat greater problem, because as big centre after big centre has

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  its new exchanges installed local problems which will be more difficult to handle will be created. The number will probably work out at something like 2,500 a year. I cannot be more specific at the present moment on my right honourable friend's precise proposals for overcoming this, but this I can say: the Post Office is determined to deal with any problems (and we are fully alive to what these problems are) with every sympathy. My right honourable friend's proposals and plans so far as this aspect is concerned have been drawn up in full consultation with the unions affected.
  LORD LUCAS OF CHILWORTH: My Lords, I am grateful to the noble Lord for those answers. There is just one further question I should like to put to him. Can he tell the House by what amount it is estimated that this concession will affect the revenue account of the Post Office?
  EARL FERRERS: My Lords, while the noble Lord is thinking of the answer to that one, may I ask him this? If I understood him rightly, this "attractive bombshell," as it has been called, has come about by reason of the ability of the Post Office to use equipment more efficiently. If I remember correctly, some six weeks or so ago there was a reorganisation in the scale of charges. Can the noble Lord give us any idea why it should be necessary to reorganise them now, or has something cropped up in the last six weeks which has enabled this to be brought about?
  LORD CHESHAM: No, nothing of the kind has occurred. The tariff changes which were made some time ago were made of necessity, because of the decision—a very proper one. I think—that telephone rentals should approach something like their actual cost and because of the coming into being of back-dated pay awards to Post Office personnel. That was the reason for that introduction. This scheme comes in now because, after a very long period of working on the matter, research and so on, this is the first moment that it could have been introduced in the form of a White Paper. The effect on the Post Office revenue is really this—I trust that I have understood the question of the noble Lord, Lord Lucas of Chilworth, correctly. The
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  concessions will cost some £8 million a year, of which £6 million has already been paid for, so to speak, by the previous increase in the local call charges, whereas the rest will be realised by economies. I trust that that is the information which the noble Lord wanted.

  ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
  4.20 p.m.
  Debate resumed.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I think it is time to resume our discussion on the Amendment to the loyal Address in reply to the gracious Speech from the Throne. I should first of all like to say how much I have appreciated the manner in which the debate was opened to-day by my noble friend Lord Wise. I think he put an excellent statement before the House. He has drawn very accurate attention—if I may put it that way—to the problems of the agricultural industry to-day. He referred to the feeling in the industry, which has been illustrated recently by articles in all the farming journals. I should like to be a little more detailed than Lord Wise, and to quote chapter and verse to the noble Earl who is about to reply. Perhaps his advisers may be able to produce the answers to the questions I am going to ask, though I feel pretty certain that he must have read the leading article in last Friday's Farmer's Weekly and no doubt will be almost ready to give an answer at once.
  In the course of this debate, we have said that the Government's decision to override the recommendation of the Whitley Council in one case may have wide repercussions upon other wage negotiations and settlements. The Farmer's Weekly quotes the words of the Chancellor of the Exchequer:
  "Wage increases unrelated to, and going far beyond, the general growth of real wealth within the country, are by far the greatest danger we have to face, and we should be deceiving ourselves if we pretended otherwise. Those who ask for wage increases, those who grant wage increases and those who adjudicate about wages should have this fact in the forefront of their minds. Any large mistake at this stage by any of them could do grievous damage to the nation as a whole."

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  This important farming journal then goes on to point out:
  "What the Chancellor said amounts to a warning not only to firms and employers who decide pay claims direct with their men, but to those whose claims are referred to arbitration."
  We have had one or two announcements from the Government implying that they do not wish in any way to interfere with the ordinary methods of recognised arbitration, but the Farmer's Weekly has anticipated that reply, because it has gone a step further, and says this:
  "Unlike most industries there is often a considerable time lag"—
  to which the noble Earl, Lord Ferrers, has referred—
  "in agriculture between a tribunal award … and any possible adjustment of farm prices. For instance, four months will elapse between the minimum wage going up at the end of last month and the next Price Review."
  The noble Earl, Lord Ferrers, correctly estimated that the total overall annual cost of that increase was £13½ million.
  EARL FERRERS: I did not mention that figure.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: Then I am afraid that I have made a mistake, because I have put that figure down: perhaps I was thinking aloud. At any rate, the estimated cost is £13½ million, of which £4 million has to be met by the farming industry before the normal time of the meeting for price review. The Farmer's Weekly continues:
  "After Mr. Thorneycroft's blunt warning, what will be the Government's attitude to farm costs? Is the Chancellor's statement to be regarded as retrospective? The Prime Minister … says the Government has no intention of interfering with the normal process of wage arbitration. But the farming industry is a case on its own."
  The paper asks that any doubt should be speedily cleared up by the Minister of Agriculture
  "… telling us quite clearly just how far the Chancellor's statement overrides an existing and explicit agreement with the farming industry"—
  that is, the explicit agreement between the Government and the farming industry that the price review procedure should go on—
  "or on the other hand, how far this agreement remains inviolate in the new economic order."
  I have good reason to press home this point, because the noble Earl who will be replying to this section of the debate
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  has heard me on various occasions on this matter, especially on the time lag. Two points arise. The first is that the agricultural industry has already been made to absorb, by what is termed "increased efficiency", something like £130 million to £140 million over the whole period of operation of the Price Review. Last year the amount left over to be absorbed by the industry by increased efficiency, with the increased sum of £4 million to be found in this agricultural year for wages, will amount to £31 million.
  I have had some pleasant correspondence with the noble Earl in the course of the Recess. He has been kind and patient in replying to letters of mine, but I want him to know that I am not at all reassured in this matter; nor is the industry. I should like to quote a few sentences from the noble Earl's letter to me of September 4. He was dissenting from my suggestion that in a period of increasing costs there should be a special Price Review—and that is the real implication of part of the case put by the noble Earl, Lord Ferrers; that whenever costs go up specially in a particular year, there ought to be a special Price Review, so that the matter can be dealt with more rapidly and adjusted to the industry's needs. In his letter, the noble Earl, Lord St. Aldwyn, says this:
  "In this connection perhaps I may remind you of the point I made in the debate on April 17, namely, that a good part of the total cost increase of £38 million taken into account in the 1957 Annual Review had already been absorbed by the industry last year."
  How? I am not going to turn to any farming journal or any Party literature to give my suggested answer to that. It has been absorbed by loss of income by the farmers.
  I turn to a magazine, The Esso Farmer, issued by one of the oil companies who supply farmers with their oil supplies. In the issue for Autumn, 1957, there is an article by Mr. J. E. Harrison, of the Bristol University Department of Economics, in which, after a very careful argument—not an argument which right the way through is in favour of my position, but a very fair examination of the whole question—he shows conclusively, by means of a graph, that all farm incomes are definitely down while all farm costs are up. Talk about increased costs being absorbed by increased efficiency has not put more money into the

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  farmer's pocket. The method of dealing with this matter during the last six years has left him in a poorer position to meet the actual increased costs. I hope that we can have the answer of the Government to this question.
  Let me turn now to some other questions in relation to agriculture about which we are concerned. I put it to the noble Earl that the extraordinary fall in the last nine months of the cattle prices at the auctions, and the net return, even allowing for the fact that the fall in prices has meant an increased payment by the Government of subsidies, if you take the actual benefit shown to the consumer of that fall in the market price, indicates that there is a very big gap somewhere between the two. There has been a fall in some meat prices: there has been a fall in pork prices, and there has been a recent fall in bacon prices. But when you consider that if a man to-day produces at very high cost to himself the modern, even grade A bacon pig—say 6 score 14 up to about 8 score—he is very fortunate if, all in, including the subsidy that is paid for the grade, he gets about £17 for a bacon pig which years ago, when his costs were much lower than they are to-day, was fetching him as much as £23, £24 or £25. What is the answer? Who is responsible for that? How far is the farmer now subsidising the consumer as much as the Government subsidise the development of agricultural production? I think the facts are such that we should have a clear and straight answer about it.
  The facts that I have just mentioned are perhaps an answer to that part of the speech of the noble Marquess, Lord Salisbury, yesterday, in which he raised most interesting points, and in respect of which I feel a great deal of agreement with the noble Earl, Lord Swinton, in his comments upon the remedy put forward by the noble Marquess. Nevertheless, a large part of the Marquess's speech was illustrated by reference to the methods in the wages process in the agricultural industry, and then following on the prices. From what he said, he seemed to think, if I read him aright, that in the end it was the consumer who paid. I am bound to say that on the return to the farmers on the actual sale of their productions, whatever they may be, animal, vegetable
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  or cereal, with the possible exception of certain periods in the horticulture industry, they have not had the benefit, and the consumer has not had the benefit. Certainly the agricultural industry is different from all the others, because those engaged in it cannot put up their prices. They have no control over the matter of putting up their prices. All they can do ultimately is gradually to resist the Government's specific request year after year to increase agricultural production as being one of the most important and balancing factors in our national trade position in relation to improving the position of the balance of payments. As your Lordships know, it is always said that if we produced every year the proper quantity of home-produced food, and used it properly, while restricting some imports, we should have a real contribution to make to the balancing of our payments and the stabilising of our general economic position.
  There is one other matter that I should like to quote from the farming journal. It is a letter from a well-known agriculturist, Mr. J. L. Cherrington, who I am sure is known to the noble Earl, Lord St. Aldwyn; he is certainly popular with the farmers who listen in to the new television programme. It is a letter which interested me greatly—and in case the noble Earl wishes it to be looked up, it is on page 38 of the journal. At the end of some cogent arguments with regard to the possible effect the farmers fear of a development of the European Common Market scheme, he asks two questions. First, he asks:
  "Is British production of individual commodities likely to be influenced by European Common Market considerations?"
  Secondly, he asks:
  "Will the machinery of the Agriculture Act be used to bring about such an alteration?"
  Obviously Mr. Cherrington is not at all satisfied with the statements made by Mr. Maudling as the result of his conversations with regard to the European Common Market, and the fear in the minds of farmers is that, in order to accommodate the general development of the European Common Market, and to deal with possible opposition to our view on agriculture from Scandinavia and the Low Countries, and even from France, steps may be taken in dealing with the price levels at the Price Review to make it easier to accommodate the attitude

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  taken up by those who will be in the European Common Market and, like ourselves, interested in the agricultural as well as the industrial aspect of that market. I should like an answer to those two questions, which have not been formulated by me, and which have come not from a political source but from somebody respected in the agricultural industry itself as being competent.
  I have little time left to speak in regard to the Amendment. I do not propose to continue the debate on industrial relations which was so ably opened yesterday by my noble friend Lord Hall. I am greatly obliged to him for what he said, and particularly for the manner in which he presented his case to this House. The speech of the noble Earl, Lord Swinton, almost took out of my mouth something of which I have notes here; that is, that I have been much more impressed by the approach made by Lord Chandos to the problem than I have by the policy announced in general by the Government. On the lines of his approach it would at least be possible for industry to make an approach to the General Council of the Trades Union Congress for consultation and discussion on this matter, although there are some "catches" in the scheme which Lord Chandos suggests: and certainly, as I heard him admit in a sound broadcast recently, in the event of a sharp rise in profits, or in the event of some disaster occurring in the industry from other directions, there would have to be some "escape" clauses in the stabilised period as to the method of increase.
  I hope that something more may be heard of that proposal, both from the side of the industrialists, whom Lord Chandos represents, and from our own trade union organisation. Certainly, now that there has been a letting off of steam here and there—and I do not blame my trade union colleagues for a moment for having defended their position—it would be much better to get together to see what real progress can be made. The Government must face the fact that the working people of the country will never again consent to face the kind of deflation and the evil consequences of 1920 to 1928; they will never allow it to happen. It will not be any use then to talk about the wickedness of disputes. It is up to the Government of the country, especially a Govern
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  ment who have been in office for six years, with power in their hands to direct policy, to avoid these things. To come along and say, "This is inevitable," will not be an answer. The Government must get together with the people themselves to avoid having these dreadful things happening. I believe that can be done if, instead of sticking to political dogma, whatever kind of control is required is instituted in order to put the situation right.
  I felt a great deal of sympathy with part of the speech made by the noble Earl, Lord Ferrers; and when he was quoting some of the things said about farmers, and how they put out their hands for more subsidies, and so on, I could not help thinking that the general industry of the country has had a long period of far greater protection than the farmers ever had. It is true that, for some reason or other, the Government are to enter into a European Common Market, which will throw open many of the industries which have built their prosperity on the basis of protection under the Safeguarding of Industries Act and the subsequent measures. They will now he subjected to a wintry blast of free competition from Europe. I have not so far met one industrialist who can forecast what the net effect of that will be upon his particular industry or upon the level of employment. I should say that the Government must first of all remember that the working people of this country will not again stand the conditions of 1920 to 1931, or even 1935. I say to the Government: After you have been in office for six years the great thing is to put your own policy right. You promised the moon, and now you are in this position. Get together with the workers themselves, and make the best arrangements you can to avoid all the trouble which otherwise will subsequently occur.
  4.42 p.m.
  THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN): My Lords, I am sorry that, because I have had to be attending to other duties in Rome at the Conference of the Food and Agriculture Organisation, I have not been able to be present during the earlier stages of your Lordships' debate upon the gracious

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  Speech. I am glad, however, to have the opportunity of replying to this afternoon's debate on its agricultural aspects.
  Before I deal with the proposals in the gracious Speech I will try to reply to some of the points which have been raised on other matters. The noble Lord, Lord Wise, and the noble Viscount, Lord Alexander of Hillsborough, were concerned about the position of the Agricultural Wages Board. I should like to make it absolutely clear that there is no question of interfering in any way at all with that completely independent body. As the noble Lord opposite knows, it is composed of farmers and workers, with a number of independent members as well. They are completely independent and they will remain so. As regards the Price Review, and any effect that the present situation might have on that, I would remind noble Lords that the system of dealing with the Price Review which was worked out at considerable length in conjunction with the farmers, and which I had the honour of announcing in this House some time ago as part of the long-term assurances, will not be interfered with in any way at all. Therefore, the position, so far as the Review is concerned, is exactly the same as it has been ever since the last Review which was held on the new basis.
  A question was also raised by the noble Viscount, Lord Alexander of Hillsborough, on Special Reviews, and why there was not one on this occasion. If the noble Viscount will cast his mind back he will remember—I cannot quote the date when I told him—I announced that it was agreed with the farmers' unions that there should be specific circumstances, and only when those specific circumstances were arrived at would there be a Special Review. When they were arrived at, the Government would not be able to refuse a Special Review, and, equally, unless they were arrived at, the farmers would not ask. So the question of Special Reviews is, I think, adequately covered under the new arrangement. The arrangement was that only if the effect of the cost changes in Review commodities for the remainder of the year is more than three-quarters of one per cent. of the total value of the guarantees would a Review be held. That is with the full agreement of the farmers.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: The National Farmers' Union.
  EARL ST. ALDWYN: Yes, representing the farmers.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: A most docile body.
  EARL ST. ALDWYN: I am afraid I cannot agree with that last statement. They are very active defenders of their members, as I believe most unions are. The noble Lord, Lord Wise, raised the question of horticulture and the Free Trade Area. Their position is exactly the same as that of agriculture, and the assurances which have been given both by my right honourable friend the Prime Minister and my right honourable friend the Minister of Agriculture, and many others, are absolutely unaltered. The position of agriculture and horticulture is exactly the same as it was when it was first stated. The noble Lord, Lord Dynevor, asked about forestry and the Free Trade Area. I made that position quite clear when we were discussing the Watson Report. Forest products, like other basic raw material for industry, will not come under the protective heading of "agriculture."
  I think I should now turn to the proposals in the gracious Speech. As has been said, the Prime Minister announced in another place our intention to amend certain provisions of the Agriculture and Agricultural Holdings Acts. I should like to-day to explain very briefly what we have in mind and why we have decided on this course. The Franks Committee has recommended major changes in the procedure for action under the Agriculture and Agricultural Holdings Acts. That Committee considered it wholly undesirable in principle that agricultural executive committees should have adjudicating functions. They recommended that the hearing of notices to quit cases and the making of supervision and dispossession orders should be transferred to independent tribunals. The Committee also recommended that there should be an appeal against supervision which they regarded as in effect a penal measure.
  The Franks Committee, of course, was not concerned with policies but with procedures. Her Majesty's Government believe that the broad conclusions of the Committee are in accord with public

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  opinion at large. They can find no sufficient reason for making an exception for agriculture, and have decided to accept, in principle, the recommendations as they apply to the functions of agricultural executive committees. Having said that, I want to record my own view and the view of my Minister, which is also, I know, the view of his colleagues, that the county committees have throughout performed their difficult and responsible functions with scrupulous care and fairness. My Lords, I cannot overemphasise that too much; they have done a really magnificent job. Our decision to accept the Franks Committee's recommendations is, therefore, very far from implying any criticism whatever on our part of the way in which the committees have carried out their responsibilities. The criticism we do accept as valid, however, is that the principle that agricultural executive committees should combine executive with judicial functions is wrong.
  But the application of the Franks' recommendations raises real practical difficulties. If the judicial functions in relation to supervision and dispossession are transferred to tribunals, while the general responsibilities of the county committees under Part II of the Agriculture Act, 1947, are left as they are, it would mean that committees would find themselves having to act in these cases as prosecutors before tribunals. This would be a very distasteful form of voluntary public service to ask committees to undertake, and it is one which I doubt very much whether many of them would be willing to perform.
  The operation of Part II of the 1947 Act raises other problems. Public opinion and agricultural circumstances have changed a good deal since 1947. The Government have been for some time conscious of the increasing difficulties, in the light of these changes, of administering fairly the penal sanctions provided in Part II of the 1947 Act. In 1947 the Government was buying all the food a farmer could produce at fixed prices. The whole emphasis was on expanding gross output on every farm—cost and quality were almost secondary factors in those days of strict rationing and world food shortage.
  To-day the situation is quite different. Cost and quality are now of primary importance and our deficiency payment
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  schemes are not designed to protect the farmer who is inefficient or whose produce is of poor quality. Detailed control of individual farm operations is no longer necessary or practical. Now that the emphasis is on a high level of net output produced at the lowest possible cost, it is far more difficult to pick out individual farmers for penal action. And even though supervision was meant to be helpful and has been sympathetically administered, it has in practice come to be regarded as having a penal element in it.
  In these circumstances the number of cases which we could act on has turned out, in recent years, to be small; the effects of no real significance; and the individual cases sometimes involving serious personal hardship. All this means that any effective balance there may have been between guaranteed prices and the penal sanctions has in practice proved to be theoretical rather than actual.
  Surely, my Lords, no one, with the possible exception of the noble Lord, Lord Wise, believes that supervision or dispossession of a comparative handful of our farmers has had anything to do with the tremendous vitality and progressiveness evident throughout the farming industry. It is due, surely, to the readiness of our farmers to accept advice and guidance from all sides, particularly, perhaps, from the National Agricultural Advisory Service and the Agricultural Land Service; and also to the general guidance and direction which the Government can properly exert through the Annual Price Reviews and the development of our production grants. It is by these means that we can best ensure that the fullest and most productive use is made of our agricultural land. We have concluded, therefore, after weighing up all the practical considerations, that the only logical and sensible course is to repeal the penal provisions.
  I think it has been recognised from the first that it is a difficult matter to find the right balance between the policeman and the adviser. However, although we now feel that the balance should be somewhat changed, I should like to emphasise that there is no question that the repeal of the penal provisions will in any way affect the price guarantees to farmers under Part I of the 1947 Act. These have, in fact, been strengthened and extended by

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  the 1957 Act, which passed through your Lordships' House as recently as last July. The long-term assurance this Act provided much strengthened the provisions of Part I of the 1947 Act. And I think we can be assured that those who in the past have held back from seeking advice for fear of the penal provisions—many of them those most in need of advice—will in future come forward without hesitation.
  I turn now to the Agriculture Holdings Act. There has for some years been a growing recognition that in practice these provisions have proved a bit too rigid in relation to security of tenure. No sensible person with any knowledge of agriculture will question that the efficient tenant needs a fully adequate degree of security of tenure. Efficient production depends on reasonable security of tenure and would be impossible without it.
  We must not on any account, therefore, interfere with full and proper security for the satisfactory tenant, and we have no intention of doing this. What does seem to be required, however, is a slight change of emphasis. in particular concerning the exercise of the Minister's overriding discretion.
  This is desirable not least in the interests of the younger men, whose hopes of getting a farm are sometimes being frustrated to-day because unsatisfactory tenants remain in possession. That is a point which several noble Lords have touched on this afternoon. I am glad to say that for England and Wales, as a result of discussions held over the past twelve months, the National Farmers' Union and Country Landowners' Association have reached a measure of agreement on the change of emphasis that is needed. An amending Bill will, of course, be required to give effect to the changes in functions which I mentioned earlier, and we propose to take the opportunity of this to amend the existing security of tenure provisions to give effect to the changes agreed with the Country Landowners' Association and the National Farmers' Union. In Scotland the statutory provisions are somewhat different, and my right honourable friend the Secretary of State is considering the question of what amendments would be appropriate there.
  As I said earlier, the Franks Committee also recommended that agricultural
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  executive committees should no longer exercise judicial functions in relation to notices to quit. We accept that conclusion. The Committee recommended that we should set up new independent tribunals to hear these applications. We believe, however, that the existing Agricultural Land Tribunals are the right bodies to undertake this work, and that there should be appeal from them on points of law to the ordinary courts.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: May I just get a little more light shed on this? What many farmers suspect—perhaps they are not right in their suspicions, but we should like to know—is that in these proposed amendments the main alteration will be that the members of the county agricultural committees will no longer perform any of the functions under Part II of the Act, with the result that their knowledge, based on their farming experience, as to the state of efficiency of the farm, will be missing. Then the Government propose to alter the powers in the Agricultural Holdings Act in such a way that landlords can go direct, without any check upon their efficiency, and ask for possession. How do the Government propose to fulfil the first tenet, which I frankly admit was laid down by the noble Earl: that the efficient farmer has a right to a reasonable security of tenure? How are they going to deal with the evidence in regard to this alteration? That has not yet been explained by the noble Earl.
  EARL ST. ALDWYN: On the question of notices to quit, as the noble Earl knows the procedure at present is that the case is first dealt with by the county committee, and if either party is dissatisfied it goes to the Tribunal. The alteration we are making is that the county committee are cut out and the case goes straight to the Tribunal. I feel that in many ways that has advantages because, as the noble Viscount also knows, inevitably there has been a considerable time-lag between the giving of notice and the final hearing of the case by the Tribunal. Under the new system the notice will be given, any appeal will go straight to the Tribunal, and the case will be dealt with much more quickly. But the alteration of cutting out the county committee has really no effect on security, because the Tribunal, which is

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  quite independent (the chairman is appointed by my noble and learned friend the Lord Chancellor, and there is a representative of the landlord and of the farmer) will be exactly the same; there is no alteration. I think the noble Viscount can be absolutely assured that that position is quite clear.
  LORD SILKIN: My Lords, I think there is a little confusion, though I do not want to pass judgment on that: I was a member of the Franks Committee which reported in a different sense. But what my noble friend is concerned about is, who is going to supply the information to the Land Tribunal? At the moment the county agricultural committees themselves make the inspection and they have the information. Will their function of inspection still continue? Will they be in a position, say, of giving evidence to the Land Tribunal? Is that what the noble Earl has in mind?
  EARL ST. ALDWYN: As I understand it, the present position is that the two parties give their evidence before the county committee, the committee inspect the land and come to a decision. On appeal, the matter goes to the Tribunal, where again the two parties give evidence, calling whom they will to give evidence for them; and more often than not, but not necessarily, the Tribunal inspects the land as well, having considered all the facts that have been put before them. Frankly, I do not see that either party will be any worse off under this procedure than they were before. I hope that that satisfies the noble Viscount.
  LORD SILKIN: Often the county committee take the initiative where a farm is badly farmed. The real point is that they are deemed to have knowledge of the conditions in the county and have a wide experience. Is that going to be lost? Will it be used in some way?
  EARL ST. ALDWYN: To a certain extent, if the noble Lord feels it is a loss, it will be lost because they will not have considered the case. But, bearing in mind the composition of the Tribunal, it is not a significant loss. All the evidence on either side will be put before the Tribunal, just as it is now. It is a perfectly sound and capable body to make the necessary decisions. I do not think there is any real loss to either side.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: I am sure the noble Earl is trying hard to satisfy me, and I thank him for his efforts. But I want to know a little more about the procedure, as it is likely to come about. Who takes the initiatory action—the landlord?
  EARL ST. ALDWYN: Certainly.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: Who produces the evidence—just the landlord and the tenant? That is what I want to know. The proposal is to cancel the present powers and the administrative function of the county agricultural committees in relation to Part II of the Act. Where is the evidence coming from, and on what basis? And is the same kind of Tribunal to deal with cases of unsatisfactory owner-farmers?
  EARL ST. ALDWYN: With due respect to the noble Viscount, I think we are getting a little muddled. I thought we were talking about notices to quit. From what the noble Viscount has just been saying, he is still harking back to Part II, which is quite a different thing. I thought I had made the position on notices to quit quite clear, as to procedure and so forth. I also said that we are proposing to remove the disciplinary powers under Part II of the Act, so that there will not be any initiation by the county committees.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: That leaves farmer "wide open."
  EARL ST. ALDWYN: I must take up the noble Viscount on that. He says that that leaves the tenant farmer "wide open." He is not "wide open" at all. The tenant farmer is perfectly capable of bringing before the Tribunal such evidence as he desires, and the Tribunal is perfectly capable of assessing it.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: It is principally pro-landlord.
  EARL ST. ALDWYN: That is a grossly unfair remark.
  Now, my Lords, I think we might pass on to the question of rents. Farm rents are, of course, generally fixed by agreement between landlord and tenant, but where they cannot agree they can ask the Minister to appoint an arbitrator, and his award has to be made on the basis laid

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  down in the 1948 Act. A good deal of evidence has been received by us that the existing statutory guidance to agricultural rent arbitrators is insufficient and that further definition of the rent properly payable is required. What we propose to do, therefore, after consultation with the interests concerned, is to consider whether the terms of the Act giving guidance to arbitrators can with advantage be improved and clarified.
  I have tried to deal with the main proposals as put forward in the gracious Speech. We shall, of course, have ample opportunity of considering these matters further, when eventually a Bill comes before your Lordships' House, but I felt it only right that the House should have an indication now of where the Government stand in this matter.
  LORD SILKIN: My Lords, can the noble Earl say whether it is proposed to introduce a Bill first in this House or in another place?
  EARL ST. ALDWYN: My Lords, I cannot guarantee it, but I think that the Bill will probably be introduced in another place.
  5.10 p.m.
  THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, the noble Viscount, Lord Hall, was good enough to tell me that he had left his Amendment in the hands of the noble Viscount, Lord Alexander of Hillsborough. I do not know whether the noble Viscount wants the Amendment put to the House.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: Yes.
  On Question, Amendment negatived.
  THE LORD CHANCELLOR: My Lords, we now return to the general Motion for the humble Address. I do not know whether any of your Lordships wishes to address the House on the general debate. If not, I want to take up only a few moments of your Lordships' time. We have had a most interesting speech from my noble friend Lord Swinton this afternoon. I believe that the noble Earl would agree that in the last thirty years there have been few occasions when either of us has disagreed with my noble friend Lord Salisbury, and even fewer occasions when we have agreed in disagreeing with him. That is the position with regard to his ultimate sug
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  gestion, that wage disputes should come to a Minister and should be discussed in the House.
  I believe that we all appreciated the concern which the noble Marquess had, and which was echoed by my noble friend Lord Swinton to-day, over the problem before us. The noble Earl put forward two interesting suggestions. One was a general "get-together" (if I may put it colloquially) following the example, say, of the Dutch Foundation of Labour in similar attempts that have been made abroad. I shall, of course, consider that suggestion very carefully, and discuss it with my right honourable friend the Minister of Labour. It is a subject that has been very much in our minds and it is interesting to have to-day the imprimatur of the noble Earl. The second point he raised was the plan of my noble friend Lord Chandos; and, here again he will not expect a definite answer from me. I assure him, however, that as he has expressed his sympathy with the plan and has had the support of the noble Viscount who leads the Opposition, it is indeed a matter which we ought to, and will, consider.
  THE EARL OF SWINTON: My Lords, it might be considered, even if it is not correct in all respects. Here is a concrete proposal which might form a basis of discussion and bring us together.
  THE LORD CHANCELLOR: My Lords, I am grateful to the noble Earl for saying that, and I am sure the whole House is grateful for his sympathetic inquiry and the tentative method in which he has put forward this suggestion, not dictating to anyone but making suggestions which are obviously well worthy of pursuit.
  I want to say one other general word on what the noble Viscount said in relation to the industrial aspect of the Common Market in Europe. There were three matters that occurred to me. As I have not yet had time to check, I hope the House will forgive me if my recollection is wrong; but if it is right, it is most interesting, in regard to the Common Market, that not only the General Council of the Trades Union Congress but, I believe, all except one of the areas of the Federation of British Industries have given it their general support—subject, of course, to safeguards which my right honourable friend the Prime Minister has said exist.

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  The second point I wish to stress, after what the noble Viscount has said, is that with European integration proceeding apace, and with the six Messina Powers having formed their Customs Union, the problem which we must always have in our minds is that unless we can succeed in the Common Market industry in this country will be faced with an integrated economy from the Baltic to the Mediterranean—one cannot get away from the existence of that problem. On the other hand, the prize of the Common Market is a more prosperous market of 250 million people in Europe who have a great industrial and commercial tradition behind them. I have said that because I wish to put the matter in the balance in which it must be looked at.
  I want to say very little, apart from dealing with these two subjects, because my noble friend Lord St. Aldwyn has dealt with the agriculture aspect, and I dealt fully, or tried to do so (I am afraid at inordinate length), with all points raised in yesterday's debate. I hope so dealt with them that those who raised those points will feel that they have bear, considered, whether or not they agree with my answer. With regard to the debate as a whole, I am sure your Lordships' House feels that it can congratulate itself on the interesting aspects of all the topics that have been raised, and also on the marked sense of responsibility which has been a feature of the speeches in all parts of the House. It would be invidious and take too long for me to mention any particular names, but perhaps the highest compliment I can pay this debate is to say that it came up to the high standard which had bean set by the openers, my noble friends Lord Waldegrave and Lord Colville of Culross.
  I believe that everyone, those who support and those who criticise the policy of Her Majesty's Government, was anxious to emphasise the importance of the general points which are now before the country as well as this House; the stability of our economy, social justice among our people and the continual growth of the ideals of Western civilisation at the present time. In your Lordships' House we have dealt mainly with domestic problems, but there cannot be
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  absent from our minds the problems outside these shores: the greater interdependence of this country and the United States of America, which my right honourable friend the Prime Minister has mentioned; the general aspects of international affairs in the United Nations Organisation, which were referred to briefly but none the less pointedly by the noble Lord, Lord Rea; and the continuous development of our Commonwealth and Empire as the answer to "colonialism", used, as a term of criticism. And as the gracious Speech indicates, we have still to deal with the problems of Singapore. Malta and Cyprus. In addition, there is the continuing and ever-present problem of the results of our very success in trusteeship and in training throughout our Colonies. These certainly give us plenty to think about in the Session which we have just begun.
  I come back, however, to the point which has been mainly in your Lordships' minds and I think agreed to by all noble Lords in every Party—namely, that our whole future depends on the success of our fight against inflation. I hope that after this debate nobody doubts the importance of the problem or the determination of Her Majesty's Ministers to deal with it. On that, all depends. But, my Lords, as I ventured to say last night, at the same time we intend to secure a real advance towards social justice by safeguarding the liberty of the subject, strengthening our institutions and protecting those least able to look after themselves.
  I am sorry, although I am not unused to the suggestion over my political years, that some noble Lords have described this programme as inadequate. I confidently assert that the advances which we are determined to make will, even if they are not all headline news, contribute some real measure of happiness to individual citizens; and that, after all, my Lords, is the first and most real reason, for the existence of government.
  On Question, Motion agreed to, nemine dissentiente: the said Address to be presented to Her Majesty by the Lords with White Staves.
  House adjourned at twenty-four minutes past five o'clock.